Friday, Sep 01, 2006


MSN: Why we should be worried about US house prices

Good article which lays blame for bubble in the right place. Also mainsteam article read by many pointing out the problems.

Posted by waitingfor hpc @ 01:28 PM (493 views)
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1. George Monsoon said...

This is sobering stuff. We may well be in for the biggest financial upset since the first world war.
I would otherwise be fairly cheerful, but I work for an American company, and if their trade falls, so the job cuts will follow.
So by the time I am in a position to buy a nice home for three times my annual salery, I may well be collecting my P45!!!

Oh well, I could always go busking with the guitar..... . . . . .

Friday, September 1, 2006 03:23PM Report Comment

2. indiablue19 said...

Too bad Charles Bean didn't bother to point out that the UK is doing exactly the equivalent type of "blue smoke and mirrors" trick on the inflation figures here. The thing that worries me in this whole concept of recession is that everything in the UK is already more expensive. I've noticed lots of stuff I bought in the US that is exactly the SAME price here -- but it's in pounds, not dollars. That's nearly a 100% mark-up. And my take on the personal economy is that people here don't have the disposable income they do in the States either. So it's a two-way whammy. I do a regular grocery price comparisons with relatives in the US and the only thing I can find that's a good deal here in comparison to there is -- drum roll please -- carrots. Not promising.

Friday, September 1, 2006 03:33PM Report Comment

3. Jake The Muss said...

If house prices do start to go down then perhaps they could fiddle it so the "purchase price" of a property is used in the inflation index, that way the inflation busters win on the way up and on the way down.

I import commodites that are represented on the CPI, prices up 15% so far in 06, anticipating 30% by year end, looks like we'll be falling off the CPI asap.

Friday, September 1, 2006 03:48PM Report Comment

4. Retired Banker said...


I read many American blogs,and have been surprised how low incomes are in most parts of the USA,
although as you say consumer goods and general costs of living are much lower over there.
My younger brother lived and worked in the States for some years (married a girl from Pittsburg), and
always said that it was $'s for 's, and also that Americans' are always "willing to do a deal".
Apparently his sister-in-law who lives in Manhattan (and also has a holiday home in the Hamptons), even
succeeds in getting price reductions when shopping in Macey's; which takes some chutzpah.

I believe that you are living in Scotland at present, but if you were to move to the S.E. of England you
would find that disposable incomes are considerably higher.

Btw central London property prices are now higher than Manhattan.

Friday, September 1, 2006 04:11PM Report Comment

5. indiablue19 said...

Retired Banker,

Yes, this is true, you can often drive an impromptu bargain in the US, even in a department store. Show them the "stain" on the shirt and they'll knock off another 20%. But there are just VAST amounts of goods in the stores there. They've got so much stuff at the end of the season they're better off to give it away than warehouse it for the next season!

I find prices here for just everyday clothing, linens, groceries, remarkable in some cases. It is said that Edinburgh is high-priced in relation to income as compared with the rest of Europe, but I haven't been impressed shopping in England either. It is generally cheaper for me to buy clothing from the States and pay the customs penalty.

Higher incomes, as you have mentioned, in the south may be the attraction for everyone to try to crowd into the Home Counties. But I've looked through the Guardian ads for work down there and it isn't worth moving relative to the increased housing costs I would face. In short, you choose your poison I suppose. For now, ours is indeed Scotland.

Friday, September 1, 2006 04:37PM Report Comment

6. uncle chris said...

Might be time to get your money out the more exposed banks - wish I knew which ones they were. Any ideas the financial wizards amongst you?

Friday, September 1, 2006 04:44PM Report Comment

7. Cstanhope707 said...

Absolutely I used to live in Chicago and I just went to the Century 21 web site for the US, chicago, jokingly entered $150k (thats about 70k) expecting nothing and I saw property after property in nice parts of the city for that price range, big houses too.......

My Chicago Cop friend also confirmed this.....

Friday, September 1, 2006 06:26PM Report Comment

8. Caledonian-emigre said...

The price of things in the UK is expensive relative to the Euro-zone not just the USA.
A meal out in Britain can cost 2 to 3 times more than in France or Germany.

Friday, September 1, 2006 06:40PM Report Comment

9. harold said...

Detailed blog article in relation to this can be found here at Safe Haven:

These guys are now freely using the "D" word. Time will tell.

Saturday, September 2, 2006 10:37AM Report Comment

10. uncle tom said...


Received wisdom has it that of the principal UK banks, Barclays are probably the most vulnerable and HSBC probably the most secure.

Whilst I number amongst those who expect a severe banking crisis to be part of the agenda when the housing market turns turtle, I don't see any immediate warning signs of the banks being in serious distress.

However, should it emerge that a major bank in the US, UK or Eurozone has been 'doing an Enron' then there is the risk of sudden chaos and a rapid domino effect across the sector.

In such an event, I would probably clear my accounts without delay, using the money to buy NSI products and some oil and mining stocks.

Saturday, September 2, 2006 12:30PM Report Comment

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