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Max Keiser Says Property Bubbble Will Burst Within 24 Months In The Uk

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I just watched this video; http://www.maxkeiser...men-of-finance/ in which Max Keiser seems very certain the the property bubble will burst within the next 24 months (or he will "eat his shorts"). What he doesn't make clear is why he thinks this, i.e. what will cause it and why it will come within 24 months. Anybody who agrees with this viewpoint, can you explain what you think will be the catalyst and timeframe?

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I just watched this video; http://www.maxkeiser...men-of-finance/ in which Max Keiser seems very certain the the property bubble will burst within the next 24 months (or he will "eat his shorts"). What he doesn't make clear is why he thinks this, i.e. what will cause it and why it will come within 24 months. Anybody who agrees with this viewpoint, can you explain what you think will be the catalyst and timeframe?

The property bubble burst 6 years ago.

I think what he meant was the nominal price of houses will collapse.

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I just watched this video; http://www.maxkeiser...men-of-finance/

My sympathies

in which Max Keiser seems very certain the the property bubble will burst within the next 24 months (or he will "eat his shorts").

Yes, he always does. It's his job.

What he doesn't make clear is why he thinks this, i.e. what will cause it and why it will come within 24 months.

Therein lies the rub. They never do, it is always some undefined "black swan". It is like waiting for the rapture.

Anybody who agrees with this viewpoint, can you explain what you think will be the catalyst and timeframe?

The usual suspects will along soon to inform you that the government will lose control of interest rates due some undefined "event". They will talk of black swans and bring out the quote about the market staying irrational longer than you can stay sober. Or solvent.

When queried as to why the UK has not gone Greece in the half decade since the crisis they will mention something about the UK being relatively good or "we are next" as presumably traders, being mainly men, cannot multitask and can only short one governments bonds at a time.

Personally my understanding is that household debt has dropped to the point where, with the mooted govt mortgage backing, there could be a run up in house prices. Can't see it being sustainable long term, leading to a decline. Something like that. To my mind the main obstacles to prices prices falls from current levels are the cheap servicing of debt possible, high landlord benefit levels etc. With substantial moves in these areas hard to see the falls.

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The property bubble burst 6 years ago.

I think what he meant was the nominal price of houses will collapse.

In London they are increasing. In my area of north London I am seeing properties going on the market for £100k more than a year ago. I am talking about tiny, box flats on sale for £350-£400k and they seem to be going. They are much higher than 2007 prices.

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The property bubble burst 6 years ago.

I think what he meant was the nominal price of houses will collapse.

Yes, it should be remembered that we have already had a 30% real terms decline. Sadly that appears to still have left property at high levels in many parts if the country, though it is highly regional with the Mids and North having seen decent falls.

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In London they are increasing. In my area of north London I am seeing properties going on the market for £100k more than a year ago. I am talking about tiny, box flats on sale for £350-£400k and they seem to be going. They are much higher than 2007 prices.

I understand that a lot of this is a foreign buying effect. In which case if there is another Asian financial crisis (possible, given the bubble in China) you could see liquidation of assets as debts are called in at home. That to my mind is a possibility, but I am unsure of the proportion of foreign ownership

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Maybe he's trying to get RT to commission his show for another 24 months...

He's been predicting financial Armageddon for a long time now; hats off, he predicted the credit crunch but it looks like through various smoke and mirror techniques they have managed to engineer a soft landing so it looks like years of slowly lowering living standards rather than a financial collapse; a financial collapse would have hurt wealthier and older people more while a long wind down will mainly impact the young and poor.

A long slow wind down of the economy is not so exciting to make a weekly show about.

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it should be remembered that we have already had a 30% real terms decline.

Which means very little since none of us are paid in or able to save vegetables, petrol, holidays or electricity. As far as I can tell, all this statistic means is that if I sold a house today and took the money out in cash, then went back in a time machine to 2007 I could buy a lot more stuff than if I went shopping with the cash today. Doesn't seem all that useful.

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Maybe he's trying to get RT to commission his show for another 24 months...

He's been predicting financial Armageddon for a long time now; hats off, he predicted the credit crunch but it looks like through various smoke and mirror techniques they have managed to engineer a soft landing so it looks like years of slowly lowering living standards rather than a financial collapse; a financial collapse would have hurt wealthier and older people more while a long wind down will mainly impact the young and poor.

A long slow wind down of the economy is not so exciting to make a weekly show about.

All the armageddonista's are wearing a bit thin now. Then again a stopped clock is right twice a day.

Both cable and the Euro hit some new highs in recent days, in Dollar terms at least

Edited by aSecureTenant

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I understand that a lot of this is a foreign buying effect. In which case if there is another Asian financial crisis (possible, given the bubble in China) you could see liquidation of assets as debts are called in at home. That to my mind is a possibility, but I am unsure of the proportion of foreign ownership

***BZZZT* wrong. Many asian buyers will have not declared these assets to taxmen/creditors and if things go wrong, they will hang on until the death, as few but their immediate family will know about them.

The thing that would really drive liquidation by Asian buyers would be a collapse in the pound and riots with buildings being burnt down. Both possible, but unlikely, in my view.

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My sympathies

Yes, he always does. It's his job.

Therein lies the rub. They never do, it is always some undefined "black swan". It is like waiting for the rapture.

The usual suspects will along soon to inform you that the government will lose control of interest rates due some undefined "event". They will talk of black swans and bring out the quote about the market staying irrational longer than you can stay sober. Or solvent.

When queried as to why the UK has not gone Greece in the half decade since the crisis they will mention something about the UK being relatively good or "we are next" as presumably traders, being mainly men, cannot multitask and can only short one governments bonds at a time.

Personally my understanding is that household debt has dropped to the point where, with the mooted govt mortgage backing, there could be a run up in house prices. Can't see it being sustainable long term, leading to a decline. Something like that. To my mind the main obstacles to prices prices falls from current levels are the cheap servicing of debt possible, high landlord benefit levels etc. With substantial moves in these areas hard to see the falls.

This is why the wife and I are buying a home next year. Do I want to pay half a mill for it? No. Do I want to stay living with her sister? NO. We want a home of our own with a little doggy and a cat and it will cost what it costs and that's that.

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This is why the wife and I are buying a home next year. Do I want to pay half a mill for it? No. Do I want to stay living with her sister? NO. We want a home of our own with a little doggy and a cat and it will cost what it costs and that's that.

Surely your wife's sister would love a little doggy?

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Surely your wife's sister would love a little doggy?

Ha ha it has been mooted!

Seriously though we both want a home and will budget so we can pay the mortgage down in less than 5 years so that IF interest rates do do what they did to me in the early 90s we will be ok.

I would LOVE to wait more and see that 500k house drop to 350 but it aint gonna happen soon and by soon I mean in the next 4 years.

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Anyway - the question arises as to whether London will be covered by thousands upon thousands of Dormant Dwellings?

In addition people notice the dormant dwellings, break in, change the locks then rent them out.

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I've been calling 2015 for a while now [Link].

My current prediction is game over in 2015, with the election coinciding with doubled-up student debt, Universal Credit, the ongoing annuity squeeze, ongoing Eurozone issues, and Fed tightening. Of course, there could be a crisis before then, but that's my best bet. By then, I should have at least 2xgross salary saved as a deposit. No rush.
If it doesn't pan out this time, well I'm sanguine. I can stay solvent longer than this market can remain irrational. :)

I've just opened a two year fixed rate ISA on the basis of the 2015 prediction. Watching and waiting patiently now.

Q

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***BZZZT* wrong. Many asian buyers will have not declared these assets to taxmen/creditors and if things go wrong, they will hang on until the death, as few but their immediate family will know about them.

The thing that would really drive liquidation by Asian buyers would be a collapse in the pound and riots with buildings being burnt down. Both possible, but unlikely, in my view.

No liquidation is required. If/when Asia goes down and Asian money stops flowing into London new build flats, the price of a 40 square metre flat in the East End will go back to what locals can afford to pay e.g. £50k instead of £250k.

They are bidding up tulip bulbs. It doesn't matter all that much whether the tulip bulbs are seized by government or not, outside of self-referential bubble pricing they don't have very much intrinsic value.

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Just a shame the interest rates on fixed isas are so low at the moment. My 2yr fix runs out next year, currently 3.7% but at today's rates it hardly seems worth fixing again. If they're still rock bottom by then I'll have to have a re-think.

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Yes, it should be remembered that we have already had a 30% real terms decline. Sadly that appears to still have left property at high levels in many parts if the country, though it is highly regional with the Mids and North having seen decent falls.

no we haven't.

not even close.

when we get back to a proper metric of a house being 3.5* average single salary, then we'll have the decline.

at present that metric is still up at around 7* to 8*.(based on average salary of £25kpa)

we've got a 50% drop to go...plus undershoot from bubblenomics.....so at lowest we sould see average HP of around £87.5k, bottom in an around £65k

Edited by oracle

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All the armageddonista's are wearing a bit thin now. Then again a stopped clock is right twice a day.

told you before that last statement is incorrect....you've just been fed centuries of false dogma that you repeat parrot-fashion.

..or do you need educating that the earth is not flat?

...lets try time being a vector measurement, not a scalar one.

Edited by oracle

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I just watched this video; http://www.maxkeiser...men-of-finance/ in which Max Keiser seems very certain the the property bubble will burst within the next 24 months (or he will "eat his shorts"). What he doesn't make clear is why he thinks this, i.e. what will cause it and why it will come within 24 months. Anybody who agrees with this viewpoint, can you explain what you think will be the catalyst and timeframe?

This time last year Keiser was 99% sure there would be a systemic collapse before April 2013.

He's also come up with some other past their sell-by date predictions about the price of PMs, the collapse of the paper gold market, the Euro replacing the dollar as the world reserve currency, all sorts

He really should keep away from timescales.

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Whatever max bloody keiser says or any one else is irrelevant ,

The numbers will not lie and cannot be talked into correction, come the next election, the national debt will have doubled, private debt is as bad as ever, the main cuts are still to come.

Yields are rising,, yet interest rates at record lows for a record time, flat lining, QE stuck at 400bn or something .

If interest rates rise the whole thing is toast, it's so obvious.

When the actual deficit is zero, rates are at sustainable normal levels, then this thing has calmed down. Still have about 1.4trn debt though.

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Yes, it should be remembered that we have already had a 30% real terms decline. Sadly that appears to still have left property at high levels in many parts if the country, though it is highly regional with the Mids and North having seen decent falls.

The "real terms" fall in prices (vis a vis inflation) is for many, or most, no such thing. Wages have not kept up with inflation either, so they have fallen in real terms as well. Also, with higher prices there is less disposable income to pay for a mortgage.

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I just watched this video; http://www.maxkeiser...men-of-finance/ in which Max Keiser seems very certain the the property bubble will burst within the next 24 months (or he will "eat his shorts"). What he doesn't make clear is why he thinks this, i.e. what will cause it and why it will come within 24 months. Anybody who agrees with this viewpoint, can you explain what you think will be the catalyst and timeframe?

About 2 years ago he confidently predicted that the pound will tank and ... were still waiting ...

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