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Why Does The Media Insist On Reporting Economic Problems Like They Are All Disconnected Episodes?

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..........And financial incompetence!

Reading the newspapers it almost seems like they can't believe the bad luck.

The housing market and the economy was doing well, then subprime hit from America, banks stopped lending now everyone is in trouble. Commodity prices are rising because there's too much demand from China and India.

The stock market's losing value because people have lost confidence in it.

There's a large trade deficit - because!

The fact that the German / Austrian economists of the 1920s/30s described all these things as part of the trade cycle that occurs starting with a credit driven boom, seems lost on these people.

Why do people not see that these aren't just a random series of unfortunate events, but the very consequences of the action taken by the BoE, Federal Reserve and US & British governments in 2001.

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what makes me chuckle is the clumsy connection made between; America's sub prime problem>credit crunch>inflation>oil prices>food prices>wage demands>falling house prices>global problem>global solution needed.... by any of our ministers when they're interviewed and the interviewers allow them to get away with it every time, actually it doesn't make me chuckle, it makes my nose and eyes bleed with rage :angry: ....and relax :)

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Because chavs wouldn't understand.

What the media need to do is give away a dot to dot picture so people would understand.

Most people can't or don't want to grasp complex problems, some of my colleagues think I'm like Frazier from Dads Army as I'm all gloom and doom and they don't want listen.

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I think it's partly because the common folk wouldn't understand the complexity of the problem. People like things to be simple, and they like to be able to blame one or two minor factors that are beyond their control, rather than considering their own role in all of this.

A great example is US school shootings. People just say 'oh well they listen to rock music so it's rock music's fault', or 'they played violent videogames which hypnotise them into killing people'. They never want to consider that multiple issues in human nature and the way modern consumer society works are major contributors to these events because that would essential make them realise that their whole lives and entire are based on shallow concerns of no significance.

Same with the economy, they wanted cheap goods, they wanted to live beyond their means, and they fuelled a credit bubble and encouraged the government to neglect important industries in favour of rubbish. Now they're paying the price and they want to blame everyone else, but the only person to blame is staring at them in the mirror.

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Both the BBC and ITN were at it the other night when they reported on high food prices. There was not one mention of all of it being driven by high oil prices because if people started to connect the dots there might be some unrest. Instead, everything is nicely compartmentalised and treated as seperate issues. There's no way the pwned media would wish to expose speculation as the real reason for the high price of everything. Or maybe it's too difficult to explain in a 30 second sound bite so they only report the symptoms and not the cause.

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the media especially TV likes to simplify to bytesize and dumb down... its natural... they want ratings and people have the attention span of a goldfish...

most media is made by dumb people for consumption by dumb punters. and well they have the D notice system too... don't talk about B&B don't talk about the crash.... keep gordo in power... don't rock the boat....

and simply a great many journos are lazy and creatures of habit... they listen to the same people telling them the same things day after day... its just a job.. after all....the editors need material... to print.. show etc..

no offence meant to the large numbers of Journalists no doubt present on HPC... there are some good ones I know... I'm just stereotyping sorry

Edited by jonpo

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I think it's partly because the common folk wouldn't understand the complexity of the problem. People like things to be simple, and they like to be able to blame one or two minor factors that are beyond their control, rather than considering their own role in all of this.

A great example is US school shootings. People just say 'oh well they listen to rock music so it's rock music's fault'

See, that's a dumbing down in itself. 15 years or so ago the problem wasn't rock music, but the secret messages that were revealed when you played the music backwards!

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Why do people not see that these aren't just a random series of unfortunate events, but the very consequences of the action taken by the BoE, Federal Reserve and US & British governments in 2001.

And, indeed, themselves.

The reason they're not viewed as connected, or even presented as such, is it's, well, a bit complex. It also effectively means telling the viewers off, because as with so much in life, the mess we're in at the moment required the complete co-operation of large sections of the population. Let's face it, you can offer all the insane-income-multiple-IO-40-year-buy-with-fifteen-mates mortgages, zero rate credit cards, buy-now-pay-2050 deals, and all those wierd forms of dirt cheap and highly available credit, in the world, but without individuals willing to use them, they ain't gonna do one iota of damage to anything. Very tricky sell, that, especially given that the overall message is "The Government and BoE made some stupid mistakes, and a whole load of you fell for it hook, line, and sinker. Mr. Blair dared you to go play chicken on the M6 Toll, and you did. He's a prat for making the dare, but you're even more of one for accepting it."

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The problem for the media (for example in the coverage of Northern Rock) is that they fail to understand that bank deposits are safe regardless of the performance of the bank in question. If that were not the case all banks would be unable to repay their depositors on demand.

Once this fact is understood the rest falls into place.

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And, indeed, themselves.

The reason they're not viewed as connected, or even presented as such, is it's, well, a bit complex. It also effectively means telling the viewers off, because as with so much in life, the mess we're in at the moment required the complete co-operation of large sections of the population. Let's face it, you can offer all the insane-income-multiple-IO-40-year-buy-with-fifteen-mates mortgages, zero rate credit cards, buy-now-pay-2050 deals, and all those wierd forms of dirt cheap and highly available credit, in the world, but without individuals willing to use them, they ain't gonna do one iota of damage to anything. Very tricky sell, that, especially given that the overall message is "The Government and BoE made some stupid mistakes, and a whole load of you fell for it hook, line, and sinker. Mr. Blair dared you to go play chicken on the M6 Toll, and you did. He's a prat for making the dare, but you're even more of one for accepting it."

Nah.

Prisoners dilemma.

If cheap credit is offered to all, you have to take it or you will be left behind and have to rent from those who do.

The rational thing to do when offered cheap credit is to take all you can get. Sad, but true.

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Nah.

Prisoners dilemma.

If cheap credit is offered to all, you have to take it or you will be left behind and have to rent from those who do.

The rational thing to do when offered cheap credit is to take all you can get. Sad, but true.

Like most people did.

I never went berserk but I continually used 0% interest rate cards, bought stuff on my main card and transferred it off it was stupid not too. Although I always paid off what I transferred within the 0% period.

When we last moved I had £1K left over for repairs bought all the stuff on my credit card transferred it off and stuck the money in the bank.

However most people just binged borrowed which is why the system is about to implode.

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Regarding the media coverage of events so far. I find it amazing that after the coverage given to NR, which to be fair was way over the top and just made a bad situation worse, that there has been so little made of B&B. It is actually now being under reported. How many times can they be baled out? If NR had not happened, then by now there would be queues outside every branch of B&B, and a host of TV cameras too.

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Regarding the media coverage of events so far. I find it amazing that after the coverage given to NR, which to be fair was way over the top and just made a bad situation worse, that there has been so little made of B&B. It is actually now being under reported. How many times can they be baled out? If NR had not happened, then by now there would be queues outside every branch of B&B, and a host of TV cameras too.

Because then people on MSE and BBC HYS would start moaning that the media is talking us into a recession/banking crisis.

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I think that the only way all of this is happening is because it was talked up, far too much and for far too long. It needs to be talked about now, but I think that the prospects are just so bad, that no one is prepared to actually say it like it is. They talk of a recession. I think that a recession should be the least of our worries !!

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Because chavs wouldn't understand.

What the media need to do is give away a dot to dot picture so people would understand.

Most people can't or don't want to grasp complex problems, some of my colleagues think I'm like Frazier from Dads Army as I'm all gloom and doom and they don't want listen.

Sadly, I think you are right. It needed a simple catchy phrase "It is the credit crunch", once they had that, then people could accept that something had changed and that house prices would now drop. Much the same thing happens with all sorts of issues, historically it was "god created the universe", now it is more likely to be "the big bang created the universe", with neither explanation making any kind of sense at all to the majority of people.

Whoever coined the phrase "credit crunch" did those of us hoping for a crash a great favour, without it we might still be waiting to see falls.

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Nah.

Prisoners dilemma.

If cheap credit is offered to all, you have to take it or you will be left behind and have to rent from those who do.

The rational thing to do when offered cheap credit is to take all you can get. Sad, but true.

Can't agree I'm affraid.

The rational thing to do, as in every situation in life, is to step back, analyse, consider, then act. When borrowing sums of money easiest expressed in terms of their percentage of a million, this counts doubly so.

I'm not 100% sure how this relates to the "Prisoner's Dilemma" either really, as the situation posed there effectively "you're currently ******ed, but if you do the wrong thing, and your mate does the right thing, then you're un******ed and he's Royally Buggered", and no amount of enquiry on the part of each prisoner would find gain additional insight as to what the sensible course of action was. As far as the last (at least) five years are concerned, a relatively minor* delve would have turned up the fact that what may seem on the surface to be analogous to the Prisoner's Dilemma is, in fact, nothing of the sort. Said situation involves the captive being already ******ed, and being offered the chance to un****** himself, whereas living in rented accomodation and doing a simple bung-it-through-Excel comparison with buying an equivalent place in, say, 2003 (Home Counties example, picked the date because of a certain other thread), made it pretty damn clear that buying was in no way analogous to saving oneself, and only represented a very good chance of making sure you were truely screwed in a few years time.

Okay, that's leaving aside the whole peer group pressure, media ramping, and general blind optimistic stupidity of humanity, but to include that would have implied that being influenced by the casual views of others is more rational than attempting to construct your own hypothesis, which it quite clearly isn't.

Sorry, but nothing's going to shift me from my belief that those ultimately responsible for this are the borrowers, not the lenders, and not the Government. Yes, the lenders shouldn't have forgotten why they used to have controls, and the regulators (and therefore the Government) shouldn't have let them forget, but ultimately, the signature at the bottom of the form is that of the borrower, and that's what counts. No-one forced anyone to play this game. They cajoled, they enticed, they dangled the carrot, but they never forced. Foxtons, Northern Rock, Paragon, HBOS, Kirsty - all they did was sell, they never showed up at the door with a 12-bore. No-one had to sign.

* I am not economist, and never will be, but was (and am) more than capable of taking a root about what lies behind some of this stuff and drawing my own conclusions. Okay, I make my living from rooting about stuff in a logical manner, but I am in no way different in my capabilities to do this than Yer Average Brit.

(Applogies for liberal use wude words)

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Can't agree I'm affraid.

The rational thing to do, as in every situation in life, is to step back, analyse, consider, then act. When borrowing sums of money easiest expressed in terms of their percentage of a million, this counts doubly so.

I'm not 100% sure how this relates to the "Prisoner's Dilemma" either really, as the situation posed there effectively "you're currently ******ed, but if you do the wrong thing, and your mate does the right thing, then you're un******ed and he's Royally Buggered", and no amount of enquiry on the part of each prisoner would find gain additional insight as to what the sensible course of action was. As far as the last (at least) five years are concerned, a relatively minor* delve would have turned up the fact that what may seem on the surface to be analogous to the Prisoner's Dilemma is, in fact, nothing of the sort. Said situation involves the captive being already ******ed, and being offered the chance to un****** himself, whereas living in rented accomodation and doing a simple bung-it-through-Excel comparison with buying an equivalent place in, say, 2003 (Home Counties example, picked the date because of a certain other thread), made it pretty damn clear that buying was in no way analogous to saving oneself, and only represented a very good chance of making sure you were truely screwed in a few years time.

Okay, that's leaving aside the whole peer group pressure, media ramping, and general blind optimistic stupidity of humanity, but to include that would have implied that being influenced by the casual views of others is more rational than attempting to construct your own hypothesis, which it quite clearly isn't.

Sorry, but nothing's going to shift me from my belief that those ultimately responsible for this are the borrowers, not the lenders, and not the Government. Yes, the lenders shouldn't have forgotten why they used to have controls, and the regulators (and therefore the Government) shouldn't have let them forget, but ultimately, the signature at the bottom of the form is that of the borrower, and that's what counts. No-one forced anyone to play this game. They cajoled, they enticed, they dangled the carrot, but they never forced. Foxtons, Northern Rock, Paragon, HBOS, Kirsty - all they did was sell, they never showed up at the door with a 12-bore. No-one had to sign.

* I am not economist, and never will be, but was (and am) more than capable of taking a root about what lies behind some of this stuff and drawing my own conclusions. Okay, I make my living from rooting about stuff in a logical manner, but I am in no way different in my capabilities to do this than Yer Average Brit.

(Applogies for liberal use wude words)

No worries. :)

Here's my thesis in as few words as possible. It's not really housing specific, just general to credit extension.

-----------------------------------------------------------------

Some people live a very good lifestyle in the boom, while others are marginalised.

Everyone suffers in the bust, just some might suffer less than others.

If I borrow and you won't, I use the credit to buy the assets you need and then you work to pay my interest payments off.

This is why t's a prisoners dilemma when credit is extended.

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Reading the newspapers it almost seems like they can't believe the bad luck.

Why do people not see that these aren't just a random series of unfortunate events, but the very consequences of the action taken by the BoE, Federal Reserve and US & British governments in 2001.

- SNIP -

Good point, I think I know why.

There are plenty of people on this forum involved with the media.. just look at the thread about a HPC documentary! This must be a great site for anyone researching HPC based economics and view points. I expect there are enough people who know exactly what is going and could write a f**king good article/program about it.

The problem I have seen is that the media ALWAYS watch their backs. They are terrified of being proved wrong or being sued or made a scapegoat.

To this end the press can really only quote what other people say and suggest opinion on said statement. If someone important enough to be able to quote turned around and said exactly that then it would be headline news tomorrow. Nobody important enough is likely to state it since they were probably instrumental in not stopping it all getting out of control in the first place.

Therefore the media can't really say anything.

Therefore they don't.

:(

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Some people live a very good lifestyle in the boom, while others are marginalised.

Everyone suffers in the bust, just some might suffer less than others.

If I borrow and you won't, I use the credit to buy the assets you need and then you work to pay my interest payments off.

This is why t's a prisoners dilemma when credit is extended.

It depends on a desire on the part of the potential borrower to look deeper into it, certainly, but as far as a fair percentage (although not as many as this place tends to assume) of the population are concerned, the Prisoner's Dilemma stands.

It's also fair to say that my take on this is somewhat coloured by the fact that the house three doors up from what I'm renting at the moment (identical apart from a loft conversion, which could be DIY'd for about £10k) has had it's price reduced by more than I've paid in rent since the turn of the Millenium, and is still just as "For Sale" as it was in February. It was easyish for me looking forward, and it's sodding great looking back, but I can fully understand how there are those who'd not have spotted the "chose not to play the game, because it's clearly silly" route out of the dilemma... I've met enough of the buggers.

Doesn't mean I don't think it's their fault though, ultimately ;)

(Very happy to agree to differ, simply because you're the only hyperinflationist I've come across on here who actually thinks it will happen because their reasoning says it will happen, not because their investment position makes it's occurance desirable. Not my personal view, but much respect for the principle behind the position!)

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  • 399 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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