Saturday, August 11, 2007

Fear Fear Fear!!!!!!!!!!!!!

City hit by biggest crisis for a decade

Britain's golden economic era is facing its final days with financial markets suffering their worst crisis in a decade, analysts warned last night

Posted by cheeky charlie @ 10:55 AM (2763 views)
Please complete the required fields.



31 thoughts on “Fear Fear Fear!!!!!!!!!!!!!

  • “Prof Spencer said the crisis was in many senses comparable to the Wall Street Crash. He said: “When historians look back, I would imagine they will compare this credit market slump with the events in 1929.”

    Says it all really!

    Reply
    Please complete the required fields.



  • Cheekie Charlie says:

    “We have become far too dependent on this kind of growth,” he said. “We are going to see a pretty big correction – but it’s a correction, not a crash.
    “The age of big City bonuses is coming to an end. London’s housing market boom is now effectively over.”
    The capital’s housing market has seen record jumps in the past year, following record City bonuses last year
    Prof Spencer added that the housing market nationally was already grinding to a halt, but that the financial crisis would accentuate this.
    “Prices will flatline,” he said. “We are not talking about a crash, but we are expecting house price inflation to come back to practically zero for the next two years.”
    With many companies facing financial difficulties, it also seemed likely that some would lay off workers, raising unemployment.
    Experts said the events of recent days suggested the crisis was of historic proportions.”

    NO CRASH !!!!!!!!! This is beyond the realms of wishfull thinking – this is praying!

    Reply
    Please complete the required fields.



  • japanese uncle says:

    My ‘chaos’ of a gallactic order seems to be unfolding, sadly.

    Reply
    Please complete the required fields.



  • Over to you Crash Gordon…

    Reply
    Please complete the required fields.



  • japenese uncle

    can you expand on your chaos of gallactic order as i am interested (nervous but interested)

    Reply
    Please complete the required fields.



  • planning4acrash says:

    It will be trouble in the short term, but, like an earthquake, it dissipates excess tension, re-balances and precipitates structural shifts. What kind of shifts? If China looses control of exchange rates, they could become a consuming economy for the first time, boosting manufacturing for the west and giving power to the Chinese people, that could happen for a lot of places. I doubt that communism can survive even 20yrs of consumerism, maybe we will see it implode like the USSR. The one way traffic of shifting cost base to emerging economies, one way bets like the carry trade, all these things could go into reverse and find a new stability. The large scale global economy is ending it’s infant years, entering adolescence, become more self aware and seeking balance and maturity. More co-operation between governments on global issues is likely to be high on the agenda because all countries have a vested interest now in what happens everywhere else now and are acutely aware of it. This co-ordinated release of liquidity could signal a new co-operative process, as could the synchronised raising of interest rates around the world. We more co-operation to tackle resources, environmental and social problems. I just hope that the challenges we all face do not precipitate war.

    Reply
    Please complete the required fields.



  • david20040_0 says:

    Chaos of a gallactic order, you guys are going to have egg on your faces come Monday morning when the shares recovoer.

    Reply
    Please complete the required fields.



  • david20040_0 says:

    1. uncle chris said…

    “Prof Spencer said the crisis was in many senses comparable to the Wall Street Crash. He said: “When historians look back, I would imagine they will compare this credit market slump with the events in 1929.”

    Says it all really!

    Just one person says this and you guys take it without questioning it.

    Reply
    Please complete the required fields.



  • How would you describe this debacle david20040_0 ? Are you going share shopping on Monday already ? I have read articles
    saying this is a great chance to buy some cheap shares and others saying wait, the storm ain’t over yet.

    Reply
    Please complete the required fields.



  • David

    I think things will bounce back but as someone says its like an earthquake and all the aftershocks, the stock market is all about risk and investors are nervy.

    How it will all affect house prices to be honest is very objective, credit tightening may well cause a price levelling ( and i say levelling as there are very different opinions of a crash, a 20% reduction in “Average” house prices to me will be a levelling, 50%+ is a crash ), at the end of the day house prices are very much like shares, they are really only worth what someone will pay you for them.

    Reply
    Please complete the required fields.



  • David ….. no doubt there will be up days and down days, but the mystery of the missing billions will rumble on for a few months yet. I have always spouted off to my friends (many of whom responded with yeah right!) that there would be a major ‘correction’ in the world markets due to dangerous ‘carry trade’ dynamics, followed by a ‘correction’ (we’ll use that word because ‘crash’ seems to upset you) in the housing market. I thought this was going to happen when the markets ‘corrected’ last May/June but my timing was premature. At the end of the day, the increasing exponential-esk trend for UK debt (£1.3 trillion and counting) was unsustainable, and to believe it would do so was living in cloud cuckoo land.

    Reply
    Please complete the required fields.



  • planning4acrash says:

    David, Are you Glorious Sunshine or Landlord Association in disguise? Have you actually read any of the front pages this weekend?!

    Anyhow, don’t worry yourself; there, there dear, just take your happy pills and go rock too and fro in the corner of the room, it’ll all be just fine come tomorrow, just another bad dream.

    Reply
    Please complete the required fields.



  • Its all going pete tong…

    Reply
    Please complete the required fields.



  • David, if we stop feeding you, you may go way. If you stay, we will just ignore you, the facts now speak for themselves rather more loudly than you.

    Reply
    Please complete the required fields.



  • I’m convinced there is going to be something big happening to the stock market soon – and yes history does repeat itself.

    Take 1929 Crash – ok the jury is out on why it happened specifically – take it as a symptom of someting bigger – just look at the socio-economic-political landscape before it – it is almost ‘exactly’ as we have it today – almost to the letter!

    Sorry – it’s a bit ‘tea-leaf’ reading I know – but when the system is the system there is the same olde self-determinism going on as always – we can’t change it.

    Take Biology – populations just crash – that’s what they are designed to do – it goes hand in hand with growth!

    Life = Death / Boom = Bust / Growth = Crash = on the grand scheme its all about dynamic equilibrium!!!

    Sit back and watch history for a change (as opposed to making it of course) – this may be one to tell your grand kids!

    I was there when…… or I was doing x when I witnessed ……..

    Oh – on a side point – we’ve had the 50 year floods recently (sod Global Warming claiming that one!!) – someone give me good odds on one super-cool 1947 or 1962-stylee winter!!!!

    Reply
    Please complete the required fields.



  • I think David is right on this one. Stock market valuations are well underpined by earnings. The PE on the FTSE100 is 11.6. The average PE of the shares in my US portfolio was 10.81 (before the recent falls). The consumer may be stretched, but much consumer expenditure is necessary not discretionery; for energy, medical, cars, home maintenance, food. There are plenty of companies that exist to service those needs either directly or indirectly which are healthy and the shares not highly rated, so the stock market is a BUY – current and future volatility notwithstanding.

    Reply
    Please complete the required fields.



  • Yes the picture may look good – but this was just the case in 1929 – but sentiment at the bad influence of utility stocks kicked the market hard – sound familiar!!!

    Oh – side point part 2 – interestingly – the winter of 1928/1929 was one of the hardest (meteorically speaking) of the 20th Century – not a cause I know – but an interesting ingredient to chew over!!! As I say – if we get a bad one this year it going to have some effect.

    The kick in the nuts can come from different people – but it’s still a kick in the nuts!!!

    Reply
    Please complete the required fields.



  • 7. planning4acrash said…

    David, Are you Glorious Sunshine or Landlord Association in disguise? Have you actually read any of the front pages this weekend?!

    Headlines? What about the headlines earlier this week saying house prices would boom by another 40%? Those were just dismissed out of hand.

    Reply
    Please complete the required fields.



  • European-bear says:

    My opionion, for what’s its worth….most of the guys and girls on this site are not just doomongers for house prices, but for every asset. As far as shares goes…as someone mentioned the p/e ratio is really OK and trading at no more than long term averages….certainly not the 2-3 times long tem varegares back in 2000. Since 2000 stock markets dropped by anything up to 75% (eg the DAX in Germany) which put the p/e ratio back to where it shouild have been. Since then, stocks are really no more overvalued than at the bottom of the slump as dividend and earnings growth has been good since 2002. Now the lack of liquidity in themarket and bad debts by leveraged buy outs will hit some stocks badly and moving forward this could effect overall profitability and even at worst a hit on dividens. But I do not buy a 1929 crash…it already happened (2000-2002 but slowly). Traders are acutely aware of recent history so panic as soon as they percieve the market getting a bit ahead of itself…..then the bargin hunters come in….it will take a couple of decades for traders to forget the 2000-2002 crash, which will then alow markets to get ahead of basics with a new paradigm of valuations……There has been at loeast 1 or 2 “mini crashes” every year since 2002 (i.e. a 5-10% correction), and I suspect this will end up being the same (although at the bigger end of the corrections)….volatility will be marked with anything up to 3-4% swings (either way!) in single days for the next month or so
    But as for house prices…..they are overvalued in the UK and US and Ireland and NZ and Australia and…..due to lax lending practices (but not in Germany and Japan)….the HPC is coming sometime soon and I hope the latest land registry figures might signal the start…but I am more doubtful about an equity meltdown. I also predict the mother of all recessions in the UK perhaps in 2 years times caused by the HPC, at worst a mild recession in the US (at the end of the day, US house prices are much lower in the UK and wages higher, so even though there are bad loans, many can keep paying), and places like Germany and japan will do OK….(the biggest recssion of the lotr I reserve for Ireland……houses are the worst of all pyramids there, with 15% of GDP being building new houses and about a 10% non opccupancy rate….as houses fail to sell there will be a massive hit to the Irish economy…from being a celtic tiger it will maybe suffer a recession of 10% shrinking GDP output…..

    Reply
    Please complete the required fields.



  • I am sorry to have to say this but any headline which denotes the housing market continuing to rise, i.e. The Metro’s headline this week is greeted with derision. However if a headline shows market crashes ahead it is just accepted without question.

    I want house prices to crash.

    But you guys are kidding yourself if you think this is the start of anything major.

    On Monday the markets will start to recover just like they have done before.

    As for Glorious Sunshine, no clue, he probably just got bored of this site.

    Reply
    Please complete the required fields.



  • I believe that house prices are (over) due for a correction. Therefore I tend to agree with stories suggesting all isn’t well with the housing market and tend to be scornful of those stories suggesting all is well and prices can only go ever higher. Bit obvious really.

    As for the markets, the sub-prime issue and it’s potential impact has been discussed on here for months and I think many posters on here would agree that what has happened to the markets this week has been well anticipated, it’s not a surprise. I think many would also agree that Thursday and Friday are part of a potential trend rather than a blip. I am of the opinion that we could be on the verge of the biggest downturn in the financial markets since, who knows when? I’m thinking biblical in proportion. We’ll see……..

    Reply
    Please complete the required fields.



  • David, for house prices to rise by a further 40% (by 2012 I presume) you need buyers and in today’s market that would require either a) greater personal leverage via increased debt b) a good dose of inflation or c) interest rates falling to <5%. Take your pick because in the UK these are the only options that would facilitate such a phenomenon (hard to spell a 12pm).

    Reply
    Please complete the required fields.



  • With the stocks going down so much I would not be surprised to see interest rates going below 5% again. I think a drop to 5.25% would cause prices to rocket again.

    Reply
    Please complete the required fields.



  • Will the dash for cash expose the weakness of the UK’s exposure to high risk lending – Is the UK Government prepaed to stand by and watch banks fold? We shall see.

    Reply
    Please complete the required fields.



  • “Their infidels are committing suicide by the hundreds on the gates of Baghdad. Be assured, Baghdad is safe, protected.”

    Reply
    Please complete the required fields.



  • The Bank of England’s remit is to curb inflation and protect the pound.

    They can’t simply charge in like the cavalry and lower rates. Bernanke wasn’t able to do that either. What you’re seeing is a re-evaluation of risk on a big scale.

    Shares can do what they like – they might even recover next week but the fact is that at the moment, no-one can buy or sell debt.

    Now THAT is a problem.

    Reply
    Please complete the required fields.



  • david20040_0 says:

    The BoE did cut rates in 2005 which led to another house price boom.

    Reply
    Please complete the required fields.



  • It appears that the BOE cut in 2005 was interpreted by many as the top of the current cycle, which is why many people went out and over-levereged themselves. They all thought IRs would drop back to 3.5% …. how wrong they were. It won’t be nice to see, but I think many people currently on fixed rate mortgages will not be refinanced due to the credit crisis, and will have no option but the standard variable rate. Expect repossessions to soar.

    Reply
    Please complete the required fields.



  • It appears that the BOE cut in 2005 was interpreted by many as the top of the current cycle, which is why many people went out and over-levereged themselves. They all thought IRs would drop back to 3.5% …. how wrong they were. It won’t be nice to see, but I think many people currently on fixed rate mortgages will not be refinanced due to the credit crisis, and will have no option but the standard variable rate. Expect repossessions to soar.

    Reply
    Please complete the required fields.



  • David,

    Lower rate setting by the BOE is not the really issue here. IBR is though and no one wants the risk. So if suddenly everything is high risk the rates will reflect this. You could have 1% BOE interest rates (which would be totally insane) yet the IBR will set the rate to the punters and that could be 8% or even 20% depending on the scarcity of liquidity. Sadly any borrowing is going to cost us all a lot more. Any reports I have seen on UK house price rises seem to completly ignore any world economics which as Mr Brown said are events outside the governments control. Even whilst teh Government is acknowledging the problem you seem to be in denial. Big mortgage I guess. Finally on HPC the nature of the forum suggests members believe that HPC will happen and we look for news on that topic. Most members are bears remember. Why don’t you set up HPMR (mega rises) and you and your landlord Dad can go and play there. Otherwise remove it from your favourites and hand type the address each time so you are reminded of the landing page you’ll end up on.

    Reply
    Please complete the required fields.



  • I must say that it is not a foregone conclusion though …

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>