Us Eyes Uk Housing Market

[Guest muttley]

This is from the property expert, Edmund Conway, it today's Telegraph.

http://www.telegraph.co.uk/property/main.j.../prword2608.xml

Americans are taking a keen interest in our own housing market - and that of Australia, while we're on the subject - because our slowdown has already started.

So far, the Bank of England has steered the market clear of a crash, while managing to slow the pace of house-price inflation dramatically -

However, according to economists at Lombard Street Research, the BoE's success, so far, at preventing a crash does not imply the same will be the case in the US.

Pah!

Edited August 26, 2006 by muttley

[Realistbear]

This is from the property expert, Edmund Conway, it today's Telegraph.

http://www.telegraph.co.uk/property/main.j.../prword2608.xml

Pah!

Bottom line of the article is 70% right on:

On the other hand, if there were a US crash, matters could worsen here. The chain reaction would go something like this: US house prices crash and, as a result, Americans stop spending in their shops.

The US economy slows and, with fewer things being sold on the high street, America imports fewer goods from Britain. Some companies here are forced to cut jobs and some homeowners have to sell up. Voilà - a trigger for a possible fall in prices.

There was also an IMF report not so long ago warning that a crash in one housing market could spark another on the other side of the world because - thanks to globalisation - our economies are increasingly reliant on each other.

However, most economists agree that what is of prime importance for property is the domestic market. The prospects for the UK look considerably brighter than they do in the US, although with prices over here still extremely high - often beyond what buyers can afford - Britain is not yet out of the woods.

Our bubble is far worse than the US which has extremes on the Coasts only. We are up 300% since Gordon's Miracle Economy whereas the US are up, on average, about 20-30% (100% in the bubbles). If the US goes into recession, rather WHEN, we go with them.

The bit about our domestic economy looking bright is a bit out of touch. Have they been reading the ONS employment reports, or our twin deficits, 1.5% deflator inflation in the last Q, bankruptcy repossession increases?

Edited August 26, 2006 by Realistbear

[DabHand]

No its different here. No really it is.

Sarcasm aside, l regard the global effect on the cycle as a magnifier. With global credit, the housing bubble in the UK has gone way beyond anything that could have been sustained even 20 years ago. It really is different this time in that sense.

We now have a new breed of bull who, unable to comprehend the macro effects of global credit on local houseprices, have attempted to rationalise the phenomena using local factors. Punching the air and roaring "Yeah, its different this time..Yeah!" like mediocre used car salesman at an American Psycho audition these pitiful lumpen proles are simply incapable of the mental leaps required. Remember those people running out onto the seabed to pick up fish prior to the Indonesian tsunamai...oblivious to the fact that every other "dumb" animal down to the smallest rodent was rapidly making its way inland.

I use this parallel because globalisation has exaggerated the slosh of the cycle. I wonder just how well individual countries will be able to address the coming aftermath of this credit binge when so much of the control will be out of their hands...i.e. globalised.

[Caledonian-Emigre]

No its different here. No really it is.

"Yeah, its different this time..Yeah!" like mediocre used car salesman at an American Psycho audition these pitiful lumpen proles are simply incapable of the mental leaps required. Remember those people running out onto the seabed to pick up fish prior to the Indonesian tsunamai...oblivious to the fact that every other "dumb" animal down to the smallest rodent was rapidly making its way inland.

There is a whole generation who (thankfully) have never experienced the horrors of - however they also cannot relate to what inflation feels like and do not believe that a bust/recession is possible while in the midst of a boom.

Human history is littered with destructive wars and boom and bust scenarios (they are well documented for the Roman empire).

The Dutch sold houses and lost fortunes just to buy tulips and the US witnessed massive queues in front of soup kitchens during the height of the Great Depression.

Times change, but the bulls seem to think that things will just get better and better

[Guest muttley]

From the article

Furthermore, the current account deficit in the US is far bigger than in the UK - a clear sign that Americans are having to borrow much more to keep spending than we do over here.

Is this true? Are Americans really in more debt than the Brits?

I was talking about this with some Americans last year. They conceeded there was a bubble, but they were talking about properties that had gone from $90,000 to $140,000. So how is the crrent account deficit in the US far bigger than in the UK?

For any American readers, look what you can buy for approx $178,000. This was posted by Shedfish on another forum.

http://www.rightmove.co.uk/viewdetails-498...=3&tr_t=buy

Edited August 26, 2006 by muttley

[Realistbear]

From the article

Is this true? Are Americans really in more debt than the Brits?

I was talking about this with some Americans last year. They conceeded there was a bubble, but they were talking about properties that had gone from $90,000 to $140,000. So how is the crrent account deficit in the US far bigger than in the UK?

For any American readers, look what you can buy for approx $178,000. This was posted by Shedfish on another forum.

http://www.rightmove.co.uk/viewdetails-498...=3&tr_t=buy

Last statistic I read on personal debt was that the US had 11 Trillion $ and we had 1.2 Trillion pounds. With sterling currently at 1.89 that translates into UK personal debt of 2.27 Trillion $. The US population is about 5 X ours which means our total has to be adjusted to 2.27 X 5 = 11.34 Trillion $. We owe more than the average American.

[Guest muttley]

Last statistic I read on personal debt was that the US had 11 Trillion $ and we had 1.2 Trillion pounds. With sterling currently at 1.89 that translates into UK personal debt of 2.27 Trillion $. The US population is about 5 X ours which means our total has to be adjusted to 2.27 X 5 = 11.34 Trillion $. We owe more than the average American.

What are the figures for US GDP v UK GDP? I imagine their's is higher.

Would anyone like to show how the current account deficit is bigger for the UK than the US?