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KingOfTheBongo

Absolutely Speechless

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I bumped into an ex work colleague yesterday in the pub. I remember that a couple of years ago he was snapping up studios and one bedroom flats around London. At the time I was very puzzled as to how this was possible as he was only earning around 25k (think his mum helped him with a deposit on the first one or two at least). This was before I had even heard of mortgage backed securities and liar loans.

Apparently he has five places. Thinks he has lost about 50k so far on them (and the rest, I'm sure). And then he said something that I couldn't believe - "But there isn't any reason for property to be worth less now, is there?". I started trying to explain how banks have been involved in an orgy of lending which has caused an enormous house price bubble, but I was so shocked that I just gave up. How can he have so much exposure to the property market and not have bothered to look at even the basics. Is it denial or just plain laziness? And how many other people are still thinking like him - that it's just a downwards blip for a month or two?

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I bumped into an ex work colleague yesterday in the pub. I remember that a couple of years ago he was snapping up studios and one bedroom flats around London. At the time I was very puzzled as to how this was possible as he was only earning around 25k (think his mum helped him with a deposit on the first one or two at least). This was before I had even heard of mortgage backed securities and liar loans.

Apparently he has five places. Thinks he has lost about 50k so far on them (and the rest, I'm sure). And then he said something that I couldn't believe - "But there isn't any reason for property to be worth less now, is there?". I started trying to explain how banks have been involved in an orgy of lending which has caused an enormous house price bubble, but I was so shocked that I just gave up. How can he have so much exposure to the property market and not have bothered to look at even the basics. Is it denial or just plain laziness? And how many other people are still thinking like him - that it's just a downwards blip for a month or two?

I've come to believe it's pointless trying to explain the impact of loose lending. Either people can't understand, or they can't bear to understand, or they're too busy looking for scapegoats (seems to be the media talking things down, at the moment).

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I bumped into an ex work colleague yesterday in the pub. I remember that a couple of years ago he was snapping up studios and one bedroom flats around London. At the time I was very puzzled as to how this was possible as he was only earning around 25k (think his mum helped him with a deposit on the first one or two at least). This was before I had even heard of mortgage backed securities and liar loans.

Apparently he has five places. Thinks he has lost about 50k so far on them (and the rest, I'm sure). And then he said something that I couldn't believe - "But there isn't any reason for property to be worth less now, is there?". I started trying to explain how banks have been involved in an orgy of lending which has caused an enormous house price bubble, but I was so shocked that I just gave up. How can he have so much exposure to the property market and not have bothered to look at even the basics. Is it denial or just plain laziness? And how many other people are still thinking like him - that it's just a downwards blip for a month or two?

Plain laziness.

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I bumped into an ex work colleague yesterday in the pub. I remember that a couple of years ago he was snapping up studios and one bedroom flats around London. At the time I was very puzzled as to how this was possible as he was only earning around 25k (think his mum helped him with a deposit on the first one or two at least). This was before I had even heard of mortgage backed securities and liar loans.

Apparently he has five places. Thinks he has lost about 50k so far on them (and the rest, I'm sure). And then he said something that I couldn't believe - "But there isn't any reason for property to be worth less now, is there?". I started trying to explain how banks have been involved in an orgy of lending which has caused an enormous house price bubble, but I was so shocked that I just gave up. How can he have so much exposure to the property market and not have bothered to look at even the basics. Is it denial or just plain laziness? And how many other people are still thinking like him - that it's just a downwards blip for a month or two?

"Think of how dumb the average person is. Then remember that 50% are even dumber" - anon

.

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If you werent looking for reasons, then NONE were voiced in public to alert you. Nothing would jump out and say " Oi, Mug, they are looking for your money!"

All you saw was property porn on the telly, you heard about BTL onthe radio with property clubs you could join, you would be sucked into the whole thing by an industry dedicated to the thing.

SIVS, dodgy credit ratings, insolvent monolines, capital ratios, et al, was all, and still is hidden away from public view, unless you look and question and read and investigate.

Its all part of the plan. Its the same with any business, they tell you the good parts, and unless you investigate and look at the competition, you would be nine the wiser.

Course, worse for the Housing boom, was that your bank was one of your three wise men, someone to be trusted.... I think they may have blown that myth out of the water for the next 20 years.

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I am guessing he is under aged 35? If I am correct, he has no adult memory of the last property crash, it's as simple as that. One cannot fully comprehend what one has not experienced (eg I read books about the horrors of war, but unless you've been in one first hand how can you really know how visceral and arm slicing it is?)

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If you werent looking for reasons, then NONE were voiced in public to alert you. Nothing would jump out and say " Oi, Mug, they are looking for your money!"

All you saw was property porn on the telly, you heard about BTL onthe radio with property clubs you could join, you would be sucked into the whole thing by an industry dedicated to the thing.

SIVS, dodgy credit ratings, insolvent monolines, capital ratios, et al, was all, and still is hidden away from public view, unless you look and question and read and investigate.

Its all part of the plan. Its the same with any business, they tell you the good parts, and unless you investigate and look at the competition, you would be nine the wiser.

Course, worse for the Housing boom, was that your bank was one of your three wise men, someone to be trusted.... I think they may have blown that myth out of the water for the next 20 years.

I agree. Also you had reputable broadsheet paper(s) (I won't mention any names) carrying advertisements from get-rich-quick-property-schemes, so that a reader might have concluded that the adverts were from respectable sources.

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If you werent looking for reasons, then NONE were voiced in public to alert you. Nothing would jump out and say " Oi, Mug, they are looking for your money!"

All you saw was property porn on the telly, you heard about BTL onthe radio with property clubs you could join, you would be sucked into the whole thing by an industry dedicated to the thing.

SIVS, dodgy credit ratings, insolvent monolines, capital ratios, et al, was all, and still is hidden away from public view, unless you look and question and read and investigate.

Its all part of the plan. Its the same with any business, they tell you the good parts, and unless you investigate and look at the competition, you would be nine the wiser.

Course, worse for the Housing boom, was that your bank was one of your three wise men, someone to be trusted.... I think they may have blown that myth out of the water for the next 20 years.

Very true.

The other thing the property programmes didn't explain even if it's there actually staring you in the face as you watch the programmes is that a lot of the associated advertising is linked to the programmes so there's a direct vested interest, as well as some indirect ones.

Imagine how much marketing revenue would have been lost if a more balance picture had been presented. It all happened with a huge coinciding of multiple vested interests.

On the downturn there could well turn out to be a similarly amplifying affect.

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I bumped into an ex work colleague yesterday in the pub. I remember that a couple of years ago he was snapping up studios and one bedroom flats around London. At the time I was very puzzled as to how this was possible as he was only earning around 25k (think his mum helped him with a deposit on the first one or two at least). This was before I had even heard of mortgage backed securities and liar loans.

Apparently he has five places. Thinks he has lost about 50k so far on them (and the rest, I'm sure). And then he said something that I couldn't believe - "But there isn't any reason for property to be worth less now, is there?". I started trying to explain how banks have been involved in an orgy of lending which has caused an enormous house price bubble, but I was so shocked that I just gave up. How can he have so much exposure to the property market and not have bothered to look at even the basics. Is it denial or just plain laziness? And how many other people are still thinking like him - that it's just a downwards blip for a month or two?

Some people just are'nt willing to except bad news,especially whe delivered by someone in different circumstances to themselves.

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But there isn't any reason for property to be worth less now, is there?

There wasn't any reason for property to be worth more in 2006 than it was in 2001, either.

It's only worth what someone can afford to pay for it.

It's only worth what someone can afford to pay for it.

It's only worth what someone can afford to pay for it.

Not as snappy a mantra as "location location location", but less likely to drop you into a financial cesspit.

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How can he have so much exposure to the property market and not have bothered to look at even the basics. Is it denial or just plain laziness?

Neither.

It's because it's property

& as we all know

you can't go wro zzzzzzzzzzzzzzzz

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Neither.

It's because it's property

& as we all know

you can't go wro zzzzzzzzzzzzzzzz

Time for bed?.. Laura???.. wake up!!!

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Basically it is a case of the innumerate but otherwise intellegent being brain fried by the tricky and the twisty into believing a trwisted numeric con. Since a great deal of people are innumerate it turns into a giant pyramid scheme.

I had a mate once who wanted to buy into a pyramid scheme - I talked her out of it but she was bitter - until 2 weeks later the whole thing crashed and the mate that was trying to sell to her got burned for 25 grand. She still didn't thank me though.

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Are you nuts!!!! there is no excuse for being so badly misinformed, if you're gonna get yourself in hock for a few hundred grand you better do some research. Oh my God! the retardedness of it all makes me wanna scream! AAAAAARRRRGGGGGGHHHHHHHHH!!!!!!! Ok, feel better now. Some way to learn a lesson, though, eh?

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I'd imagine his lask of care was due to the fact that he wasn't putting his hand in his pocket...rather just using some-one else's money (ie. the banks).

I'm sure he'll begin to understand the difference between recourse and non-recourse security very soon.

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There wasn't any reason for property to be worth more in 2006 than it was in 2001, either.

It's only worth what someone can afford to pay for it.

It's only worth what someone can afford to pay for it.

It's only worth what someone can afford to pay for it.

Not as snappy a mantra as "location location location", but less likely to drop you into a financial cesspit.

It's only worth what someone can borrow to pay for it.

It's only worth what someone can borrow to pay for it.

It's only worth what someone can borrow to pay for it.

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I had a mate once who wanted to buy into a pyramid scheme - I talked her out of it but she was bitter - until 2 weeks later the whole thing crashed and the mate that was trying to sell to her got burned for 25 grand. She still didn't thank me though.

Similar experience - "Women Empowering Women" was the name of the pyramid scam. The person I knew got 16 grand first time round from 2 grand. Tried to convince my mum to join, I told my mum not to, and the person telling her. My mum ignored it, the woman put in her 16 grand. She never did mention how that went. I was 14, I guess financial advise from someone who still speaks squeaky isn't welcome.

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It's only worth what someone can borrow to pay for it.

It's only worth what someone can borrow to pay for it.

It's only worth what someone can borrow to pay for it.

To the tune of "There's only one...."

Worth what they'll lend you

It's only worth what they'll lend you

Worth what they'll lend you

It's only worth what they'll lend you

Edit: It works for other chants too.

You're bust and you know you are...

1-0 to the HPC...

Edited by thecrashingisles

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I am guessing he is under aged 35? If I am correct, he has no adult memory of the last property crash, it's as simple as that. One cannot fully comprehend what one has not experienced (eg I read books about the horrors of war, but unless you've been in one first hand how can you really know how visceral and arm slicing it is?)

Spot on. He's late 20's. I hadn't thought about it this way, but I guess he doesn't have any idea of what he could be in for so he is currently in blissful ignorance.

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If you werent looking for reasons, then NONE were voiced in public to alert you. Nothing would jump out and say " Oi, Mug, they are looking for your money!"

All you saw was property porn on the telly, you heard about BTL onthe radio with property clubs you could join, you would be sucked into the whole thing by an industry dedicated to the thing.

SIVS, dodgy credit ratings, insolvent monolines, capital ratios, et al, was all, and still is hidden away from public view, unless you look and question and read and investigate.

Its all part of the plan. Its the same with any business, they tell you the good parts, and unless you investigate and look at the competition, you would be nine the wiser.

Course, worse for the Housing boom, was that your bank was one of your three wise men, someone to be trusted.... I think they may have blown that myth out of the water for the next 20 years.

Yes. I mainly agree with this. There were a few bits and pieces in newspapers though. I remember reading in about 2003 about the phenomena of self cert mortgages and how they were dearer than certification mortgages so why are a third of mortgages selfcert? etc etc. I never saw that panorama programme that Eric has now posted a link to.

On the other hand, bubble mania and house price bubbles bursting have been quite common. The numpties should know better.

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If you werent looking for reasons, then NONE were voiced in public to alert you. Nothing would jump out and say " Oi, Mug, they are looking for your money!"

All you saw was property porn on the telly, you heard about BTL onthe radio with property clubs you could join, you would be sucked into the whole thing by an industry dedicated to the thing.

SIVS, dodgy credit ratings, insolvent monolines, capital ratios, et al, was all, and still is hidden away from public view, unless you look and question and read and investigate.

Its all part of the plan. Its the same with any business, they tell you the good parts, and unless you investigate and look at the competition, you would be nine the wiser.

Course, worse for the Housing boom, was that your bank was one of your three wise men, someone to be trusted.... I think they may have blown that myth out of the water for the next 20 years.

Great post. On top of that, even now there seems to be the odd good news stories (from the point of view of the property bulls) floating around in the likes of the Express and the BBC. Price drops slowing, etc. Whilst they are clearly complete nonsense, if you can't be bothered to look into these things you could still believe that your property empire is "safe as houses".

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Yes. I mainly agree with this. There were a few bits and pieces in newspapers though. I remember reading in about 2003 about the phenomena of self cert mortgages and how they were dearer than certification mortgages so why are a third of mortgages selfcert? etc etc. I never saw that panorama programme that Eric has now posted a link to.

Well watch it now HERE!!!!!!!!!

http://video.google.co.uk/videoplay?docid=...75&hl=en-GB

Seriously worth watching.......... ALL THE WARNINGS WERE THERE

And watch this one too -- http://video.news.sky.com/skynews/video/?&...270508_0900.flv

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I'd imagine his lask of care was due to the fact that he wasn't putting his hand in his pocket...rather just using some-one else's money (ie. the banks).

I'm sure he'll begin to understand the difference between recourse and non-recourse security very soon.

Spot on.

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  • 396 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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