Momentum's viral video attacking HPI

[adarmo]

2 hours ago, hi5lo5 said:

The ABS investor report is open. I follow a bunch of them in particular Nationwide and Leeds building society. A traunch of ABS called "Guildford No1" from Leeds consists of over 85% buy to let loan contracts and the deliquency rates are stable. It would be interesting to see if they go up in the next few months. Also we would be absolutely sure about the BTLers selling if the number of contracts are declining due to early repayments.

How much is a CDS on that one?

[adarmo]

2 hours ago, spyguy said:

No. UK did not have a securitised mortgage market.

There was some but 90% of the UKs problem was lending too money to people to buy houses.

NR problems were down to wholesale funding borrowing.

BandB was down to BTL and tenants defaulting on rents.

It was leverage blowing up.

If BS which is what they are,  had stuck low ltv, with reasonable deposits the uk would have been uk.

This is interesting. By Jan 2007 around 15 to 25% of the £1trn of outstanding mortgages had been securitised. My understanding was that when things started going south the securitsation market seized up and this stopped banks being able to lend as much as they had been since they lost a huge chunk of their cash source. Everyone then got nervous about what was in the stuff they'd bought (you'd think they'd do this before investing) and the bottom fell out of the bond market. I remember being talked out of investing in the NewStar High Yield bond fund when it fell by 60%. If I had trusted my head and not the financial advisors in my office I'd have made £12k in a year! Anyway, 

I agree that the financial impact of things this side would have been OK but it is highly likely we'd have felt the fallout from a US going into a deep recession, but nothing as bad as we saw. 

[adarmo]

4 hours ago, spyguy said:

 

But, really, if you had a time machine, you ought to have used to go back 50 odd years and put birth control pills in Browns and Blairs parent's food.

 

HAHAHA  

[adarmo]

2 hours ago, PopGun said:

That they've borrowed Sh1t loads of money to fund their ideology.

 

What is their ideology? I thought Tories were pro small government and small government spending? If that's the ideology you're talking about they've borrowed loads and loads of money to shrink the size of the state? Talk me through that. 

If not what is do you mean by 'their ideology'?

[adarmo]

19 minutes ago, spyguy said:

Figures on the deficit varies a bit. It was somewhere between almost 10% to 12% in 2010.

Even at 9.9% thats fcking shocking. Its the sort of number youd expect if a country was at war or had an atomic bomb droped on it,

I dont think any previous govermet had managed cut 6% of a deficit in a relative short period.

In yhe olden days, a deficit of 5% was considered a major fckup.  Brown certainky exceeded expectation. Even more considering he followed the Cins spending from 97 to 20p01 and was running a surplus.

Of course, it was not so much being prudent. And all to do with going for a massive voteforme or workforme leader forever.

In 5 years from 2001 we went from being German to being Greek. And the larger part of Browns fjnancual inckbtinence has yet to land.

Agreed anything over 5% would be terrible. If a company was doing that it'd be curtains for the Board. 

Yet, there are some who bang on about the total amount borrowed and fail to grasp the concept of a structural deficit and eroded tax base. 

[spyguy]

4 minutes ago, adarmo said:

This is interesting. By Jan 2007 around 15 to 25% of the £1trn of outstanding mortgages had been securitised. My understanding was that when things started going south the securitsation market seized up and this stopped banks being able to lend as much as they had been since they lost a huge chunk of their cash source. Everyone then got nervous about what was in the stuff they'd bought (you'd think they'd do this before investing) and the bottom fell out of the bond market. I remember being talked out of investing in the NewStar High Yield bond fund when it fell by 60%. If I had trusted my head and not the financial advisors in my office I'd have made £12k in a year! Anyway, 

I agree that the financial impact of things this side would have been OK but it is highly likely we'd have felt the fallout from a US going into a deep recession, but nothing as bad as we saw. 

There was some securitisation. All junk. Puch taverns did loads for their pub buying splurge. That blew up too.

Not being able to create new MBS would have just stopped new loans dead. It would not have affected banks solvency.

The problems uk banks had in 2007 was down to funding their ongoing capital in wholesale money markets.

BSs used fund the bulk of their capital from depisitors. Expensive and limited. They started using whole sale money markets, expecting to roll over borrowing whenever. And it was cheaper and offered more a lot more money than grannies saving their pensions.

But that cheapness and size came at a cost - liquitidy, followed by professionals who sniffed the start of banks problems and pulled their capital. Uk banks wrre caught with 25 year mortgages and no capital.

The most unsane and kesser known thing is there was a early run with Abbey national, which us where kuqman arnold and steven hester made their money and reps.

On demute, Abbet national discivered they could make more money by getting into commercial leases rather than residential mortgages. There were higher margins and much more demand. High demand and slightly higher margins was because commercial leasing is many times riskier than residential mortgages with a 20% deposit. Thdn the leases started going bad, abbey national failed its capital adequacy req - whuch were laughably low those days. Arnold and Hester were parachuted in to unravel all these deals, which people had earned big bucks from setting up.

[billybong]

8 minutes ago, adarmo said:

What is their ideology? I thought Tories were pro small government and small government spending? If that's the ideology you're talking about they've borrowed loads and loads of money to shrink the size of the state? Talk me through that. 

If not what is do you mean by 'their ideology'?

and like debt they constantly talk before elections about burning quangos but the numbers on the quango payrolls still seem to increase with ever higher wages.  Small government you know.

The other lots are no better of course.

[Darby Ram]

8 hours ago, Si1 said:

I do suspect socialism can work somewhat better in smaller countries where the govt is less removed from the population and accountability is more direct.

 

But having said that the Scandinavian countries have done so well over the decades due to having a long tradition of market economics with effective government. Imho. People rarely cite the successful right wing govts they've had, whilst banging on about the left wing ones.

The market economies of the Nordic countries are very different to the market economies of the Anglo-American world, though. More state-owned enterprise and direct government employment, higher union density and labour market protection and more government ownership of financial assets. The accountability thing is important but there is nothing to stop a large country devolving more power - especially fiscal power - to local government.

Some graphs on the Nordics form this very interesting post:

 

[spyguy]

8 hours ago, Si1 said:

I do suspect socialism can work somewhat better in smaller countries where the govt is less removed from the population and accountability is more direct.

 

But having said that the Scandinavian countries have done so well over the decades due to having a long tradition of market economics with effective government. Imho. People rarely cite the successful right wing govts they've had, whilst banging on about the left wing ones.

Socialism or a highly redistrubtive tax /benefit system work when the country is pretty much uniform and play by the rules i.e dont take the piss and work, or look for work.

As countries get more diverse, social and family links break. Paying taxes then becomes less about supporting your neighbour whos between jobs, and more paying for the Somali single mum whos rocked up with 7 kids and no intention of working., ever.

Then redustrbutive systems break diwn and have to become more of a state insurance system.

[PopGun]

2 hours ago, adarmo said:

If you think a reduction in the deficit of nearly 75% from 2010 to 217 is small then what do you consider to be successful? 

In 2010 the deficit was 9.9% of GDP, in 2016 it was 2.6%. Wrestling that back under control is what should be considered, not the area under that curve (borrowing, but you know that right?).

Out of interest why are you so focused on the total amount borrowed? What do you think could have been done better? Do you think HTB (which set all this chain off) contributed to it?

Again you swerve from answering the question. Why is that?

[adarmo]

9 minutes ago, PopGun said:

Again you swerve from answering the question. Why is that?

Read up on structural deficit. 

You blame the Tories for borrowing more, but actually they've reduced the deficit by more than any government in memory. Government budgets happen with a lagged effect, you couldn't go and strip out £100bn in 12 months could you? To put that number in context the NHS budget for 2017/18 is £124bn. Imagine if they had, what do you think the impact on the wider economy would have been?

You can answer that question yourself, I manage to back up my points with figures. I'm not lazy though. So go on enlighten us all. I'm still at a loss as to what you think the total borrowed over the last seven years has to do with funding Tory ideology (or even what that ideology is), or why you think that the amount borrowed is the useful metric. 

Take it from an accountant it's the deficit, and direction of growth, that matters. 

[PopGun]

1 minute ago, adarmo said:

Read up on structural deficit. 

You blame the Tories for borrowing more, but actually they've reduced the deficit by more than any government in memory. Government budgets happen with a lagged effect, you couldn't go and strip out £100bn in 12 months could you? To put that number in context the NHS budget for 2017/18 is £124bn. Imagine if they had, what do you think the impact on the wider economy would have been?

You can answer that question yourself, I manage to back up my points with figures. I'm not lazy though. So go on enlighten us all. I'm still at a loss as to what you think the total borrowed over the last seven years has to do with funding Tory ideology (or even what that ideology is), or why you think that the amount borrowed is the useful metric. 

Take it from an accountant it's the deficit, and direction of growth, that matters. 

Just look up the numbers and paste them on here already ....

ill even give you a clue, Tories borrowed more, a lot lot more.

shake that magic money tree.

[dugsbody]

6 hours ago, PopGun said:

That they've borrowed Sh1t loads of money to fund their ideology.

You seemed to be trying to make a point about the deficit. I am failing to see what the point is. That the Tories have reduced it? Because they have. And this is ultimately required. Keep in mind, I loathe the Tories (and dislike Labour). But I am at least objective about blatant facts.

Having said that, I have my doubts that any government in the UK will achieve a surplus for very long in order to start reducing our very high debt. What do you think?

[giggler000]

On 27/07/2017 at 11:18 PM, Habitationi Bulla said:

And the Tory Party had the benefit of hindsight ... difference between the Labour bubble and the Tory one, is the Tory Party said before the 2010 election you cannot build an economy on cheap credit and high house prices. Then they actually used taxpayers money via HTB and got the BoE to come up with FFL to "create a nice little housing bubble".

I blame the Tory Party for the 2010 - 2017 bubble, its 100% there creation though the Libs cheered them on.

While they all seem to lie, like Nicks liberal democretes (intentional) to students - I wonder, since many have never been in power (read as directly over countries gear sticks), when they get there to the top do they get told something important like "if you implement this s*** you'll take down the country" or "the queen thinks you're wrong, please rethink" that swiftly makes them change their mind?  He must have known getting part control on the student vote and then rolling back for what got him there would decimate future chances for his party - makes you even think he was put there to ensure there was only a 2 party option.

[adarmo]

20 hours ago, Habitationi Bulla said:

Ive been reading your posts for a few weeks and to be honest i've never read such a prolific writer who thinks the status quo in prices is pretty much here to stay and at best we can hope for is a 10% drop i.e. early 2016 prices which were absolutely outrageous. 

Which is why i asked.

 

There's no harm in asking. But to be clear there's a difference between what i think will happen having been so disappointed for the last ten years, and what I've been hoping will happen for that amount of time. 

I would love to see prices become more affordable and I'd be over the moon if they never went up again even as someone who is about to buy his first house mainly because at some point I'd like to move and i don't want to have to spend even more than i already would at today's prices. 

I've hoped for prices halving for years and if the gfc couldn't do it i don't know what will. 

[spyguy]

3 minutes ago, adarmo said:

There's no harm in asking. But to be clear there's a difference between what i think will happen having been so disappointed for the last ten years, and what I've been hoping will happen for that amount of time. 

I would love to see prices become more affordable and I'd be over the moon if they never went up again even as someone who is about to buy his first house mainly because at some point I'd like to move and i don't want to have to spend even more than i already would at today's prices. 

I've hoped for prices halving for years and if the gfc couldn't do it i don't know what will. 

The GFC saw IRs being slashed to levels never seen ever.

They also saw transaction numbers collapse. Areas I watch must have the probate rate running at 2 x the the number of trsnactions. That is very unstable.

As the cost of QE slowly sinks in - you are going to be retiring 10 years later than you thought - and the its affect kicks in, I expect housing to get hammered.

 

[adarmo]

21 hours ago, Habitationi Bulla said:

Says man who believes the current bubble is not the Tory partys fault.

We all know what Labour done, some of us are old enough to have been priced out by it, but one thing Labour did not do was use taxpayers money to create a bubble ... only to bail it out.

What about housing benefit under Labour? That's an expense and not a balance sheet account (unlike help to buy).

I'm 35 this year so without prices going crazy I'd have been a first time buyer 15 years ago. 

I'm not removing blame from the Tories, they should have allowed prices to correct and I've made no secret of my surprise when they didn't. But prices getting up to this level happened under Labour and the utter hypocrisy of this momentum movement makes me more than a little annoyed. 

[spyguy]

As far as house price and politics goes, heres another simple number that I have distilled from the mortality stats:

In 10 years time, 50% of people over 65 will be dead.

Its that simple.

Put that into your plan of 'Not giving it away'.

[adarmo]

8 minutes ago, spyguy said:

The GFC saw IRs being slashed to levels never seen ever.

They also saw transaction numbers collapse. Areas I watch must have the probate rate running at 2 x the the number of trsnactions. That is very unstable.

As the cost of QE slowly sinks in - you are going to be retiring 10 years later than you thought - and the its affect kicks in, I expect housing to get hammered.

 

I don't disagree with anything you've written other than housing getting hammered. It might happen but would need a sudden shock, IRs suddenly going up by a few %, unemployment rising, an exodus of population (for all the bluster around Brexit the population is still increasing).

By hammering what sort of % fall are you thinking?

[spyguy]

1 minute ago, adarmo said:

I don't disagree with anything you've written other than housing getting hammered. It might happen but would need a sudden shock, IRs suddenly going up by a few %, unemployment rising, an exodus of population (for all the bluster around Brexit the population is still increasing).

By hammering what sort of % fall are you thinking?

Itll be hammered relative to income. Outside of London/SE  wages double, or housing halves. Take your pick.

London/SE is see being even worse. Dont have to raise IRs for that, just halve housing benefit. End of the day, 60% of households  within the M25 depend on HB.

[adarmo]

18 hours ago, PopGun said:

Just look up the numbers and paste them on here already ....

ill even give you a clue, Tories borrowed more, a lot lot more.

shake that magic money tree.

 Never said they didn't borrow more. I said it's the wrong metric. It's the metric Labour churn out which is odd because it's the consequence of the structural deficit that they left. 

All yourself why Labour was borrowing so much during the longest period of uninterrupted economic growth in the country's history. 

[adarmo]

5 minutes ago, spyguy said:

Itll be hammered relative to income. Outside of London/SE  wages double, or housing halves. Take your pick.

London/SE is see being even worse. Dont have to raise IRs for that, just halve housing benefit. End of the day, 60% of households  within the M25 depend on HB.

 I'll take wages doubling if that's on offer. 

I'm surprised housing benefit is that far entrenched. 

[Habitationi Bulla]

3 hours ago, giggler000 said:

While they all seem to lie, like Nicks liberal democretes (intentional) to students - I wonder, since many have never been in power (read as directly over countries gear sticks), when they get there to the top do they get told something important like "if you implement this s*** you'll take down the country" or "the queen thinks you're wrong, please rethink" that swiftly makes them change their mind?  He must have known getting part control on the student vote and then rolling back for what got him there would decimate future chances for his party - makes you even think he was put there to ensure there was only a 2 party option.

Nah i dont think that, theyve gone out an intentionally blown up a housing bubble .. how would leaving things as they were blow up the economy.

[Habitationi Bulla]

9 minutes ago, adarmo said:

 I'll take wages doubling if that's on offer. 

I'm surprised housing benefit is that far entrenched. 

Of course you would you're a soon to be home owner you'd much rather peoples savings were destroyed, so your kind could keep unearned wealth at the expense of others

Does it not cross your mind that if wages were to rise 10-20% PA, interest rates would shoot up.

You're on the side of the insane housing bubble.

[Habitationi Bulla]

48 minutes ago, adarmo said:

What about housing benefit under Labour? That's an expense and not a balance sheet account (unlike help to buy).

I'm 35 this year so without prices going crazy I'd have been a first time buyer 15 years ago. 

I'm not removing blame from the Tories, they should have allowed prices to correct and I've made no secret of my surprise when they didn't. But prices getting up to this level happened under Labour and the utter hypocrisy of this momentum movement makes me more than a little annoyed. 

You've done nothing but try shifting the blame to Labour for the 2010-17 bubble, as for the video you're "more than a little annoyed" at an irrelevant video, but just surprised he Tory party didn't let prices correct.

Personally i couldn't care less about some poxy video but i'm f'en raging that the Tory party have used my/taxpayers money to blow up a bubble to enrich themselves and  to win the 2015 election which has caused huge stress to me and my family as well as millions of others priced out Brits of all ages.