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Over the past 12 months people have MEWed a breathtaking £50 billion. As a percentage of income this almost double anything we have seen in history and the money released is enough to fund 2 million jobs at above average salary.

MEWing has motivated people to stop work, buy expensive cars, built extensions and vote labour.

Here is the future guys. Just look at the suckers rally in 1989.

MEW.jpg

post-712-1183116189_thumb.jpg

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Guest DissipatedYouthIsValuable
I understand why there is a dip in 2005. Why was there the same dip in the previous boom? 'M' shaped in both booms... why?

It's the inevitable M-shaped dip of the MEW tremble. In all the books, honest.

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good graph! looks like history could repeat itself

yep will be interesting to see what happens. Not long to wait to see if the same pattern will emerge.

Its interesting to look at posts around 2005, we see people tracking downward trends and telling us how the crash was here. No one was predicting a "suckers rally" then of course - but hey hindsight can make us all look clever ;)! Anyway, I guess the point is even when it looks like its going one way, you never know for sure.

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MEWing has motivated people to stop work, buy expensive cars, built extensions and vote labour.

I would take exception to the extensions bit. Everything else is a bad waste of money but for the past 3 years (much like back in 1987 to 1990) building an extension has been far, far cheaper than moving to somewhere that already had the additional space.

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yep will be interesting to see what happens. Not long to wait to see if the same pattern will emerge.

Its interesting to look at posts around 2005, we see people tracking downward trends and telling us how the crash was here. No one was predicting a "suckers rally" then of course - but hey hindsight can make us all look clever ;)! Anyway, I guess the point is even when it looks like its going one way, you never know for sure.

If Gordon Brown is aware of these MEW statistics, he might want to get his election out of the way within the next 2 or 3 weeks. A £50 billion drop in spending (which has to happen when house prices stop rising) is going to rip the head of the economy.

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If Gordon Brown is aware of these MEW statistics, he might want to get his election out of the way within the next 2 or 3 weeks. A £50 billion drop in spending (which has to happen when house prices stop rising) is going to rip the head of the economy.

Oh but don't forget. Merv said that "we just don't know how many people borrow the money to stash away in savings". Well I guess we do now as savings are at their lowest for some time. Sounds like a crack-up boom to me :lol:

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I would take exception to the extensions bit. Everything else is a bad waste of money but for the past 3 years (much like back in 1987 to 1990) building an extension has been far, far cheaper than moving to somewhere that already had the additional space.

Def. With the high stamp duty building an extension is maybe even cheaper than all the moving fees, and your house is worth more. Very effiecient way to do things.

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I understand why there is a dip in 2005. Why was there the same dip in the previous boom? 'M' shaped in both booms... why?

The spike dip in 88/89 reflects the rise in base rate from 7.5% in May 1988 to 15% in October 1989 and the consequent collapse in equity.

Edited by South Lorne

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Over the past 12 months people have MEWed a breathtaking £50 billion. As a percentage of income this almost double anything we have seen in history and the money released is enough to fund 2 million jobs at above average salary.

MEWing has motivated people to stop work, buy expensive cars, built extensions and vote labour.

Here is the future guys. Just look at the suckers rally in 1989.

MEW.jpg

I believe that the annual increase in GDP is of the order of 30 - 40 billion. So, if this were totally spent on consumption here (rather than abroad, or invested, I suppose), then if it stopped, we'd be in recession-land wouldn't we?

Peter.

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I believe that the annual increase in GDP is of the order of 30 - 40 billion. So, if this were totally spent on consumption here (rather than abroad, or invested, I suppose), then if it stopped, we'd be in recession-land wouldn't we?

Peter.

Very much so and the feel bad factor would triple the effect.

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The spike dip in 88/89 reflects the rise in base rate from 7.5% in May 1988 to 15% in October 1989 and the consequent collapse in equity.

Thanks for this. So why the increase again in 1990?

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Thanks for this. So why the increase again in 1990?

IOt looks like it starts in 1989. One reason could be that they expected the price of their house to continue to rise and any difficulties they may have been facing were temporary - this may have encouraged them to borrow more in order to stay afloat, unfortunately the opposite happened.

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I met someone last week who lost his job a few months ago, and is struggling to find work. He said "luckily we had some equity in our house, so we've got enough money to keep going".

So the equity in the house is a cushion for when times get hard. The problem is that times are about to get harder. I wonder how many others are doing the same?

:unsure:

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Thanks for this. So why the increase again in 1990?

.....it looks like people started MEWing to survive as values started falling but by late '90 the crash took hold and there would not have been much for many to MEW and therefore the major dip commenced. Although interest rates started to fall from Oct 90 by 1% to 14% and continued to Feb 94 to 5.25% this did not help. In fact it took the introduction of BTLs in 95 to really kick start HPI and rebuild 'confidence' for MEWing to start climbing again........we see some of the results today.... :o

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Thanks for this. So why the increase again in 1990?

.....it looks like people started MEWing to survive as values started falling but by late '90 the crash took hold and there would not have been much for many to MEW and therefore the major dip commenced. Although interest rates started to fall from Oct 90 by 1% to 14% and continued to Feb 94 to 5.25% this did not help. In fact it took the introduction of BTLs in 95 to really kick start HPI and rebuild 'confidence' for MEWing to start climbing again........we see some of the results today.... :o

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I met someone last week who lost his job a few months ago, and is struggling to find work. He said "luckily we had some equity in our house, so we've got enough money to keep going".

So the equity in the house is a cushion for when times get hard. The problem is that times are about to get harder. I wonder how many others are doing the same?

:unsure:

MEW= Borrow the money, then make the repayments from the borrowed money, one day it will all tie up in the middle. What then?

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Oh but don't forget. Merv said that "we just don't know how many people borrow the money to stash away in savings". Well I guess we do now as savings are at their lowest for some time. Sounds like a crack-up boom to me :lol:

What kind of retarded logic is Merv peddling, why would you borrow at a higher rate to gain interest at a lower one...... surely even the sun readership that think captain cash is an economist isn’t fouled by that load of garbage.. I may be wrong though sadly

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I like the way the graph goes below zero into minus territory at it's worst......how'd you withdraw a negative percent of your income from your home value? Stuff some cash under the mattress?

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I like the way the graph goes below zero into minus territory at it's worst......how'd you withdraw a negative percent of your income from your home value? Stuff some cash under the mattress?

Does that include people paying off parts of their mortgage?

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