Saturday, Oct 03, 2015

One for the bears

Armstrong Economics: Real Estate and the Economic Confidence Model


The peak in real estate may have arrived. At the same time, this reflects the shift away from government bonds. Blackstone Group LP, the largest real estate fund to assemble, has come right on point. Blackstone raised $15.8 billion, creating the largest real estate fund in history. As we have warned, this reflects investment capital shifting into real estate. We may see a major high in real estate in many areas due to taxes and regulations. They are even looking at introducing property taxes in places within Europe where they did not exist before.

Posted by libertas @ 12:34 AM (5392 views)
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14 Comments

1. libertas said...

This may actually be the case for the top end of the market with the new stamp duty regime, for wealthy folk who can afford to shift capital into the stock market, etc.

Friday, October 2, 2015 11:36PM Report Comment
 

2. taffee said...

Fits in with Japanese asset price deflation example...simply inconceivable for sheeple to comprehend that prices can fall but very very possible

The real clues are near zero interest rates.... they only appear when things are really really bad not because governments
Are nice and want people to party but because they are so bad they have no idea what else to do

Saturday, October 3, 2015 06:08AM Report Comment
 

3. libertas said...

Yes, Taffee, which is why house prices fell in 2008 whilst interest rates are plunging. Though it is conceivable that rates could fall into strength here if it is led by Chinese deflation whilst strength is gathering here. Note, Armstrong looks at things on a global basis, though this chart reflects US prices more than others, and could relate to dollar pricings, and could also be completely wrong.

Saturday, October 3, 2015 08:36AM Report Comment
 

4. libertas said...

And, which is why I question those who state that prices would fall if rates went up, since rising rates would be a sign that the global economy was strengthening.

Saturday, October 3, 2015 09:10AM Report Comment
 

5. taffee said...

Prices originally fell 2007/2008 because there was a bubble and rates rose to 5.75% 5 years too late......boe quickly realised a massive collapse That would stuff all the banks was on the cards and started to slash rates

It's possible you are right about interest rates not being able to be put up...however they did the same in Japan (zirp) and
Property still plunged in price after the public realised the cat was out the bag and they had been hoodwinked

Saturday, October 3, 2015 09:16AM Report Comment
 

6. taffee said...

libertas

Bearing in mind rising rates in U.S. not only was the catalyst for a property crash but nearing bought the entire financial
System to an end....I think it is safe to say rising rates can affect house prices which is why sensible governments
Never reduced rates to near zero

U.S. in the west stared all this after 9/11 but actually it was to mitigate the fall out of the dotcom boom which was fuelled
By the carry trade of cheap yen...made cheap after the zirp in Japan after their credit bubble burst in early 90s

Trust me....this is end game stuff!

Saturday, October 3, 2015 10:03AM Report Comment
 

7. libertas said...

Taffee, are you saying that the Swiss government is not "sensible" having negative rates? It is only end game for your paradigm. The rest of the world will continue, unless we have a nuclear war.

You also IGNORE that Yellen spoke recently about a potential need for negative rates in the next recession. And you IGNORE the FACT that some US notes ARE NEGATIVE right now and falling.

Regarding 5.75% rates, these were put up into strength, they did not trigger the crash, that was caused by a breakdown in the derivatives market that would have happened regardless of what occurred with rates.

Saturday, October 3, 2015 11:53AM Report Comment
 

8. libertas said...

Rates do not lead, they follow the market and provide it a feedback. In fact, that is the same with EVERY market player and mechanism, including the central banks. The scary truth is, that nobody is in control, which is why the observation of cycles, as Armstrong does, can be a powerful measure and predictor, since cycles are a product of all the various parts plotted over time.

Saturday, October 3, 2015 11:55AM Report Comment
 

9. britishblue said...

Some of armstrongs predictions have been remarkably accurate and based on charts he did years ago. It wld be interesting to see whether this chart was compiled 20 years ago, like much of his stuff. If so it could be time to fastn your seat belt

Saturday, October 3, 2015 05:32PM Report Comment
 

10. hpwatcher said...

Some of armstrongs predictions have been remarkably accurate and based on charts he did years ago. It wld be interesting to see whether this chart was compiled 20 years ago, like much of his stuff. If so it could be time to fastn your seat belt

A lot of nonsense has been written about cycles, most are models are wrong, some are useful. The test is in how far they reflect the reality, which simply is not realistic in most cases.
I've always found Armstrong's predictions rather on the accurate side - I've paid occasional attention to them - I have found it quite extraordinary the way in which the economy has differed so much from Armstrong's prediction; then for something [negative] to suddenly happen to bring them into line.

I think Libby may come to regret posting that chart here.

Sunday, October 4, 2015 11:14AM Report Comment
 

11. libertas said...

He was wrong recently about Sterling being about to crash and burn.

I do struggle with this chart, but he has since said that it relates more to US housing than anywhere else.

Sunday, October 4, 2015 11:44AM Report Comment
 

12. libertas said...

He was wrong recently about Sterling being about to crash and burn.

I do struggle with this chart, but he has since said that it relates more to US housing than anywhere else.

Sunday, October 4, 2015 11:44AM Report Comment
 

13. hpwatcher said...

He was wrong recently about Sterling being about to crash and burn.

Depends what the mean by crash and burn - the GBP has gone from the high of 1.71 and is now around 1.51, in a matter of 12 months. I think there are a lot of people who would probably describe that as a crash and burn. GBP may well fall a lot further too....

I do struggle with this chart, but he has since said that it relates more to US housing than anywhere else.

It's indicative of economic confidence, which is pretty global these days; especially when one considers that UK and US property growth is mostly funded by Chinese buyers. A falling Chinese economy may well see the end of this situation, which will definitely have global effects.

Monday, October 5, 2015 09:37AM Report Comment
 

14. clockslinger said...

Looks like a bald assertion and nothing more.
And, again, for any number of reasons, this isn't Japan.
But just for starters, does anyone even know what owner occupation rates are in Japan?
Average mortgage in Japan? Conditions attached to getting a mortgage in Japan?
That might put such comparisons in context.
And if Osbourne went full Abe with QE? Ffs!

Sunday, October 11, 2015 05:12PM Report Comment
 

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