Is It Time To Admit We Are Just Plain Wrong.

[Guest]

There may not be any sense to the market but I guess naively I always thought that something would change politically. Surely people would realise that house prices trebling in a decade had screwed either them or their children?

But instead everyone shrugged their shoulders and accepted it as 'normal' and all the big votes went the establishment's way.

[Growlers2]

Bump on this thread! Things are always darkest before the dawn.

[streamingfreedom]

I am convinced of it.

Said it before, one of these days just being in the black by a penny is going to be the equivalent to being a millionaire yesterday. For some mental reason people in so many cases do not see a huge mortgage as debt, they seem to be able to separate that one huge debt from credit card, personal loan or stuff purchased on tick.

The only way this trick works though is when the government keeps giving them 10% plus returns yearly on their homes, it all makes sense then.

In order to do this though the government as to make sure houses are never built, immigrants keep flooding in and young adults are allowed to borrow ever increasing amounts of debt and growing multiples. Of course it is going to end, but how and when?

It will end but the people with the debt don't care. It's not like they'll be excecuted or have their hands cut off; they just give the stuff back. They just see it like rent. You pay monthly for the car and if you can't afford it just give it back. Same with the house. Live for today, have it now. Spare money peron the to pay your mortgage down quick? Nah, trade up the BMW 3 series to a Range rover. That's what most people do.

There will be a few more sensible people that having bought at low rates and even on help to buy etc, haven't overstretched, are living a more frugal life, building savings and pay down debt quick and they'll probably be OK. And I'm fine with that. I think it's actually a good idea in some cases.

For those that use every spare penny to emulate a footballers lifestyle on credit, they deserve everything they get.

[streamingfreedom]

Markets are amoral, they're not out to screw you. People buying houses aren't thinking about outbidding you, they're only thinking about themselves and there's nothing fundamentally wrong with that. It's not personal - they're just doing what they think they need to do, rightly or wrongly.

As such if their plans don't work out they are no more or less deserving of sympathy than anyone else. When the Redcar steelworks closed those who lost their jobs deserved some sympathy IMO, renter or BTLer.

Great post. I had many years of struggling to cope. All the same issues as mentioned in this thread - seeing people with barely a pot to piss in driving around in brand new leased Range Rovers, part-time tax-credit rapists with BTLs, couldn't they see the madness? Couldn't they see that they were fundamentally wrong on so many levels? My dad wondering why I was struggling to make much progress despite having a decent enough job, whilst my sister and her husband do menial jobs yet live a life of riley (clue:she bought in 1997, the year I went to university). Awful, hurtful, years.

Then the crash happened, finally i was going to be vindicated. The great crash, resulting in the great 10 year depression.Chickens coming home to roost for all those people who made so many bad decisions. What happened? Nothing. A 3 year blip followed by normal service. So what did I learn?

1. There is only one reality: yours. If it works for you it works for you. If it works for them it works for them. Good luck to them. Respect their decisions, respect their analysis and if they're wrong, they're wrong, if they're right, they're right. That's it.

2. Sitting out the game is as much of a risk as taking part (this is actually the number one thing I missed from 2003-2008). If the economy is as ******ed as I think it is house price crash to the extent we talk (talked?) about can not happen in isolation. The likelihood is we're all toast.

3. There are no fundamentals: Anyone who appeals to 'fundamentals' when making an argument has no understanding of history. There is a constant state of flux, one economic system is replaced with another, fair value is not a constant. Just because we have a bubble, that doesn't mean that 3x salary is still a good rule of thumb for a house price

4. It IS different this time. You know how different 2016 is from 1997 in all kinds of ways? And how different 1997 was from 1977 in all kinds of ways? That's it. But the main place that it's different is that technology is allowing the system to increase in complexity exponentially. In the great crash of the 20s the technology wasn't available to respond to a crashing market. Now the entire global trading system could be stopped in an instant whilst politicians get together and decide how they're going to catch a falling knife. Who to sacrifice, who to save and how. It's not right. But it's reality.

5.The economy is an insane fantasy. And like all fantasies the person whose fantasy it is can make it up as they go along for as long as they like.

Excellent post. I can relate to everything there, especially the sitting out being as risky as going in. Agreed if and when the big crash comes we're all toast. You will probably need bars on your windows and self defence training would have been a good investment.

[pig]

Markets are great for some things, not so great for other things. Conservatives have always understood this to be true.

Free markets, on the other hand, are Neoliberal poison. Good for nothing.

To be fair, I think the whole privatisation debate is still pretty contentious across the political spectrum.

Hard to disagree on 'free' markets, but unfortunately this is a lot more contentious than it should be.