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Royal Bank Of Scotland Lecture

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Royal Bank of Scotland Lecture

Their conclusions:

Yes – it will end in tears –all booms do especially the bigger they are and the longer they last

It is definitely (90% probability!) a bubble in some areas – including much of the UK

But it may not end just yet

Key is the US which, barring accidents, looks OK for a while longer

Now is the time to reduce exposure to housing not increase it

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Quite a detailed presentation with great graphs, like those on pages 23 to 25.

The one that especially grabbed my attention though was the graph on the USA (page 34) indicating impending doom.

I always think that Britain follows USA both on the upswing and the downswing.

Unfortunately only about 2 months ago I saw a graph on these boards (which I cant find now) from somewhere like the USA National Bureu of Statistics ? that showed a much more relaxed set of figures that shown in the RBS presentation.

Why the difference / who should we believe?

Incidentally, I attended a seminar that included a RBS speake here in Hong Kong about 3 months ago and when asked about a global (USA led) house crash he didn't think the chances were all that high.

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Quite a detailed presentation with great graphs, like those on pages 23 to 25.

The one that especially grabbed my attention though was the graph on the USA (page 34) indicating impending doom.

I always think that Britain follows USA both on the upswing and the downswing.

Unfortunately only about 2 months ago I saw a graph on these boards (which I cant find now) from somewhere like the USA National Bureu of Statistics ? that showed a much more relaxed set of figures that shown in the RBS presentation.

Why the difference / who should we believe?

Incidentally, I attended a seminar that included a RBS speake here in Hong Kong about 3 months ago and when asked about a global (USA led) house crash he didn't think the chances were all that high.

The UK does it can't help being tied to the states. Did he have anything to say about the HK market? and where it is in this point in time? Pegging the HKD to the US does not seem relevant anymore.

I think he mis-judged the problems in the states which are beginning to appear now. If by Xmas the US property market continues to decline and get worse then the bubble is pricked there.

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Ooo, good read...

P31 "...past bubbles have burst primarily because of outside shocks"
Edited by dnd

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Royal Bank of Scotland Lecture

Their conclusions:

Well bully for the RBS. There's no altruism in this stunning relevation.

Basically Scotlands greediest bank knows the "pop" is impending, knows they won't be able to milk the House price rush much more, and knows there's nothing to loose and everything to gain by fessing up now. Stops them looking like the exploitative twats they are. Also stops them looking incompetent.

But lets face it, the impending crash has been on the cards for some time. Has that stopped them dishing out IO or Self Cert mortgages left right and centre...though not.

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Page 22: Could see falls of 50%. :)

I had a feeling this was going to be a bearish week.

Page 28: Get out of BTL and get out now seems to be the message. If you bought near the top, get out. If you have an IO mortage you are in trouble. If you bought a house bigger than you need think about it and then sell. Its going to be bad and everyone will pay for the Miracle Economy with tears. Wow. Its everything the bears have been saying for months now.

Time to take up defensive positions--when this lot collapses sterling will not be the place to be IMO. The charts indicate we are going down harder than the US which has lower PE ratios and a more resilient and diversified economy.

Edited by Realistbear

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Page 33 - bad news for STRs too

Like I said - we're ALL ****'d

Depends how you take up your defensive position. A crash of the order RBS suggest (up to 50%) will kill inflation quite quickly as the recession will long, deep and painful (as the recent Wall St. Journal article stated). I am thinking about US inflation protected bonds now and have recently taken up a few positions in utility stocks --domestic supply mostly. We could see a commodities bust also as China will slow at some point and that may have a knock-on effect on the uber commodity-gold.

Bottom line: diversify, diversify and then diversify. But get out of the most at risk asset: leveraged/IO/BTL property (page 37).

90% bubble risk! I would worry if there was a 30% risk. :o

Edited by Realistbear

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Excellent

How on earth did you source this?

There's still little to worrry about for those that have bought, even recently. As long as they are not highly leveraged, or have not overstretched themselves with properties that are too large for their needs, or which are taking a large amount of their income (when they have a relatively low income, don't forget if you are paying half your salary in mortage payments and you earn £4k per month, it still leaves you with £2k a month to spend - hardly breadline situation ). Only if all criteria are satisfied will people be in trouble, as most people never realise their "gains" or "losses" from HP movemenmts as they don't need to move.

Only the fools end up in trouble. Look at the 89 crash. Thousands lost their homes. But millions were home owners, stuck tight and weren't affected at all. Many continued to make money through their diverisfied portfolios throughout the early 90's . The fallout from bubbles bursting actually has less impact on most people than is sometimes imagined. Many people don't have mortgages at all. Many millions don't have a penny owed to any bank.

A few holidays in Cornwall rather than the Bahamas, yes. But if people imagine everyone's going to be running to soup kitchens and sending their children to work to pay the mortgage selling the family silver in wheelbarrows , they are wrong. The world has changed.

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Guest Alright Jack

Quite a detailed presentation with great graphs, like those on pages 23 to 25.

The one that especially grabbed my attention though was the graph on the USA (page 34) indicating impending doom.

I always think that Britain follows USA both on the upswing and the downswing.

Unfortunately only about 2 months ago I saw a graph on these boards (which I cant find now) from somewhere like the USA National Bureu of Statistics ? that showed a much more relaxed set of figures that shown in the RBS presentation.

Why the difference / who should we believe?

Incidentally, I attended a seminar that included a RBS speake here in Hong Kong about 3 months ago and when asked about a global (USA led) house crash he didn't think the chances were all that high.

Oh FFS these guys aren't paid to say what they think, they're paid to tout the official line which goes something like everything's peachy until the truth is undeniable at which point the official line is to 'save face' at the eleventh hour.

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The one that especially grabbed my attention though was the graph on the USA (page 34) indicating impending doom.

there we go again with the doomsday cult HPC! You just see what you want to see, don't you?

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There's still little to worrry about for those that have bought, even recently. As long as they are not highly leveraged, or have not overstretched themselves with properties that are too large for their needs, or which are taking a large amount of their income (when they have a relatively low income, don't forget if you are paying half your salary in mortage payments and you earn £4k per month, it still leaves you with £2k a month to spend - hardly breadline situation ). Only if all criteria are satisfied will people be in trouble, as most people never realise their "gains" or "losses" from HP movemenmts as they don't need to move.

Only the fools end up in trouble. Look at the 89 crash. Thousands lost their homes. But millions were home owners, stuck tight and weren't affected at all. Many continued to make money through their diverisfied portfolios throughout the early 90's . The fallout from bubbles bursting actually has less impact on most people than is sometimes imagined. Many people don't have mortgages at all. Many millions don't have a penny owed to any bank.

A few holidays in Cornwall rather than the Bahamas, yes. But if people imagine everyone's going to be running to soup kitchens and sending their children to work to pay the mortgage selling the family silver in wheelbarrows , they are wrong. The world has changed.

Believe it or not, but a decent package to the Bahamas is cheaper than a holiday in Cornwall where decent restaurants cost the earth and accomodation is either very poor or hyper expensive. 7 nights about 425 pounds http://www.otravel-holidays.com/bahamas_holiday.html

Holidays in the UK are too expensive now along with everything else in this god-forsaken miracle economy. :angry:

Edited by Realistbear

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Believe it or not, but a decent package to the Bahamas is cheaper than a holiday in Cornwall where decent restaurants cost the earth and accomodation is either very poor or hyper expensive. 7 nights about 425 pounds http://www.otravel-holidays.com/bahamas_holiday.html

Holidays in the UK are too expensive now along with everything else in this god-forsaken miracle economy. :angry:

I think he meant a holiday in a tent. Eating tinned steak on a camping gas stove.

But that's ok, buy buy buy, while interest rates are low.

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Earlier thread.

Excellent

How on earth did you source this? [Financial Planner]

For an earlier link to this tract see 'Has Donnie Found The Hpc Bible?' [May 5 2006]:

http://www.housepricecrash.co.uk/forum/ind...showtopic=29383

Apologies if this has been pinned or posted before.

I think I have found a text of nigh-Biblical potency for the HPC "cult". If not THE bible it would certainly make a good gospel book.

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Importantly, This was written some months ago.

He basically says there is going to be a crash, the only thing delaying it being that interest rates will be lowered and the US bubble will continue until 2009.

Um, none of those facts are now true!!!

Wheeeeeeeeeeeeeeeeeeeee craaaaaaaaaash!!!!!!!!!!!!!!!

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A crash of the order RBS suggest (up to 50%) will kill inflation quite quickly

How will a crash in the UK kill inflation when it's being driven to a large extent by commodity use abroad? And if you're right and Sterling collapses too, that's a whole host more imported inflation to deal with.

A US recession would certainly help to reduce inflation as there'd be hundreds of billions less per year going to China to buy commodities to make tat for US consumers, but the UK economy is pretty much irrelevant to global inflationary pressures.

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there we go again with the doomsday cult HPC! You just see what you want to see, don't you?

Heh :lol: ....says the VI Troll.

When the crash actually transpires as expected, do we trade up from a cult to a full fledged religion.

Membership will require a few more active brain cells than the Bull-HPI-Voodoo society. Also, we operate more on fact than on "faith".

X

Edited by geneer

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there we go again with the doomsday cult HPC! You just see what you want to see, don't you?

I think if you take the trouble to read all my post you will find I am a bit more even handed than you suggest.

Now if only I could find the chart I saw we could compare them. ;)

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Shouldn't one of the media-savvy amongst you forward this report to BBC, Sky, Bloomberg, Reuters, FT, Daily Telegraph, The Times, Guardian, Independent etc???

Go on, someone is bound to be interested in such a dramatic document. :)

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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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