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London Bubble Is Built On Equity Not Debt

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Interesting video from FT.com. London bubble is based on equity not debt.

http://video.ft.com/...e/editorschoice

Your computer screen might not last long as the lack of house building (or inventory) is seen as fundamental strength of the supply side!

So you are all wrong, only the rich can get harmed from a London bubble pop, and many properties are at pre crisis levels.

So its a good job we didn't build much.

Since when has Author been spelt auther?

Edited by aSecureTenant

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Equity is simply the current price - the mortgage.

the current price is the amount of mortgage someone else is prepared to borrow.

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More than half of outstanding London mortgages are interest only. Telegraph

Also equity is itself dependent on bubble prices. Equity can vanish overnight if prices fall.

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Well, he seems a trustworthy fella.

+ Nice choice of axis on that last graph.

+1.

I remember someone on this forum telling me to always distrust graphs whose axis do not start at zero.

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They never learn...

http://youtu.be/7MagNCXV8SA?t=2m7s

(actually biderman did learn, he's a regular featured doomonger on zerohedge nowadays)

Saying anything is built on equity is inane. Its just saying, in other words, 'prices are high because prices are high' Meaningless drivel and not a reason or cause in of itself.

Debt is a real, tangible 'thing' An actual transfer that has taken place. Something has been bought, and something sold.

Equity is the notion that an entire market should be valued at margin. Everything is assumed to have gone up in value even if it has not been sold.

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Interesting video from FT.com. London bubble is based on equity not debt.

http://video.ft.com/...e/editorschoice

Your computer screen might not last long as the lack of house building (or inventory) is seen as fundamental strength of the supply side!

So you are all wrong, only the rich can get harmed from a London bubble pop, and many properties are at pre crisis levels.

So its a good job we didn't build much.

Since when has Author been spelt auther?

This is indeed an interesting video and deserves closer attention. A common fear on this forum is TPTB cannot allow a HPC because it will bring down the whole UK banking system. Well, this video is actually saying that because since the crash so much property has been bought with cash rather than a mortgage, a HPC can now actually be absorbed by the banking system. This video is another example of a subtle but certain shift in the serious newspapers of late - a HPC might actually be a positive thing!

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They never learn...

http://youtu.be/7MagNCXV8SA?t=2m7s

(actually biderman did learn, he's a regular featured doomonger on zerohedge nowadays)

Saying anything is built on equity is inane. Its just saying, in other words, 'prices are high because prices are high' Meaningless drivel and not a reason or cause in of itself.

Debt is a real, tangible 'thing' An actual transfer that has taken place. Something has been bought, and something sold.

Equity is the notion that an entire market should be valued at margin. Everything is assumed to have gone up in value even if it has not been sold.

Supposedly five trillion worth of notional value.....

http://www.savills.co.uk/_news/newsitem.aspx?intSitePageId=0&intNewsSitePageId=144360-0&intNewsMonth=2&intNewsYear=2013

Edited by crashmonitor

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This is indeed an interesting video and deserves closer attention. A common fear on this forum is TPTB cannot allow a HPC because it will bring down the whole UK banking system. Well, this video is actually saying that because since the crash so much property has been bought with cash rather than a mortgage, a HPC can now actually be absorbed by the banking system. This video is another example of a subtle but certain shift in the serious newspapers of late - a HPC might actually be a positive thing!

Only 37.3% of private households have mortgages apparently........

http://www.theguardian.com/news/datablog/2013/may/13/mortgages-property-debt-uk-trends

Nice to know that the Government has the interests of the majority of households in mind when they brought forward help to boomers 2.

Edited by crashmonitor

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This is indeed an interesting video and deserves closer attention. A common fear on this forum is TPTB cannot allow a HPC because it will bring down the whole UK banking system. Well, this video is actually saying that because since the crash so much property has been bought with cash rather than a mortgage, a HPC can now actually be absorbed by the banking system. This video is another example of a subtle but certain shift in the serious newspapers of late - a HPC might actually be a positive thing!

Yeah, but it's the swing-voters that are the ones in debt. Best not have the crash when you're trying to get re-elected.

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This is indeed an interesting video and deserves closer attention. A common fear on this forum is TPTB cannot allow a HPC because it will bring down the whole UK banking system. Well, this video is actually saying that because since the crash so much property has been bought with cash rather than a mortgage, a HPC can now actually be absorbed by the banking system. This video is another example of a subtle but certain shift in the serious newspapers of late - a HPC might actually be a positive thing!

This is what I've been saying for years. The BoE is redistributing wealth from the cash rich to the poor.

The Tories seem hell-bent on making the (relatively) poor suffer - I mean borrow - too.

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