Saturday, May 10, 2014

Well from the qoutes the bankers didnt!

Did you see the hongkong crash 1997 coming

The comments from.expert bank analysts are simply priceless and can be compared to the 'experts' analysis presently....nothing else to say

Posted by taffee @ 09:33 AM (2411 views)
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12 thoughts on “Well from the qoutes the bankers didnt!

  • This article is about something that happened in Asia 17 years ago. I hear that people also didn’t see the great carrot crunch coming in 1567.

    Fortunately I didn’t meet anyone in the biz who didn’t know some sort of disaster was looming two years or so before it arrived in 2007. We’d all seen it happen before with events like the Long Term Capital Management thing and the signs were incredibly obvious to anyone with a calculator and an ear for the thousands of stories told daily in city bars and the like.

    Here’s the thing though – why would anyone in the biz do anything when they were making millions as it hurtled towards the horizon? Would any of you turn down a few million?

    One definition of an expert could be someone who makes a fortune out of a situation. I don’t suppose they care much if potless bedsit dwellers subsequently bang on about how silly they are.

    None of these same experts, who to a man, saw the last thing coming think anything bad is coming now. My money is on the experts with the serious wedge being correct again.

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  • Wow…I cannot tell whether you agree or don’t agree…the whole point as you mention is these things happen all
    the time in history…..this time yet again they are saying it’s different this time which it isn’t

    Don’t think all the masters of the universe made millions..in fact most even Goldman almost went bust

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  • britishblue says:

    Flashman. I agree that many experts knew this crash was coming. But i think the point that Taffee is highlightling is that some very major players were publicly issuing statements completely to the contrary. Our government, the Bank of England and our banking sector are talking about there potentially being a housing bubble to the media, when they all know full well that in London there is a huge, huge bubble underway with potentially disatrerous effects when it pops. Do the experts you mix with believe that London property is undervalued and still has some way to go before it reaches real value?

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  • Almost went bust in 2007/2008 of course

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  • @3

    Yes that’s pretty much what I meant…in fact weren’t Goldman selling packages mortgage toxin to banks
    And clients whilst shorting them

    2007/2008 though showed many were unaware that the music had already stopped…anyway as small people
    We just need to be aware that you cannot trust anyone….it’s quite clear also that the players are trying to rope
    General public into stocks whilst planning a whopping crash

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  • BB, if you’re selling something you tend to say its good especially when its worth a fortune to you. That shouldn’t be confused with them getting it wrong. Another thing that people misunderstand is this notion that banks/funds etc are somehow all in it together. A large part of what they do is against each other. In 2007/2008 there were some big winners and some big losers. There was delight in some quarters at seeing a few of their competitors go down even if they took a temporary hit as a consequence.

    It’s important not to confuse London and surrounding areas with the rest of the country. Inflation adjusted house prices in the UK as a whole are still well below peak but the economy is now as big as it was at peak. That’s why they only talk about potential bubbles rather than actual bubbles.

    London, on the other hand, is a special case and it could be argued that prices are in line with other major world cities. To answer your question directly most people I mix with think that London prices might stagnate or even temporarily fall a little for the reasons I gave a few days ago. I haven’t come across anyone credible (or any credible analysis) that thinks there is the remotest chance of an all out crash in London. There is a hell of a lot of money being made at the moment and that kind of situation does not tend to coincide with a crash

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  • britishblue says:

    Flashman what do you view as London? Do you see it as everything within the M25 or much righter circle further in. London is such a huge place that there are many markets within markets. There is a difference between hot money continually coming into safe haven South Kensington to sustainable price increases in the outskirts in places like Tolworth. The speculative boom that is taking place on the outskirts has nothing to do with increased rental values, peoples disposable incomes or their ability to withstand future rises in interests rates. It is all to do with the tidal effect of central London prices spreading outwards.

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  • bb, research shows that Dorking and St Albans (deliberately chosen as towns just on or just beyond the M25) have always tracked central London rises or falls with an accuracy of 95%. They might even be a bit lower than that this time, so they are not being dragged up quite as much as usual. It is therefore not accurate to say that there is some sort of disproportionate speculative boom going on in the outskirts. People in the outskirts tend to earn London or London related income and there is a lot of money being made right now by enough people to buy what’s on offer.

    “The speculative boom that is taking place on the outskirts has nothing to do with increased rental values, peoples disposable incomes or their ability to withstand future rises in interests rates. It is all to do with the tidal effect of central London prices spreading outwards”

    Actually prices in these areas outside the centre of London evidentally do reflect incomes and an ability to withstand future interest rate rises. Historically speaking there are not that many houses for sale and there are more than enough people with sufficient income to buy them. The vast majority of these people will be able to withstand quite steep increases in interest rates for all the reasons explained before on this site. Repossessions in times of steep interest rate rises are always very low (0.3% or less).

    The disconnect here is that the ‘priced out’ tend to think it terms of bubbles and crashes because they are flabbergasted by how far short they are of being able to afford what there is on offer. They are not, in fact, crazy prices (in economic terms) because there are more financially eligible buyers than there are houses for sale at ‘crazy prices’.

    The answer doesn’t lie in hoping for crashes that have almost no chance of coming in this cycle or in increasing interest rates that will only decrease what you can afford. Only a dramatically increased supply ( building in the high employment areas) will make houses properly affordable for the priced out. I can understand why it’s comforting to believe in crashes but ultimately it’s better to face up to the structural flaws that are keeping you out.

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  • it’s better to face up to the structural flaws

    Indeed – like the artificially low interest rates and absurd government schemes to keep house prices high.

    It’s a rigged market ponzi, which eventually will likely collapse – once the ability of UK government to support the bloated monster that UK housing has become. Not only has it borrowed from the future, its now trawling the whole world (China, Singapore) to pull in those mad enough to pay the large premium….all to keep the party going for a bit longer.

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  • A particular type of flat in a particular area of North London – I have occasionally watched – has now increased in price from £275,000 in 2012, to £375,000 in 2014 – that is an increase of £100,000 in two years. If that isn’t a bubble – then nothing is.

    TBH I really think that certain people haven’t a clue about what is really going on. They have already made up their minds about what is happening and continue to spew their unhelpful and unwanted comments.

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  • People are snapping up those flats at £375,000 because they can afford them. Quite frankly that sounds cheap for a North London flat. You couldn’t get anything for so little in Paris.

    Seeing as we’re being honest, if you hadn’t spent a tenth of your life preaching about a collapse that never came, you might have bought one of them two years ago for £275,000. If you’d listened to me you would have. Can’t be more helpful than that.

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  • ‘But, what is a housing bull like you doing on a housing bear website like this?’

    Providing insight and guidance against the tide of ignorance and delusion emanating from a select few. Campaigning for more housing choice and a better standard of living for the priced out and the future generation (my children are the inspiration for this. I actually do most of my work on it elsewhere)

    Let’s compare the fortunes of person x if he’d followed my advice 5 years ago to his fortunes if he’d followed your advice five years ago:

    Followed my advice: be living in a house that cost considerably less than it does now. Mortgage payments far less than he’d be currently be paying in rent and soon to be further shrinking now that five years of repayments and compound inflation have done their work. Not taken by surprise by the effects of population surge. Delighted to have organised his life around the recovery accurately timed and predicted by good old flashy

    Followed your advice: deposit evaporated, chance of buying a house evaporated, paying a fortune in rent, feeling like a chump and bitter as hell.

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