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Guardian: A Decade After The Crash...

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Everything that concerns me about the housing market and the economy is in this, and the word that I use time and time again, "illusionary". From money loaned for mortgages that can and never will be paid back, to interest only mortgages with no repayments vehicles, to the inevitable raising of interest rates and millions this will catch out.

My biggest mistake is not being thick or naive enough to go along with it, so many people pretending they have fantastic homes when it is all illusionary, you never own that home until that last payment is made, and so many people will never get there and the government and BOE know it.

The Northamptonshire council crisis is just a small example of what is going wrong in the UK right now, so much money being ploughed into un productive housing, £40 Billion per year going on housing benefit alone, all to line the pockets of the top 1%

Edited by Guest

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Agree with most of that article.

we really do have massive structural problems in this country, as do most western countries.

im still in the camp of big house price falls, but, it’s when? Interference to prop up can’t continue forever, I predicted a few years ago 2018 will be the year of reckoning, it looks like spilling over into 2019 but the foundations of our economy are worse than rocky.

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Guy on the right actually looks happy... Wonder if he got a more fulfilling job. 

The student debt part is insane. £100bn, students owe £60k after leaving and have 6% interest rates. People should be up in arms. This is a disgrace of a country and will effectively cripple output long term as the brightest get screwed out of having a good life. I did physics, if I were to do a stem today I would bugger off abroad and head someone cheaper. Most courses are in English anyway. 

Edited by UnconventionalWisdom

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1 hour ago, UnconventionalWisdom said:

Guy on the right actually looks happy... Wonder if he got a more fulfilling job. 

The student debt part is insane. £100bn, students owe £60k after leaving and have 6% interest rates. People should be up in arms. This is a disgrace of a country and will effectively cripple output long term as the brightest get screwed out of having a good life. I did physics, if I were to do a stem today I would bugger off abroad and head someone cheaper. Most courses are in English anyway. 

Agree, it's all ridiculous. After an unsustainable debt fueled housing bubble that bought world economies to it's knees, TPTB decided we must get the bubble back up and running again but this time make it even bigger. Less deranged people would be thinking we must never make those mistakes again.

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2 hours ago, inbruges said:

Everything that concerns me about the housing market and the economy is in this, and the word that I use time and time again, "illusionary". From money loaned for mortgages that can and never will be paid back, to interest only mortgages with no repayments vehicles, to the inevitable raising of interest rates and millions this will catch out.

My biggest mistake is not being thick or naive enough to go along with it, so many people pretending they have fantastic homes when it is all illusionary, you never own that home until that last payment is made, and so many people will never get there and the government and BOE know it.

The Northamptonshire council crisis is just a small example of what is going wrong in the UK right now, so much money being ploughed into un productive housing, £40 Billion per year going on housing benefit alone, all to line the pockets of the top 1%

The word you're looking for is "illusory".

Furthermore, housing benefit is administered by local authority but paid by the dwp. Not sure what.point you're trying to make about Northamptonshire; the cuts they're facing are predominantly from the dclg budget not dwp.

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1 hour ago, Hullabaloo82 said:

The word you're looking for is "illusory".

In February '18 a Bank of England committee member publicised, that they have made everyone wealthier, an approx. £12,000 better off. They would be loath to rase interest rates as they own 25% of Government debt, for which a government hasn't the means to pay off the debt. It's a classic....

  • The country's high street is dead doors.
  • Consumers wages have been static for 10 years.
  • Interest Rates are moving upwards
  • Unemployment is starting to rise
  • Unstable Government
  • Upside Inflation 
  • Upside Oil prices
  • Hard Brexit

The question is will the bank, stop a run on the pound or let it head lower? 🤣

 

 

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1 minute ago, maverick73 said:

In February '18 a Bank of England committee member publicised, that they have made everyone wealthier, an approx. £12,000 better off. They would be loath to rase interest rates as they own 25% of Government debt, for which a government hasn't the means to pay off the debt. It's a classic....

  • The country's high street is dead doors.
  • Consumers wages have been static for 10 years.
  • Interest Rates are moving upwards
  • Unemployment is starting to rise
  • Unstable Government
  • Upside Inflation 
  • Upside Oil prices
  • Hard Brexit

The question is will the bank, stop a run on the pound or let it head lower? 🤣

 

 

I thought the whole point was to let the pound collapse so cash rich people "in the know" can get rich by speculating on currency and chucking their money into global equiti-- sorry, sorry I meant so that Britain can become something something more competitive something something free wheeling free market economy etc? 

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2 hours ago, Gigantic Purple Slug said:

As usual a completely politicised article which blames everything on Tory austerity and help to buy, while conveniently forgetting the massive 10 year credit bubble the labour party pumped from 1997 to 2007.

 

Yes, typical.

 

Disingenous little weasles at least slipped this in there:

Quote

British household finances also slumped from being among the most solvent in the 1990s to being among the most indebted compared with households in other major western countries.

 

Of course they do not flesh that out at all because then they would have to acknowledge that it correlates to the end of a Conservative government and the start of a Labour one.

Amazingly they even tried to make out things would have been just fine and dandy if Crash Gordon had been allowed to continue his post-crash spending spree. Remember the Labour treasury even admitted to the incoming Tories that "there is no money."

Good old Guardian. Maybe they should get back to the anti-Trump stuff. They just need to remember to avoid talking about US GDP.

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4 hours ago, Hullabaloo82 said:

I thought the whole point was to let the pound collapse so cash rich people "in the know" can get rich by speculating on currency and chucking their money into global equiti-- sorry, sorry I meant so that Britain can become something something more competitive something something free wheeling free market economy etc? 

It's already begun to change. All the new build flats are being converted into student digs. The UK has started the global education system ra ra ra... electronic cars.... basically they will ultimately align with the US, and join the lands of tax haven. As the the UK residents, they get shafted.

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7 hours ago, Gigantic Purple Slug said:

As usual a completely politicised article which blames everything on Tory austerity and help to buy, while conveniently forgetting the massive 10 year credit bubble the labour party pumped from 1997 to 2007.

 

 

Yep, article was on about "austerity", their idea of austerity is for the Tory party to increase spending at a slightly slower rate than Labour.  I am interested in seeing the reaction when we are forced into some genuine austerity.

 

11 hours ago, inbruges said:

 

My biggest mistake is not being thick or naive enough to go along with it, so many people pretending they have fantastic homes when it is all illusionary, you never own that home until that last payment is made, and so many people will never get there and the government and BOE know it.

 

In some way I think I should have loaded up on debt in the early 2000s while still in my early 20s.  Instead of "over thinking it", and actually looking into the fundamentals of the economy.

 

On the positive side my life went in a totally different direction, and I ended up living in another country.  I am well placed for the next global melt down :)

Edited by reddog

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13 hours ago, maverick73 said:

In February '18 a Bank of England committee member publicised, that they have made everyone wealthier, an approx. £12,000 better off. They would be loath to rase interest rates as they own 25% of Government debt, for which a government hasn't the means to pay off the debt.

Raising interest rates would have very little impact on the Treasury's ability to repay outstanding debt because it has mostly been issued at fixed interest rates. Therefore it will not be a factor in the MPC's decision-making. 

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4 hours ago, Ah-so said:

Raising interest rates would have very little impact on the Treasury's ability to repay outstanding debt because it has mostly been issued at fixed interest rates. Therefore it will not be a factor in the MPC's decision-making. 

Gilts range from 3 months to 30 years... why buy long term debt when rates are rising, basically the value of a bond becomes less each time a interest rate rise occurs.

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“What you are doing is lending them more money backed by the taxpayer to push up house prices even more,” he said. Mr Edwards explained that while US property prices corrected back to normal levels following the financial crisis, the UK market has become a “bubble on top of the previous bubble”. - Link

 

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14 hours ago, maverick73 said:

Gilts range from 3 months to 30 years... why buy long term debt when rates are rising, basically the value of a bond becomes less each time a interest rate rise occurs.

Gilts are not issued for 3 months - you mean Treasury Bills - these are offered between 1 month and 2 year maturity and are zero coupon. 

The bulk of what the Bank owns will be long-term debt with original issuance between 10 and 30 years. 

Yes, the value of the files will go down when interest rates rise (although not necessarily because the Bank rate is an overnight deposit rate rather than a long-term interest rate), but the Bank doesn't really care about short term profit and loss because it is planning on holding the government debt to maturity rather than selling.

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  • 140 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%



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