suntory Posted August 19, 2015 Author Share Posted August 19, 2015 (edited) Before I forget, in addition to Australia (iron ore) and Canada (oil) being totally ******ed due to the plunge in commodity prices, the NZ economy is about the get a major blow in Q3 and Q4. Check out this chart for whole milk powder: https://www.globaldairytrade.info/en/product-results/whole-milk-powder/ Prices for Whole Milk Powder have dropped from around $5000 in Feb 2014 to an unbelievable $1800 per metric tonne this month. If you wonder why this might be rather important for the NZ economy, then have a look at this: "With annual exports in excess of NZ$13.7 billion, the dairy industry is New Zealand’s biggest export earner, accounting for more than 29% by value of the country’s merchandise exports. Around 95% of New Zealand’s milk is exported." The Kiwis are toast and I would not be at all surprised if they launch negative interest rates within the near future. They already dropped their rate twice in the last few months from 3.5 to 3%. Back to Canada and Australia: interesting to note that Sydney, Melbourne, Toronto, Vancouver and Auckland are actually some of the most hyper inflated property bubbles on the entire planet. The global credit unwind is global and every ******ing asset price bubble is vulnerable. Edited August 19, 2015 by suntory Quote Link to comment Share on other sites More sharing options...
billybong Posted August 19, 2015 Share Posted August 19, 2015 (edited) With the ongoing carnage in the oil markets I updated a chart I have been working on which compares Brent Crude price in GBP with the average cost of a property in Kensington & Chelsea. The number of the left hand side of the chart is number of barrels required to buy the average K&C as per LR data. As you can see, only once in the last 20 years did this chart go trough 50.000 barrels and if oil continues to drop the way it does now this very rare event is about to happen again: Please note that the property price in the last two months were estimates. Once new LR data is released I will update the chart accordingly. For the time being I wanted to capture a trend developing. Does anyone else think that property prices in prime London are slightly overvalued? Ahahahahaha. A very interesting chart. Just to say that 1998/1999 was a relatively low point for UK house prices (probably including K&C) and some would say the start of the next phase of the house price bubble and it also coincided with a very low point for oil with it dropping down to about $18 a barrel so relative to oil UK house prices would have still seemed expensive. Oil prices then increased fairly rapidly to around 2001 - 2002. From the chart relative to oil K&C house prices currently also seem very expensive. Relative to a lot of things they seem expensive but maybe especially oil. Consequently I suppose to an oil magnate London house prices do seem very pricey and would make that person reluctant to buy at least in London. If oil prices stay low likely that would be very good for the crazy London house prices i.e tend to dampen London house prices without the oil based money house purchases and which must be a very good thing for the UK's general economy. It might just be a coincidence but the first spike in that chart comes about a year in advance of the millennium (celebration with some concern about the transition leading up to and around the millennium date) and also might have heralded the bursting of the dotcom bubble early in year 2000 and general upheaval around that time and then into 2001 and major changes - and the current spike might well be heralding something significant (to do with US, UK, EU, China, Greece, Middle East, Asia etc?) which might also include the bursting of the UK house price bubble. Edited August 20, 2015 by billybong Quote Link to comment Share on other sites More sharing options...
BLOW FLY Posted August 20, 2015 Share Posted August 20, 2015 (edited) This is a great read and a great thread. But. I predict UK property rises / prices / indices will still be positive come turkey cooking time in December. BF Turkeys would vote for Christmas if they knew how..... Edited August 20, 2015 by BLOW FLY Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted August 20, 2015 Share Posted August 20, 2015 No link in OP. Keep taking the prozac (and buying your metals) I link, therefore I am ? Quote Link to comment Share on other sites More sharing options...
Meerkat Posted August 20, 2015 Share Posted August 20, 2015 I link, therefore I am ? Ideally to a pseudo-economist of the establishment or some other central planner or their pawns in the mass media, pls. Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted August 20, 2015 Share Posted August 20, 2015 Thanks for those RM figures, Suntory. I had a quick look. Pages 15 onwards are all for the Nova development. About 30+ studios, 1beds being dumped. Studio for £675K or higher anyone ? I can see this Nova tower being a tumbleweed property in the not too distant future. Like many other high rise new builds. Quote Link to comment Share on other sites More sharing options...
suntory Posted August 20, 2015 Author Share Posted August 20, 2015 Thanks for those RM figures, Suntory. I had a quick look. Pages 15 onwards are all for the Nova development. About 30+ studios, 1beds being dumped. Studio for £675K or higher anyone ? I can see this Nova tower being a tumbleweed property in the not too distant future. Like many other high rise new builds. Well spotted. Yes, Nova seems to be the main culprit here. Part owned by Land Securities and a Canadian government pension fund. From what I can tell the Canadians are getting triple ******ed here: CAD is tanking, their main export revenue is collapsing, oh and their investment into London property will, as you say, turn into tumbleweed. Three of or four years down the line, I am seriously wondering if some real bargains can be made here. Imagine buying a pad in SW1E for something like £200k. Would it be possible? Hard to tell now but I see absolutely no chance that Nova is getting out of this unscathed. To put it bluntly, they are totally and absolutely ******ed beyond belief. Quote Link to comment Share on other sites More sharing options...
suntory Posted August 20, 2015 Author Share Posted August 20, 2015 HOLY SHIT! Oil is taking another beating a few minutes ago, now down to $40.20. The markets in the US are opening in about 3 hours and from where I am standing this will be absolute carnage. Futures for S&P 500, the Dow and NASDAQ are all in the red by an average of -0.6%. This shit is getting real. Quote Link to comment Share on other sites More sharing options...
frederico Posted August 20, 2015 Share Posted August 20, 2015 Well it was all over BBC news this morning, apparently Britain has a housing crisis, who'd have thought. Quote Link to comment Share on other sites More sharing options...
frederico Posted August 20, 2015 Share Posted August 20, 2015 HOLY SHIT! Oil is taking another beating a few minutes ago, now down to $40.20. The markets in the US are opening in about 3 hours and from where I am standing this will be absolute carnage. Futures for S&P 500, the Dow and NASDAQ are all in the red by an average of -0.6%. This shit is getting real. The guys who fix the market are all on holiday. Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted August 20, 2015 Share Posted August 20, 2015 Well spotted. Yes, Nova seems to be the main culprit here. Part owned by Land Securities and a Canadian government pension fund. From what I can tell the Canadians are getting triple ******ed here: CAD is tanking, their main export revenue is collapsing, oh and their investment into London property will, as you say, turn into tumbleweed. Three of or four years down the line, I am seriously wondering if some real bargains can be made here. Imagine buying a pad in SW1E for something like £200k. Would it be possible? Hard to tell now but I see absolutely no chance that Nova is getting out of this unscathed. To put it bluntly, they are totally and absolutely ******ed beyond belief. £200K might seem a bargain....but I'd be wary of the service charges attached. For a "millionaire buyer" , monthly charges of £500-£1000 might not be a lot. But for the average Joe on a mortgage, it might be larger than his repayment. I see plenty of cases like this on the French Riviera. If prices did fall that low, I might offer to rent the pad with a 5/7/10 year lease and limit the rent increases to 1% pa. Quote Link to comment Share on other sites More sharing options...
yellerkat Posted August 20, 2015 Share Posted August 20, 2015 ...absolute carnage. Futures for S&P 500, the Dow and NASDAQ are all in the red by an average of -0.6%. Not my definition of carnage! Quote Link to comment Share on other sites More sharing options...
Venger Posted August 20, 2015 Share Posted August 20, 2015 (edited) Well spotted. Yes, Nova seems to be the main culprit here. Part owned by Land Securities and a Canadian government pension fund. From what I can tell the Canadians are getting triple ******ed here: CAD is tanking, their main export revenue is collapsing, oh and their investment into London property will, as you say, turn into tumbleweed. Three of or four years down the line, I am seriously wondering if some real bargains can be made here. Imagine buying a pad in SW1E for something like £200k. Would it be possible? Hard to tell now but I see absolutely no chance that Nova is getting out of this unscathed. To put it bluntly, they are totally and absolutely ******ed beyond belief. What.. and then we can have the HPC. Don't see why not. Breakdown types donate all their money to the homeowners, and let's have a HPC. I bought my first house in the very early 1980's. It was three bedroomed terraced house in a decent part of Sheffield, it cost about £10,500 and my pay was about £5,750. After a couple of years my job took me to London, in price terms I virtually swapped my Sheffield house for a one bedroom flat with an SW1 post code, Sloane Square was less than a five minute walk away and the nearest "off licence" was Berry Brothers & Rudd. A couple of years after that I paid about £22,000 for a two bedroom flat in Fulham, I think at the time my wages had topped £10,000. Property costs can't have been too much of a burden because soon after I bought a Porsche. Incidentally, I had no student debts and a rock solid final salary pension that subsequently allowed me to retire at 55. Absolutely none of this is available to my children. They're fortunate in that I can afford to match for them the benefits that I was lucky enough to enjoy, but anyone from my generation who thinks their own hard work and industry were the keys to their good fortune is just taking nonsense. We were the most privileged generation that has ever lived. Edited August 20, 2015 by Venger Quote Link to comment Share on other sites More sharing options...
suntory Posted August 20, 2015 Author Share Posted August 20, 2015 Not my definition of carnage! Dude, these are the Futures trading which is usually a fraction of the actual moves traded on the day. For all three futures to be in the red by that much is a pretty big move. Added to that Shanghai took another beating today. Now down by 30% from its recent high. Wow, just wow! Quote Link to comment Share on other sites More sharing options...
suntory Posted August 20, 2015 Author Share Posted August 20, 2015 (edited) Just in case anyone missed it because it was a pretty well hidden number, the most recent LSL Acad HPI report shows that Year on Year growth for Greater London was 1.4%. No, it did not make a mistake with the decimal point: one point four percent. http://www.acadata.co.uk/acadHousePrices.php Edited August 20, 2015 by suntory Quote Link to comment Share on other sites More sharing options...
WideAsleep Posted August 20, 2015 Share Posted August 20, 2015 Dude, these are the Futures trading which is usually a fraction of the actual moves traded on the day. For all three futures to be in the red by that much is a pretty big move. Added to that Shanghai took another beating today. Now down by 30% from its recent high. Wow, just wow! Buy the dip? Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted August 20, 2015 Share Posted August 20, 2015 Well it was all over BBC news this morning, apparently Britain has a housing crisis, who'd have thought. It's terrible, the streets are filled with people with no homes !!!! Oh...hang on....we have a "housing MARKET/PRICE crisis" Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted August 20, 2015 Share Posted August 20, 2015 Just in case anyone missed it because it was a pretty well hidden number, the most recent LSL Acad HPI report shows that Year on Year growth for Greater London was 1.4%. No, it did not make a mistake with the decimal point: one point four percent. http://www.acadata.co.uk/acadHousePrices.php Above inflation....oh dear, still getting more expensive. Give it a month though. England is about to find out that London is different...it's MUCH worse Quote Link to comment Share on other sites More sharing options...
winkie Posted August 20, 2015 Share Posted August 20, 2015 HOLY SHIT! Oil is taking another beating a few minutes ago, now down to $40.20. The markets in the US are opening in about 3 hours and from where I am standing this will be absolute carnage. Futures for S&P 500, the Dow and NASDAQ are all in the red by an average of -0.6%. This shit is getting real. Quote Link to comment Share on other sites More sharing options...
olde guto Posted August 20, 2015 Share Posted August 20, 2015 It's terrible, the streets are filled with people with no homes !!!! Oh...hang on....we have a "housing MARKET/PRICE crisis" Yes and 20 people are living in one small terraced house!!!! Oh wait, they actually are: http://www.housepricecrash.co.uk/forum/index.php?/topic/206114-dawn-raids-a-look-at-the-underbelly-of-britains-housing-crisis/ Though probably pretty rare that sort of thing is hiding the magnitude of the problem (in London at least). Quote Link to comment Share on other sites More sharing options...
winkie Posted August 20, 2015 Share Posted August 20, 2015 Yes and 20 people are living in one small terraced house!!!! Oh wait, they actually are: http://www.housepricecrash.co.uk/forum/index.php?/topic/206114-dawn-raids-a-look-at-the-underbelly-of-britains-housing-crisis/ Though probably pretty rare that sort of thing is hiding the magnitude of the problem (in London at least). Some things never change....all cyclical.... Quote Link to comment Share on other sites More sharing options...
janch Posted August 20, 2015 Share Posted August 20, 2015 With the ongoing carnage in the oil markets I updated a chart I have been working on which compares Brent Crude price in GBP with the average cost of a property in Kensington & Chelsea. The number of the left hand side of the chart is number of barrels required to buy the average K&C as per LR data. As you can see, only once in the last 20 years did this chart go trough 50.000 barrels and if oil continues to drop the way it does now this very rare event is about to happen again: Please note that the property price in the last two months were estimates. Once new LR data is released I will update the chart accordingly. For the time being I wanted to capture a trend developing. Does anyone else think that property prices in prime London are slightly overvalued? Ahahahahaha. Just to add that the previous peak coincided with the Asian currency crisis too. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted August 20, 2015 Share Posted August 20, 2015 Yes and 20 people are living in one small terraced house!!!! Oh wait, they actually are: http://www.housepricecrash.co.uk/forum/index.php?/topic/206114-dawn-raids-a-look-at-the-underbelly-of-britains-housing-crisis/ Though probably pretty rare that sort of thing is hiding the magnitude of the problem (in London at least). What, they are forced to be there and can't get out and go somewhere else ( back to whence they came ) ? We have more a population/infrastructure/immigration/social crisis more than anything else. Fewer people taking more of more people, ye still they flock to rip off britain where you can get 10's of thousands of someone elses money for doing nothing. Quote Link to comment Share on other sites More sharing options...
billybong Posted August 20, 2015 Share Posted August 20, 2015 (edited) Just to add that the previous peak coincided with the Asian currency crisis too. The UK base rate also had a bit of a peak of 7.5% in the middle of 1998 (near the first oil chart peak) before trending mainly downwards to the middle of 2003. The US and EU didn't have a similar rate peak at that time although they both did a couple of years or so later when the UK had a secondary peak lower than the 1998 peak.. Edited August 20, 2015 by billybong Quote Link to comment Share on other sites More sharing options...
nome Posted August 20, 2015 Share Posted August 20, 2015 I'm 41 and admit I know or understand very little about the intricacies of world economics, inflation rates, interest rates etc etc All I do know is I've never before seen so much general turmoil, disruption and uncertainty in the world as we're seeing right now... with the Middle East in meltdown, Russia sabre rattling, China becoming an economic monster then recently, apparently, rapidly deflating, most commodities seem to be at either record lows or record highs, stock markets are all over the place... and yet, so far at least, everything seems to just keep trundling along as normal. I'm sure that past financial crises were triggered by much less dramatic circumstances than we're seeing right now. Quote Link to comment Share on other sites More sharing options...
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