onlybone1 Posted March 18, 2008 Share Posted March 18, 2008 I am in the process of writing an article for a magazine called Invest Today, it is delivered to 300,000 investors! I have 1500 words space which is about 3 A4 sheets with graphs and graphics etc. You can visit the website at http://www.investtoday.co.uk. With recent events, I think the public are now becoming aware of a causal relationship between loose credit, high house prices, dodgey bank practices and economic meltdown. To this end I am going to write an article bringing together a number of elements such as debt levels, nae earnings, interest rates, working population, inflation, wealth breakdown and the big one how property is at the epicentre of this economic earthquake. Obviously, I am trying to be objective and I may also be able to get in a housepricecrash.co.uk reference. Anyway, to all the well informed on this site I am just after sources and links to various data I may find useful. If you know of some useful sources I would be grateful for a quick post with a link. Any ideas also welcome. Thanks onlybone Quote Link to comment Share on other sites More sharing options...
NorthamptonBear Posted March 18, 2008 Share Posted March 18, 2008 Research moneyweek's articles. Plenty of sources. Otherwise Fred Harrison. Work out rental yields. When I was in St. Albans in a house share in 1998 - I think we were providing about 13% return on value of house. Same house virtually same rent, but probably 2.5 + times as expensive. Previous relations to house prices/rent/earnings. Bubbles. I like that bull trap, bear trap, denial fear graph. That should add some FUD. Quote Link to comment Share on other sites More sharing options...
Not Long Now Posted March 18, 2008 Share Posted March 18, 2008 I am in the process of writing an article for a magazine called Invest Today, it is delivered to 300,000 investors! I have 1500 words space which is about 3 A4 sheets with graphs and graphics etc. You can visit the website at http://www.investtoday.co.uk.With recent events, I think the public are now becoming aware of a causal relationship between loose credit, high house prices, dodgey bank practices and economic meltdown. To this end I am going to write an article bringing together a number of elements such as debt levels, nae earnings, interest rates, working population, inflation, wealth breakdown and the big one how property is at the epicentre of this economic earthquake. Obviously, I am trying to be objective and I may also be able to get in a housepricecrash.co.uk reference. Anyway, to all the well informed on this site I am just after sources and links to various data I may find useful. If you know of some useful sources I would be grateful for a quick post with a link. Any ideas also welcome. Thanks onlybone http://www.housepricecrash.co.uk/graphs-index.php Here is as good a start as any. If you can get a hold of house prices compared to average income multiples used to buy a house over the last few years, that would tell it's own story. Additonally, the types of mortgages used over that period (ie the growth of Interest Only and or 100% mortgages) would also tell a huge story. Good luck...and don't forget to post a link on here when it's published. Quote Link to comment Share on other sites More sharing options...
greenalien Posted March 18, 2008 Share Posted March 18, 2008 (edited) Wikipedia on Ponzi Schemes Reading this article from Wikipedia should ring a few bells... Edited March 18, 2008 by greenalien Quote Link to comment Share on other sites More sharing options...
Questiondog Posted March 18, 2008 Share Posted March 18, 2008 (edited) Debt statistics might be handy http://www.creditaction.org.uk/debt-statistics.html Someone had a very good quote about 500 years to get to 500bn debt and 11 to get up to 1.4Trillian debt but I’m not sure where that came from...(or all the extra money that went into that personal debt.) Probably handy to see what the current level of personal savings have been doing over the last 20 years also... not that I have any links to that kind of thing... <edited for poor spelling and grammer. > Edited March 18, 2008 by Questiondog Quote Link to comment Share on other sites More sharing options...
mbga9pgf Posted March 18, 2008 Share Posted March 18, 2008 Liar Loans.... Debunk the Supply and demand myth. Track the number of registered properties for sale. Discuss the impact NOW of the credit crunch and the effect down the line once secured lending is damaged by dropping house prices. Quote Link to comment Share on other sites More sharing options...
alexw Posted March 18, 2008 Share Posted March 18, 2008 add in the outsourcing effect, and the effect of excess global liquidity, i.e. monies spent on foreign goods recycled into providing cheap credit. Quote Link to comment Share on other sites More sharing options...
Son of Fred Posted March 18, 2008 Share Posted March 18, 2008 It's nice to keep things topical so as it is Holy Week, perhaps a few quotes from the good book might go down well with your investors? "Go to now, ye rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted, and your garments are motheaten. Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days" James 5:1-3 or.. "Do not wear yourself out to get rich; have the wisdom to show restraint. Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle." Proverbs 23:4-5 and lets not forget this piece of advice: "People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs." 1 Timothy 6:9-10 Jesus saves! Quote Link to comment Share on other sites More sharing options...
Not Long Now Posted March 18, 2008 Share Posted March 18, 2008 It's nice to keep things topical so as it is Holy Week, perhaps a few quotes from the good book might go down well with your investors?or.. and lets not forget this piece of advice: Jesus saves! ...I think he was looking for something a little more concrete to be honest mate... Quote Link to comment Share on other sites More sharing options...
R K Posted March 18, 2008 Share Posted March 18, 2008 I can save you 1498 words. "Rental yield" 1 graph - Job done. Quote Link to comment Share on other sites More sharing options...
A.steve Posted March 18, 2008 Share Posted March 18, 2008 Someone had a very good quote about 500 years to get to 500bn debt and 11 to get up to 1.4Trillian debt but I’m not sure where that came from...(or all the extra money that went into that personal debt.) It would be very interesting to correlate house price inflation with the increase in year-on-year consumer debt (from credit action) weighted by volume of real-estate transactions (Land Registry?) to illustrate the extent to which house prices have been fuelled by unsustainable increases in debt. Quote Link to comment Share on other sites More sharing options...
The Bachelor of Arts Posted March 18, 2008 Share Posted March 18, 2008 Try the daily reckoning.com and moneyweek. Also 'goldseek.com' and the market oracle have loads of stuff. If you really want to go for it, try 'theinternationalforecaster.com' also. Good luck. D Quote Link to comment Share on other sites More sharing options...
@contradevian Posted March 18, 2008 Share Posted March 18, 2008 Dstars posted a good link to an article on bubbles and mania's recently. Just search his recent posts. http://www.harpers.org/archive/2008/02/0081908 Quote Link to comment Share on other sites More sharing options...
pootle Posted March 18, 2008 Share Posted March 18, 2008 To understand the relationship between price and lending ask yourself the question "how much would houses be worth if you could not borrow money to buy them?" Once you understand that loosening credit directly results in the price of houses rising then you will understand that credit tightening will have the opposite effect. Continuous credit expansion is impossible, therefore continual house price inflation is impossible. Credit crunch = house price crash. It really is that simple. PS - the credit crunch was always going to unavoidable, it was merely a question of when it was going to happen. Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted March 18, 2008 Share Posted March 18, 2008 At the root of how things have gone so badly wrong is loose credit. Banks engaged in excessive credit creation, spurred on by being able to sell on the risk of default and just take the commission. As well as this, banks reserve ratios arhave been too low allow further credit creation on their own books, whilst at the same time they have also managed to create some rather opaque securities which are hard to value and which in a falling market don't seem to have justified their credit ratings. All this available credit has allowed consumers to get highly leveraged on their homes. Many have just bid prices higher and higher, borrowing with ever increasing earning multiples, spurred on by the prospect of super normal profits from the housing bubble. Many others have fallen for the illusion of rapidly increasing equity and have chosen to increase their spending power through Mortgage Equiry Withdrawal. Now in times gone by this might have been alright, as tradtionally a dose of good old inflation and in particular wage inflation has served to rapidly erode the value of debt. This time round, however, wages in the western world have been surpressed by the rise of China and a result wage inflation is not possible on the same sort of scale. As the economy grinds to a halt, the best the politicians and central bankers seem to be able to come up with a stimulus package, ie more of what got us into trouble in the first place. More heroin for the heroin addict to ease the pain of withdrawal. This might keep the economy ticking over internally, but what is clear is that we will get poorer relative to the rest of the world. Easy money and lower interest rates will cause Sterling to fall rather as the dollar has. The result is we will definitely see the price of commodities and imports rise in Sterling terms. Meanwhile it is quite likely that grossly overvalued assets such as houses will continue to fall, as without massive wage inflation and with tigher lending criteria it is very clear that house prices are unsustainable at current levels. In summary we are heading for a definite case of bi-flation. Rising import and commodity costs and falling asset values. Quite a painful place to be really. Quote Link to comment Share on other sites More sharing options...
Paddles Posted March 18, 2008 Share Posted March 18, 2008 People with multiple buy to let properties will get margin calls from their lenders to ensure that they get some of their capital back in a falling market. Oh, and if you really are a journalist, you may want to make a note that it isn't "dodgey". Quote Link to comment Share on other sites More sharing options...
marzipan Posted March 18, 2008 Share Posted March 18, 2008 Anyway, to all the well informed on this site good luck finding any! i suggest you don't take too much notice of what people say here, all the armchair economists here are far too excitable and irrational to provide any useful commentary. i suggest you try a more balanced message forum such as the motleyfool Quote Link to comment Share on other sites More sharing options...
pootle Posted March 18, 2008 Share Posted March 18, 2008 (edited) good luck finding any! i suggest you don't take too much notice of what people say here, all the armchair economists here are far too excitable and irrational to provide any useful commentary. i suggest you try a more balanced message forum such as the motleyfool Hmm, the old ad hominem argument. Doesn't really contribute to the debate though does it? As you are also a contributor here so you include yourself in this ad hominem? Perhaps you could use some circular logic to suggest that as it is an ad hominem you can treat your own attack on yourself as meaningless, as it truly deserves, and so ignore it. Edited March 18, 2008 by crash_bang_wallop Quote Link to comment Share on other sites More sharing options...
roger196 Posted March 18, 2008 Share Posted March 18, 2008 If you can get a hold of house prices compared to average income multiples used to buy a house over the last few years, that would tell it's own story. Additonally, the types of mortgages used over that period (ie the growth of Interest Only and or 100% mortgages) would also tell a huge story. Have a look at my affordability index in the economics section of this website. This compares house prices with median disposable income over many years. The most interesting part is the calculation of the deviation from the mean for each year. If you need further expln , mail me direct. Quote Link to comment Share on other sites More sharing options...
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