Wednesday, July 11, 2012

Another financial disaster in the making?

Ftbs sleepwalking into decade of nequity

whats sad about the whole financial crisis is that had the boe let a recession happen in 2003/2004 and kept interest rates around 5%,we would be coming out of it and returning to some sort of growth.

Posted by taffee @ 07:40 AM (2493 views)
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21 thoughts on “Another financial disaster in the making?

  • house prices near me are dropping in price and no one is buying

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  • mark wadsworth says:

    That makes a refreshing change from the Mail shouting “Quick! Get on the property ladder! The only guaranteed route to untold riches!”

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  • happy mondays says:

    Where do you live mark?

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  • I know someone who works in estate agency and things have collapsed over the last 2 months…lack of listings lack of sales lack of exchanges

    seems that something is gonna happen…quite what is anyones guess

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  • In my area (Surrey) there are so few houses for sale that certain properties don’t even get on findaproperty as the estate agent has a waiting list of people renting locally who want to buy.

    Not much haggling on the price in such cases and the prices are scarely high for a family home.

    I wonder whether any proper price falls will happen within the next 5-10yrs. Long term for certain but it feels like its going to be too long for me to hold out.

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  • tulips from amsterdam were sky high with huge demand,then one day there was an uaction and no-one turned up!

    after that the price fell 99%

    history says all bubbles burst and each time they say ‘its different this time’

    shafting 16-24 years olds and retired people shows all you need to know about how bad a society is

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  • @5 bursting of japans credit bubble

    ================================================================================================
    Prices were highest in Tokyo’s Ginza district in 1989, with choice properties fetching over 30 million yen[6] (approximately $215,000 US dollars) per square meter ($20,000 per square foot). Prices were only marginally less in other large business districts of Tokyo. By 2004, prime “A” property in Tokyo’s financial districts had slumped to less than 1 percent of its peak, and Tokyo’s residential homes were less than a tenth of their peak, but still managed to be listed as the most expensive in the world until being surpassed in the late 2000s by Moscow and other cities. Tens of trillions of dollars worth were wiped out with the combined collapse of the Tokyo stock and real estate markets. Only in 2007 had property prices begun to rise; however, they began to fall in late 2008 due to the financial crisis.
    ======================================================================================================

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  • A few years back politicans were saying we are not like Japan and won’t have a lost decade (or two!). 5 years in and no end in sight they don’t mention that anymore.

    Think I would have preferred the no bailouts, high interest rates and lots of short sharp pain approach than the slow death we have now got.

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  • mark wadsworth says:

    HM, it’s definitely a game of two halves, house prices are falling quite markedly in “the regions” (Northern Ireland is the extreme case) falling noticeably where other Mark is (Cheshire, I believe) and are still going up in central london. For people like Tommy R or me (London/Essex border) prices seem flattish or possibly going up slightly again. B-gger.

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  • How have they managed to bastardise the NW house price index in this article so that it shows flat prices instead of falling prices over the last 3 years?!
    N

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  • general congreve says:

    To be fair, in the case of the profiled couple I think it is a good thing they are stuck in a one-bed. Do we really want these characters breeding? Just look at the face of the dopey looking husband.

    That said, nice bit of bearishness from the MSM.

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  • @11…what ya talking about,they have credit cards and car loan,that helps the banks pay bonuses

    its the idiots with no debt who refuse to partake in modern economics that are the problem

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  • mark wadsworth says:

    Drewster 10, they haven’t, that’s exactly what NW’s chart looks like, i.e. flattish over the last three years (mixture of big falls and big gains)

    GC, that is spiteful.

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  • OMG, (rubbing my eyes) what have I just read!? “buyers being lured to snap up newly built homes”, “being lured”? Daily Mail used the word “lured” to describe property purchase!?

    Whatever next?? Kirsty Allsop finally uses the word “crash”!?

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  • Hey, I agree with the sentiment, but 5% interest rates would not have cut it. We should have had rates probably go above the 17% they reached in 1992. Everybody knew what to do, they get busy saving, deleveraging, disposing of toxic and overvalued assets and got into the business of building capital. The market got busy with the business of bankrupting failed business models and we got back to work. The result was one of the greatest technological leaps forward in history, development of the internet, software and hardware development of unprecedented magnitude alongside huge productivity gains.

    The real tragedy was allowing interest rates to go below the 8% to 10% range, which if sustained, would have built massive capital and savings and we would never have had such a speculative bubble as we have today.

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  • @Drewster, MW
    Ah ok, it’s just that they have used the nominal prices, not real prices.
    N

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  • general congreve says:

    @13 – Was only poking a little tongue in cheek fun at a bad photo. In reality it’s obvious he’s brighter than your typical bottom feeder, or he’d be happily sitting in a large house paid for by the taxpayer with his 5 illiterate kids right now.

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  • general congreve says:

    @15 – That’s the way it’s done, and they should have gone through with it then and reformed the financial system at the same time. Now we’re all going to have to fall from a much greater height.

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  • In fairness GC there’s very little humour without a bit of spite

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  • general congreve says:

    @20 – Thank you BW, things are rarely funny unless they are in some way somewhat offensive.

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  • mark wadsworth says:

    GC, are you sure? What about knock-knock jokes? They’re quite harmless, for example:

    Knock knock
    Who’s there?
    F***
    F*** who?
    F*** off you c***!

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