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Uk Consumer Credit Booms In March, Business Lending Jumps Too

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http://uk.reuters.com/article/2015/05/01/uk-britain-lending-idUKKBN0NM3F420150501

Lending to British consumers jumped in March by its biggest amount since before the financial crisis and business borrowing showed its strongest rise in at least four years, the Bank of England said on Friday.

The figures, which come less than a week before a national election, suggest underlying strength in the British economy despite some recent weak data.

The BoE also said mortgage approvals inched down after rising for three straight months.

The BoE said consumer credit grew by 1.24 billion pounds in March, higher than a forecast of 800 million pounds in a Reuters poll of economists.

That was the biggest monthly increase since February 2008 and compared with the same month last year, the increase was the biggest in nearly nine years.

Fantastic news. Debt is growth.

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What happened to an economy based on savings? Hahaha! If only our leaders admitted on TV that 97% of money in the economy is created by private banks. Therefore money=debt. People would go mental..

It's also created by borrowers - not just the banks. No one is dragging anyone into the banks to force them to sign up for mortgages.. or to bang their credit cards in the shops.

Promises between people are made out of nothing too - but they're pretty real, if you're honest. Companies extend credit to other companies all the time.. magicking up money too.

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What happened to an economy based on savings? Hahaha! If only our leaders admitted on TV that 97% of money in the economy is created by private banks. Therefore money=debt. People would go mental..

That information is free for anyone to discover if they wish. Most people would either stick to the belief that banks lend out savers' deposits or just wouldn't care!

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It's also created by borrowers - not just the banks. No one is dragging anyone into the banks to force them to sign up for mortgages.. or to bang their credit cards in the shops.

Promises between people are made out of nothing too - but they're pretty real, if you're honest. Companies extend credit to other companies all the time.. magicking up money too.

You're conflating two crucially different ideas.

On the one hand you have moral obligations predicated on consenting informal 'contracts' between autonomous individuals, on the other you have bullsh!t debt contracts written by w@nkers and signed by w@nkers.

If you make a contract of the first kind with me, and abrogate it, I have the latitude to decide that you are dead to me*, and make my peace with it. If you as a money debtor enter into a contract of the second type then I can bring the force of the state to bear to ensure that you are compelled to keep your promise.

I question your notions about 'Real Conservatives' and 'hard markets'. They own you, because you are willing to accept their right to issue money as your obligation to accept the reality of the debt.

If this really was just about house prices, it would have been done in 2003. Wake. The. F**k. Up.

* Flagging the possibility of a rather important unspoken message.

Edited by bland unsight

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You're conflating two crucially different ideas.

On the one hand you have moral obligations predicated on consenting informal 'contracts' between autonomous individuals, on the other you have bullsh!t debt contracts written by w@nkers and signed by w@nkers.

If you make a contract of the first kind with me, and abrogate it, I have the latitude to decide that you are dead to me*, and make my peace with it. If you as a money debtor enter into a contract of the second type then I can bring the force of the state to bear to ensure that you are compelled to keep your promise.

I question your notions about 'Real Conservatives' and 'hard markets'. They own you, because you are willing to accept their right to issue money as your obligation to accept the reality of the debt.

If this really was just about house prices, it would have been done in 2003. Wake. The. F**k. Up.

* Flagging the possibility of a rather important unspoken message.

OK about promises - unless they're important contracts, there is less harm and more options when they're broken between parties... but I've/ we've got little choice but to operate in this reality-construct of lenders-and-debtors (free-willed debtors / 'w@nkers'.. who when buying at these prices.. low IQ or high IQ, are market participants).. and markets.

It's centuries old system... money/debt / possession / and especially power (power always matters)... I can't see it being overturned, even though I would like something superior - that's a big ask. I can however see market correction, as has occurred many times in the past, shaking out positions, and allowing younger blood / generations, smarter minds, to get position. What other choice is there. I can't magic up a world where if you've got no money... you're still good for a nice home for your family... 'can always rely on the kindness of strangers' - it's not the reality... we're mostly all competitive beings jockeying for position in life for ourselves and loved ones.

'Every now and again, however, Contact disturbs some particular ball of rock and discovers something nasty underneath. On every occasion, there is a specific and singular reason, some special circumstance which allows the general rule to go by the board. In the case of the conglomerate you see before you - that special circumstance is a game (Azad).'

'The idea, you see, is that Azad is so complex, so subtle, so flexible and so demanding that it is as precise and comprehensive a model of life as it is possible to construct. Whoever succeeds at the game succeeds in life; the same qualities are required in each to ensure dominance.'

~ Is that true...

'It doesn't have to be totally true, but cause and effect are not perfectly polarised here; the set-up assumes that the game and life are the same thing, and such is the pervasive nature of the idea of the game within the society that just by believing that, they make it so. It becomes true; it is willed into actuality. Anyway; they can't be too far wrong, or the empire would not exist at all. It is by definition a volatile and unstable system; Azad - the game - would appear to be the force that holds it together.'

-The Player of Games

Debts are retired by paying them off, "restructuring" or default. In the first case, no value is lost; in the second, some value; in the third, all value. In desperately trying to raise cash to pay off loans, borrowers bring all kinds of assets to market, including stocks, bonds, commodities and real estate, causing their prices to plummet.

The process ends after the supply of credit falls to a level at which it is collateralised acceptably to the surviving creditors. Financial assets, and all other asset-classes of value, will be selectively repudiated by default, not obliterated by inflation.

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No one is dragging anyone into the banks to force them to sign up for mortgages.. or to bang their credit cards in the shops.

Not sure.

Past experience of past loans and credit card has been that they stuff credit down your throat. Letter arrives: 'We've increased your credit limit without asking' or 'you've nearly paid off your unsecured loan, return this form and £10k will be in your account in 24hrs'.

Slippery slope.

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Not sure.

Past experience of past loans and credit card has been that they stuff credit down your throat. Letter arrives: 'We've increased your credit limit without asking' or 'you've nearly paid off your unsecured loan, return this form and £10k will be in your account in 24hrs'.

Slippery slope.

One that the market should balance out, by forcing correction.

I refuse to put others and their live choices (over-extending themselves into debt), often living highly materialistic lives... cars/holidays/nicer or more expensive homes than my family rent/refuse to buy... before my own family.

It's a market, not a victim fest for those who over-extended themselves. That Aussie debt article is even going on how older boomers with the nicer homes (worth fortunes) can't downsize as nothing suitable.

Come on.. last empty house I showed you.. outside London.. it was also victim-reply for owners/debtors, and it turns out the actual owner, is likely a flipper, who own home is a a £9m+ valued Kensington house he bought back in 2003 for around £3.3m.

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One that the market should balance out, by forcing correction.

I refuse to put others and their live choices (over-extending themselves into debt), often living highly materialistic lives... cars/holidays/nicer or more expensive homes than my family rent/refuse to buy... before my own family.

It's a market, not a victim fest for those who over-extended themselves. That Aussie debt article is even going on how older boomers with the nicer homes (worth fortunes) can't downsize as nothing suitable.

Come on.. last empty house I showed you.. outside London.. it was also victim-reply for owners/debtors, and it turns out the actual owner, is likely a flipper, who own home is a a £9m+ valued Kensington house he bought back in 2003 for around £3.3m.

Those that choose to extend themselves with debt making it look like they are worth more than they really are all ages, earning all amounts....all they are doing is living a life above the level of their income, they can't downsize or upsize their high level of debt won't allow them to.

The people you are criticising are the people that chose not to spend more than they earned over a working lifetime, not paying more debt interest than they had to, those that choose not to live above their means, pay their debt down, saving and investing......sure they might have a nice fully paid for home they worked hard to pay for all their lives....why should they downsize, they can now afford not to......they didn't ask for house price increases, rising house prices do them no favours at all....what their house is worth has no relevance nor will increase their quality of life.....only taking on more debt ie releasing equity meaning more income/work required to pay for it, that is not giving anyone a better quality of life only a worse one. ;)

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Those that choose to extend themselves with debt making it look like they are worth more than they really are all ages, earning all amounts....all they are doing is living a life above the level of their income, they can't downsize or upsize their high level of debt won't allow them to.

The people you are criticising are the people that chose not to spend more than they earned over a working lifetime, not paying more debt interest than they had to, those that choose not to live above their means, pay their debt down, saving and investing......sure they might have a nice fully paid for home they worked hard to pay for all their lives....why should they downsize, they can now afford not to......they didn't ask for house price increases, rising house prices do them no favours at all....what their house is worth has no relevance nor will increase their quality of life.....only taking on more debt ie releasing equity meaning more income/work required to pay for it, that is not giving anyone a better quality of life only a worse one. ;)

Okay Winkie, but there should be enough at the margin where they should/will want to cash out, on extreme high values.

Of the older types, dying off now. Some of them bought for a few thousand pounds in the 50s... still in same houses today... cracking on though.. half-blind woman I'm thinking off in her 4-bed house.. husband passed a while ago (both senior professionals who bought for £5k and their initial debt was quickly inflated away with wage inflation.)

They're dying off now I suppose... lucky inheritors inherit. Sadly a few years back the very elderly guy I used to say hello to on our walks... was a Japanese POW, so he certainly knew extreme hardship.. and fully deserved an ever improving standard of life (cheap house and rising wages) as a survivor back to the UK, and I couldn't have any grudge against him living in 3 bed house by himself. Nor any of them... just want a tilt in sellers looking to cash in.. more supply to market... to help younger market participants against these house prices. Eg... same for younger generation... £250K-£350K run-down semis requiring big mortgage... or hope for lower values from the renter-saver position?

only taking on more debt ie releasing equity meaning more income/work required to pay for it, that is not giving anyone a better quality of life only a worse one.
Edited by Venger

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OK about promises - unless they're important contracts, there is less harm and more options when they're broken between parties... but I've/ we've got little choice but to operate in this reality-construct of lenders-and-debtors (free-willed debtors / 'w@nkers'.. who when buying at these prices.. low IQ or high IQ, are market participants).. and markets.

It's centuries old system... money/debt / possession / and especially power (power always matters)... I can't see it being overturned, even though I would like something superior - that's a big ask. I can however see market correction, as has occurred many times in the past, shaking out positions, and allowing younger blood / generations, smarter minds, to get position. What other choice is there. I can't magic up a world where if you've got no money... you're still good for a nice home for your family... 'can always rely on the kindness of strangers' - it's not the reality... we're mostly all competitive beings jockeying for position in life for ourselves and loved ones.

I agree with a great deal of this, but I think that it is important to bear in mind that the structure of the underlying mortgage finance did change rapidly. Before the mid1990s I'd reckon that your chances of getting a naked interest-only mortgage were not good. By 2004 for median households trying to buy with income from work, your chances of buying without a naked interest-only mortgage were not good. By 2012, we're back to nobody being able to get a naked interest-only mortgage.

I reject your thesis that we are all "competitive beings jockeying for position". It pays no attention to the reality of what we are, which is sorry little genetic machines with Stone Age brains compelled to operate in an environment almost entirely defined by our technologies and with no meaningful relationship to our so-called EEA (environment of evolutionary adaptedness). Within us there is a desire to look out for number one but in the healthy neuro-typical it is partnered to a desire for connection and the awareness of a need to cooperate. We are social animals, (not socialist!!!).

Your argument is also just too historically myopic. It's not just about the debt - it's about how much debt and who decides to decide how much is too much.

The western democracies fell in love with fantasies predicated on debt growth. We aren't even getting started on the unwinding of this mess. For crying out loud, we haven't even had a sustainable resolution in Greece - the worst of the worst.

The problem with your thesis that you have "little choice but to operate in this reality" is that you fail to follow its import to its natural conclusion, which is that if debt levels grow sufficiently and if all that credit expansion is directed to property then prices will rise to a point where over a lifetime, there is no benefit to owning as opposed to renting. To deny this possibility is to accept the Ponzi logic entirely.

Basically, it is not a hard market. It a market where the rules are constantly re-written. Any win is referenced to a counter-factual. For example, I might say "I will win if house prices fall and I buy the house I am renting today and the money handed out paying the mortgage is less than the rent I would have paid out if I'd had to pay rent to live in it till the day I died". But that choice of counter-factual is arbitrary. I could have said, "I'm definitely losing, because if we hadn't allowed a systemically catastrophic explosion in mortgage credit between 1997 and 2008 then I'd be buying this house for a bloody song compared to the bonkers money I'm being asked to stump up"

It's also completely bananas to propose that it is a "centuries old system... money/debt / possession / and especially power". Go back just a hundred and fifty years and there are debtor's prisons. Go back to 1971 and Nixon closes the gold window. You are supposing a system when there is no system - there is just change.

220px-Utrecht_Moreelse_Heraclite.JPG

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Within us there is a desire to look out for number one but in the healthy neuro-typical it is partnered to a desire for connection and the awareness of a need to cooperate. We are social animals, (not socialist!!!).[..]It's also completely bananas to propose that it is a "centuries old system... money/debt / possession / and especially power". Go back just a hundred and fifty years and there are debtor's prisons. Go back to 1971 and Nixon closes the gold window. You are supposing a system when there is no system - there is just change.

220px-Utrecht_Moreelse_Heraclite.JPG

Heraclitus of Ephesus - Heraclitus is famous for his insistence on ever-present change in the universe.

Even if I accept much of that; my lifespan is limited and same for my loved ones. I may want a superior system for all society... but have to work within the constraints of the system as it's been for decades and appears to be set for some long continuation in my lifetime.

Sometimes I do question my pettiness in wanting 'more' (a house which meets my requirements and matches my market view of some fair value) - but I'm not asking for much, vs what other people have (value of their homes [with stimulus intervention] vs today's general incomes. And I'm not being as petty as some in the 'co-operating' system are, self-seeking to preserve their own valuations and position at extremes.

Some of us have to muddy through base reality; it's up to others who already are wealthy (eg many boomers) to ponder and try to move society towards cooperating nice/fairness... (if they weren't so focussed on not having enough at the top, wanting more still, telling people how house prices continually go up) - why we need hpc.

There is change, yes... and over the longer term you're right.... changes which totally rearrange things and the way things are done.... but (at most times) a system in place during each change. History to this point suggests wealth and power has been important. I would love to reach a stage where 'money is poverty' [meaning that money only has a function in a scarcity economy, and therefore its existence betrays a pre-abundant (poor) society.] - but it's unlikely in my life time.

Tucker: Wow, you guys are a lot of help.

Church: Try shifting your paradigm. Think outside the box.

Tucker: Hey the box is there for a reason. I like thinking inside of it. I feel safe in there.

-Red vs Blue

Technically, it was a branch of metamathematics, usually called metamathics. Metamathics; the investigation of the properties of Realities (more correctly, Reality-fields) intrinsically unknowable by and from our own, but whose general principles could be hazarded at. Metamathics led to everything else, it led to the places that nobody else had ever seen or heard of or previously imagined.

It was like living half your life in a tiny, stuffy, warm grey box, and being moderately happy in there because you knew no better… and then discovering a little hole in one corner of the box, a tiny opening which you could get a finger into, and tease and pull at, so that eventually you created a tear, which led to a greater tear, which led to the box falling apart around you… so that you stepped out of the tiny box's confines into startlingly cool, clear fresh air and found yourself on top of a mountain, surrounded by deep valleys, sighing forests, soaring peaks, glittering lakes, sparkling snowfields and a stunning, breathtakingly blue sky. And that, of course, wasn't even the start of the real story, that was more like the breath that is drawn in before the first syllable of the first word of the first paragraph of the first Chapter of the first book of the first volume of the story.

Metamathics led to the Mind equivalent of that experience, repeated a million times, magnified a billion times, and then beyond, to configurations of wonder and bliss even the simplest abstract of which the human-basic brain had no conceivable way of comprehending. It was like a drug; an ultimately liberating, utterly enhancing, unadulterably beneficial, overpoweringly glorious drug for the intellect of machines as far beyond the sagacity of the human mind as they were beyond its understanding. [...]The Minds had long ago come up with a proper name for it; they called it the Irreal, but they thought of it as Infinite Fun. That was what they really knew it as. The Land of Infinite Fun. It did the experience pathetically little justice.

There was only one problem with the Land of Infinite Fun, and that was that if you ever did lose yourself in it completely - as Minds occasionally did, just as humans sometimes surrendered utterly to some AI environment - you could forget that there was a base reality at all. In a way, this didn't really matter, as long as there was somebody back where you came from minding the hearth. The problem came when there was nobody left or inclined to tend the fire, mind the store, look after the housekeeping (or however you wanted to express it), or if somebody or something else - somebody or something from outside, the sort of entity that came under the general heading of an Outside Context Problem, for example - decided they wanted to meddle with the fire in that hearth, the stock in the store, the contents and running of the house; if you'd spent all your time having Fun, with no way back to reality, or just no idea what to do to protect yourself when you did get back there, then you were vulnerable. In fact, you were probably dead, or enslaved.

It didn't matter that base reality was petty and grey and mean and demeaning and quite empty of meaning compared to the glorious majesty of the multi-hued life you'd been living through metamathics; it didn't matter that base reality was of no consequence aesthetically, hedonistically, metamathically,intellectually and philosophically; if that was the single foundation-stone that all your higher-level comfort and joy rested upon, and it was kicked away from underneath you, you fell, and your limitless pleasure realms fell with you.

-Excession

Edited by Venger

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Heraclitus of Ephesus - Heraclitus is famous for his insistence on ever-present change in the universe.

Even if I accept much of that; my lifespan is limited and same for my loved ones. I may want a superior system for all society... but have to work within the constraints of the system as it's been for decades and appears to be set for some long continuation in my lifetime.

Sometimes I do question my pettiness in wanting 'more' (a house which meets my requirements and matches my market view of some fair value) - but I'm not asking for much, vs what other people have (value of their homes [with stimulus intervention] vs today's general incomes. And I'm not being as petty as some in the 'co-operating' system are, self-seeking to preserve their own valuations and position at extremes.

Some of us have to muddy through base reality; it's up to others who already are wealthy (eg many boomers) to ponder and try to move society towards cooperating nice/fairness... (if they weren't so focussed on not having enough at the top, wanting more still, telling people how house prices continually go up) - why we need hpc.

There is change, yes... and over the longer term you're right.... changes which totally rearrange things and the way things are done.... but (at most times) a system in place during each change. History to this point suggests wealth and power has been important. I would love to reach a stage where 'money is poverty' [meaning that money only has a function in a scarcity economy, and therefore its existence betrays a pre-abundant (poor) society.] - but it's unlikely in my life time.

Local invariance and symmetry are the things which enable us to make sense of the world - translational, rotational, time translational and Galilean - if Nature were without these properties it would be impossible to isolate environment from observation, cause from effect, or to talk about 'change' in any meaningful way, as Eugene Wigner described beautifully in 'The Unreasonable Effectiveness of Mathematics in the Natural Sciences'. The absence of invariance principles in mainstream economics is a clue to understanding its predictive inadequacy.

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The problem with your thesis that you have "little choice but to operate in this reality" is that you fail to follow its import to its natural conclusion, which is that if debt levels grow sufficiently and if all that credit expansion is directed to property then prices will rise to a point where over a lifetime, there is no benefit to owning as opposed to renting. To deny this possibility is to accept the Ponzi logic entirely.

Basically, it is not a hard market. It a market where the rules are constantly re-written. Any win is referenced to a counter-factual. For example, I might say "I will win if house prices fall and I buy the house I am renting today and the money handed out paying the mortgage is less than the rent I would have paid out if I'd had to pay rent to live in it till the day I died". But that choice of counter-factual is arbitrary. I could have said, "I'm definitely losing, because if we hadn't allowed a systemically catastrophic explosion in mortgage credit between 1997 and 2008 then I'd be buying this house for a bloody song compared to the bonkers money I'm being asked to stump up"

It's also completely bananas to propose that it is a "centuries old system... money/debt / possession / and especially power". Go back just a hundred and fifty years and there are debtor's prisons. Go back to 1971 and Nixon closes the gold window. You are supposing a system when there is no system - there is just change.

We've been there once - in 2007 - against a top in house prices, before base rates were floored / Global £Tns QE / FLS / Project Merlins etc.

I'm we're not denying it; for many areas we've just had a few years of serious HPI on HPI.

Not denying it.. whole reason I am a hpcer. To try and determine where we are in market conditions where prices topped out, to position for hpc... and buying at better value. Where investors/over-stretchers/older owners see their gains stripped away. And it has been made ever more complex with global flows.. Chinese money / US-Swedish/UK firms buying up rentals... etc to read the market... to establish just how much money is out there, and the limits on what they're prepared to pay. Those willing to pay mad-high prices with a view that real estate is going to continue to be a store-of-value... those wanting to exploit renters (with a view that there can be no hpc / no real change)... whether they're making mistakes and the wider system will force correction.

I ask myself that question often enough.. continue renting vs prices now / hpc to come. It's difficult.. a market decision... to decide... and I continue to hold off from buying, and wait and expect lower house prices (in my area) - partly with a view the QE main part isn't in the wider system. The market can withhold $Tns at same speed Fed/BoE/ECB can print it, which might manifest itself in some event.. perhaps bonds and a deflationary asset-price crash. And with a view the banks do not gain when the wider market is holding so many $Tns in equity, rather than the banks having a good spread of debt on prime.

Then of course generational imbalances which... I'm hoping zugzwang's hints will come into play of a complex system.... local invariance/symmetry etc) and 'nature/life finds a way'... younger-productive-people as a group (renter savers and those coming through) finding ways to put the brakes on and force change - refusing to buy and meet these prices is the main way... MMR and the banks somewhat on their side now for that.

It's true for some already... Council-Dweller (where buying under RTB doesn't stack up for him).. but that doesn't stop investor groups wanting such people (who can and do buy) to sell them onto them at ponzi high prices, because they don't fear HPC.. and expect HPI/rentierism... in a market where inventory is quite low and still many a rentier investor/ asset wealth seeker (at any high purchase price). It's a market.

It could be a hard market if the new crash comes along.... with so many having yield chased at higher prices into so many investments / bonds... leaving those with money in position against a wider asset price crash. Change yes, but the main change has to be HPC, painfully liquidating bad positions (landlords etc) and allowing good positions in at lower prices.. including council dweller if it turns out HPC makes his RTB 70% cheaper in the future for a Gov that can no longer QE without consequence and needs to raise funds, with a lot less liquidity in system.

Where letting agents can try and scaremonger tenants into thinking they must vote Conservative else instability from other parties leading to stress on landlords, and landlords extra costs to be passed onto them (tenants) via higher rent demands. ONLY HPC can rebalance this. The change that is required.. and sadly the yield chasing asset rich will have correction (including some innocents who've paid mad-high prices, who hpcers like to excuse with 'They are bad at math' / or 'They just wanted a home.' Their number is small vs the main VI.

Sky News This Morning - Renting Is Wasted Money. Started by Si1, Apr 27 2015 08:13 AM

I`m 55 and I have got 10 more years to pay half my rent (wife will pay the other half)

So £25,000 rent over 10 years. After that my pension or benefits will cover it.

I`m struggling to work out why I should spend £220,000 on buying this council house.

????

20fvj7.jpg

24df1j6.jpg

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Heraclitus of Ephesus - Heraclitus is famous for his insistence on ever-present change in the universe.

Even if I accept much of that; my lifespan is limited and same for my loved ones. I may want a superior system for all society... but have to work within the constraints of the system as it's been for decades and appears to be set for some long continuation in my lifetime.

...

There is change, yes... and over the longer term you're right.... changes which totally rearrange things and the way things are done.... but (at most times) a system in place during each change. History to this point suggests wealth and power has been important. I would love to reach a stage where 'money is poverty' [meaning that money only has a function in a scarcity economy, and therefore its existence betrays a pre-abundant (poor) society.] - but it's unlikely in my life time.

Technically, it was a branch of metamathematics, usually called metamathics. Metamathics; the investigation of the properties of Realities (more correctly, Reality-fields) intrinsically unknowable by and from our own, but whose general principles could be hazarded at. Metamathics led to everything else, it led to the places that nobody else had ever seen or heard of or previously imagined.

It was like living half your life in a tiny, stuffy, warm grey box, and being moderately happy in there because you knew no better… and then discovering a little hole in one corner of the box, a tiny opening which you could get a finger into, and tease and pull at, so that eventually you created a tear, which led to a greater tear, which led to the box falling apart around you… so that you stepped out of the tiny box's confines into startlingly cool, clear fresh air and found yourself on top of a mountain, surrounded by deep valleys, sighing forests, soaring peaks, glittering lakes, sparkling snowfields and a stunning, breathtakingly blue sky. And that, of course, wasn't even the start of the real story, that was more like the breath that is drawn in before the first syllable of the first word of the first paragraph of the first Chapter of the first book of the first volume of the story.

Metamathics led to the Mind equivalent of that experience, repeated a million times, magnified a billion times, and then beyond, to configurations of wonder and bliss even the simplest abstract of which the human-basic brain had no conceivable way of comprehending. It was like a drug; an ultimately liberating, utterly enhancing, unadulterably beneficial, overpoweringly glorious drug for the intellect of machines as far beyond the sagacity of the human mind as they were beyond its understanding. [...]The Minds had long ago come up with a proper name for it; they called it the Irreal, but they thought of it as Infinite Fun. That was what they really knew it as. The Land of Infinite Fun. It did the experience pathetically little justice.

There was only one problem with the Land of Infinite Fun, and that was that if you ever did lose yourself in it completely - as Minds occasionally did, just as humans sometimes surrendered utterly to some AI environment - you could forget that there was a base reality at all. In a way, this didn't really matter, as long as there was somebody back where you came from minding the hearth. The problem came when there was nobody left or inclined to tend the fire, mind the store, look after the housekeeping (or however you wanted to express it), or if somebody or something else - somebody or something from outside, the sort of entity that came under the general heading of an Outside Context Problem, for example - decided they wanted to meddle with the fire in that hearth, the stock in the store, the contents and running of the house; if you'd spent all your time having Fun, with no way back to reality, or just no idea what to do to protect yourself when you did get back there, then you were vulnerable. In fact, you were probably dead, or enslaved.

It didn't matter that base reality was petty and grey and mean and demeaning and quite empty of meaning compared to the glorious majesty of the multi-hued life you'd been living through metamathics; it didn't matter that base reality was of no consequence aesthetically, hedonistically, metamathically,intellectually and philosophically; if that was the single foundation-stone that all your higher-level comfort and joy rested upon, and it was kicked away from underneath you, you fell, and your limitless pleasure realms fell with you.

- Excession

I think Banks had to resort to a bland, constructed object (the box) for base reality while relying on the immense grandeur of nature to paint a sufficiently seductive picture of metamathics precisely because natural reality is far more awe-inspiring than socially constructed reality. Science is the Land of Infinite Fun ;)

Being socially constructed economics is, to my mind, a kind of inverse metamathics: a tiny, stuffy, warm grey box, intrinsically irreal, but whose general principles can be hazarded at. It's as possible to get trapped inside the box as it is to get lost in true metamathics, and as likely that if left untended base reality will kick away the box's higher-level comforts from those that currently enjoy them.

Do you remember the paper that you posted last year on The Generational Short? This, along with physical limitations on growth (lack of perpetual resources) and the unlikelihood of perpetual compliance in the face of continually degrading living standards, is the base reality that economics cannot escape. We are the Outside Context Problem.

I think you're right that, although the current economy is of course mutable, fundamental change generally occurs on multi-generational timescales; but in order for even that to happen it still needs advocating now. There's a lot to be said for arguing for the future you want and planning for the reality you've got. Societal considerations may effectively force us to live inside a tiny, stuffy, warm grey economic box but it's worth remembering that it's just a box all the same:

It was just like some ancient electricity-powered computer; it didn't matter how fast, error-free and tireless it was, it didn't matter how great a labour-saving boon it was, it didn't matter what it could do or how many different ways it could amaze; if you pulled its plug out, or just hit the Off button, all it became was a lump of matter; all its programs became just settings, dead instructions, and all its computations vanished as quickly as they'd moved.

It was, also, like the dependency of the human-basic brain on the human-basic body; no matter how intelligent, perceptive and gifted you were, no matter how entirely you lived for the ascetic rewards of the intellect and eschewed the material world and the ignobility of the flesh, if your heart just gave out . . .

- Excession

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I think Banks had to resort to a bland, constructed object (the box) for base reality while relying on the immense grandeur of nature to paint a sufficiently seductive picture of metamathics precisely because natural reality is far more awe-inspiring than socially constructed reality. Science is the Land of Infinite Fun ;)

Being socially constructed economics is, to my mind, a kind of inverse metamathics: a tiny, stuffy, warm grey box, intrinsically irreal, but whose general principles can be hazarded at. It's as possible to get trapped inside the box as it is to get lost in true metamathics, and as likely that if left untended base reality will kick away the box's higher-level comforts from those that currently enjoy them.

Do you remember the paper that you posted last year on The Generational Short? This, along with physical limitations on growth (lack of perpetual resources) and the unlikelihood of perpetual compliance in the face of continually degrading living standards, is the base reality that economics cannot escape. We are the Outside Context Problem.

I think you're right that, although the current economy is of course mutable, fundamental change generally occurs on multi-generational timescales; but in order for even that to happen it still needs advocating now. There's a lot to be said for arguing for the future you want and planning for the reality you've got. Societal considerations may effectively force us to live inside a tiny, stuffy, warm grey economic box but it's worth remembering that it's just a box all the same:

You have professional qualifications - including qualifications from advanced studies into intricate patterns... I get the impression some of your position on hpc, which is often sophisticated and highly intelligent, transfers over from whatever is your professional expertise.

Sometimes I feel a bit this way (pic below), as Tony (but $ poorer - although not nearly as badly positioned as most financially), Vs some people on hpc with serious intellectual depth (including Bland Unsight).

Where I think we need a bit of anger/resistance.. financial bloody noses, against these house prices, the stimulus... those who want to price us out of roof over our heads and keep us renting... many who have enjoyed long-wave conditions/inheritance... and prevention measures to stop them failing when market has sought to force a rebalance.

ca99f006-1da3-439a-bdcf-40449af3ace7.jpg

The Generational Short, could be replaced by Chinese money-buyers (from some studies and projections) - see my latest post on China thread.

That younger generation 'compliance' is key for me; I suggest we need some resistance, but things feel very compliant and accepting so many posts who blame banks for still lending easy, and little against those hpcers going to the lenders to release equity/new mortgage on their own homes, extending their repayments into their 70s, out of their own homes to buy their daughters sort a mortgage for a place in London. Even sympathy for the smiling landlords expanding (Antis) as being future victims on banks.

I fear 20 years of Japan younger-generation compliance... look at house prices in London and other UK areas... employment centres of the US too.

Latest entry from DoctorHousingBubble: At the core, a healthy housing market is one where owner-occupied buyers dominate the bulk of home sales. That is simply not the case. This is how you have well paid tech workers in San Francisco cramming into a 2-bedroom apartment like a clown car simply to get by.

In Canada it appears there's a movement from younger-generations where it's not that the house prices in main cities are too high, but that they don't earn enough for $1m (CAN) mortgage. That's compliance to me. http://www.greaterfool.ca/2015/04/17/the-entitled/

Correction and rebalancing has been escaped from... perhaps it can continue to do so... perpetual compliance... the compliance from the younger-renter-saver side, has already been many more years and more extreme than I anticipated to this point.

Even if there was tech to bring online to create more fairness and higher living standards for the masses, if the older VI guarded it, I doubt they would allow it to be turned on. Too many love the different power equations over those who have less and market rebalancing is not allowed (and too much compliance, fear and no stomach for it anyway from those who would gain from it). Bit like that revived elderly guy from 100s of years in the past, in Star Trek TNG who wants to speak to his lawyers, and doesn't feel like he has any identity without his money and his power.

You and Bland Unsight are full of some of the best qualities of human spirit... wanting a better fairness world (so do I), but both of you able to keep it in focus, for the future you'd like to see, vs these market conditions... I like your position, wish I could put that first myself too. I can't plan for it against current market conditions, which if we did ever see correction, would have many a VI giving sob stories to soft-hearts anyway... and test soft-hpcers... which is partly why hpc 2008 was allowed to be stopped by stimulus.

Edited by Venger

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...Sometimes I feel a bit this way (pic below), as Tony (but $ poorer - although not nearly as badly positioned as most financially), Vs some people on hpc with serious intellectual depth (including Bland Unsight).

Where I think we need a bit of anger/resistance.. financial bloody noses, against these house prices, the stimulus... those who want to price us out of roof over our heads and keep us renting... many who have enjoyed long-wave conditions/inheritance... and prevention measures to stop them failing when market has sought to force a rebalance...

Correction and rebalancing has been escaped from... perhaps it can continue to do so... perpetual compliance... the compliance from the younger-renter-saver side, has already been many more years and more extreme than I anticipated to this point...

You and Bland Unsight are full of some of the best qualities of human spirit... wanting a better fairness world (so do I), but both of you able to keep it in focus, for the future you'd like to see, vs these market conditions... I like your position, wish I could put that first myself too. I can't plan for it against current market conditions, which if we did ever see correction, would have many a VI giving sob stories to soft-hearts anyway... and test soft-hpcers... which is partly why hpc 2008 was allowed to be stopped by stimulus.

Academic qualifications, which lead me to think too deeply about things and then nobody pays me for it :P

I think you have a lot of intellectual depth Venger. I learn things from you all the time, both directly and in working out my own thoughts through our conversations. I also agree with you: we do need more anger/resistance and financial bloody noses.

I absolutely want a HPC and I do think it's probably the best - or at least the most reliable, albeit a long time coming - and fairest outcome that we can realistically plan for as (hopefully) happening on a timescale which is meaningful to the main body of our own lives.

Compliance may be already stretched beyond the point that we find tolerable but even the most compliant will not be perpetually so, and when there are competing priorities compliance in itself can be dangerous: compliant renters still have a finite ability to pay rent, they can't prop up increasing house prices indefinitely and BTL landlords are in a far more precarious position than owner occupiers.

I think you're right to plan first for the likely realities (and I think your position is one for fairness) - in which I would include both historic cycles of boom and bust and significant but not fundamental changes that broadly fall within the parameters of the current economic norm (such as the creation and effective abolition of interest only residential mortgages) - especially as you have a family to consider and look after.

The coming bust could potentially be massive, given both the long run up and the international nature of the boom, and so I think there might be an opportunity to push for something at least a bit better in its wake.

Working out what that could be might be like creating irreal worlds, but then so is all economics: it's just that some people are in a position to enforce their vision (or in most cases lack-thereof, wherein they treat emergent features of an artificial system as absolute and incontrovertible truths) on the rest of us.

As long as we keep a hold of what is actually going on then I think it's okay to also argue and hope - but not expect or plan - for something better. It beats letting the VI have the platform all to themselves at least.

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It's just discussion of where we are in the market Count - how compliance comes in to it, and how, or when (eventually) it might play out, or crash.

Count, sadly your £650,000 averaging Northamptonshire houses are doing my head in... yet clearly the upsizers are still in the market.... and it's your thread asking "Is it Time To Give Up".

http://www.housepricecrash.co.uk/forum/index.php?/topic/202648-nearly-3-years-on-the-marketfinally-found-a-buyer/

http://www.housepricecrash.co.uk/forum/index.php?/topic/204118-is-it-time-to-give-up/


Do you remember the paper that you posted last year on The Generational Short? This, along with physical limitations on growth (lack of perpetual resources) and the unlikelihood of perpetual compliance in the face of continually degrading living standards, is the base reality that economics cannot escape. We are the Outside Context Problem.

I think you're right that, although the current economy is of course mutable, fundamental change generally occurs on multi-generational timescales; but in order for even that to happen it still needs advocating now. There's a lot to be said for arguing for the future you want and planning for the reality you've got. Societal considerations may effectively force us to live inside a tiny, stuffy, warm grey economic box but it's worth remembering that it's just a box all the same:

I like the idea that youth.. generational imbalances... being the Outside Context Problem for the Vested Interests. OCP being code for a major event, force, that suddenly emerges to shake-up and change current-reality, that many believe unchangeable.

Especially if I imagine many VI on the housing wealth side of things, as I do, being complacent, living it up... thinking it's all cosy and secure.... if compliance does break... younger generations with less to lose (the OCP).. wanting to meddle with the fire in that hearth, the stock in the store, the contents and running of the house.

'An Outside Context Problem was the sort of thing most civilisations encountered just once, and which they tended to encounter rather in the same way a sentence encountered a full stop.'

Yes; advocate it now... it might help wake up some, and get them to sell up/cash in, before the OCP forces HPC.... if they will listen. I think it's a bit soft (but agree with it), as the VI reading/listening to it, may assume the OCP isn't angry (and they are not as angry as I would like them to be.. very compliant it seems).... and go back to their super locked in house prices, new cars, cruises, Infinite Fun.... thinking there is no OCP they need to be concerned about.

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...I like the idea that youth.. generational imbalances... being the Outside Context Problem for the Vested Interests. OCP being code for a major event, force, that suddenly emerges to shake-up and change current-reality, that many believe unchangeable.

Especially if I imagine many VI on the housing wealth side of things, as I do, being complacent, living it up... thinking it's all cosy and secure.... if compliance does break... younger generations with less to lose (the OCP).. wanting to meddle with the fire in that hearth, the stock in the store, the contents and running of the house.

Yes; advocate it now... it might help wake up some, and get them to sell up/cash in, before the OCP forces HPC.... if they will listen. I think it's a bit soft (but agree with it), as the VI reading/listening to it, may assume the OCP isn't angry (and they are not as angry as I would like them to be.. very compliant it seems).... and go back to their super locked in house prices, new cars, cruises, Infinite Fun.... thinking there is no OCP they need to be concerned about.

I like it too. It's elegant.

Especially as, in addition to those who are openly angry, for many it's just an emergent function of compliance itself: tell people that they are "priced out" enough times and eventually, instead of complying with the intended message and taking on excessive debts, many will just accept that they are "priced out" as a given and move on to thinking about other things. In the long run this level of compliance, of giving up, actually breaks the system that fosters it:

...Fantastic news. Debt is growth.

What happened to an economy based on savings? Hahaha! If only our leaders admitted on TV that 97% of money in the economy is created by private banks. Therefore money=debt. People would go mental..

It's also created by borrowers - not just the banks. No one is dragging anyone into the banks to force them to sign up for mortgages.. or to bang their credit cards in the shops...

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As long as we keep a hold of what is actually going on then I think it's okay to also argue and hope - but not expect or plan - for something better. It beats letting the VI have the platform all to themselves at least.

Risk is overthinkin a (fairly) simple problem.

We had the crash in 2008 - 30% real in UKs case and collapse of banking system. No possible debate about that.

houses today are close to the cheapest theyve ever been for an FTB as % of income in any cycle. No debate there either.

Even if one compared today to the height of the 70/80s real price of capital houses are only around 20% over fair value. Thats a worst case.

Spending 10-20 years or more worrying about that seems, at best, irrational (to me). But then we also know humans are irrational and make very poor decisions, especially those blessed with intellect & more especially when asset prices are cheap (nobody bought equities or houses in March 2009 right? That would have been idiotic right?)

Buy the dips (or 2009/10 if you have a time machine) if you want a house (to live in). If you want a financial asset and seek some graham & Dodd sort of margin of safety then sure, wait a generation or more. 1932 or 2009 might come round again.

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Risk is overthinkin a (fairly) simple problem.

We had the crash in 2008 - 30% real in UKs case and collapse of banking system. No possible debate about that.

houses today are close to the cheapest theyve ever been for an FTB as % of income in any cycle. No debate there either.

Even if one compared today to the height of the 70/80s real price of capital houses are only around 20% over fair value. Thats a worst case.

Spending 10-20 years or more worrying about that seems, at best, irrational (to me). But then we also know humans are irrational and make very poor decisions, especially those blessed with intellect & more especially when asset prices are cheap (nobody bought equities or houses in March 2009 right? That would have been idiotic right?)

Buy the dips (or 2009/10 if you have a time machine) if you want a house (to live in). If you want a financial asset and seek some graham & Dodd sort of margin of safety then sure, wait a generation or more. 1932 or 2009 might come round again.

cheapest as percentage of income?

damn those deposit requirements, which, as it happens, the Government has to provide in many cases.

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Buy the dips (or 2009/10 if you have a time machine) if you want a house (to live in). If you want a financial asset and seek some graham & Dodd sort of margin of safety then sure, wait a generation or more. 1932 or 2009 might come round again.

The 2008/9 was a minor correction, it was hardly a buying time for anyone using basic economic fundamentals.

Of course if you knew that QE,0.5, FFL, H2B 1 and 2 were going to come into play it was a cracking time to buy.

I'm staggered anyone on this site can say otherwise.

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