Jump to content
House Price Crash Forum

Archived

This topic is now archived and is closed to further replies.

Bear Goggles

Time For The Revolution

Recommended Posts

Okay, I know I’m in danger of sounding like Russell Brand, but I have become increasingly convinced that there is no chance of any real change occurring without some kind of revolutionary event.



Let me explain.



Over the past few years of posting on this forum - It’s been off and on btw, I haven’t been visiting every day since 2004 - I’ve noticed a gradual change from a broadly economically-focussed debate (what house pries are going to do), to a more politically-focussed debate (What house prices Should do). This change reflects the course of events.



Pre-financial crisis it was reasonable to argue that it was only a matter of time before house prices corrected. It was not “different this time”, and we had not entered “a new paradigm”, governments cannot control markets, so therefore we just had to wait for the crash to play out.



Since then we’ve had the crisis, bailed the bankers, socialised the losses, expanded debt even more, and new highs in property prices have been reached. Welcome to HPC hell.



I think it is fair to say that the economic narrative has failed. The market cannot be relied on to correct in a timeframe that is of any use to the average human lifespan. Lives have already been blighted, a generation has been priced out. We are where we are.



Ironically, the libertarians still citing Mises’ inevitable “final collapse” of the “boom brought about by credit expansion” are beginning to sound more like marxists fruitlessly awaiting their own ‘inevitable’ collapse of capitalism.



So without risking turning this into a wonkish debate about the similarities or differences between libertarians and marxists, I’d like to use a phrase that has been used by both - “creative destruction”. Politics has trumped economics, it’s the only place that change can come from. So by “revolutionary”, I don’t mean the uprising of the proletariat, or violent insurrection. I mean the creative destruction of the political status quo, something that will shake it to its core and push it into a state of flux and forces new ideas to the fore.



I don’t care where this comes from: UKIP taking us out of Europe, Scottish nationalists breaking up the UK, The Labour Party discovering a new found love of socialist populism, libertarians “bringing back capitalism”, I don’t care. This towering pile of sh!te needs toppling or we’ll just go on like we are for another generation. Let’s call it democracy’s last stand. I urge everyone to do whatever they feel is best to help make that happen.



Viva la revolution ;)


Share this post


Link to post
Share on other sites

Well you say that lives are blighted and a generation is priced out, yet a significant proportion of the population have 'wealth' beyond their wildest dreams tied up in their house, more than they have earned in a lifetime of work. To make matters worse they brainwash their offspring along with dozens of media outlets all the saying the same thing.. "get on the property ladder and make free money while you sleep."

I do actually agree with you but can't see any catalyst for revolutionary change, indeed we have never had a proper revolution in the UK, just the whiff of the threat of a Socialist state was sufficient to get Labour reforms, a welfare State, NHS and other things . Once the threat of a Socialist State was removed, all these reforms were rapidly dismantled.

I think we are going to have to wait a few decades for the boomers (including myself) to die off for change to take place. Watching QT last night was very disheartening, an audience packed with old customers rejecting any kind of change or development. Incredibly selfish attitude.

So the voters have been bought off, this time with their own money, or houses, which in the UK are pretty much the same thing.

Share this post


Link to post
Share on other sites

All it takes is for people not to sign up to joint income mortgages. If buyers only signed up to mortgages on single main income they would get affordable housing like we had in the 90's. Let the BTL lot initially step in and buy more houses with less competition. They would soon have to sell them at a loss, as prices adjust downwards because without capital appreciation there is no profit.

Share this post


Link to post
Share on other sites

All it takes is for people not to sign up to joint income mortgages. If buyers only signed up to mortgages on single main income they would get affordable housing like we had in the 90's. Let the BTL lot initially step in and buy more houses with less competition. They would soon have to sell them at a loss, as prices adjust downwards because without capital appreciation there is no profit.

I happen to think this is happening. Let the speculators carry out the price discovery and hopefully get their fingers burned, rather than first time buyers.

If anything H2B and all the hype is a sign of market weakness, not strength IMO.

Share this post


Link to post
Share on other sites

Amongst the general electorate in the early 90s a party like the United Kingdom Independence Party wasn't envisaged as that was before the Conservative part of the LibLabCon was shown to be utterly sleaze and vested interest ridden in the mid 90s.

So far as most people in the UK were concerned europe was still the Common Market and it was before the eu started to come to the fore as a serious political bloc in the late 90s which UK people never voted for (and still haven't).

In the early 80s the Labour part was regarded as daft and incompetent but not as now just for the banks, landlords and other corporate vested interests.

All that changed once the Labour part of the LibLabCon was given the opportunity to show it's no different reneging on promise after promise with blatant lies from the very start.

The LibDem part has now convincingly shown it's no different as well and the Conservative part has even managed the amazing achievement of reinforcing the sleaze, vested interest lack of difference and now with a "cash for questions" Newark by-election in the offing as a cherry on top.

Share this post


Link to post
Share on other sites

Well you say that lives are blighted and a generation is priced out, yet a significant proportion of the population have 'wealth' beyond their wildest dreams tied up in their house, more than they have earned in a lifetime of work. To make matters worse they brainwash their offspring along with dozens of media outlets all the saying the same thing.. "get on the property ladder and make free money while you sleep."

I do actually agree with you but can't see any catalyst for revolutionary change, indeed we have never had a proper revolution in the UK, just the whiff of the threat of a Socialist state was sufficient to get Labour reforms, a welfare State, NHS and other things . Once the threat of a Socialist State was removed, all these reforms were rapidly dismantled.

I think we are going to have to wait a few decades for the boomers (including myself) to die off for change to take place. Watching QT last night was very disheartening, an audience packed with old customers rejecting any kind of change or development. Incredibly selfish attitude.

So the voters have been bought off, this time with their own money, or houses, which in the UK are pretty much the same thing.

I may be inclined to agree with you, however housing isn't the only potential catalyst. That's why I say I don't care where it comes from. UKIP supporters aren't bothered about housing - they're mainly boomers - they are bothered about the EU and immigration.

I personally don't agree with their views, but I admire their militancy. They are legitimising the disruption of politics. We need more people to do that or nothing's ever going to change.

Share this post


Link to post
Share on other sites

I happen to think this is happening. Let the speculators carry out the price discovery and hopefully get their fingers burned, rather than first time buyers.

If anything H2B and all the hype is a sign of market weakness, not strength IMO.

In 1998 we were offered 3 times main plus 1 x second income. Average wages at the time were £17k and £9k so £60k could be borrowed. Unsurprisingly houses were £60k. Now lending has increased to 4.3 times joint income. Say wages are £25k and £15k that means £172k can be borrowed now.... oh look where house prices are.

Where do the people signing up to 4.3 times joint income think the same nominal price rises are going to come from that their parents got? In effect we have gone from 3.52 times main income (£60k/£17k) to 6.9 times main income (£172/£25k) How higher joint income multiples will people be prepared to sign up to? Say 5 times joint and at wages today that gives £200k i.e. 8 times main income (£200k/£25k). Though 3.52 to 6.9 is +96%, 6.9 to 8 is only +16% so any large increase in nominal prices has to be from huge wage rises. The problem is as more people sigh up to joint income mortgages then more women have to work. They say globalisation has driven wages down but I think it's partly been caused by more women being prepared to work (to service debt).

If higher nominal house prices rely largely on wage rises don't forget interest rates are at a 300 year low. People overcommitting to debt are signing away their future pay rises on the ridiculously high mortgage amount that will need more servicing when (or if) interest rates rise. It's going to take more and more labour to be able to afford to buy. Clearly people will need to sign to 50 year mortgages to lower monthly payments but pay a huge amount more in mortgage interest. This to "live their dream" of a life of servicing debt so banks can make more profits.

the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.

Share this post


Link to post
Share on other sites
...

Ironically, the libertarians still citing Mises’ inevitable “final collapse” of the “boom brought about by credit expansion” are beginning to sound more like marxists fruitlessly awaiting their own ‘inevitable’ collapse of capitalism.

...

Many followers of one or another political creed are essentially religious rather than rational. They are driven by faith and the belief that their political or economic view is The Truth as opposed to other people's mistaken view of the world. It is essentially human to suspend the obvious reality in order to hope (often to no effect) that the outcome will benefit you and your peers. We can see this with the rise of UKIP and the inability to see it's leader as yet another trougher with no interest in the people that vote for the party. Mises might yet still be right and society will collapse as a result of the 2008 crash and it's subsequent rebuilding of credit and yet-to-come bigger crash. The Marxists will no doubt view such an event as the proof that capitalism must inevitably collapse, as predicted by their dead economist friend.

Sadly if this were to happen house prices would almost certainly be of no interest as you would be looking mainly for something to eat to stay alive.

As humans we look for a simple, or at least simplified, scenario so we can see an easy solution. Immigration, socialism (whatever that is nowadays), capitalism (likewise), planning laws, taxes, you name it it gets trotted out here by posters with a chip on their shoulder time and time again. The housing market will correct at some point. If you can't wait, don't, if you can wait do. If people invested a little less emotional capital in the fantasy of "home ownership" and looked at the reality of mortgage indebtedness perhaps 96% of the UK wouldn't constantly obsess about real estate values.

Share this post


Link to post
Share on other sites

I may be inclined to agree with you, however housing isn't the only potential catalyst. That's why I say I don't care where it comes from. UKIP supporters aren't bothered about housing - they're mainly boomers - they are bothered about the EU and immigration.

I personally don't agree with their views, but I admire their militancy. They are legitimising the disruption of politics. We need more people to do that or nothing's ever going to change.

Their disruption will lead to a Labour or LibLab government instead of a Con or LibCon government.

How is that going to change anything?

Share this post


Link to post
Share on other sites

I happen to think this is happening. Let the speculators carry out the price discovery and hopefully get their fingers burned, rather than first time buyers.

If anything H2B and all the hype is a sign of market weakness, not strength IMO.

The market is dead. It's a politicised zombie. All we will do is end up precipitating another intervention, even if all buyers go on strike.

Share this post


Link to post
Share on other sites

Their disruption will lead to a Labour or LibLab government instead of a Con or LibCon government.

How is that going to change anything?

Really? You sound quite sure of the outcome. I'm not so sure it's that predictable.

Share this post


Link to post
Share on other sites

All it takes is for people not to sign up to joint income mortgages. If buyers only signed up to mortgages on single main income they would get affordable housing like we had in the 90's. Let the BTL lot initially step in and buy more houses with less competition. They would soon have to sell them at a loss, as prices adjust downwards because without capital appreciation there is no profit.

Your post illustrates why the economic argument has failed.

"If people would just..." They won't, so it's meaningless even hypothesising.

The market is already politicised, there is no way of backing out of this, it's radical change or nothing.

Share this post


Link to post
Share on other sites

Your post illustrates why the economic argument has failed.

"If people would just..." They won't, so it's meaningless even hypothesising.

The market is already politicised, there is no way of backing out of this, it's radical change or nothing.

They will. Either voluntarily (prices a barrier / not seeing value) or forced to by not passing lenders' qualifying criteria. I'm not buying at these prices. Can hope MMR . HTB can only sucker in so many fools.

There's some reports indicating there recent buying frenzy at high prices has absorbed a lot of pent-up demand.

Share this post


Link to post
Share on other sites

HTB can only sucker in so many fools.

...Until they introduce the next ramping scheme.

Like I say, I'm completely open to a libertarian revolution of removing all market props and letting the whole thing crash and burn. Bring it on! But at the moment politics is trumping economics, it's the politics that needs changing.

Share this post


Link to post
Share on other sites

Their disruption will lead to a Labour or LibLab government instead of a Con or LibCon government.

How is that going to change anything?

Really? You sound quite sure of the outcome. I'm not so sure it's that predictable.

Well unless UKIP gain enough votes to have a large number of MPs themselves(and that would have to be a huge percentage of the vote) then what other outcome can you foresee? In the past the LibDems have sometimes had very large percentages of the vote with very few MPs.

It's the reason Lab and Con fought against proportional representation and always will, with FPTP their monopoly is unlikely to ever be broken, especially now the banksters have subverted them both.

It's very difficult for another party to slowly gain support and eventually govern.

Share this post


Link to post
Share on other sites

This smells like Dublin in '06. Rent to Buy was launched to ease an 'affordability crisis'. The government started talking about engineering a 'soft landing' for the property market. Then the ar$e fell out of everything. And what did a nation noted for risings & rebellions do? They sucked it up!

There will be no revolution. Nobody will take to the barricades because there's too much else to be doing. And as long as we can buy cheap booze, watch the Kardashians, and cheat the system so we think we're winners, the vast majority will remain placid.

Share this post


Link to post
Share on other sites

When people predict a revolution it seems to be that they expect things to change to how they want. At the moment though the powers that be are doing what the majority wants which is increasing house prices.

We're already experiencing change, it's just not something that us on here want.

Share this post


Link to post
Share on other sites

World war three might be the turning point. FTSE 100 might look like a triple top if you zoom out to a 60-70 year view. Putin is spoiling for a fight to divert attention from his bankrupt economy.

Share this post


Link to post
Share on other sites

Nuclear weapons pretty much guarantee ww3 is off the cards.

But a Beppe grillo style 5 star movement could happen here. A soft revolution is possible and probably only one more financial crisis away.

Share this post


Link to post
Share on other sites

When people predict a revolution it seems to be that they expect things to change to how they want. At the moment though the powers that be are doing what the majority wants which is increasing house prices.

We're already experiencing change, it's just not something that us on here want.

The powers that be are doing what the majority wants?

I don't think that is true and it think the inability of any individual party to form a majority at the last general election demonstrates that.

There's a lot of dissatisfaction out there, and while everyone has different political views, I think most of us can agree that current policies have failed.

Share this post


Link to post
Share on other sites

In 1998 we were offered 3 times main plus 1 x second income. Average wages at the time were £17k and £9k so £60k could be borrowed. Unsurprisingly houses were £60k. Now lending has increased to 4.3 times joint income. Say wages are £25k and £15k that means £172k can be borrowed now.... oh look where house prices are.

Where do the people signing up to 4.3 times joint income think the same nominal price rises are going to come from that their parents got? In effect we have gone from 3.52 times main income (£60k/£17k) to 6.9 times main income (£172/£25k) How higher joint income multiples will people be prepared to sign up to? Say 5 times joint and at wages today that gives £200k i.e. 8 times main income (£200k/£25k). Though 3.52 to 6.9 is +96%, 6.9 to 8 is only +16% so any large increase in nominal prices has to be from huge wage rises. The problem is as more people sigh up to joint income mortgages then more women have to work. They say globalisation has driven wages down but I think it's partly been caused by more women being prepared to work (to service debt).

If higher nominal house prices rely largely on wage rises don't forget interest rates are at a 300 year low. People overcommitting to debt are signing away their future pay rises on the ridiculously high mortgage amount that will need more servicing when (or if) interest rates rise. It's going to take more and more labour to be able to afford to buy. Clearly people will need to sign to 50 year mortgages to lower monthly payments but pay a huge amount more in mortgage interest. This to "live their dream" of a life of servicing debt so banks can make more profits.

the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.

This is totally the main reason behind the huge price rises over the last 20 years. But try explaining it to someone and they just look at you blankly and state that rent is dead money!

Share this post


Link to post
Share on other sites

The powers that be are doing what the majority wants?

I don't think that is true and it think the inability of any individual party to form a majority at the last general election demonstrates that.

There's a lot of dissatisfaction out there, and while everyone has different political views, I think most of us can agree that current policies have failed.

Failed who?

I think they've succeeded admirably in their real purpose.

Banks and international businesses wield unprecedented global power and wealth and a small minority of humans are steadily acquiring the majority of planetary resources. Democracy has been subverted by plutocracy almost everywhere.

Dissatisfaction isn't enough, I liked your OP but IMO the reality is that the rich no longer fear the poor very much and are acting accordingly. As the hardware wielded by the rich gets ever more expensive and sophisticated this trend will continue. Only protest on a massive scale will slow this down.

Once they worked out that media was the key to keeping the masses drugged and stupid, a return to historical wealth differences became inevitable.

Share this post


Link to post
Share on other sites

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   217 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.