We are at the end of a slow-moving housing Ponzi scheme - David McWilliams

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

"At another level, there is a deeper, more philosophical debate waging. It centres on the core inconsistency embedded in what we might call the “promise of property”. The inconsistency is the promise that property will make you wealthy once you own it and sell it on, allied with the promise that the first-time buyer can buy an affordable house. You can only have both of these aspirations for a number of generations because eventually, the society runs out of buyers. We are here now. If we promise homeowners the option to sell on eventually, cashing in at much higher prices than they originally bought the property for, then we need to create a buying class with limitless income. Societies that get lucky economically can probably get away with this, in a fast-growing economy, for at most two generations, then we run out of buyers rich enough to play the game."
http://www.davidmcwilliams.ie/we-are-at-the-end-of-a-slow-moving-housing-ponzi-scheme/

[stuckinlimbo]

Great article, it does feel like we are at a moment of transition right now. From what I see, I think there is greater public acceptance that there is a problem with housing, and there may be less Gen Zers willing to opt into the ponzi scheme (because it’s no longer possible). 

[NuBrit]

It's not just a regular ponzi scheme though. It's a state sponsored ponzi scheme that transfers wealth from the young to the old. All brought to you by Boris and his mates, with the great British public acting as cheerleaders for it all.

Labour actually have a pretty decent proposal for dealing with the housing crisis (1 million council houses to be built over 10 years), but it'll never win an election. Far too many people have too much to lose from falling house prices. Therefore I see house prices just continuing to rise, in the short-term at least. The longer it all goes on though, the more likely we are to get something similar to the 2007 implosion of the market. 

[Si1]

50 minutes ago, NuBrit said:

It's not just a regular ponzi scheme though. It's a state sponsored ponzi scheme that transfers wealth from the young to the old. All brought to you by Boris and his mates, with the great British public acting as cheerleaders for it all.

Labour actually have a pretty decent proposal for dealing with the housing crisis (1 million council houses to be built over 10 years), but it'll never win an election.

Did you have a link to that proposal?

50 minutes ago, NuBrit said:

 

Far too many people have too much to lose from falling house prices. Therefore I see house prices just continuing to rise, in the short-term at least. The longer it all goes on though, the more likely we are to get something similar to the 2007 implosion of the market. 

 

[spyguy]

1 hour ago, NuBrit said:

It's not just a regular ponzi scheme though. It's a state sponsored ponzi scheme that transfers wealth from the young to the old. All brought to you by Boris and his mates, with the great British public acting as cheerleaders for it all.

Labour actually have a pretty decent proposal for dealing with the housing crisis (1 million council houses to be built over 10 years), but it'll never win an election. Far too many people have too much to lose from falling house prices. Therefore I see house prices just continuing to rise, in the short-term at least. The longer it all goes on though, the more likely we are to get something similar to the 2007 implosion of the market. 

Ahh ..... this time. Nothing for 1997->2010 though.

Roughly, what has happened in the UK and Ireland (the article is for Ireland, which has it owned ffed up situation).

Since Bretton Woods, BoE prints credit in to the economy via private banks.

Over time more and more of the credit has gone into unproductive real estate.

Banks normally  tie mortgages to wages which are tied to the economy - If the economy grows, then wages growth then credit increases - houses move in sync with wag7es/economy growth.

Roughly, until Brown, houses moved around 4 LTE.

If you paid over 5 LTE than the housing is overpriced.

Under 4 - and in the mid 90s even London saw LTE fall under 3 - than you are getting cheap housing.

Enter Brown and Balls and their genius macro economics.

Restrictions removed from banks which promptly blew themselves up in 10 years. 200 odd years of UK finance - poof!

Un restrained credit -self cert. And nuts- non amortising lending a plenty - IO here n there.

In normal time. LTE would have fallen to meet wages.

However the genius of Brown did not stop with blowing up the banks.

He then went on to remove the concept of work to income, inventing tax credits which allowed a low paid person doing 16h/w to have an upper middle class income -whilst the kids werestill at school.

And the removal of migration flooded the UK with 15m-20m from ~2000 - see the current 'I cant believe weve got so many EUers' articles.

UK has not a of rowing  back to do -

Benefits to be rolled back,. and the low paid/ benefit esp migrants with them.

HP back to sane LTEs.

All the while as the demographics change in a negative way.

The productive part of the economy, the one thats pays for all this fwittery - the private sector, is stalled as the is so little moving as HP prevent economies from transition. You are seeing the death of high street retail and nothing replacing it.

Ditto the finsec, which was growing at a paid clip from 1986. Now drastically shrink as technology. regulation and deleveraging removes several 100k of jobs.

I know many town where retail and the finsec made up 50%+ of the private sector work force.

 

 

 

 

[phantominvestor]

45 minutes ago, spyguy said:

Ahh ..... this time. Nothing for 1997->2010 though.

Roughly, what has happened in the UK and Ireland (the article is for Ireland, which has it owned ffed up situation).

Since Bretton Woods, BoE prints credit in to the economy via private banks.

Over time more and more of the credit has gone into unproductive real estate.

Banks normally  tie mortgages to wages which are tied to the economy - If the economy grows, then wages growth then credit increases - houses move in sync with wag7es/economy growth.

Roughly, until Brown, houses moved around 4 LTE.

If you paid over 5 LTE than the housing is overpriced.

Under 4 - and in the mid 90s even London saw LTE fall under 3 - than you are getting cheap housing.

Enter Brown and Balls and their genius macro economics.

Restrictions removed from banks which promptly blew themselves up in 10 years. 200 odd years of UK finance - poof!

Un restrained credit -self cert. And nuts- non amortising lending a plenty - IO here n there.

In normal time. LTE would have fallen to meet wages.

However the genius of Brown did not stop with blowing up the banks.

He then went on to remove the concept of work to income, inventing tax credits which allowed a low paid person doing 16h/w to have an upper middle class income -whilst the kids werestill at school.

And the removal of migration flooded the UK with 15m-20m from ~2000 - see the current 'I cant believe weve got so many EUers' articles.

UK has not a of rowing  back to do -

Benefits to be rolled back,. and the low paid/ benefit esp migrants with them.

HP back to sane LTEs.

All the while as the demographics change in a negative way.

The productive part of the economy, the one thats pays for all this fwittery - the private sector, is stalled as the is so little moving as HP prevent economies from transition. You are seeing the death of high street retail and nothing replacing it.

Ditto the finsec, which was growing at a paid clip from 1986. Now drastically shrink as technology. regulation and deleveraging removes several 100k of jobs.

I know many town where retail and the finsec made up 50%+ of the private sector work force.

 

 

 

 

I don't know how you can have an economy that is mostly financial ******ery and not actual technology and innovation. Unless we're exporting that ******ery outside the country, it won't make the country rich. Except those involved in it.

The % of an economy that is finance shouldn't grow because it means it's pushing out other economies and industries.

2 hours ago, NuBrit said:

All brought to you by Boris and his mates, with the great British public acting as cheerleaders for it all.

I think it goes earlier than Boris. But the ******wittery of the general public cheering it on just shows the stupidity of the general public.

[NuBrit]

1 hour ago, Si1 said:

Did you have a link to that proposal?

 

https://labour.org.uk/issues/housing-for-the-many/#1

[Si1]

8 minutes ago, NuBrit said:

https://labour.org.uk/issues/housing-for-the-many/#1

I don't know how current that is since it was a Jeremy Corbyn initiative (it's introduction is from him as leader of Labour)

[Speed1987]

All this talk is ********...

House prices are going up, due to the money supply being increased.

Earnings have increased also since 1980...

So has life expectancy.

There are plenty of properties in major UK cities for 100-150k, anybody can get one.

If you really want you can buy one somewhere cheap for 50k.

If you wanna buy one next to the queen or in Chelsea for 50k, dream on.

Edited July 4, 2021 by Speed1987

[NuBrit]

1 hour ago, spyguy said:

Ahh ..... this time. Nothing for 1997->2010 though.

The Conservatives have been in power for 11 years now, house prices have gone insane since. All government measures are actively interfering in the market with the intent of pushing prices higher.

The Tories are the fat sow that devours its young.

[Si1]

3 minutes ago, NuBrit said:

The Conservatives have been in power for 11 years now, house prices have gone insane since. All government measures are actively interfering in the market with the intent of pushing prices higher.

The Tories are the fat sow that devours its young.

Yeah. Brown isn't in power anymore. Hasn't been for a while.

[spyguy]

6 minutes ago, NuBrit said:

The Conservatives have been in power for 11 years now, house prices have gone insane since. All government measures are actively interfering in the market with the intent of pushing prices higher.

The Tories are the fat sow that devours its young.

You need to look at HP *AND* transactions.

https://tradingeconomics.com/united-kingdom/mortgage-approvals

[Dorkins]

15 minutes ago, Si1 said:

Yeah. Brown isn't in power anymore. Hasn't been for a while.

Brown is to Tory fanboys what Thatcher is to their Labour equivalents, decades later they are still blaming it all on one person despite many politicians having held power since then and with plenty of time to change the policies they inherited. On housing, Osborne literally said in a Cabinet meeting he wanted a "nice little housing boom" and 8 years ago the Daily Mash was parodying him because everybody could see what he was doing:

https://www.thedailymash.co.uk/politics/politics-headlines/this-housing-boom-will-be-perfect-says-osborne-2013032163413

Labour were last in power for 13 years, the Tories will pass that in under two years' time. Time to start owning the legacy.

Edited July 4, 2021 by Dorkins

[yelims]

First of he is referring to Irish market which only superficially resembles uk and pretty much same trajectory as rest of oecd tho this time there is not over borrowing as getting credit in Ireland now is an exercise in pulling out own teeth 

 

secondly David is a populist who gets money by getting airtime, he was right before during the credit bubble 15 years back but since his predictions turned out the exact opposite, for example he was wildly critical of crypto as it goes against his print print print ideology 

 

thirdly he doesn’t seem to grasp that with constrained supply (insert 100 different reasons for that) and rampant money printing of which he is a massive advocate (listen his podcast on Spotify) the result is erm house inflation 

Edited July 4, 2021 by yelims

[Insane]

4 hours ago, NuBrit said:

Labour actually have a pretty decent proposal for dealing with the housing crisis (1 million council houses to be built over 10 years), but it'll never win an election.

No it won't as people don't believe it will happen. Election Promises, Manifestos and Proposals while in opposition are quite meaningless as too often people see them dumped after Government's get Elected.  

 

[hughjass]

These Tax Credits the LP bought in have been a lot of the problem, can they ever be reigned in . I dont think so ,its going to be a long hard slog to get back to reality if they ever can. So labour want a million council houses , what in big sink estates or the odd one on a private estate. What about housing associations do they have anything to offfer?

[Si1]

3 minutes ago, hughjass said:

These Tax Credits the LP bought in have been a lot of the problem, can they ever be reigned in . I dont think so ,its going to be a long hard slog to get back to reality if they ever can. So labour want a million council houses , what in big sink estates or the odd one on a private estate. What about housing associations do they have anything to offfer?

Tax credits have already mostly ended

[hughjass]

Really, thats news to me, who stopped it??? When????

[hughjass]

 for information on income-related benefits, tax credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours. 

Ive just pulled the above from the.Gov website. Si1 looks like you need to do some research

[Si1]

Just now, hughjass said:

 for information on income-related benefits, tax credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours. 

Ive just pulled the above from the.Gov website. Si1 looks like you need to do some research

 

https://www.gov.uk/claim-tax-credits

 

"How to claim

Tax credits have been replaced by Universal Credit."

I know there are legacy claimants but they're being transferred onto universal credit which is less generous

 

[captainb]

3 hours ago, phantominvestor said:

I don't know how you can have an economy that is mostly financial ******ery and not actual technology and innovation. Unless we're exporting that ******ery outside the country, it won't make the country rich. Except those involved in it.

The % of an economy that is finance shouldn't grow because it means it's pushing out other economies and industries.

I think it goes earlier than Boris. But the ******wittery of the general public cheering it on just shows the stupidity of the general public.

Erm..  UK does export its financial services globally, as does new York and Singapore and Geneva. That's it.

You need a orders of magnitude more robots in Sunderland making car batterys to replace 5% of that.

"Exports of UK financial services were worth £60 billion in 2019 and imports were worth £18 billion, so there was a surplus in financial services trade of £41 billion."

 

https://commonslibrary.parliament.uk/research-briefings/sn06193/

Edited July 4, 2021 by captainb
Added link

[hughjass]

Universal Credit

£ 266.73 per week

How to claim

This amount includes the extra £20 per week uplift. This is due to end in September. From September, if your circumstances stay the same, your Universal Credit will be £246.73 per week. We are campaigning to keep the £20 uplift. Ask your MP for their support.

There is usually a five-week wait for the first payment when you start your claim for Universal Credit.

---

Child Benefit

£ 35.15 per week

How to claim

   I have just madw up a claim and this came back. Said I was with a partner rentng 2kids, thats a nice top up.

I h 

[hughjass]

We are tatered is my thoughts. Just look after no 1 like many many do.

[Si1]

15 minutes ago, hughjass said:

Universal Credit

£ 266.73 per week

How to claim

This amount includes the extra £20 per week uplift. This is due to end in September. From September, if your circumstances stay the same, your Universal Credit will be £246.73 per week. We are campaigning to keep the £20 uplift. Ask your MP for their support.

There is usually a five-week wait for the first payment when you start your claim for Universal Credit.

---

Child Benefit

£ 35.15 per week

How to claim

   I have just madw up a claim and this came back. Said I was with a partner rentng 2kids, thats a nice top up.

I h 

Yeah there's that. In practical terms people in low wage jobs needed to work 16 hrs PW under Gordon Brown's tax credits to get topped up to crazy amounts. Now they have to work 35 hours per week to get a lot less. It's certainly not at the glorious levels of Labour vote buying that it was in 2010. In fact I think the generosity of them back then turned many working class Labour voters against Labour out of principle.

[hughjass]

Thats quite informative Si1, i didnt know you have to do 35 hours a week, so all those 16 hours aweek claims are finished are they?