Friday, December 7, 2007

Want to take free lessons in Economics and Finance… jump in London cab!

Too much cheap credit can be ruinous

"In Roaring Twenties' America, Joseph Kennedy knew it was time to off-load his shares when the shoe-shine boy started giving him stock tips. In New Millennium Britain, we have been witnessing a similar, equally clear, "sell signal": mini-cab drivers as property tycoons." ... well, add plumbers, builders, etc.

Posted by confused76 @ 02:23 PM (785 views)
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3 thoughts on “Want to take free lessons in Economics and Finance… jump in London cab!

  • Confused – please hold off selling for now until we get the nod from the man down the pub.

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  • But, in the Committee’s judgment, the balance of risks implies that a modest further increase in interest rates is necessary to meet the inflation target of 2½% in the medium term.
    6 november 1997
    Against that background, the Committee judged that a decrease in Bank Rate of 0.25 percentage points to 5.5% was necessary to meet the 2% target for CPI inflation in the medium term.
    6 Deceember 2007

    Interesting how the job descriptions the same but the manner with which it is dealt with differs in 10 years

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  • Thecrashiscomingbaby says:

    Ive just had one such lesson myself. I was speaking earlier today to one of the old chaps (about 65) who sits in our estate office (we have 24 hour concierge service in my development – and the estate office always has someone there). I wanted to test the waters so I asked him if prices were going down. He looked at me as if to suggest Id asked a really stupid question and then said, “house prices only ever go one way mate – up”.

    When people on the street who have no experience investing money or any ability with numbers (beyond the bare basic) start saying buy houses, you know the market is done for. But what is worse (and this fills me with indignation) – here is a working class East Ender, an honest man who has toiled all his life buying properties NOW trying to double it in three years. Out of a genuine feeling of humanity I wanted to advise him against it – but he has already figured everything out. House Prices simply cannot crash – it is a physical impossibility. Now Im not just suspecting that the bubble is about to burst, I KNOW it will burst.

    There is something perversely wrong with this country when the whole of society is convinced that road to future prosperity means borrowing, borrowing and borrowing some more money and sticking all that money into the bloated property market. Unfortunately, in this world, there are plenty of suckers out there and they DO get burnt all the time. As Joe Kennedy’s shoe shine boy example shows. The moral of the story is: when the herd is buying like mad, sell. When the herd is selling like mad, watch and wait, let the market crash and when no on is buying, buy.

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