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RichM

Debt Won’t Bring Down Our House Of Cards

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I'm beginning to think he's a house price crash villain.

I think we need some "boos" for this guy...

http://www.timesonline.co.uk/article/0,,2095-2241798,00.html

Though some good news at the end:

The zero-interest-rate policy, however, is set to end. Fukui said last week that policy would be “proactive”, which some interpreted as an end to zero interest rates as early as next month. Others are not so sure.

Grant Lewis, a Daiwa Securities economist, thinks the Bank of Japan will delay until the autumn, and the end of prime minister Junichiro Koizumi’s term in office. But he thinks when rates rise, they will eventually do so significantly, ending up at 3%. That really would be the end of the cheap-money era.

Even still, BOO! BOO! The days of low IRs are behind you...

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I'm beginning to think he's a house price crash villain.

I think we need some "boos" for this guy...

http://www.timesonline.co.uk/article/0,,2095-2241798,00.html

Though some good news at the end:

Even still, BOO! BOO! The days of low IRs are behind you...

One feature not noted here is that a lot of debt that would have been finance deals, credit cards etc. has been MEWed to mortgage & made 'more affordable' by lower payment over a longer period.

Somewhat distorts the figures don't it!

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Open the Sunday Times and have a look at how much space is occupied by banks offering mortgages, credit cards, overdrafts, loans.

Then think that this guys wages are paid by them.

Is he really going to start telling people to cool it on the debt?

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I have a few problems with this article...

Qoute 1 - About one in 10 households with unsecured debts found them to be a heavy burden. The proportion has not changed much over the past decade.

Proving what? IR's have remained historically low, also, how is "heavy burden" defined. People grow more relaxed about debt as memories of bad times fade - we have all observed stigma's associated with debt and bankruptcy lessen over the last few years. I suggest that the definition of "heavy burden" has probably changed in the public conciousness.

Quote 2 - The number struggling with their mortgages, about 7% of those with home loans, has risen over the past three years but is still lower than it was for most of the 1990s.

As above, I don't want to be a Semantic disputant, but i think this is a bit meaningless without context, definition or support.

Quote 3 - And, while mortgage lending is up by 11% on a year ago, the growth of consumer credit has slowed to 7%.

Both higher than GDP growth, in the long run, i do not believe that increasing your liabilities/interest payments faster than your income is sustainable.

Quote 4 - The vast majority of households have more assets than debt

Yes, but the value of assets can change, the value of debt is fixed. That's why assets price crashes are so damaging.

Am I talking nonsense or are these fair spots?

Charlie

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I'm beginning to think he's a house price crash villain.

I think we need some "boos" for this guy...

http://www.timesonline.co.uk/article/0,,2095-2241798,00.html

Though some good news at the end:

Even still, BOO! BOO! The days of low IRs are behind you...

And once more for those in the back seats..

the halifax and the office of the deputy prime minister both show prices dropping over most of the country..

:) duh

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  • 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%



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