Thursday, June 21, 2012

HOUSE PRICE CRASH (in Denmark)

Danish House Prices Slump to Seven-Year Low as Market Stalls

Danish house prices plunged in the first quarter to a seven-year low after sellers slashed values to unload properties that had been on the market for a record- high number of days. The average price per square meter fell to 10,897 kroner ($1,857) in the first three months, down 7.4 percent from 11,769 kroner a year earlier, according to data released today by the Copenhagen-based Association of Danish Mortgage Banks and the Mortgage Bankers Federation. The average time on the market before a sale reached 230 days, the highest since the association began collecting the data in 2004.

Posted by general congreve @ 12:35 PM (1994 views)
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25 thoughts on “HOUSE PRICE CRASH (in Denmark)

  • general congreve says:

    @1 – Sorry, sorry, for and against assets.

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  • General,

    Since you’re back on your favourite topic, I thought I’d offer something else from Detlev as a counter against Au as a wealth preserver. See

    https://www.housepricecrash.co.uk/forum/index.php?showtopic=179723

    Basically, it’s one thing thing to have bought a few years ago then decide to keep a stake in the game, especially if you have already taken some profits. Buying in now with prices at these levels is psychologically harder and riskier in the sense that there is no profit to protect against a sudden drop.

    Recall that gold was moving in lockstep with the equity markets not long ago or is it different this time??

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  • mark wadsworth says:

    Still not cheap though, just less insanely expensive.

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  • Recall that gold was moving in lockstep with the equity markets not long ago or is it different this time??

    It’s different this time. Just like UK housing, in which house prices only ever go up, but you eventually get rampant inflation too…..

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  • gold and oil fell for 19 years from 1980 to 1999

    In fact oil was…..wait for it….$9 a barrell in 1999

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  • QG: “Basically, it’s one thing thing to have bought a few years ago then decide to keep a stake in the game, especially if you have already taken some profits. Buying in now with prices at these levels is psychologically harder and riskier in the sense that there is no profit to protect against a sudden drop.”

    That rings a bell!

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  • general congreve says:

    @3 – Basically, it’s one thing thing to have bought a few years ago then decide to keep a stake in the game, especially if you have already taken some profits. Buying in now with prices at these levels is psychologically harder and riskier in the sense that there is no profit to protect against a sudden drop.

    It’s a valid point QG, I am in total agreement. Those who have dithered since I first starting posting on here, which was around the same time I invested 50% of my cash assets in gold and silver, have missed out on an average 1.2% gain per month in gold since then (average not compounded). That is mightily impressive growth and any one on the sidelines who has left it this late ,and perhaps doesn’t feel they understand or necessarily believe the fundamentals, is obviously going to be asking questions about whether it is can continue to go up from here. Of course, when I went in I went 50% of cash assets and kept 50% in cash (so even the King Goldbug GC hedged his bets!), which I’ve now pretty much enjoyed spending before the BoE can p1ss any more of its value up the wall!

    If I was still 100% in cash I think I’d be more worried about trusting the government the government, who has consistently decreased the value of sterling since we went of the gold standard. With reference to @6, there has been no bull market in sterling versus real goods, just one long never-ending bear market.

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  • general congreve says:

    @3 – Sorry, didn’t answer your point on Detlev’s article. Agreed, that gold rises on expectations of more stimulus, although I do not believe the value is vastly over-egged on expectations, rather seeing it to be at least slightly undervalued. There are a number of metrics to measure this, one such metric is that if the US returned to a dollar-backed with 25% gold as it once was, gold’s value would have to be $2500/Oz. There are other metrics placing the value all the way up to $50,000/Oz, but $2500/Oz is the lowest and seemingly quite an honest and reliable figure based on the history of the dollar, IMO.

    So I would say a minimum of 35% upside if no more printing takes place, but if it doesn’t what of peoples savings, the pension funds, government revenues and debts? It all goes bang and then what is paper currency worth? In the very worst case scenario for gold, you can guarantee gold will not be going to zero, paper currency on the other hand?

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  • general congreve says:

    @10 – $2500/Oz as things stand, with no more printing from the FED.

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  • It’s $1568 at the mo.

    Think I’ll get some more sovs tomorrow.

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  • Gold will likely continue to rise. The only reason for the current inactivity is due to ”twist” being considered less inflationary than QE…..but, in my view, the overall effect will be the same. The US economy will carry on declining, and QE will start again, only to called something else.

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  • @hpwatcher (Thursday, June 21, 2012 08:41PM)

    Operation-twist-stick-or-go-bust !

    Let’s twist again, like we did last summer”, so goes the song by Chubby Checker, which seemed to be the sentiment behind Ben Bernanke and co.’s announcement of further monetary stimulus yesterday.

    But will the extension of Operation Twist by a further $267bn make a marked difference, or were traders right to be disappointed by the absence of QE3?

    Operation Twist describes a monetary process where the US Federal Open Market Committee (FOMC) buys and sells short-term and long-term bonds depending on its objective.

    In September last year the Fed used the device to attempt to lower long-term interest rates, by selling short-term treasury bonds and buying long-term treasury bonds and consequently pushing long-term yields lower.

    That operation was due to conclude this month, but the Fed has said it will now continue through the end of the year in what Bernanke termed a “highly-accommodative policy”.

    The FOMC will purchase T-bills with maturities of between six and 30 years and sell or redeem an equal amount of T-bills with three years or less left until they mature.

    “The continuation of the Maturity Extension Programme [operation twist’s formal name] should put downward pressure on longer-term interest rates and make broader financial conditions more accommodative than they would otherwise be, therefore supporting the economic recovery,” said Bernanke.

    More of the same then.

    Some would argue that this is no bad thing; of all the markets across the globe the US has held its own this year, with both the S&P 500 and Dow Jones on a steady upward trajectory until the beginning of May. They have also been in recovery mode since the start of this month, following a sell off in May.

    US bulls
    Many managers have also been espousing the virtues of the US, with Crispin Odey, one of the most high profile, going as far as changing the mandate on his flagship European hedge fund so he could take advantage of the growth opportunities across the pond.

    His reasoning, along with that of other US bulls, is the economy has rebalanced and deleveraged ahead of Europe and the UK and has every chance of growing from here.

    Corporate balance sheets are generally in good nick globally, but in the US where companies are first-class they are doing even better.

    “The US has been expensive every year in my career. The PE ratios of companies are at a premium because it is the best market with the best companies and the best dividends and payouts and you get a lovely exposure to the dollar which will do well if Greece exits the Euro,” said David Coombs, head of multi-asset investments, “You’re paying a premium for a reason and you have to get used to it.”

    On the other hand, Coombs said any market valuations made off the back of government bond yields would be inaccurate while QE and monetary stimulus in its various guises is ongoing.

    This is because gilts, treasuries and bunds are trading on “false yields” and when you are pricing valuation metrics off false inputs, you are in a “very, very scary place” from an asset allocation point of view. Although he does still think equities are cheap, but for different reasons.

    US bear
    Another person who is less than bullish on the US is Bryan Collings, managing partner of Hexam Capital and lead manager of the Global Emerging Markets Fund at the firm.

    He said after the election the US would be ripe for a reversal, as it alongside the problems in the eurozone has proven an effective distraction for investors.

    Collings does not envisage a massive capitulation from US equities, but said the easy money has been made in that market and once risk comes back on the table capital will start to flow elsewhere.

    The Fed has also brought its growth forecasts down and is not benign about the challenges the US economy faces.

    Chubby Checker might take a light-hearted tone in his 1961 classic, but Bernanke was grave in his address yesterday and his decision to “twist again” not taken lightly at all.

    SOURCE http://www.portfolio-adviser.com/news/pa-analysis/operation-twist-stick-or-go-bust

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  • “the lowest and seemingly quite an honest and reliable figure based on the history of the dollar” – but “it’s different this time.”

    “if the US returned to a dollar-backed with 25% gold as it once was” – expected anytime soon?

    “So I would say a minimum of 35% upside if no more printing takes place” – and the US returns to 25% gold backed dollar?

    Not one negative metric?

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  • general congreve says:

    @15 – Let’s get this whole ‘different this time’ jibe cleared up first. I believe things to be exactly the same this time, as they’ve always been throughout the 5000 years of gold being money and the far shorter periods coinciding with this period where numerous fiat currencies have temporarily masqueraded as money.

    The Dollar does not have to be declared 25% backed by gold for gold to get to $2500/Oz, its just a metric, based on past valuations, to assess fair value today.

    At the end of the day the negative metric for gold is this whole housing ponzi, bank ponzi, bank bailout, QEing, twisting, artificially 300-year low interest rates, rating agency downgrading, Euro collapsing, unemployment rocketing, world trade falling, deficits and debt sky rocketing, dog and pony show carrying on at its increasingly unstable and frenetic pace and everything being just fine because none of that matters because ‘its different this time’ and debt, economic collapse and money printing no longer have any impact on currency values’. That is the negative risk for gold.

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  • ” Let’s get this whole ‘different this time’ jibe cleared up first. I believe things to be exactly the same this time” – HPW, you’re wrong..

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  • general congreve says:

    @17 – I suggest you don’t get us mixed up and use out of context quotes in reply to me then, that way they’ll be no confusion.

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  • I wasn’t mixing you two up, I was trying to point you at each other, but no comment from the “it’s different” corner.

    Do you expect a gold backed dollar anytime soon?

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  • general congreve says:

    @19 – Well, maybe you were doing something really clever there ‘pointing us at each other’, but can’t see it myself.

    Do I expect a gold backed dollar anytime soon? No, I expect you to die Mr Rumble!

    Goldfinger-based jokes aside, I don’t think it matters if they go back to a form of gold-backed currency or not, it is a separate issue. Ignoring paper currencies I expect gold’s value in relation to real world goods to keep increasing as real world deflation continues apace (see house prices in gold etc.). Nominal deflation in a paper currency system can always be countered by money printing, as the UK QE-wheeze amply demonstrates with our housing market.

    Having said that I think the world will at some point in the next decade or so be forced back on to a metallic commodity standard, whether that is a gold standard or b-metallic standard including silver I do not know. Whether it is started by China making a bit for the reserve currency by suddenly unveiling a gold-backed Yuan (backed with thousands of tonnes of sneaky stockpiled gold) or the US just discharging all its debts and reverting to a new dollar backed by all the gold it has in its vaults (including Germany’s that it is looking after!) I do not know. All I know is I would rather hold gold than paper in the current financial situation.

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  • general congreve says:

    @19 – Detlev Schilcter puts it a little better than me. This from his latest essay on his site:

    When and how exactly the present system will end, nobody can say. I believe we are in the final inning. Around the world, all major central banks have now established zero or near-zero interest rates and are using their own balance sheets in a desperate attempt to avoid their highly geared banking systems from contracting or potentially collapsing. If you think that this is all just temporary and that it will be smoothly unwound when the economy finally ‘recovers’, then you are probably on some strong medication, or have been listening for too long to the mainstream economists who are, in the majority, happy to function as apologists for the present system.

    I still believe that chances are we will, at some point, get the full throttle, foot-on-the pedal monetary overkill, the ultimate Ueber-QE that will push the system over the edge. This will be the moment when central bankers discover – and discover the hard way – that their ability to print their fiat money may well be unlimited but that the public’s confidence in this fiat money certainly is not. The whole system will blow up in some hyperinflationary fireball, which has been the end of most previous experiments with complete fiat money systems, all others having ended with a voluntary return to commodity money before the public had lost complete faith in the system. And the prospect for a voluntary and official return to a gold standard seems slim at present.

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  • “No, I expect you to die Mr Rumble!” – patience, eventually, though probably before an hpc.

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  • ” Let’s get this whole ‘different this time’ jibe cleared up first. I believe things to be exactly the same this time” – HPW, you’re wrong..

    Oh, yes he is!…..On, no he isn’t! etc etc

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  • Well what do you expect. The poor Danes must pay 25% VAT, have mega high income tax and even have a tax on fat now so you can’t buy danish bacon and butter without mega premiums. And you honestly believe with such COMMUNISM that they can afford houses?

    This is the diminishing returns in Socialism/Communism.

    Go Ron Paul.

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  • Libertas – So high taxes forced the banks to loan more?

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