Jump to content
House Price Crash Forum
Sign in to follow this  
Mr Blek

The Pyramid Scam

Recommended Posts

Here's an excellent article as to why the current housing market resembles a pyramid scam.

Another one on why its a pack of cards. Explains 'The Last Guy' concept. A must read.

This article is very interesting. Written in mid 2004 and I believe we are starting to see most of what the author said.

The bottom line? Save your money.

There is a basic rule of economics: buy low, sell high.

If you go into the market now, you may well be the last man.

Share this post


Link to post
Share on other sites

Good post that man

Stock options is pyramid gambling as they gamble on stock they don’t even hold so unless they match the ‘Gets’ with the ‘Puts’ then it can take a lot of people down.

Derivates are apparently weapons of mass financial destruction but alas I don’t really understand them but would like too. Know thou enemy and all that.

CNN says GM stock to go down 33% this year ! I say and the rest

Share this post


Link to post
Share on other sites

A chilling reminder of how fragile the bubble is.

With FTBs out of the market in the UK the quote below is apt:

"It's a pyramid scheme. Everybody's taking the massive appreciation on their current home and they're rolling it up to the next big home. It's like any good pyramid scheme. It will work as long as you have people entering the bottom of the pyramid. You've got to have those new people entering to allow the pyramid to grow, to allow people to roll-up.

Share this post


Link to post
Share on other sites

its the people further up the pyramid using there winnings to buy extra options in the lower levels of the pyramid that is keeping it propped up.

this is even worse than new people coming in

Share this post


Link to post
Share on other sites

its the people further up the pyramid using there winnings to buy extra options in the lower levels of the pyramid that is keeping it propped up.

this is even worse than new people coming in

Have you ever seen the results of someone loosing after winning in a straight pyramid scheme. "Make" 30K from "gifts", spend on the basis that you are going to get to keep the lot and what? no more people prepared to "give" you money for nothing? 30K down? oops. Sounds to me like MEW

Edited by Elizabeth

Share this post


Link to post
Share on other sites

Have you ever seen the results of someone loosing after winning in a straight pyramid scheme. "Make" 30K from "gifts", spend on the basis that you are going to get to keep the lot and what? no more people prepared to "give" you money for nothing? 30K down? oops. Sounds to me like MEW

It's sheer alchemy!

These pyramid schemes are never 'straightforward', there is always a twist, a hook if you will, we had that "Women Empowering Women" scam that played on some vague form of feminism and excluded men (maybe the men running the scam thought males were too clever? doubtful), this gave it some exclusivity and distinction, and reinforces the doublethink, if anyone questions the scheme it's because "they don't want you to succeed", "we are empowering you and they don't like it, don't listen to them", "we are the collective, do as we say and we will look after you".

You see the same with the PR from the lenders and estate agents, it's all about playing on emotions, and reinforcing the notion that you too can be part of the wonderful club of property ownership that is the answer to wealth and happiness, and we've made it so simple for you, and don't listen to those "doom mongers", you can trust us. It's sheer emotional bull$hit, that's the only angle they've got now the cold financial logic is against them.

Share this post


Link to post
Share on other sites

It's sheer alchemy!

These pyramid schemes are never 'straightforward', there is always a twist, a hook if you will, we had that "Women Empowering Women" scam that played on some vague form of feminism and excluded men (maybe the men running the scam thought males were too clever? doubtful), this gave it some exclusivity and distinction, and reinforces the doublethink, if anyone questions the scheme it's because "they don't want you to succeed", "we are empowering you and they don't like it, don't listen to them", "we are the collective, do as we say and we will look after you".

You see the same with the PR from the lenders and estate agents, it's all about playing on emotions, and reinforcing the notion that you too can be part of the wonderful club of property ownership that is the answer to wealth and happiness, and we've made it so simple for you, and don't listen to those "doom mongers", you can trust us. It's sheer emotional bull$hit, that's the only angle they've got now the cold financial logic is against them.

there's a lot of mind-games happening.feminisation of society is one of them.

I AM NOT SEXIST!!.....but what other societies on the globe work on the principle of mass feminisation??

...yup,ants and bees.

wake up and smell the coffee folks....

.both based on slavery to a "common goal"...thing is the common goal has bugger all to do with the individual.......any wonder why male fish are turning female with chemical exposure?,new men????.....the obsession with lack of body hair??.....emasculation is happening!

...and if you think lack of war is an amiable goal.....yeah fine,but do a little research into how ant colonies work.......they work by DEMOLISHING the opposition.....sort of like watching two drunk girls on a saturday night.no surrender,just death or glory.

Edited by oracle

Share this post


Link to post
Share on other sites

there's a lot of mind-games happening.feminisation of society is one of them.

I AM NOT SEXIST!!.....but what other societies on the globe work on the principle of mass feminisation??

...yup,ants and bees.

I'm not entirely convinced, if we had really sucumb to mass feminisation there would be no wars, unless of course what we're actually seeing is the rise of the ladette.

Anyway, I wasn't taking aim at feminism, that's just an example of a 'hook' used for emotional manipulation, it can be anything of course provided it has currency.

There again I'm largely superfluous.

Share this post


Link to post
Share on other sites

I'm not entirely convinced, if we had really sucumb to mass feminisation there would be no wars, unless of course what we're actually seeing is the rise of the ladette.

Anyway, I wasn't taking aim at feminism, that's just an example of a 'hook' used for emotional manipulation, it can be anything of course provided it has currency.

There again I'm largely superfluous.

why would there be no wars????......ant colonies fight to the death amongst each other for supremacy.

......and they consist of (female) workers ruled by (female)egg producing queen,with the exception of a few (male)soldiers and drones.

...to say female society would be gentler is pure falsehood...it's just the impression we are given.

...when you see a bunch of drunken girls fighting in your local nightclub,you will probably see for yourself the method of combat is a lot more viscious.

Share this post


Link to post
Share on other sites

there's a lot of mind-games happening.feminisation of society is one of them.

I AM NOT SEXIST!!.....but what other societies on the globe work on the principle of mass feminisation??

...yup,ants and bees.

Maybe in England, but up here in Scotland a woman is still a woman and they get a slap if they step out of line.

Share this post


Link to post
Share on other sites

Excellent work Mr Blek. I thoroughly enjoyed all three of those links. Plenty of sense in all of them.

This housing situation rather reminds me of someone attaching a bungee cord to themself before trying to climb a ladder. The higher they go the more the bungee cord pulls on them and the tireder they get. Then they can hold on no more and they are flung back to the ground with great force. The higher they go the greater the force with which they snap back. The way in which interest rates have been artificially surpressed and the housing market has been artificially bolstered, what with the abuse of celf-cert and people using their parents as guarantors. etc., means that people have got higher up that ladder than in any previous housing boom... and that the force of the bungee cord is stronger than it ever had been in any previous housing boom... and that, when the artificial aid to their climb up the ladder finally evaporates, they will come down with more force than in any previous housing crash.

Bring it on!

Edited by Bingley Bloke

Share this post


Link to post
Share on other sites

looking in the mirror yesterday i can conclude were all turning into woman.

i saw the face of a man looking back, but i have breasts and i look like im pregnant

Share this post


Link to post
Share on other sites

looking in the mirror yesterday i can conclude were all turning into woman.

i saw the face of a man looking back, but i have breasts and i look like im pregnant

:D

That’s our hard-earned thrifty genes faulting us in the age of ample food and optional exercise.

Share this post


Link to post
Share on other sites

Good post that man

Stock options is pyramid gambling as they gamble on stock they don’t even hold so unless they match the ‘Gets’ with the ‘Puts’ then it can take a lot of people down.

Derivates are apparently weapons of mass financial destruction but alas I don’t really understand them but would like too. Know thou enemy and all that.

That in itself is not necessarily evil. At the end of the day when you buy your travel insurance you do not expect the insurance company to own that particular bus/ship/plane you travel on. What matters is its ability to meet your claim. Same in option trading.

Share this post


Link to post
Share on other sites

Here's an excellent article as to why the current housing market resembles a pyramid scam.

Another one on why its a pack of cards. Explains 'The Last Guy' concept. A must read.

This article is very interesting. Written in mid 2004 and I believe we are starting to see most of what the author said.

The bottom line? Save your money.

There is a basic rule of economics: buy low, sell high.

If you go into the market now, you may well be the last man.

Great great post -!! Have been saying this for ages!!!

Share this post


Link to post
Share on other sites

Interestingly he hints at how markets don't crash until the last bear (who could conceivably participate) turns bull.

Some of these 'last guys' inhabit this forum and have been showing signs of stirring recently.

Hi Ianbe

Oh God, I think you may be talking about me!!! I've been feeling very bearish since discovering this forum a couple of months back; tutting and smirking at the individual points that reinforce, with high credibility, the general concensus (apart from TTRTR et al).

But in the last couple of days I'm seeing close friends in the EA business (we live in an expensive coastal resort near Barcelona) doing fantastic sales (commission of €84,000 on one house alone!) and actually signing up for a new house of their own at a cool €1.65m.

I've now found myself feeling that I really should buy one of the few remaining crappy apartments that haven't been renovated yet (I'm a builder) and make the €80,000 profit that they all say I can make in 3 months.

My head says no, no, no, no, never - but the voices tell me "just go for it you coward - how can you lose".

Help - I'm being seduced by the dark side - what can I do?

Cheers

LL

Share this post


Link to post
Share on other sites

Good post that man

Stock options is pyramid gambling as they gamble on stock they don’t even hold so unless they match the ‘Gets’ with the ‘Puts’ then it can take a lot of people down.

Derivates are apparently weapons of mass financial destruction but alas I don’t really understand them but would like too. Know thou enemy and all that.

CNN says GM stock to go down 33% this year ! I say and the rest

Think you mean 'calls' and 'puts'.

good starting page to understand derivatives

Derivatives can be used for speculation/leverage, but more importantly are a hedge against adverse price movements, much like an insurance policy. They are now widely regarded as a balancing mechanism in most markets. The housing market has no obvious hedging mechanism which makes it all the more dangerous.

There is growing interest in a commercial property derivatives based on IPD (Investment Property Databank) indices, but there is no reliable index for residential property.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

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.