drbubb

(Do others who see this get as angry as I do - to see such stupidity repeated?): (1) Reintroduction of 90% mortgages should help turn a profit ! BBC: Northern Rock reports £232.4m loss for 2010 Nationalised lender Northern Rock, rescued after its near-collapse, has reported a loss of £232.4m for 2010. But the company said it was making progress, with income up and costs reduced during the second half of its financial year. However, executive chairman Ron Sandler said that trading remained "difficult" in the current environment. He said Northern Rock was still in talks with the government on returning the company to private ownership /source: HPC NewsBlog == == fine (!?) - and what's the long term impact here ? (2) In an interview with the Telegraph, Mervyn King says that “imbalances” in the banking system remain and are “beginning to grow again”. Mr King urges high street banks to take a better, longer term view towards their customers and to stop focusing on the need to “simply maximise profits next week”. He accuses them of routinely exploiting their millions of customers. “If it’s possible [for financial services firms] to make money out of gullible or unsuspecting customers, particularly institutional customers, [they think] that is perfectly acceptable,” he says. The Governor criticises the “weight put on the importance and value of takeovers” and raises concerns that companies with good reputations have been “destroyed” in the search for short-term profits. Mr King expresses regret for not sounding a louder warning over his concerns before the last banking crisis. /source: http://www.telegraph.co.uk/finance/economi...hief-warns.html

We understand each other !

Yes, a big success too. But dont forget that several Gold threads have been combined into one. If you combined all the DrB Diary threads, that would be a huge thread also

Exactly. But I think you have spelled the word wrong. There's an "R" in there someplace

Wow. I wonder how many arrange to "lose their jobs" in order to get these generous benefits

Someone should show him how much MORE he will get from the system than what he paid in. The real losers will be the younger folk... many will get nothing

We may be in the foothills of a mountainous inflationary spike. Some countries are trying to prevent that now

Brown's plan: Everyone inflates thru QE at the same time - so no currency crashes. But now some countries (mainly in Asia) are deviating from that plan - They want to stop inflation.

If the government is bust and enough people lose their jobs, I wonder how long this practice will last.

I see. It certainly makes sense to me that you would want to buy at a time like this. But please accept that you may find prices 10%, 15%-20% or even lower in 2013-14*. If you can live with that, you are probably making the right decision. *(they may be higher too. there's always a chance my bearish scenario will not happen. Look at my track record on the Property Diary and you can see I don't always get it right.)

It will, so long as the jobs are there. If no jobs, they will want to live wherever they can do so cheaply, and get fed. We cannot be sure that will be the city. Some think it may be in farming areas or small towns

The first scent of victory, and people want to buy? Why not wait for the battle to go a bit further, and for the bulls to get warn out, nervous and panicky? That is when the real bargains will be had. What is your hurry?

You don't get it do you? The UK saved its property market from a crash by moving to a "Zero Interest Rate Policy" (ZIRP) in late 2008/ early 2009. The crash underway then came over a year LATER than the one in the US, and the slide was picking up steam, when sharp interest rate cuts were implemented. (This was part of Gordon Brown's machivellian plan to "save the world.") Suddenly, many people who had Tracker mortgages linked to Base rates or Libor found they were paying almost nothing in interest on their mortgages. For these lucky folk, it was cheaper to stay put in owned accommodation, rather than selling out and renting, or moving somewhere else. SO THEY STOPPED SELLING. And the supply of homes for sale quickly dried up. At the same time, the government started ramping up its generous housing benefits, matching market rents. This made it easy for BTL landlords to hold onto their property investments. And many began to bid for new properties, think the ZIRP might last for years.

You don't get it do you? The UK saved its property market from a crash by moving to a "Zero Interest Rate Policy" (ZIRP) in late 2008/ early 2009. The crash underway then came over a year LATER than the one in the US, and the slide was picking up steam, when sharp interest rate cuts were implemented. (This was part of Gordon Brown's machivellian plan to "save the world.") Suddenly, many people who had Tracker mortgages linked to Base rates or Libor found they were paying almost nothing in interest on their mortgages. For these lucky folk, it was cheaper to stay put in owned accommodation, rather than selling out and renting, or moving somewhere else. SO THEY STOPPED SELLING. And the supply of homes for sale quickly dried up. At the same time, the government started ramping up its generous housing benefits, matching market rents. This made it easy for BTL landlords to hold onto their property investments. And many began to bid for new properties, think the ZIRP might last for years.

A test I use to use was this: Compare : + RENTING, at a market rent, with: + BUYING, where you make some artificial assumptions: 1. 100% finance 2. Interest only mortgage, at a "hedge-able" interest rates (ie not a temporary "teaser" rate) 3. Add some minor amount for maintenance, major: if it is an older property. When you make this comparison, if the monthly cost is identical : You get the capital gains for free. But you have the capital losses too. When buyers are afraid of losing money, which you will normally not see until there have been some months (or years) of capital losses, then the unusual circumstance of BUYING being cheaper than RENTING can arise. But you need to be careful that the underlying fundamentals are sound. In cities like Detroit, which have been losing jobs and population for decades, the situation of being "cheaper to buy" can last a long time.

Any sense what is happening to Incomes in London? The Halifax data suggests that Gross Earnings have now stopped rising, UK-wide: http://www.greenenergyinvestors.com/index....showtopic=14353

Keep you eyes open for bargains. I think 2011 will be a year of HARD falls, especially after a (disappointing?) spring. If you are going to buy make sure, you try "low ball" bids. The way to be successful in that, is make a low ball bid and be prepared to walk away, if the vendor does not respond well.

If you look at NSA figures ... it looks very flat: Mon.: Rt'move : London : Hometrack chg./ Na'wide H-oldSA HalifaxSA HalifaxNSA: H&Nindex : mom : DelusIdx 2011 J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,211 = n/a = 164,173 161,470 : £161,341 :- 0.33% :138.3% : F. : : 230,030 : 430,680 : 154,000 - 0.2% / 161,183 = n/a = 162,657 161,680 : £161,432 :+ 0.06% :142.5% : M : : ? ? ===================================== mom: + 3.1% : + 4.2% : Est.DI: 142.5% /: -0.02%: = n/a = : -0.92% : +0.13%

Foster design picked for $2.8B HK cultural hub Associated Press, 03.04.11, 04:22 AM EST HONG KONG -- Acclaimed British architect Norman Foster has won the right to design Hong Kong's new $2.8 billion West Kowloon cultural hub. Hong Kong's No. 2 official Henry Tang told reporters Friday that the West Kowloon Cultural District Authority board has endorsed Foster + Partners' "City Park" proposal. Others who submitted proposals were Dutch architect Rem Koolhaas and a local designer. Foster's plan envisions transforming the 100-acre (40-hectare) reclaimed site for the cultural hub on Kowloon peninsula into a lush waterfront park that contains an opera house, concert halls, a museum and arts schools. His other designs include the Hong Kong international airport, the international terminal in Beijing and the HSBC building in Hong Kong. ============= More on “City Park”: Youtube video: http://www.wkcda.hk/pe2/en/conceptual/foster/en/index.html Sources: http://www.forbes.com/feeds/ap/2011/03/04/...ub_8338382.html http://hk.news.yahoo.com/article/110304/4/n0ta.html

The Panic may be about to set in - if it hasn't already. I was phoned today about "discounted London properties" being offered in Hong Kong this weekend. Are they getting desperate ? This is only the second time I have been phoned like this, and the first time they volunteered discounts. The property is in the Royal Docks area, I believe, and offered at about Pds.350 psf - cheaper than most coming thru here.

The Panic may be about to set in - if it hasn't already. I was phoned today about "discounted London properties" being offered in Hong Kong this weekend. Are they getting desperate ? This is only the second time I have been phoned like this, and the first time they volunteered discounts. The property is in the Royal Docks area, I believe, and offered at about Pds.350 psf - cheaper than most coming thru here.

Indeed. A boost for those who were "faint of heart" !: House prices fell at their fastest annual rate for 16 months during February as faltering demand continued to put downward pressure on the property market, mortgage lender Halifax said. Property values were 2.8pc lower than a year earlier, the biggest drop since October 2009 - based on average prices during the three months to the end of February and the same period a year earlier, according to the Halifax house price index for February . Prices fell by 0.9pc during February itself, more than wiping out January's 0.8pc rise.

Indeed. A boost for those who were "faint of heart" !: House prices fell at their fastest annual rate for 16 months during February as faltering demand continued to put downward pressure on the property market, mortgage lender Halifax said. Property values were 2.8pc lower than a year earlier, the biggest drop since October 2009 - based on average prices during the three months to the end of February and the same period a year earlier, according to the Halifax house price index for February . Prices fell by 0.9pc during February itself, more than wiping out January's 0.8pc rise.

IF this is a truly accurate description of the market NOW: Rental costs on an 'upward trajectory' Some 40% more surveyors reported that rents rose rather than fell, the highest level recorded since the Royal Institution of Chartered Surveyors (Rics) survey began in 1998. Demand from tenants was growing, but they were chasing space in fewer properties, the poll found. . . . Finance pressure The proportion of social tenants had risen during tough economic times, the Rics residential lettings survey suggested. Meanwhile, the proportion of student lettings had dipped compared with the previous three months, surveyors said. Surveyors in all areas of Britain expected rents to continue to rise in the three months to April. "It is unlikely that finance for first-time buyers will become much more readily available, while uncertainty over the economy may also deter potential homebuyers," said Rics spokesman Jeremy Leaf. ... then I am wondering where the Money to pay higher rents is coming from ? Is government still handing out big Housing benies? Sounds like LL's are getting more rent cheques from "social tenants" : Red = Blood supplied to vampires Absurdly high entitlements are going to bring down Western economies. But those on entitlements are going to find their blood supplies cut off fair soon, I would have thought.

It is a CYCLICAL THING It also happened during the Depression of the 1930's in USA : The years of the roaring '20s and the stock market and huge spending boom which preceded the 1929 top do seem to foreshadow the period we are living through now. After the Tech and Internet Boom of the 1990s, the market peaked and the stock market bubble burst. We now remember 2000 ushered in a two year plus stock market slide, but nothing to rival the Wall Street Crash of 1929-1932. The generosity of our modern Federal Reserve has, so far, saved us from a slide into economic crisis. People have kept spending, using cheap borrowed money, and easy credit supported by rising house prices. As I write this, the property bubble is still growing, and our American dream of never-ending abundant times are still intact. In those older days of my father's youth, people were also ambitious and optimistic. They traded up when possible, and borrowed money if needed, in order to improve the quality of their lives. My father wrote about those times: "One afternoon in the summer of 1929, I heard a horn blowing in front of our house. I looked up and saw a brand new Model "A" Ford with my dad at the wheel. It turned out that he had traded the old Model "T" with the rumble seat in for a brand new Model "A". It was a great car and the whole family piled in and went for a ride. I was ecstatic!" (My Fabulous Journey Through Life, Family Archive, 2003, page 4.) But that magical car did not stay in our family long. Within a few months, the economic climate had changed, and my grandfather lost his job, making it impossible to keep up the payments. So the car got repossessed, along with the new cars of many other unfortunates who also lost their employment and their regular wages. And with the job losses, the stock market crash of 1929 morphed into a severe downturn in the economy. The slowdown was aggravated by a collapse in credit. In the roaring twenties, it was easy to borrow money, for building new homes or buying new cars. Some, like my grandfather who had worked as a piano tuner, got credit beyond what that they could readily service. So when the work dried up, and money got tight, the payments became impossible. In the thirties, America became glutted with repossessed cars and houses for sale. Demand for new products faded, and the wheels of industry slowed to a crawl. With no pay coming in, my father's family lived for awhile on the property of his maternal grandfather, who was better off than they were. My father was very impressed by the apparent wealth of his grandparent: he possessed his own home and even a housekeeper. But there suddenly there were too many hopes riding on one old man. "There was not enough room in this grandfather's house for our entire family so we were forced to pitch a tent in the front yard. We had use of the house for tending to our personal needs and for some of our meals." I wrote that back in Oct.2005 - when I saw clearly what was coming. It was based on something written by my own father about his experience in the 1930's: See: Lessons of the Grandparents : http://www.google.com/url?sa=t&source=...sw0A7CQd7g55Ulg