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Article On Grotesque Wealth Disparities

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Just looking at today's Grauniad and this caught my eye - (in part)

"It may be beyond passé - but we'll have to do something about the rich

The gap between extraordinary wealth and desperate poverty is growing steadily wider in Tony Blair's Britain

Jonathan Freedland

Wednesday November 23, 2005

The Guardian

I know it's frightfully old-fashioned, but I beg to differ. For the story about the £333 cocktails emerged in the same week as Shelter reported that children were being forced to sleep in kitchens, dining rooms and hallways because of cramped housing affecting 500,000 families in England alone. Of these, three in four said that the lack of space was damaging their children's education or development; many spoke of depression and anxiety. And the scale of the problem has remained unchanged since 1997.

To my mind, there is something deeply wrong here. If one man can spend £15,000 plying his pals with a syrupy cocktail, while another lays out blankets for his child to sleep in the kitchen then we know the system is broken. This is not some narrow criticism of the Labour government, but rather a challenge to our assumption that we are a civilised society at all.

For we imagine such gross inequalities to come tinged in sepia. They belong to the Dickensian dark ages, a cruelty so distant we render it now only as nostalgic entertainment: Oliver Twist at the cinema, Scrooge on the West End stage.

But the truth is that the injustice of extraordinary wealth alongside desperate poverty is no museum piece. It is alive and present in 21st century Britain."

Interesting that commentators in the Times and the Guardian are pointing out just how disastrous this property boom is turning out to be for virtually all of us. Space poverty is certainly depressing the hell out of me, and looking at the one-bed sh*tholes I could afford by mortgaging myself to the eyeballs pleases me not.

I think Freedland misses the point that so much of the housing poverty of the younger generation is a direct result of grotesque speculation by vast numbers of middle class, middle income earners who have "equity" (most of which is actually a promissory note for debt on the part of somebody else - some of it of course represents paid-down mortgages) in property that they've used to leverage BTL.

The point is - speculation is not a benign, victimless activity, certainly not if it's in housing.

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People weren't victims when prices were lower, why are they victims now?

Victims of their own inaction is all I can think of.

Spoken like a true man who was in the right place at the right time.

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People weren't victims when prices were lower, why are they victims now?

Victims of their own inaction is all I can think of.

I suppose being stupid enough to be born after say 1985 (not that this applies to me) is, well, pretty stupid.

TTRTR, why don't you turn off the knee-jerk reaction mode and engage brain before you post this sort of mindless cr*p?

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This society is indeed sick, and TTRTR post above beautifully illustrates how sick it is and just how sick some people are. Not sure what the cure is apart from a good olde fashioned riot or a house price crash.

Edited by shakerbaby

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Guest Bart of Darkness

People weren't victims when prices were lower, why are they victims now?

Victims of their own inaction is all I can think of.

Shelter reported that children were being forced to sleep in kitchens, dining rooms and hallways because of cramped housing affecting 500,000 families in England alone.

Quite agree. Shame these lazy, bone-idle kids can't take up careers as chimney sweeps anymore (score one for those pesky do-gooders with their Clean Air Act). Perhaps there's a modern day alternative (drug mules maybe?). Or maybe they should become rent boys?

More your territory I think TTRTR? :P

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This is classic Grauniad, dressing up the politics of envy/disgust as social commentary and societal neglect.

Fact, wealth disparities will always exist (and get worse in absolute terms) whether capitalist or socialst economies (even communist ones and what has happened to them and how did their peoples do/suffer in the long run). The issue should be about raising the floor in the right way so all can live with dignity and aspire to work hard and succeed for the beneift of all society. If you are on £15k a year (plenty to live on given housing benefit and other aids) and have savings of £1000 and I am on £50k a year and have savings of £10,000 and we do nothing but put our savings in the bank for 3 years at 5% interest each, you will have £1158 and I will have £11580. I started with ten times your savings and end with ten times your savings but I have gained £1422 more in absolute cash terms. I have gained more in wealth relative to you. What can one do about numbers and maths?

The REAL problem which this (socialist!) Govt has allowed to persist despite claims and aims to the contrary is to allow a real underclass to develop below these levels who have no or poor housing and low quality of life. Some may be wasters some will be hard workers who have had no breaks.

It is perfectly possible (and not that expensive) to improve the lot of those few who are truly "poor" and that is what only Govts can ensure. They have failed. It is NOT the fault of a few people who spend excess wealth in the economy. Good luck to them - spend more please and help build my pension by improving the performance of the retailers, service industries etc. We live in the system we do and the Govt seems able to work it to its own advantage to raise funds or improve things for itself, its employees and its special interest groups, lobbyists and advisers - but not for some of the people whose position in society caused the development of the movement that long ago brought the first Labour Govt to power.

I am a tory but I see less compassion and more disingenous self interest in this Govt than I have done in any administration in the last 35 years. Private charities (privately funded) do far more to help this situation than Govt. People do plenty.

I know more Labour "supporters" who are openly disenchanted with this Govt than liberals or conservatives! Unreal.

Give them a leg up and give them something to aim for not charity or pity. That is no way forward.

Pity the Grauniad journo with his £80k salary and final salary pension, with his North London pad, dining at his Islington restaurant twice a week at £70 a head - or the £10k a year factory worker living in squalor. I know who has more integrity. What is your net worth Mr Freedland? Care to reveal it?

Time for bed.

Edited by Tempest

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This is classic Grauniad, dressing up the politics of envy/disgust as social commentary and societal neglect.

Indeed, I love reading these lectures from Guardian commentators with salaries north of £200k, notice how the article focuses on the super-rich not the mere Guardian-rich... of which in volume and worth collectively out punch the super-rich, the middle-classes have leveraged their way this property bubble on a scale that would make Rockafella blush.

Aaronovitch consoles himself that despite being in the top 1% of earners he is actually quite a poor boy compared to others.

Both seem to firmly fall into the envy trap, government doesn't care for a good reason, over 66% of income tax take comes from just 13% of earners... in relative terms there aren't many of them, yet there are hundreds of thousands of Freeland's out there leveraging this bubble ever more than a handful of the super-rich.

Edited by BuyingBear

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The REAL problem which this (socialist!) Govt has allowed to persist despite claims and aims to the contrary is to allow a real underclass to develop below these levels who have no or poor housing and low quality of life. Some may be wasters some will be hard workers who have had no breaks.

NuLabour is very right wing, carrying on from Neil Kinnock who when he left office declared

the death of Socialism. NuLab knew it has had to be right wing to win tory votes and big business,

they have done what was required to get into power.

To stay in power they are having to sell the wishes of big business

to the people. Privatise everything. I read in the local paper last night that even our local parks are being privatised.

The anglo/american governments are following neoliberal policies so it is no wonder we are

seeing once again conditions for working people similar to the Victorian age.

This is the reason the Conservative party does not put up much opposition as they are quite happy to sit back and watch NuLabour follow the same policies they would implement that they would themselves

follow. If NuLab where carrying out true socialist policies the tories would be up in arms.

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Quite agree. Shame these lazy, bone-idle kids can't take up careers as chimney sweeps anymore (score one for those pesky do-gooders with their Clean Air Act). Perhaps there's a modern day alternative (drug mules maybe?). Or maybe they should become rent boys?

More your territory I think TTRTR? :P

BoD have you had a sex change? (the avatar)

Those kids would be a lot better off if it weren't for their lazy parents.

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Some people are more risk averse than others.

Some people have a "can do" "will do" attitude and some do not.

People make what they can of life.

I know people with public school education, degrees etc who are unemployed.

I also know people who worked night school to educate themselves - supported their family - and have started their own successful businesses.

You can't be annoyed with someone like TTRTR - he took a risk and it has paid off. Many perople DID have the chance in 1992-8 but chose not to - we bought 3 properties over the course of 4 years and most of the people we knew said we were mad. A few did the same as we had.

All this discussion at the moment about whether house prices have turned or have further to go - well that to me is the same situation.

Some people will buy now - as they see this as taking a calculated risk. If prices increase, they wil profit. If prices fall they will not. That is their choice.

If you do nothing and prices go up - you have missed an opportunity - if prices go down - you have avoided a loss - again - thsi is your choice.

I believe that you should try to buy in a buyers market - not a sellers market. It really takes very little for sentiment to change re housing.

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NuLabour is very right wing, carrying on from Neil Kinnock who when he left office declared

the death of Socialism. NuLab knew it has had to be right wing to win tory votes and big business,

they have done what was required to get into power.

To stay in power they are having to sell the wishes of big business

to the people. Privatise everything. I read in the local paper last night that even our local parks are being privatised.

The anglo/american governments are following neoliberal policies so it is no wonder we are

seeing once again conditions for working people similar to the Victorian age.

This is the reason the Conservative party does not put up much opposition as they are quite happy to sit back and watch NuLabour follow the same policies they would implement that they would themselves

follow. If NuLab where carrying out true socialist policies the tories would be up in arms.

I think its the victory of liberal market capitalism. There is no alternative or threat any more, so govts of both persuasions can do what they want without any comeback. Across the board, in housing, healthcare, pensions and the rest, the gains our grandparents voted for are being withdrawn. The rich have no longer have any incentive to deal with the fallout of the market system, which is in general reasonably effective but sometimes fails to address or even create social problems.

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People weren't victims when prices were lower, why are they victims now?

Victims of their own inaction is all I can think of.

Yeah, bah humbug...f**king hell TTRTR, you really are a colossal, colossal pr1ck. Yeah, you right, those kids sleeping in the kitchen are just victims of their own inaction.

You monstrous sh1t. You perform the classic mental gymnastics of the fortunate by imagining that you 'deserve' your wealth whilst anyone who is poor is just lazy, stupid etc.....apparently even children who are born into poverty. Excuse my language Mr. Moderator but the time for me to be polite has past...TTRTR you are really are a royal c0ckend.

:angry:

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Some people will buy now - as they see this as taking a calculated risk. If prices increase, they wil profit. If prices fall they will not. That is their choice.

I'd like the calculations that lead to the decision to buy. I don't think there is anything calculated about the decisions being made.

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People weren't victims when prices were lower, why are they victims now?

Victims of their own inaction is all I can think of.

Are you for real? Have you any idea what housing conditions some people live in (especially kids)? Have you any idea the damage this does to them, to their education, social skills, relationships, self esteem and their health?

Do you really think they live like that because they want to? Do you not think that if they could do any better then they would?

It is narrow minded views like this that perpetuate the myth in this country that anyone who isn't rolling in money is either lazy, inactive or stupid.

We can't all be landlords...if we were who would pay the wages to pay the rent?

Some people do actually do a honest days work for an honest days pay....but it isn't always enough to pay for decent housing.

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well said marco, i wont repeat it and will just sign my name to the bottom of what you said about ttrtr.

What he fails to understand is opportunity is what has been eroded, that is the opportunity to lift yourself onto the first rung that is erroded now.

wasint when he bought his property

the guys a jerk

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I'd like the calculations that lead to the decision to buy. I don't think there is anything calculated about the decisions being made.

Are you serious?

A calculated risk means that you weigh up the pro's and the cons.

It means you look at the risk / reward scenario and make your own decision.

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I think most people would agree that a "calculated risk" is one where one has at least considered all or most of the likely and possible upsides and downsides (and even some of the unlikely or "impossible" ones) before making one's decision.

A muppet simply looking at few of the relevant factors before acting may have taken, for him/her a calculated risk but to most people, objectively he/she has inadequately diligenced the matter or worse leapt into the dark.

"My estate agent says I can get £Xpcm for the flat in the rental market and at £Y to buy it the gross yield will be 4%; after my IO mortgage costs, if I set aside £Z for insurance and the odd lick of paint/maintenance I will break even/clear £[200]pcm/lose only £[200]pcm which is not great but as a long term investment I know property always goes up so the risk is offset by the increase in capital value, its a calculated risk but I'm comfortable with it. I'm in, where do I sign?"

As with most things in the world most decisions are subjective by their nature - doesn't mean objectively they stack up.

All depends on the quality of the calculation, the underlying information and assumptions and the person doing it. It is clear that amateur (but not necessarily professional) BTLs are grossly underestimating (not understanding?) the risk in their calculations - which sort of undermines their "calculated risk" based decision.

Edited by Tempest

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I think most people would agree that a "calculated risk" is one where one has at least considered all or most of the likely and possible upsides and downsides (and even some of the unlikely or "impossible" ones) before making one's decision.

A muppet simply looking at few of the relevant factors before acting may have taken, for him/her a calculated risk but to most people, objectively he/she has inadequately diligenced the matter or worse leapt into the dark.

"My estate agent says I can get £Xpcm for the flat in the rental market and at £Y to buy it the gross yield will be 4%; after my IO mortgage costs, if I set aside £Z for insurance and the odd lick of paint/maintenance I will break even/clear £[200]pcm/lose only £[200]pcm which is not great but as a long term investment I know property always goes up so the risk is offset by the increase in capital value, its a calculated risk but I'm comfortable with it. I'm in, where do I sign?"

As with most things in the world most decisions are subjective by their nature - doesn't mean objectively they stack up.

All depends on the quality of the calculation, the underlying information and assumptions and the person doing it. It is clear that amateur (but not necessarily professional) BTLs are grossly underestimating (not understanding?) the risk in their calculations - which sort of undermines their "calculated risk" based decision.

The original post was about TTRTR

What is the difference (out of interest) between an amateur & a professional BTL?

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Guest Bart of Darkness
BoD have you had a sex change? (the avatar)

I have indeed. I've decided to get in touch with my feminine side.

From now on, call me Bartina of Sweetness.

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I realise that but the reference to "some people" and the later posts from others had wider application I thought. I don't doubt TTRTR's acumen in this sector and love the time he devotes to this board given that interest - he is a valued contributor and voice of balance. But the point is that people like him are taking differently and better informed decisions (whcih can clearly stack up) from those taken by the residential OO who decides to buy a flat or two to Btl for investment purposes because their mate has done it and thinks its easy to make money. The proof is in the fact that even hardened, experienced Landlords in part learnt the hard way how to avoid the first time pitfalls, minimise this cost here, allow for that cost there.

The former probably have portfolios that will largely survive on current yield/cashflow terms through a downturn but the latter may not.

What do long time landlords think about the effect on the market (esp rental market) of the one time "amateurish" land lord who can;t make the figures stack up?

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  • 342 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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