Wednesday, April 4, 2007

The “goldmine” propaganda, again

Rising house prices leave families with a fortune in bricks and mortar

Just two days ago the Mail published an article "Property may slump next year"... now properties "leave families with a fortune"... I am lost! However, please read the reader comments - they signal a greater awareness of the downsides of this property craze

Posted by confused76 @ 01:44 PM (417 views)
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5 thoughts on “The “goldmine” propaganda, again

  • Just reflects the psychotic speculative psychology normal for the top of a market – “it can’t go much further – hold, hold – no wait, price is rising again – get in now, before it gets out of reach – no, hold, hold, it’s looking dodgy, it’s dipping – hang on, nothing’s moving, maybe it’s recovering – oh my god, it rose by 0.000001% – whew, false alarm! – etc., etc., etc.,”

    Turning points are only ever obvious in hindsight. Are we definitely at one now? I don’t know! What I do know for sure is that we are much nearer the top of this market than the bottom.

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  • This is the media cherrypicking the statistics – the BBC is equally guilty of this. A few years ago, while HPI was out of control, the BBC used to publish a graph where you could track it. Not that the picture is less clear, and arguably negative in some places surprise surprise they don’t publish the graph any more.

    I imagine that the drivers of this media spectacle are probably grinding to a halt currently, as property developers have less and less money to splash out on advertising with the papers to keep the story going. When this happens and the papers’ editors start to lose their vested interest, they’ll quickly realise that “HOUSE PRICE CRASH” will sell more papers than a thinly funded “HOUSE PRICE BOOM” lie.

    That’s when the tide will turn.

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  • The comments are indeed very interesting indeed. If they are in anyway representative of wider public opinion then it would seem that the great deception may be nearing something of a climax.

    However, such is the importance to the economy at large of ever more debt being taken out (ie. ever higher house prices) and such is the confidence with which Gordon has promised ‘not to take risks with your mortgages’ I fear that they might just continue to bullshit their way through for some time yet.

    I have always had a feeling that they intended to destroy stirling with inflation before entering the euro anyway.

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  • Ticktock, I am not sure how much the Govt or the BoE can control things at this point.
    UK is building a timebomb of wider proportion than in the US and the crash will hurt not just “subprime” investors but many more segments of the population.
    In the US properties have been bought/used in two ways: as a place to live and as an cash-point. If they can’t use it as an ATM anymore they can live in the house and the asset value will hold long term, so they won t be in negative equity when they retire (hopefully).
    In the UK, you have a 3rd variable, houses as speculative BTL investments, with BTL accounting for 1 in 5 purchases this year. Given BTL investments are leveraged up to the roof, there will be a stampede to get out as soon as the market slows down… and I can see already signs of that in central London. I predict June as the turning point.

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  • Confused..I agree entirely but still fear they are, and will continue to, lie about inflation in order to keep rates low and then ‘support’ Stirling within its trading range on the FX markets? Isn’t that what has happened? Its the only thing that makes any sense to me.

    They have created a monster and there is no politically acceptable way to stop it.

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