We were ruined by Thatcher, Blair, and Hayek.

[One-percent]

10 minutes ago, spyguy said:

I still cannot work how you can get teachers ith a degree but cannot do the basic maths.

I went to one of my kids 'How we do Maths' nights. Where we meant to get a run down on current teaching methods.

This was for 6-10 year olds.

I asked a really simple question. I became apparent  very quickly that the school's Maths leader could not do fractions.

And she also had a degree.

Why FFS are we letting people do degrees without basic Maths skills?

Maths is often not a requirement for entry to a degree programme.  And perhaps for social sciences it does not necessarily need to be (we could discuss the level of education at schools and why someone that is capable of a levels and studying at degree level can't do maths, but another argument).  What really shocks me is that people graduate from degrees unable to write in any kind of coherent way.

on the topic of getting basic maths wrong.  My boss went to the department for education a couple of years ago for the launch of some new initiate or other.  They presented some data in algebraic form. AND GOT IT WRONG AS THEY DIDNT UNDERSTAND BASIC ALGEBRA.  The department for education. In their presentation and glossy brochure.  This was stuff I had done at 14 and could still remember so it was incredibly basic stuff. 

[Fromage Frais]

3 hours ago, onlooker said:

I always read articles by Moonbat because then I know the opposite is the truth. Hayek should be a hero on this board, as he set out the argument against credit and asset price bubbles, and gave the philosophical basis of sound money. All our problems have stemmed from Lawson's and Brown's credit binges.

This

Every time the music looked to be stopping the government/BOE arrived at the door with more drugs to keep it going.

Was it 2004/5 or so the market had a blip the property market seemed to pause everything else was ok and the global crisis was a few years away.....yet those rates cam down pronto despite inflation.  A bubble on top of a bubble...crisis oh shit all falling and back to bubble asap.

Nobody wants to be the one to stop the music, they will be hated

[scepticus]

The house price boom is a pretty steady exponential plus some noise/fluctuations which starts right after the end of WWII and continues until now, albeit during the 70s there is a small inflexion in the curve which would appear to be a change in the exponent of that exponential curve. The HPI curve mirrors the total debt curve which is remarkably smooth (much smoother than the HPI curve).

Therefore I conclude that the seeds of this phenomena were present prior to WWII, interrupted by that conflict and then left to blossom without interruption ever since. 

Looking to pick out any particular politician from this or any other country from any time between now and then as the primary contributor to where we are today is just story telling.

[eek]

1 minute ago, Fromage Frais said:

Nobody wants to be the one to stop the music, they will be hated

If things had gone down in 2004 things would have gone back to normal very quickly. Now its going to take a lot of time and the drops are going to be horrendous. Wait to you see the price of the average house down south when mortgages return to 3-4x joint income and graduates lose 10% of their income to their student loans...

[Fromage Frais]

2 minutes ago, eek said:

If things had gone down in 2004 things would have gone back to normal very quickly. Now its going to take a lot of time and the drops are going to be horrendous. Wait to you see the price of the average house down south when mortgages return to 3-4x joint income and graduates lose 10% of their income to their student loans...

I saw in an article this morning that new governments/presidents in the us do 80% of their changes in the first 100 days whilst the going is good and they have a mandate.

It looks like massive infrastructure spending and unlike giving it to banks this looks like it will get the inflation genie out of the bottle.

This looks like the the end game for our bubbles shortly

[Futuroid]

13 minutes ago, scepticus said:

The house price boom is a pretty steady exponential plus some noise/fluctuations which starts right after the end of WWII and continues until now, albeit during the 70s there is a small inflexion in the curve which would appear to be a change in the exponent of that exponential curve. The HPI curve mirrors the total debt curve which is remarkably smooth (much smoother than the HPI curve).

Therefore I conclude that the seeds of this phenomena were present prior to WWII, interrupted by that conflict and then left to blossom without interruption ever since. 

Looking to pick out any particular politician from this or any other country from any time between now and then as the primary contributor to where we are today is just story telling.

The house price boom started after WWII because that is when widespread home ownership took off.

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/a-century-of-home-ownership-and-renting-in-england-and-wales/short-story-on-housing.html

"In 1918 the majority, or 77%, of households in England and Wales rented, with the remaining in ownership."

"In 1918 just 1% of households socially rented and this reached a peak of 31% in 1981. "

"From 1953 ownership started to increase at a faster rate than in previous decades and by 1971 there was an equal percentage of households owning and renting." 

Basically, life was shit before 1950 for a lot of the UK population. After WWII, even the upper classes in the UK knew there was a debt of gratitude to be paid which led to the creation of NHS, "Social Security" and Council Housing in rapid succession. We are slowly returning to the mean, with property ownership becoming the preserve of landlords, the norm being no union representation and most people living their life in debt. 

Executive summary, unless something radical happens, get used to paying rent - you, your children and your grandchildren will doing it. Next on the agenda, paying for your own healthcare without any significant change to your level of taxation.

[onlyme2]

25 minutes ago, scepticus said:

The house price boom is a pretty steady exponential plus some noise/fluctuations which starts right after the end of WWII and continues until now, albeit during the 70s there is a small inflexion in the curve which would appear to be a change in the exponent of that exponential curve. The HPI curve mirrors the total debt curve which is remarkably smooth (much smoother than the HPI curve).

Therefore I conclude that the seeds of this phenomena were present prior to WWII, interrupted by that conflict and then left to blossom without interruption ever since. 

Looking to pick out any particular politician from this or any other country from any time between now and then as the primary contributor to where we are today is just story telling.

Inflation was pretty much exponential (including incomes) but that part got broken when the population of western countries were exposed to direct (and local later on) competition from outsourced goods during globalisation. Also for the UK at least net immigration was negative for a period leading up until the 80's then what did we get - positive net immigration and debt took over which provided a double pump to housing costs. At various times since then debt has been ratcheted higher in waves of further interest rate meddling and immigration.

 

[Futuroid]

Oh and here is a timely example of how great privatization and "competition" is as favoured by Thatcher, Major, Blair, etc.:

https://www.theguardian.com/money/2016/nov/14/greg-clark-to-meet-big-six-energy-firms-over-profiteering-report

Maybe if we leave the EU, all this will be OK?

(Just kidding, that will be a constant distraction and a good reason the squeeze the proles a bit harder).

[spyguy]

17 minutes ago, Futuroid said:

The house price boom started after WWII because that is when widespread home ownership took off.

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/a-century-of-home-ownership-and-renting-in-england-and-wales/short-story-on-housing.html

"In 1918 the majority, or 77%, of households in England and Wales rented, with the remaining in ownership."

"In 1918 just 1% of households socially rented and this reached a peak of 31% in 1981. "

"From 1953 ownership started to increase at a faster rate than in previous decades and by 1971 there was an equal percentage of households owning and renting." 

Basically, life was shit before 1950 for a lot of the UK population. After WWII, even the upper classes in the UK knew there was a debt of gratitude to be paid which led to the creation of NHS, "Social Security" and Council Housing in rapid succession. We are slowly returning to the mean, with property ownership becoming the preserve of landlords, the norm being no union representation and most people living their life in debt. 

Executive summary, unless something radical happens, get used to paying rent - you, your children and your grandchildren will doing it. Next on the agenda, paying for your own healthcare without any significant change to your level of taxation.

Err, surely you mean the percentage of home owners rather than prices, moving from most people renting (post WWII) to most people becoming owner-occupiers.

Based on price/earnings  UK house prices have been creatively narrow - bar the Barber boom, 1988-1992ish, and 2002 onwards.

[macfarlan]

2 hours ago, Futuroid said:

Monbiot is saying what I've been saying all along.

It's fine to have a problem with neoliberalism and globalisation. But voting for Brexit and leaving the Tories to implement it, or voting for a billionaire property developer who staffs his hotel and other projects with immigrants, is an act of supreme folly.

On the surface they may have enticing sound bites, but these are the same people who designed the system you are trying to escape from.

Precisely.

Lots of Americans voted for change (from neoliberalism; a political ideology that was failing increasing numbers of americans), and chose Trump; a Neoliberalist's wet dream.

 

Edited November 14, 2016 by macfarlan

[Futuroid]

7 minutes ago, spyguy said:

Err, surely you mean the percentage of home owners rather than prices, moving from most people renting (post WWII) to most people becoming owner-occupiers.

I was replying to scepticus' assertion that "The house price boom ... which starts right after the end of WWII and continues until now".

[Futuroid]

51 minutes ago, Fromage Frais said:

This looks like the the end game for our bubbles shortly

A certain way to end a bubble is with government stimulus.

100% guaranteed.

[DiggerUK]

6 hours ago, macfarlan said:

Lots of people blame Thatcher, others blame Blair............

Reagan, Thatcher, Clinton, and Blair parked imperialist tanks, on capitalist lawns.

President Trump has just parked capitalist tanks on imperialist lawns.

Not quite the end of history..._

[macfarlan]

4 hours ago, onlooker said:

I always read articles by Moonbat because then I know the opposite is the truth. Hayek should be a hero on this board, as he set out the argument against credit and asset price bubbles, and gave the philosophical basis of sound money. All our problems have stemmed from Lawson's and Brown's credit binges.

Hayek is a hero to some on this board, which I find odd. He promoted the kind of deregulation and trickle down economics that Neoliberalist politicians have thrived on. The deregulation of the banking system is one of the key reasons we have such high house prices.

[South Lorne]

2 hours ago, spyguy said:

Well Browns attempt to get everyone either on the public sector payroll or benefit is starting to backfire:

https://www.theguardian.com/education/2016/oct/19/durham-teaching-assistants-vote-strike-pay-cuts

Going by my experience of teaching assistants, most would have never turned up at school as kids.

I dont know hwy the LA just does not mandate that TAs are required to have GCSE English and Maths passes. That would clear the lot of them out.

 

...Brown saw himself as an elite and a full time politician lording it over everyone, either on benefits or working in the public sector ..basically he designed a form of communism where the central politicos are rulers....farewell and welcome to the resurrection of democracy aided by social media which questions the propaganda of the spent force, the current media moguls and their cohorts...fare thee well .......

[Venger]

5 hours ago, wsn03 said:

Why does no one ever mention Eddie George? With unnecessarily low interest rates he was quizzed about the impact it was having on a runaway housing market, he stood there smugly grinning and replied "a little bit of house price inflation never hurt anyone". I knew at that moment the market was going to end up as the generation wrecking bubble...

Didn't he also say it was for his successor to sort out? (house prices bubbling).

So another HPC thread where just a handful of people to blame for extreme runaway HPI.  I don't see anything wrong with RTB.  I didn't see anything wrong in Major allowing the HPC of that time.  I do see a lot wrong with gushing the debt out in years that followed, no-more-boom-and-bust, runaway HPI to tempt out RTB owners to sell at fortunes to BTLer, and BTLers who then saw them double in value again.

Borrowers paying for just 'can't do math' and 'just wanted a home' paying £200K to quarter of a million pounds for rubbish house as 'innocents'.  BTLer GPs with 11 houses and deep into the BTL.   So much house price ego everywhere.   Tens of millions of people are complicit in a world-view that values can pile-up to extremes out of nowhere.

[Futuroid]

42 minutes ago, DiggerUK said:

Reagan, Thatcher, Clinton, and Blair parked imperialist tanks, on capitalist lawns.

President Trump has just parked capitalist tanks on imperialist lawns.

Not quite the end of history..._

Well, if you read the article the point was that essentially ultra rich capitalists used Reagan, Thatcher, Clinton and Blair as conduits to implement their preferred approach (neoliberalism).

Trump is more of the same, except his connection to capitalism is now not even hidden, he shouts it from the rooftops. 

As an aside, as a tycoon with an extensive business empire, the possibilities for conflicts of interest must be epic. Although it will be fun when he has his first cabinet reshuffle... "you're fired!"

[Futuroid]

8 minutes ago, Venger said:

Didn't he also say it was for his successor to sort out? (house prices bubbling).

So another HPC thread where just a handful of people to blame for extreme runaway HPI.  I don't see anything wrong with RTB.  I didn't see anything wrong in Major allowing the HPC of that time.  I do see a lot wrong with gushing the debt out in years that followed, no-more-boom-and-bust, runaway HPI to tempt out RTB owners to sell at fortunes to BTLer, and BTLers who then saw them double in value again.

Borrowers paying for just 'can't do math' and 'just wanted a home' paying £200K to quarter of a million pounds for rubbish house as 'innocents'.  BTLer GPs with 11 houses and deep into the BTL.   So much house price ego everywhere.   Tens of millions of people are complicit in a world-view that values can pile-up to extremes out of nowhere.

If you zoom out, landlords and tenants are a return to the norm.

The anomaly is the 1950-2000 period. It is entirely possible that you will live as your most of your distant forefathers did. Renting.

BTL is simply a modern twist on an age old riff - rentierism. It's probably even less likely to cause outrage than in the past because compared to having a Lord of the Manor, the spoils are shared over a bigger section of society.

What is new and unsustainable is the large amount of capital appreciation on residential property, but then, is it really unsustainable? If you dispense with the notion that a high % of home ownership is the natural way of things, the value of property can be unlinked from average wages and it's simply limited by how much rent you can extract. 

What I am saying is that this might not be a bubble that will simply play itself out. To return to a society with levels of home ownership like the 80s and 90s it may require proactive intervention in the political & economic systems.

One that "Laissez faire" governments will not take.

[Venger]

The future doesn't have to be like a feudal past.

We are who we choose to be.  And what you've outlined is what many individuals have positioned the future to be.

It's entirely possible a big HPC is coming to knock those who doubled down into BTL and HPI ego-ism right off their perch.  

Seems Kenneth Clarke is well up for that, and you have to look at the banks.  Are they just going to sit around looking up to unproductive landlords?

On 10/22/2015 at 0:52 PM, dgul said:

....Now you might regard your investment as savvy, and that I was a fool to create a business instead of buying property.

But what country do you want to live in? One where any extra money is invested in property, although little new property is actually created? Where the government has to intervene to prop up the property market, because so much 'retirement' money is stuck in property that there would be a catastrophe if prices reduced? Where businesses galore are created to support the property industry (lettings agents, cleaning services, etc), but where no-one is actually any better off than before?

Or do you want to live in a country that encourages investing money in productive enterprise, where property can be left to look after itself, and where businesses are created that actually improve the quality of life for people? And where, perhaps, the government can step in to support employers if the economy hits the rails?

Because it is the real companies that create value, not the pretend property investment businesses, which only serve to inflate asset prices and transfer wealth from one set of people to another without any actual benefit to anyone.

And you'd better prefer the real companies that create value, because eventually it is these that create the value that allows the country to stand up in the world and have the capital to support imports etc. There is no 'I'm all right, Jack' because if one set of the economy just gets income from doing nothing from the other set of the economy who works it's ass off supporting the first part of the economy - then eventually the economy finds it increasingly difficult to buy all those nice things from overseas (like, say, oil).

To get back to the original point - there is a big, long term picture playing here, and the sooner people are forced to understand that you can't rely on inflating asset prices (without any actual improved quality of life, or production of stuff) to support their retirement the better. And I'm afraid that you're part of that 'forcing people to understand'. I guess I'm a bit sorry, but it is more important that we can continue to live in a country that has a future.

We've already got Section24 and SDLT surcharge, and BTLers in shock - but keep looking to renters being forever renters to landlord masters if you want to - a HPC may be more accepted than you realise, and only need a HPC - not fancypants 'political economic systems'/   

Quote

 

They aren't going to unwind and stay solvent - that's the point. They've just been notified that they need to get the f**k out or have their faces ripped off. In point of fact many will get their faces ripped off as they try to get out.

 

Still, at least the BTLers 'understand property' - that should be some comfort.

 

[eek]

53 minutes ago, Venger said:

The future doesn't have to be like a feudal past.

We are who we choose to be.  And what you've outlined is what many individuals have positioned the future to be.

It's entirely possible a big HPC is coming to knock those who doubled down into BTL and HPI ego-ism right off their perch.  

Seems Kenneth Clarke is well up for that, and you have to look at the banks.  Are they just going to sit around looking up to unproductive landlords?

I don't just think its possible, I suspect its coming and fairly soon (albeit price drops take far longer than rises to occur).

Prices are currently based on the most you can borrow. Which given that BTLers can borrow more than owner occupiers is approximately £96,000 for every £500 in achievable rent (125% PRA at 5% interest). That's about to drop to £75,000 with the new affordability rules which are in from January.

Now it may have no impact but somehow I think the fact someone can only borrow 80% of the amount they used to be able to borrow will stop prices rapidly increasing and may put them in reverse...

The real entertainment begins as BTLers see their 2 year fixed deals finish and discover there is no way they can remortgage. That's when the pain begins...

[macfarlan]

1 hour ago, Venger said:

The future doesn't have to be like a feudal past.

We are who we choose to be.  And what you've outlined is what many individuals have positioned the future to be.

It's entirely possible a big HPC is coming to knock those who doubled down into BTL and HPI ego-ism right off their perch.  

Seems Kenneth Clarke is well up for that, and you have to look at the banks.  Are they just going to sit around looking up to unproductive landlords?

We've already got Section24 and SDLT surcharge, and BTLers in shock - but keep looking to renters being forever renters to landlord masters if you want to - a HPC may be more accepted than you realise, and only need a HPC - not fancypants 'political economic systems'/   

 

Ergo, we chose who and what we currently are, but capitallism is about to adapt again, and it's entirely possible that the future could be exactly as either of you propose.

One of the key problems for capitalism at the moment is how to keep the money circulating whilst maintaining existing hierarchies; will capitalism create jobs and wages?

[scepticus]

3 hours ago, Futuroid said:

The house price boom started after WWII because that is when widespread home ownership took off.

Well if that is the case, why did widespread home ownership 'take off', especially given that historically as you say it never really happened before? Follow the chain back to the beginning.

[scepticus]

2 hours ago, Venger said:

The future doesn't have to be like a feudal past.

We are who we choose to be.  And what you've outlined is what many individuals have positioned the future to be.

Well, some may take issue with that. Maybe there is a reason that a chart of income distribution for all but the top few % of the population of somewhere like he UK or US looks the same as the distribution of particle energies in a box of gas at thermal equilibrium (e.g. a boltzmann-gibbs distribution). In fact such income distributions appear to have also held as far back as the 15th and 16th centuries (which is really as early as there is anything resembling reliable data for this). In nature there is a limited number of ways in which the dynamics of systems with large number of constituent parts whether gas molecules or people tend to express. The outcome depends on the constraints on the system (e.g. quantities being conserved, number of degrees of freedom, or whether the process is lossy etc).

Perhaps political economics and sociology is just about tacking on a narrative to something which is mainly the outcome of a stochastic (e.g. random, statistical) process which is far more likely, statistically speaking, to end up in some state Z than in states A through Y. So in theory socioeconomic state A through Y is reachable for some social evolution, just vanishingly unlikely. So most of the 'if only we didn't do [ ... ] and had done [ ...] instead' arguments we hear are likely to lead to state Z via an alternative pathway (call this unintended consequences if you like).

Really, without some idea of what socio-economic pictures are reachable with a reasonable probability and with some ability to persist/sustain we have no idea to what extent we can 'choose to be' this or that.

[Bubble&Squeak]

https://en.m.wikipedia.org/wiki/Federal_Reserve_Act