Keiser Report Housing Bubble Special

[crashmonitor]

Second half devoted to UK;. Steve Keen, the super bear, did confirm one thing I have long thought, the present uplift is nothing to do with debt, the UK mortgage to GDP ratio has slumped to 70% (from probably about 100% in 2007). It has remained very constant at about 1.4 trillion this past decade as inflation has eroded the value of the debt in real terms.. Of course foreign money, immigration and housing benefit has probably more to do with the Home counties boom, a ripple that has spread to the Norfolk border and forms a perfect arc around to the Somerset border. The rest of the country has been stuck at the 2007 peak or less except for pockets around Manchester. Where else could it go with the biggest private sector debt deleveraging of any decade in modern history.

Keen even reckons the UK housing market has legs, we are nowhere near the 95% mortgage to GDP ratio of Aus or even some European countries like Denmark.

http://newsvideo.su/video/3543796

Edited March 4, 2016 by crashmonitor

[frederico]

Does he include btl ?

Does this just mean fewer owners are relatively new.

Of course it has legs, it's barely ticking over. Not so sure about prices though.

I would say unless the market returns to being a market, that ratio will go lower.

[crashmonitor]

Does he include btl ?

Does this just mean fewer owners are relatively new.

Of course it has legs, it's barely ticking over. Not so sure about prices though.

I would say unless the market returns to being a market, that ratio will go lower.

It's increasingly difficult to get new players on board and hence a market that has survived on low volumes for nearly a decade now. Does mention Help to Buy on the above link, a desperate attempt by the government to get folk to borrow and underpin the market.

Edited March 4, 2016 by crashmonitor

[zugzwang]

How does this square with Gidiot's household debt projections?

Edited March 4, 2016 by zugzwang

[crashmonitor]

That chart pretty much backs up what Keen said. Note that chart is household income ( a much lower figure) not GDP and the ratio slumped to a decade low around the middle of 2015.

Now we can see what Osbo's plans are going forward, get the public to start borrowing again and relieve the public sector that has borrowed like there is no tomorrow to make up for the private sector slump and sluggish growth.

The only way he is going to achieve that is through HPI. Could be wishful thinking on his part. You can take a first time buyer to water but can you make them drink.

Edited March 4, 2016 by crashmonitor

[Errol]

Good Keiser show as usual. He puts the conventional media to shame. Easily the best financial discussion show on TV/Web.

[zugzwang]

That chart pretty much backs up what Keen said. Note that chart is household income ( a much lower figure) not GDP and the ratio slumped to a decade low around the middle of 2015.

Now we can see what Osbo's plans are going forward, get the public to start borrowing again and relieve the public sector that has borrowed like there is no tomorrow to make up for the private sector slump.

The only way he is going to achieve that is through HPI. Could be wishful thinking on his part.

Looking at that chart I'd say the actual bottom was the start of 2013. Just before Help to Buy was introduced!

[crashmonitor]

I'm looking at the red line and that was still dipping in 2014, then we have Osbo's forecast which is predicated on HPI through to 2020 from now. So that appears to be the plan going forward. Though it has been revised downward at the end of the year.

Edited March 4, 2016 by crashmonitor

[doomed]

Please let it stop soon. I really like what they are saying and it just seems like common sense mixed with a bit of maths that this must stop soon. The problem is I have felt like this for the last 10 years!

[Vested Disinterest]

thanks for posting!

[Sour Mash]

Good Keiser show as usual. He puts the conventional media to shame. Easily the best financial discussion show on TV/Web.

Keiser brings up some good topics and has good guests on discussing in depth topics that rarely get an airing in mainstream financial media but he really needs to cut back a bit on the OTT 'hyperactive' schtick, it diminishes the impact of what he is saying.

[Errol]

It's meant to be a bit of a comedy show as well - not completely straight. I find him hilarious.

[Democorruptcy]

Second half devoted to UK;. Steve Keen, the super bear, did confirm one thing I have long thought, the present uplift is nothing to do with debt, the UK mortgage to GDP ratio has slumped to 70% (from probably about 100% in 2007). It has remained very constant at about 1.4 trillion this past decade as inflation has eroded the value of the debt in real terms.. Of course foreign money, immigration and housing benefit has probably more to do with the Home counties boom, a ripple that has spread to the Norfolk border and forms a perfect arc around to the Somerset border. The rest of the country has been stuck at the 2007 peak or less except for pockets around Manchester. Where else could it go with the biggest private sector debt deleveraging of any decade in modern history.

Keen even reckons the UK housing market has legs, we are nowhere near the 95% mortgage to GDP ratio of Aus or even some European countries like Denmark.

http://newsvideo.su/video/3543796

Where are you putting the deferred 20% or 40% Help to Buy Bail Banks debt in that? People with 75% or 55% mortgages... for now.

[billybong]

An interesting comment on deleveraging because the 2015 report in the link below reckons there hasn't been that much deleveraging at all - quite the opposite with public sector debt. Private sector debt has gone down but not as dramatically as public sector debt has gone up.

http://www.mckinsey.com/global-themes/employment-and-growth/debt-and-not-much-deleveraging

Edited March 4, 2016 by billybong

[billybong]

The mckinsey report also updates the period after the chart below which is up to 2011.

Edited March 4, 2016 by billybong

[frederico]

You see, it all depends, how on earth can anyone think increasing debt to income is a good thing?

Actually I know, its because they think people will be spending more money, however in actual fact they are broke. Yes a few corporations are getting their money, but they are not better off.

Debt dropping as a percent of GDP is not deleveraging when GDP is a measure of house price growth and immigration.

[long time lurking]

All it says to me is most of the country are just as broke now as they were in 2007 at the peak, the difference is now we have a base rate at 0.5% when it was 5.0%+ in 2007

This don`t bode well for George ,no wonder we have 40% HTB

I would not be surprise if we see proper gifted deposits some time soon ,not the lily livered HTB ISA give away,but money in the bank on the day of completion

[zugzwang]

All it says to me is most of the country are just as broke now as they were in 2007 at the peak, the difference is now we have a base rate at 0.5% when it was 5.0%+ in 2007

This don`t bode well for George ,no wonder we have 40% HTB

I would not be surprise if we see proper gifted deposits some time soon ,not the lily livered HTB ISA give away,but money in the bank on the day of completion

He'd have to abandon his bogus austerity plans to pay for that. I mean abandon them for a second time.

[long time lurking]

Who would have thought it

Property crash fears prompt banks to offload risk onto taxpayers

https://www.rt.com/uk/334570-london-property-crash-rmbs/?utm_source=browser&utm_medium=aplication_chrome&utm_campaign=chrome

Edited March 4, 2016 by long time lurking

[Killer Bunny]

Ross Ashcroft, in that Keiser programme, on Booms and Busts Show on Monday @talk2meradiouk talk2meradio.com on itunes

[Sour Mash]

Ross Ashcroft, in that Keiser programme, on Booms and Busts Show on Monday @talk2meradiouk talk2meradio.com on itunes

Any way I can get that via the 'TuneIn' radio app/service?

[Sour Mash]

It's meant to be a bit of a comedy show as well - not completely straight. I find him hilarious.

I know it's meant to be funny, but frequently it's not and just tips over into annoying and distracts from the message. Sometimes he hits the mark but he usually just goes ridiculously over the top.

If he toned it down slightly he'd be funnier and get more people to take him seriously. Or bring a 'proper' comedian on board - when he and Stacey did the show on the BBC years ago 'The Oracle' he had Andy Zaltzman as a regular who is pretty funny and also quite knowlegable about finance.