Meanwhile, Over The Pond

[roman holiday]

You think you got it bad in the UK. Have a look at what is going on in the USA.

Seems the housing crash is well and truly full blown with no signs of improvement on the horizon. And the housing crisis, of depression proportions, is as bad as it is before a recession/ depression has even hit!

Interesting point is made that this housing crisis precedes a recession, whereas the previous housing crisis, of these proportions, had been the reult of a depression.

"This is the biggest housing collapse in this country’s history, and it’s happened before widespread job losses hit the economy. I can’t imagine how bad the housing market could get as the job losses mount."

http://financialsense.com/fsu/editorials/2008/0616.html

What happens in the USA will happen in the UK also.

Any comments?

Edited June 17, 2008 by roman holiday

[frozen_out]

Interesting point that this housing crisis precedes a recession, whereas the previous housing crises have been the reult of recessions.

Are you talking US only? In the UK this certainly isn't true, recession usually follows HPC.

Edited June 17, 2008 by frozen_out

[The Colour]

This is what is happenning to some people who lose their homes:

http://www.dailybulletin.com/ci_8277825

Tent city. Says it all.

[bobthe~]

Are you talking US only? In the UK this certainly isn't true, recession usually follows HPC.

Absolutely.

House price falls started in 1989 in the last crash and the recession was mid to late 1990.

It is one of those unchallenged opinions that the media trot out as though it were fact.

And what other crashes? IIRC correctly the US haven't had one since the great depression and we only had the last one, I can't recall any others.

It could be argued that recession made the falls worse, but you might also argue that the HPC made the recession worse...

Sorry, this wasn't meant as an attack on Mr holiday, just that I see this very often and it should be challenged.

[roman holiday]

This is what is happenning to some people who lose their homes:

http://www.dailybulletin.com/ci_8277825

Tent city. Says it all.

Yes, and I read somewhere that certain city carparks are full of people sleeping in their cars. Technically illegal in the states I believe.

[roman holiday]

Absolutely.

House price falls started in 1989 in the last crash and the recession was mid to late 1990.

It is one of those unchallenged opinions that the media trot out as though it were fact.

And what other crashes? IIRC correctly the US haven't had one since the great depression and we only had the last one, I can't recall any others.

It could be argued that recession made the falls worse, but you might also argue that the HPC made the recession worse...

Sorry, this wasn't meant as an attack on Mr holiday, just that I see this very often and it should be challenged.

And the housing crisis, of depression proportions, is as bad as it is before a recession/ depression has even hit!

Is the point of the article.

Which is also to say, we aint seen nothing yet. The housing crisis is likely to snowball into a general crisis in the American economy.

Edited June 17, 2008 by roman holiday

[The Colour]

Yes, and I read somewhere that certain city carparks are full of people sleeping in their cars. Technically illegal in the states I believe.

I think it's called "vagrancy". It's a law against making the area look bad.

[The Masked Tulip]

I just wish some Economist would stand up and say:

"Look, this housing bubble has been nuts, let's not let these greedy and/or foolish people screw the economy up for the rest of us. Let's get the housing crash over with and then we can all get back on with our lives! Most of us won't be affected with a short, sharp and very painful house price correction as most had bought before the boom began and many decided not to buy. It will just be those who bought during the bubble that get screwed and why should they screw it for the rest of us!?"

Otherwise, the very real danger is that that this slow, drawn out, painful housing crash will bring the rest of the economy, and us, down with it.

[roman holiday]

I just wish some Economist would stand up and say:

"Look, this housing bubble has been nuts, let's not let these greedy and/or foolish people screw the economy up for the rest of us. Let's get the housing crash over with and then we can all get back on with our lives! Most of us won't be affected with a short, sharp and very painful house price correction as most had bought before the boom began and many decided not to buy. It will just be those who bought during the bubble that get screwed and why should they screw it for the rest of us!?"

Otherwise, the very real danger is that that this slow, drawn out, painful housing crash will bring the rest of the economy, and us, down with it.

Instead we got an economist doing the exact opposite. He is to scared to raise the rate. Worried that the whole humpty dumpty economy will go the way of housing.

Edited June 17, 2008 by roman holiday

[Bosh]

I just wish some Economist would stand up and say:

"Look, this housing bubble has been nuts, let's not let these greedy and/or foolish people screw the economy up for the rest of us. Let's get the housing crash over with and then we can all get back on with our lives! Most of us won't be affected with a short, sharp and very painful house price correction as most had bought before the boom began and many decided not to buy. It will just be those who bought during the bubble that get screwed and why should they screw it for the rest of us!?"

Otherwise, the very real danger is that that this slow, drawn out, painful housing crash will bring the rest of the economy, and us, down with it.

There is a film that shows three climbers all dangling over a cliff on one rope, Daughter at the top, Son in the middle and Dad at the bottom.

The rope can not take all three and is beginning to give way, so dad says to the son " Cut the rope" " We are all going down if you don`t cut the rope"

Daughter is screaming to her brother not to cut the rope. He knows his dad is right and he cuts the rope, sending dad to his death, He saves his sister and himself.

Big emotional decision needed to be taken but the right one everytime you watch it Sister finally got over it.

"Cut the fu;king ROPE"

[kzb]

I think our (UK) situation is probably even worse than that of the US, in reality. It's just that for some reason we are a couple of years behind them.

Quote roman holiday:

<<Instead we got an economist doing exactly the opposite. He is to scared to raise the rate. Worried that the whole humpty dumpty economy will go the way of housing.>>

I think "the economy" in the UK is utterly dependent on property. Manufacturing and service industries have been exported. The only private sector working class jobs left that pay realistic wages are the "white van man" jobs, which are fundamentally tied to the property market.

They managed to fool the financial markets. They have issued unearned money (money supply growing 16-17% per year), and managed to get away with it, on the back of a property boom. Perhaps they learned this from the US. They can't raise interest rates as that would drive down the property market even more. Since the property market is the basis of everything, we are up sh*t creek without a paddle (but with the USA).

[roman holiday]

Since the property market is the basis of everything, we are up sh*t creek without a paddle (but with the USA).

Yep, misery loves company.

[The Spaniard]

Any socially advanced aliens looking down must be scratching (at least one of) their heads.

Same people, same housing stock, both before and after "the housing crash".

Some electronic numbers change in some banks' computers, and many real humans are compelled to abandon their real homes under threats of violence and imprisonment.

We should educate ourselves about how and why this happens.

Debt-based, commercially issued money - who needs it?

[roman holiday]

Well, the problem is the unconstrained and undisciplined issue of it, but then we are covering old ground here.

Edited June 17, 2008 by roman holiday

[Havoc]

There is a film that shows three climbers all dangling over a cliff on one rope, Daughter at the top, Son in the middle and Dad at the bottom.

The rope can not take all three and is beginning to give way, so dad says to the son " Cut the rope" " We are all going down if you don`t cut the rope"

Daughter is screaming to her brother not to cut the rope. He knows his dad is right and he cuts the rope, sending dad to his death, He saves his sister and himself.

Big emotional decision needed to be taken but the right one everytime you watch it Sister finally got over it.

"Cut the fu;king ROPE"

Vertical Limit

[The Spaniard]

Well, the problem is the unconstrained and undisciplined issue of it, but then we are covering old ground here.

The trouble is, this "ground", though familiar to many on HPC, is not even on the maps of most people.

I am trying to promote curiosity about the validity of the generally accepted maps.

[roman holiday]

The trouble is, this "ground", though familiar to many on HPC, is not even on the maps of most people.

I am trying to promote curiosity about the validity of the generally accepted maps.

I would suggest that the thoughts of multi-headed socially advanced aliens are also beyond the maps of most people.

Which is to say, solutions need to be practical.

Edited June 17, 2008 by roman holiday

[The Spaniard]

I would suggest that the thoughts of multi-headed socially advanced aliens are also beyond the maps of most people.

Which is to say, solutions need to be practically based.

The thought experiment of dispassionate uninvolved aliens cooly appraising our human absurdities can sometimes offer insights that might then contribute to or suggest real solutions.

A shift in perspective is a tried-and-tested problem solving technique.

Spock's frequently annoying but telling observations in Star Trek are a popular illustration.

[Guest LongBlackKilt]

Yes, and I read somewhere that certain city carparks are full of people sleeping in their cars. Technically illegal in the states I believe.

Now, is that worse than being asleep at the wheel?

[roman holiday]

Now, is that worse than being asleep at the wheel?

Hmmm.... interesting metaphor there.... financial suicide?

Edited June 17, 2008 by roman holiday

[roman holiday]

The thought experiment of dispassionate uninvolved aliens cooly appraising our human absurdities can sometimes offer insights that might then contribute to or suggest real solutions.

A shift in perspective is a tried-and-tested problem solving technique.

Spock's frequently annoying but telling observations in Star Trek are a popular illustration.

Agreed. As long as the thought experiments are not put into practice. The world is not a problem to be solved.

Edited June 17, 2008 by roman holiday

[Realistbear]

I sold my last house (in San Diego CA) in September of 2003, about 2 years too soon as far as the US bubble was concerned. I can take not a little satisfaction in the following article:

http://www.signonsandiego.com/news/busines...9-1b17real.html

Median value in May falls 23% from a year earlier

By Mike Freeman

UNION-TRIBUNE STAFF WRITER

June 17, 2008

Home prices continued to tumble in San Diego County last month, with the median reaching its lowest level – $380,000 – since September 2003.

A trio of factors – surging foreclosures, tougher lending standards and a weak economy – further pressured prices and demand for housing, according to La Jolla-based DataQuick Information Systems. May's median price was down nearly 23 percent from a year earlier.

It's no secret that the county's housing market has been sliding for a several years. Experts have been combing data trying to predict when it might end, but so far there's little evidence of a rebound.

2 more years down I would say. BTW, there is a graph on HPC.co that I do not have access to here in Spain where I am having a break from posting, that shows how the San Diego market was almost an exact mirror to the UK in the Great Crash of '89-'96. If it mirrors again we have fun times ahead if you are a buyer-in-waiting.

Spain should be renamed Costa Se Vende. Tons of properties up for sale and no one at the sales offices anywhere. Where I am staying, in Solabrena, there is an entire development of 400k Euro townhouses that stand empty and I am told the builder went bust trying to sell them. At 400k I am not surprised. I would be tempted top buy one for 100k on a take it or leave it basis if the trustees in bankruptcy were interested. Its a lovely little spot and away from most of the tourist trash.