drbubb

... a "gold skeptic's" response to many comments here ... (1) (2) I haven't stopped looking for Gold-related opportunities, but I have a growing "war-chest" for a possible future price dip

"To go above the speed of light..." UFO Randolph Winters 10 of 25 by Randolph Winters, Billy Meier Trimmed 10 "The solution requires the use of 'spiritual energy'. Civilisations when they reach this point usually take 200 -300 years to solve this riddle."

According some material on project Camelot, the existing pattern of Wormholes was built long, long ago. So long ago, that the ET's that use them today do not even know who the builders were

The Shoe Shine boy stopped shining shoes, and instead became an estate agent, and built up a portfolio of 12 Buy-To-Lets using his credit cards. He was looked upon as "brave" and "entrepreneurial", as all the other shoe shine boys followed him in his choice of career. And as the stood around having drinks, they thought all was fine, and could see nothing wrong with the state of the economy. They laughed at those who worked in normal jobs, and thought they were "wage slaves" and simply lacked the brains and the courage to go into property investing. As the game slowed down, they started teaching courses, living off "the glow" of their past success, and bringing fresh "suckers" into the game, even though the risk/reward was now very poor, and the market was having its last gasp. Just as the game was coming unstuck in 2008, they were all saved by a reckless decision by the BofE to cut rates to ultra low levels. After a brief wobble, more were attracted to the game, and prices recovered most of what they had lost. The former shoe shine boys told each other: as long as we are making positive cash flow, we will be fine. Don't worry : The government will save us again, if we get squeezed. As they toasted each other, and spoke of their next BMV deal, the sun was setting... and some new dark forces were walking the streets. Some would not make it home safely to their warm beds that night.

Just for you GF - you might like this... The China reserve rate change is driving global markets lower. And the timing was a big "slap in the face" to Mr. Bernanke. He gave a defensive speech in Europe, and is truly under seige. I wonder if he will last teh year? My "dream scenario" is that BB resigns and Obama appoints Volcker as temporary Fed chairman, until they can find a new chairman acceptable to Ron Paul. I just heard a comment about BB on Bloomberg. One of their interviews spoke about Bernanke "taking the dunce cap from Alan Greenspan." Wow !

Yes, I suspect that many are. And they just do not know it yet. The "opportunity" will not come until most see the "disaster." That's the way it works in a big cycle downturn. People need to learn first that it is dangerous to buy the dips. That hasn't happened yet. Rich, I never attacked you or any individual. What I do think is dangerous is the attitude of complacency which says: "we are different - we are safe." I think LL's in the UK are not safe, and are very vulnerable, far more than most know. If you are prepared and ready, that's great. Why not help others face the reality, and prepare too. Just holding on, and hoping for the best, will not be enough IMHO. SP banned bad news, and deleted bearish posts, and they actively enforced denial. PT is much healthier than that and Vanessa and other there encourage both points of view. But many PT posters do not like that, and call anything with the smallest amount of bearish commentary "boring." I have decided to post there less as a result. There is enough cyclical material there already, and those that want it should be able to find it. What I would like to see is: people on PT chipping in with a informational tidbits which show the deterioration of the market as it is happening. That is not happening yet. Most are still bolstering each other, telling them that they should not worry. My point is; THEY SHOULD WORRY. The smart ones and open minded ones should be able to see that, and will encourage truth-telling, not complacency.

WOW: The group now expects net lending, which strips out redemptions and repayments, to be just £9 billion during 2010, well down on its original forecast of £15 billion and its revised forecast of £12 billion, and only a fraction of the £108 billion that net lending totalled in 2007. Total advances are expected to be around £137 billion, less than half the £363 billion advanced in 2007, and significantly lower than the group's original prediction for the year of £150 billion. The forecasts illustrate just how much the mortgage market has shrunk since the credit crunch first struck in the third quarter of 2007. They also suggest the market has failed to recover at all during 2010, as both forecasts are lower than the totals recorded for 2009. Meanwhile, separate figures from the Bank of England showed that mortgage lending for house purchase fell to a nine-month low of £5.3 billion during October. Year=: NET LENDING === - - - - - - - - - - - - : GROSS LENDING === - - - - - - - - - - 2007 : .. £108 bn / 189k : 571,400 houses : ... £363 bn / 189k : 1,920k houses : 2010 : Est £ 9 bn / 166k :. 54,200 houses : Est £137 bn / 166k :.. 825k houses :

WOW: The group now expects net lending, which strips out redemptions and repayments, to be just £9 billion during 2010, well down on its original forecast of £15 billion and its revised forecast of £12 billion, and only a fraction of the £108 billion that net lending totalled in 2007. Total advances are expected to be around £137 billion, less than half the £363 billion advanced in 2007, and significantly lower than the group's original prediction for the year of £150 billion. The forecasts illustrate just how much the mortgage market has shrunk since the credit crunch first struck in the third quarter of 2007. They also suggest the market has failed to recover at all during 2010, as both forecasts are lower than the totals recorded for 2009. Meanwhile, separate figures from the Bank of England showed that mortgage lending for house purchase fell to a nine-month low of £5.3 billion during October. Year=: NET LENDING === - - - - - - - - - - - - : GROSS LENDING === - - - - - - - - - - 2007 : .. £108 bn / 189k : 571,400 houses : ... £363 bn / 189k : 1,920k houses : 2010 : Est £ 9 bn / 166k :. 54,200 houses : Est £137 bn / 166k :.. 825k houses :

CAUTION "to the winds", inspires... ANOTHER WARNING Can you believe that people are still expanding their BTL portolios aggressively? This post on PT was a show stopper for me: AM I EXPANDING TOO FAST? : here "Christmas is edging closer, but I should clarify that by the subject title, I'm not talking about my waistline. This question and any future responses should be useful for individuals in a similar position. My background: I used to work for a buy-to-let sourcing company a few years back, but only in the last 12 months I have come into enough money to start purchasing. So, within the last 9 months, I have completed on 5 properties and am looking to purchase a further 10-15 next year with an upper target of 20 by the end of 2011. I know that it's not quantity, but quality, but I'm buying at the low end of property (45k-60k) and cashflow is circa £250-£280 a month after all expenses (interest payment and lettings fees). I'm buying at 2003/2005 prices." - AB on PropertyTribes == so in reaction... THE CORRECTION HAS HARDLY BEGUN On Property Tribes, you can read postings like this one: "... a correction of 20% is a crash. The UK housing sector has already had one. I am not saying that each country only gets one crash. Just that the argument that the UK has been spared is false. A crash that has happened is not a crash delayed." - UNQUOTE == == At the risk on sounding "boring", I want to sound another warning. I think that PT's property investors are vastly under-estimating the severity of the correction that the UK is facing. If you agree that the UK can follow the path of the US, Ireland, and Spain, do you really want to wait around any longer before cutting your risk exposure? Message to LL's :THE UK HOUSE PRICE CORRECTION HAS HARDLY BEGUN ! When UK-wide prices fell by 20% (per the H&N index), Greater London prices fell by only 6% (from Pds. 412,731 to 386,653, per Rightmove. For November, Rightmove has just annouced their current index is 417,279, which is above the 2007 high!) So Landlords in the London area, many of whom may think of themselves as well-tested survivors with appropriate "risk-management strategies" in place, were in reality almost unscathed, and never felt a proper correction. Gordon Brown and the BofE came to the rescue with ultra-low rates just when things were getting "interesting" in late 2008. These charts might show the extent to which prices have corrected in other countries, and how small the correction has been in the UK nationally : ( see country price charts at: http://tinyurl.com/GPC-Warns ) - Notice that the peaks in Spain are almost exactly 18 years apart ! A bigger fall than last time seems likely now - we have started the correction phase. In Ireland, average prices have fallen by 35%, while in the US they are down by 28%. As of October 2010, the average price of homes in the UK was just 14% off its August 2007 high. And as I have shown, above, Greater London prices are actually 1.1% above the 2007 high, according to Rightmove. The UK has so far been spared from a deeper correction thanks to: the timely arrival of ultra-low rates in late 2008, and the (rather alarming?) lack of discipline in Housing benefits. An astounding 40% of privately-owned investment properties are let to subsidised tenants, and rents there have been allowed to rise, even though average rents in the private sector have fallen. And the UK's coalition government has now realised how expensive these generous benefits are to a hard pressed UK economy, and how excessive payments may be distorting the property market. Change is afoot, and we have begun to see it in asking prices. Rightmove has just reported a drop of more than 3% in asking prices - that's a big drop for a single month. I think the second leg down may shock many BTL investors, especially those who think that the Greater London area is somehow immune to price falls. A market cannot be propped up forever, and one of the key props (Housing benefit rent rises) is being pulled away in 2011. Do you really want to wait until next year, and see what that will do to UK prices?

BUILDER BELLWETHER, a forecasting tool - HPC posters are slowly "getting it" I told them for years about this valuable tool, and now they are starting to understand it. ... It was suggested by a PM here, that I respond to the following: Posts from HPC yesterday: BDEV versus PSN and TW ... update (1) : BtL Builders Shares Getting Hammered Today: BDEV down 3.03% and Wimpey down nearly 4% both now trading at 12 month lows, anyone think WImpey will go under as now only worth 24p a share (2) : MT You have to give it to Bubb that he does appear to have been right about BDEV being a good indicator not just of house prices but of where the economy is going. I don't mind admitting that I ignored many of his BDEV posts - simply because I was not interested in such things - but once I took the time to read them I ended up following BDEV, and to a lesser part TW, for the past 6 months. It has been fascinating watching BDEV as they have drifted down and, in the past month since the 3.6% Halifax down figures came out, gone down a fair bit. So hats off to Bubb for that. From what I have been reading the problem for the likes of BDEV and TW appears to be that as their share price fall the cost of servicing their debt becomes more expensive and at the same, because the housing market will be getting worse, then the value of their land banks will fall. I have read online the possibility of their land banks halving in value. (3) : DH Kind of obvious though, isn't it? . . . The point is that he thought it was a leading indicator, when - as far as I can tell - it lags the other indicators. So it drops on rightmove falls, Halifax falls etc. What DH is not getting is that the Builders turn down maybe 6 months ahead of the property indices, and then the TURN in the indices tends to occur at around the same times as the Builder shares cross their 252d/1year Moving Averages. Example: BDEV / Barratt ... 1yr-chart : 2yr-chart Peaked in Sept. 2009 (at 193p), and then crossed the 252d.MA in Feb.-2010, just before the HP indicies were peaking. (That cross was confirmed by the 21d crossing in Feb., and the 76d.MA crossing in March 2010.) I think it is rather nice, useful and potentially profitable to have a 6 month advance warning of a turn. These guys think it is just a ho-hum thing. What can I say? It's "Pearls before swine" for DH, I suppose. (4) MB, there totally "gets it": But BDEV has been going down for nearly a year whilst house prices were going up. BDEV had its bounce earlier than house prices in 09 and started its downward trend before house prices did. So it led them. All builders shares were spooked by the halifax large fall - the market started feeding on itself - but if you look at the last 12 months the shares have been falling for most of it; I don't understand how you can say that it has lagged if you just looked at the last 12 months as oppesed to the last 3.

(First Posted on GF's Property thread on the Main board): Depends on how you look at it, I suppose, Rich. Greece Ireland Here's Britain from the same source: Ireland is facing its property demons now. So is the USA. Greece and the UK may still need to do so. Here are the Iberian twins: Spain - Notice that the peaks in Spain are almost exactly 18 years apart ! A bigger fall than last time seems likely now. Portugal If these are "twins", then they are twins like Arnie and Devito

London is Hanging on - so far RIGHTMOVE's Big Drop announcement: + November sellers cut their asking prices by 3.2%, the biggest monthly drop since December 2007 + Falls now recorded in 4 out of the last 5 months, as year-on-year price growth heads for zero The really surprising thing to me was that London asking prices held up so well - down only -0.4% Reality is slow in coming to the Big Smoke ... because of "hot air" and rising rents, I suppose. Or maybe because London is better at attracting gullible foreigners*. Let's give it a few more months. == == *Actually, this weekend they brought a new developed by Berkeley Homes to HK: A place called Dickens Yard - prices sought were about Pds. 600 -650 psf - For Ealing Broadway! /see: http://www.cabe.org.uk/design-review/dickens-yard That looked very expensive to me. But one of the agents gave me "his" prices for Central London. And that was about half of the numbers he was quoting, so it made a bit more sense. The think that intrigued me was West Rail, and that this new project will be right next to a West Rail stop, which I think will be completed in about 2017 - is that right. If I did have such a Bearish view of UK property over the next 2-3 years, and I thought prices would be "flat to up", I might have taken a very close look. London's new infrastructure should help support property, but I think the undermining from Housing benefit cuts, fewer jobs, and a return of a global financial crisis, will more than undermine the infrastructure stimulus. If things get really bad, some of that infrastructure may get delayed, or even cancelled.

Depends on how you look at it, I suppose, Rich. Greece Ireland That 270% rise in Greece looks much more dangerous than the 135% rise in Ireland. That's twice as far, and may need a much bigger correction. Here's Britain from the same source: Ireland is facing its property demons now. Greece and the UK may still need to do so. Here are the Iberian twins: Spain - Notice that the peaks in Spain are almost exactly 18 years apart ! A bigger fall than last time seems likely now. Portugal If these are "twins", then they are twins like Arnie and Devito

ON PREDICTING HOUSE PRICES : Is it possible at all ? I believe it is possible to predict the future trend of house prices with some reasonable accuracy, but it is not easy to get the turning points exactly right, nor is it possible to predict the exact extent of a price move. Here's some of the folks from Singing Pig, who think it is so very difficult to predict property cycles, yet they happliy hang in there with loads of mortgage debt - Does this make any sense? Anyway, here's a selection of postings from a thread I started there which talks about property cycles: (1) Can't remember where I got these quotes from (maybe Taleb's Black Swan book, where he quotes others), but I think they are relevant. It is tough to make predictions, especially about the future. The future ain't what it used to be. There is a difference between what people actually know and what they think they know. Plans fail because of the neglect of sources of uncertainty outside of the plan itself. The unexpected has a one-sided effect with projects. We need to plan while bearing in mind the fact that we do not understand the future. This takes guts. The longer you wait to complete a project, the longer you will be expected to wait. I know I cannot forecast, and some people take that as an asset. (2) If cycles and trends were any guide to the future, the virtual financial collapse of the world economy would have been foreseen by one or more of the "experts" who are now confidently telling us via newspapers, Sky News, etc exactly what to expect in the immediate future. (DrB: Some did predict the financial crisis !) (3) Look Bubb - you do NOT have a crystal ball; you do NOT understand how property cycles "work" in the UK; you do NOT impress anyone with your supercilious self-praise; in particular, your posts proclaim that you do NOT understand anything at all about the UK property market. You didn't even see the USA financial collapse coming ! So try to get all of this arrogant self-delusion out of your system. We British are not impressed with typical American unsupported bragging, and there are NO consistent and predictable property cycles in the UK. Like other countries, we are affected by the professional ineptitude of bankers and other professions abroad who cause recessions by idiotic lending. (4) Bubb highlights the idiocy of many peoples approach to investing, that property investing can only work when you know where the bottom and top of the market is so you know when to buy and sell. No other industry is so focussed on such an arbitrary measure. The media, forums and even many investors and pundits seem totally preoccupied with the notion of top and bottom price, as is Bubb. In that respect, for me anyway, he highlights the nonsense that many people feel is important when investing. He may even only be a troll, but a useful one. The first and often the only question I am asked as a property investor is" what do you think the property market is doing?" often closely coupled with a similairly pointless consideration of the economy/employment/politics. All of which is COMPLETELY irrelevant to me as an investor. As a result of this obsession with market value (and top and bottom analysis) people are generally uninformed as to how to make property investing work. I was asked last year what my response was to the Mail headline that Buy to let was dead, like I was supposed to be under threat from some unseen threat in a drop in values/ availability of mortgages. The truth of it is that my overheads have shrunk ridiculously with low interest rates (which I still consider low at 5%) higher rents and a greater availability of cheap houses, the chap asking the question then added, " yes but your net value will have shrunk a bit won't it?" ...! (DrB: He fails to understand that he has been bailed out by reckless monetary policy, and is still highly vulnerable to price falls.) I think it is rather strange that they rubbish the efforts of others (who have had some success!), and yet are willing to stay invested on the bizarre theory that "no one can predict" - as if: they are relieving themselves of responsibility for studying the cycle, and being prepared for what is coming. I find it very strange indeed!

Lol. The HPC-ers still havent tweaked that London's drop was so small. Or maybe they are just unwilling to discuss it (?) OTHERS: East Anglia: -6.0% East Mids: -5.4% So'west : -4.9% North: -4.2% These are CRUSHING drops ! East Anglia is now down -4.7% year-on-year.

RIGHTMOVE's Big Drop announcement: + November sellers cut their asking prices by 3.2%, the biggest monthly drop since December 2007 + Falls now recorded in 4 out of the last 5 months, as year-on-year price growth heads for zero + 24,028 new sellers coming to market per week, down 9.1% on previous month yet still outstripping muted mortgage approvals by 2 to 1 Unseasonally high number of unsold properties and longest ever time on the market mean sellers face tough competition, while winter buyers hang back waiting for bargains /see: http://www.rightmove.co.uk/news/house-pric...x/november-2010 ANY ONE Surprised by that big drop ? Last month, after a big jump, I said: I didn't expect the "give back" in a single month ! The really surprising thing to me was that London asking prices held up so well - down only -0.4%

PREDICTIONS COMPARE, with other forecasts on that thread: The Centre for Economics and Business Research expects property prices to rise by only 2.2 per cent next year as unemployment increases. Jobless figures will rise on the back of public sector cuts and household incomes will remain under pressure, the economists say. But the centre expects low interest rates, further quantitative easing from the Bank of England and the ongoing housing shortage to offer some support to the market. House prices are likely to be 16 per cent above their current level by the end of 2014. Howard Archer, of IHS Global Insight, expects house prices to fall by 10 per cent during the coming year, while Capital Economics still expects a 20 per cent slide in property values between now and the end of 2012. Douglas McWilliams, the chief executive of the economics research centre, said: "Quantitative easing* is a powerful medicine and is likely to have a strong impact on the housing market eventually. "House prices may not move much during 2011 but they are likely to rise significantly in the following three years on the back of quantitative easing." The group expects house prices to end this year just under 7 per cent higher than they started it, at an average of £179,411. Sluggish growth next year will be followed by stronger increases of 4 per cent in 2012, 5.4 per cent in 2013 and 4 per cent in 2014, to leave the average property costing £208,816. The centre said any decision to embark on a fresh round of quantitative easing would reduce long-term interest rates and help to boost mortgage lending. As a result, it expects the number of mortgages advanced each month to rise from its current level of 47,000 to around 77,000 by 2014, although this figure is still below the peak of 119,000 reached in 2006. *Horsefeathers! : QE is spurring inflation, and that will lead to higher interest rates, I reckon. And that will not be good for UK house prices.

Interesting forecast - which fits the cycle ! For me: there's a common "narrative" behind these market moves: In other words, the Market is following a story-line that becomes predictable if you understand the plot - ie. the outline of how the cycle works. Each new stage emerges as a reaction to (or progression from) the one before it. Think of it as a book, with the chapters laid out already. For instance, we are now in the "correction" chapter, which in the UK has become distorted, and probably prolonged, by ultra-low interest rates. During this chapter, people need to lose money and get totally fed up with property to correct the huge historical excesses (overvaluation and over-lending) before it can more onto the next chapter (A Recovery.) == == == FOR THE RECORD... here's what I have posted on Property Tribes : "It would be much easier to predict the british weather than any fluctuations in the UK housing market, expert after expert give us another set of possibles," Is it? How's this (for a series of accurate predictions)?: ======== July 2007 : UK house prices are about to peak. (They peaked in Q3-2007.) April 2009: A "Dead Cat bounce" of about 9-12 months has started Oct. 2009 : The Dead Cat bounce should end around the end of the year May 2010 : The Dead Cat bounce is over, the market is rolling over Nov. 2010: The slide will average 0.5-1.0% per month, maybe more, and last into 2013 or longer We will need to wait a while before we know how accurate the last two predictions are. If something happens which is totally unexpected (a War?), then the cyclical pattern might get disrupted. So I watch out for such disruptive events. But normally, I just expect the usual cyclical narrative to be followed, and can see no reason (at this point in time), why we will not slide at "crash cruise speed" into a low in 2013 or so.

Mortgage Approvals = : - 2006 - / - 2007 - / - 2008- / - 2009- / - 2010- / J. : 121,000 : 121,000 : 73,000 : 31,000 : 48,198 : F : 115,000 : 120,000 : 72,000 : 37,937 : 47,094 : M : 117,000 : 114,000 : 64,000 : 39,230 : 48,901 : A : 108,000 : 109,000 : 58,000 : 43,201 : 49,871 : M : 115,000 : 113,000 : 42,000 : 43,414 : 49,815 : J. : 119,000 : 113,000 : 36,000 : 47,584 : 47,643 : Jl : 117,000 : 112,000 : 33,000 : 50,123 : 48,722 : A : 118,000 : 106,000 : 32,000 : 52,317 : 47,372 : S : 124,000 : 100,000 : 33,000 : 56,215 : 47,474 : O : 129,000 : 089,000 : 32,000 : 57,345 : N : 131,000 : 083,000 : 27,000 : 60,518 : D : 115,000 : 072,000 : 31,000 : 59,023 : Housing dip feared as mortgage approvals stall .. Bank of England figures for September show approvals for new home loans were static compared with August Fears of a double-dip in the housing market were exacerbated today with news that the number of mortgage approvals remained static in September, while net lending (not including redemptions and repayments) was just £112m during the month – down from £1.62bn in August. The Bank of England statistics showed approvals for new home loans in September totalled 47,474 – near-identical to the August figure of 47,498 but lower than the previous six-month average of 48,764. This follows yesterday's announcement from Nationwide Building Society that house prices fell by 0.7% in October, taking the quarter-on-quarter drop to 1.5%, the biggest decline since April 2009. . . . Analysts said the overall trend for mortgage lending was downward, reflecting high (and likely to rise) unemployment, muted wage growth, and low and deteriorating consumer confidence. Howard Archer of IHS Global Insight said low mortgage interest rates and the current stamp duty holiday for first-time buyers on all properties costing up to £250,000 only partially offsets these adverse factors – especially as it is difficult for many people to get a mortgage. "Much will obviously depend on mortgage availability, the amount of houses coming on to the market and how well the economy holds up as the fiscal squeeze increasingly kicks in," Archer added. /more: http://www.guardian.co.uk/money/2010/oct/2...tgage-approvals == == I don't fully buy those comments. The problem is not just "mortgage availability", it is also sentiment. People can see that the tide is turning lower, and they are not eager to take mortgages now, when they think they they can save money by buying later. (Of course, the BBA does not want to risk harming their business by telling you that.) All British people are not just stupid sheep, who will just buy because they can. Many will wait to buy when prices are right (ie more sensibly priced.) They have been reading about falling prices, and can see that austerity lies ahead, so it makes perfect sense to wait. The desire to wait will intensify if/when the rate of prices falls accelerates, and/or interest rates begin to rise.

Mortgage Approvals = : - 2006 - / - 2007 - / - 2008- / - 2009- / - 2010- / J : 121,000 : 121,000 : 73,000 : 31,000 : 48,198 : F : 115,000 : 120,000 : 72,000 : 37,937 : 47,094 : M : 117,000 : 114,000 : 64,000 : 39,230 : 48,901 : A : 108,000 : 109,000 : 58,000 : 43,201 : 49,871 : M : 115,000 : 113,000 : 42,000 : 43,414 : 49,815 : J. : 119,000 : 113,000 : 36,000 : 47,584 : 47,643 : Jl : 117,000 : 112,000 : 33,000 : 50,123 : 48,722 : A : 118,000 : 106,000 : 32,000 : 52,317 : 47,372 : S : 124,000 : 100,000 : 33,000 : 56,215 : 47,474 : O : 129,000 : 089,000 : 32,000 : 57,345 : N : 131,000 : 083,000 : 27,000 : 60,518 : D : 115,000 : 072,000 : 31,000 : 59,023 : Housing dip feared as mortgage approvals stall .. Bank of England figures for September show approvals for new home loans were static compared with August Fears of a double-dip in the housing market were exacerbated today with news that the number of mortgage approvals remained static in September, while net lending (not including redemptions and repayments) was just £112m during the month – down from £1.62bn in August. The Bank of England statistics showed approvals for new home loans in September totalled 47,474 – near-identical to the August figure of 47,498 but lower than the previous six-month average of 48,764. This follows yesterday's announcement from Nationwide Building Society that house prices fell by 0.7% in October, taking the quarter-on-quarter drop to 1.5%, the biggest decline since April 2009. . . . Analysts said the overall trend for mortgage lending was downward, reflecting high (and likely to rise) unemployment, muted wage growth, and low and deteriorating consumer confidence. Howard Archer of IHS Global Insight said low mortgage interest rates and the current stamp duty holiday for first-time buyers on all properties costing up to £250,000 only partially offsets these adverse factors – especially as it is difficult for many people to get a mortgage. "Much will obviously depend on mortgage availability, the amount of houses coming on to the market and how well the economy holds up as the fiscal squeeze increasingly kicks in," Archer added. /more: http://www.guardian.co.uk/money/2010/oct/2...tgage-approvals == == I don't fully buy those comments. The problem is not just "mortgage availability", it is also sentiment. People can see that the tide is turning lower, and they are not eager to take mortgages now, when they think they they can save money by buying later. (Of course, the BBA does not want to risk harming their business by telling you that.) All British people are not just stupid sheep, who will just buy because they can. Many will wait to buy when prices are right (ie more sensibly priced.) They have been reading about falling prices, and can see that austerity lies ahead, so it makes perfect sense to wait. The desire to wait will intensify if/when the rate of prices falls accelerates, and/or interest rates begin to rise.

Spline's Charts versus the Long Cycle Hi moesasji. Thanks for the post, and the cross-comparison with Spline's work. Spline's charts are great, and I think it is very smart to look at them alongside my forecasts (as a sort of "confirmation".) My work will sometimes forecast turns before they show up in Spline's charts. For example, I am currently expecting a severe downturn in the UK property indices into 2011 and longer. That isn't really showing up yet in his UK property predictor: /source: http://www.houseprices.uk.net/articles/hou...rice_predictor/ Nor is it showing up yet in the chart he has posted for mortgage approvals: /source: http://www.houseprices.uk.net/articles/pro...y_transactions/ Actually, the crash in Mortgage Approvals* is so severe, that when Spline puts it on a longer term chart, you could say that it is anticipating a second leg down in UK house prices: /source: http://www.houseprices.uk.net/ I suppose a slide could get delayed, or it may not even happen. So you might want to use Spline's site as a confirmation of the turns that I tend to forecast before he picks them up. ( BTW, he does seem to like my Builders Bellwether tool, since he has a page updating its indications on his website. ) If you put it all together: the notional Harrison 18 year cycle is the longest range forecaster. The Builder Bellwethers comes next. and then, Spline's forecasts. Amongst the published indices, some show a market move before others : == == *Mortgage Approvals are also tracked here: http://www.housepricecrash.co.uk/graphs-mo...e-approvals.php

Interesting comparisons from the Irish Property thread If Irish interest rates are pushed high enough by the prospects of default, we may soon see: "a calamitous collapse" Does anyone know what mortgage rates are now in Ireland? I do think that the UK is headed down the same difficult path as Ireland. The disaster has been delayed by the Pause in the property crash that was engineered by Brown and his cronies through ultra-low rates (QE) introduced "in the nick of time." When prices start sliding again, the British banks will all be in trouble, and need a fresh round of bailouts. Bank troubles can bring much higher rates in Britain at that time - as we are seeing in Ireland now. It amazes me that Brits seem incapable of looking across the Irish Sea to see their inevitable fate, As an internationalist American, I have no such hang-ups. If you add in the US - you will see Britain is the "odd man out" Only because Britain's price slide started later, and it was able to come up with those low rates before market sentiment became irreparably broken. But I think the "break" that kills sentiment lies in British property's future. And the end result is: Britain will be mired in a property depression still when the US and Ireland are climbing out. Shame on Mr. Brown and his team of bamboozlers. Notice how the US had the smallest rise of the three, peaked first, and has corrected the greater percentage of its rise (so far.) I think it will reach its bottom first too, and I would stay away from the other two markets, and especially the UK, until I see a low in the US.

Interesting comments by David Wilcock here: http://www.youtube.com/watch?v=LXxvjSh7bNY About Wormholes in the film CONTACT, and what Carl Sagan tried to show

Hampton, M. J. (1991) Long and Short Shipping Cycles. The Rhythms and Psychology of Shipping Markets (Little Shelford: Cambridge Academy of Transport). http://i273.photobucket.com/albums/jj235/jimolsen2/HampCycle2_zpseibnvibo.jpg (I wanted to save this entry / Dr Martin Stopford's book & review here - in case in disappears from the web) Shipping Market Cycles Cycles are not unique to shipping. They occur in many industries and in the economy as a whole. Economic historians have devoted much effort to analysing and classifying cycles into categories, usually focusing on their length. Many different types of cycle have been identified. The Kitchen is a short cycle of 3–4 years; the Juglar lasts 6–8 years; the Labrousse can last 10 or 12 years; the Kuznets lasts 20 years, while a Kondratieff spreads over a half century or more. In shipping the existence of cycles has long been accepted as part of the shipping business. In January 1901 a broker noted in his annual report that ‘the comparison of the last four cycles (10 year periods) brings out a marked similarity in the salient features of each component year, and the course of prices’. He went on to observe that the cycles seemed to be getting longer ‘a further retrospect shows that in the successive decades the periods of inflation gradually shrink, while the periods of depression correspondingly stretch out’. Although the length of cycles is of great interest, it soon became evident to observers of the shipping business that the cycles were far more complex than a sequence of regular fluctuations in freight rates. Kirkaldy (1913), saw the cycle as a consequence of the market mechanism. The peaks and troughs in the cycle are signs that the market is adjusting supply to demand by regulating the cashflow: With the great development of ocean transport, which commenced about half acentury ago, competition became very much accentuated. As the markets became increasingly normal, and trade progressively regular, there was from time to time more tonnage available at a given port than there was cargo ready for shipment. With unlimited competition this led to the cutting of rates, and at times shipping had to be run at a loss. The result was that shipping became an industry enjoying very fluctuating prosperity. Several lean years would be followed by a series of prosperous years. The wealthy ship-owner could afford to put the good years against the bad, and strike an average; a less fortunate colleague after perhaps enjoying a prosperous time, would be unable to face the lean years, and have to give up the struggle. Viewed in this way, shipping market cycles have a purpose. They create the environment in which weak shipping companies are forced out, leaving the strong to survive and prosper, fostering a lean and efficient shipping business. While Kirkaldy dwelt on the competition between owners and the part played by cash flow pressures, E.E Fayle (1933) had more to say about the mechanics of the cycle. He suggested that the build-up of a cycle is triggered by the world business cycle or random events such as wars which create a shortage of ships. The resulting high freight rates attract new investors into the industry, and encourage a flood of speculative investment, thus expanding shipping capacity: The extreme elasticity of tramp shipping, the ease with which new-comers can establish themselves, and the very wide fluctuations of demand, make the ownership of tramp steamers one of the most speculative forms of all legitimate business. A boom in trade or a demand for shipping for military transport (as during the South African War) would quickly produce a disproportion between supply and demand; sending freight soaring upwards. In the hope of sharing the profits of the boom, owners hastened to increase their fleet and new owners come into the business. The world’s tonnage was rapidly increased to a figure beyond the normal requirements, and the short boom was usually followed by a prolonged slump. This perception of the cycle suggests a sequence of three events, a trade boom, a short shipping boom during which there is overbuilding, followed by a ‘prolonged’slump. However Fayle is not confident about the sequence, since he says the boom is ‘usually’ followed by a prolonged slump. He thought the tendency of the cycles to overshoot the mark could be attributed to the lack of barriers to entry. Once again the cycle is more about people than statistics.Forty years later Cufley (1972) also drew attention to the sequence of three key events common to shipping cycles. First, a shortage of ships develops, second, high freight rates stimulate over-ordering of the ships in short supply which finally leads to market collapse and recession. The main function of the freight market is to provide a supply of ships for that part of world trade which, for one reason or another, does not lend itself to long-term freighting practices. In the short term this is achieved by the interplay of market forces through the familiar cycle of booms and slumps. When a shortage of ships develops rising freights lead to a massive construction of new ships.There comes a point either when demand subsides or when deliveries of new vessels overtake a still increasing demand. At this stage freights collapse, vessels are condemned to idleness in laying up berths. An elegant definition of the cycle as the process by which the market co-ordinates supply with changes in demand by means of the familiar cycle of booms and slumps. However, Cufley is convinced that the cycle is too irregular to predict. He goes onto say: Any attempt to make long-term forecasts of voyage freights (as distinct from interpreting the general trend in growth of demand) is doomed to failure. It is totally impossible to predict when the open market will move upwards (or fall),to estimate the extent of the swing or the duration of the phase. Finally Hampton (1991) in his analysis of long and short shipping cycles emphasizes the important part played by people and the way they respond to price signals received from the market: In today’s modern shipping market it is easy to forget that a drama of human emotions is played out in market movements… In the shipping market, price movements provide the cues. Changes in freight rates or ship prices signal the next round of investment decisions. Freight rates work themselves higher and trigger orders. Eventually excess orders undermine freight rates. Lower freight rates stall orders and encourage demolition. At the low point in the cycle, reduced ordering and increased demolition shrink the supply and set the stage for a rise in freight rates. The circle revolves. Hampton goes on to argue that market sentiment plays an important part in determining the structure of cycles and that this can help to explain why the market repeatedly seems to over-react to the price signals.In any market including the shipping market, the participants are caught up in a struggle between fear and greed. Because we are human beings, influenced to varying degrees by those around us, the psychology of the crowd feeds up on itself until it reaches an extreme that cannot be sustained. Once the extreme has been reached, too many decisions have been made out of emotion and a blind comfort which comes from following the crowd rather than objective fact. All these descriptions of the shipping cycle have a common theme. They describe it as a mechanism devoted to removing imbalances in the supply and demand for ships. If there is too little supply, the market rewards investors with high freight rates until more ships are ordered. When there are too many ships it squeezes the cashflow until owners give up the struggle and ships are scrapped. Looked at in this way the length of the cycles is incidental. They last as long as is necessary to do the job. It is possible to classify them by length, but this is not very helpful as a forecasting aid. If investors decide that an upturn is due and decide not to scrap their ships, the cycle just lasts longer. Since shipowners are constantly trying to second guess the cycle, crowd psychology gives each cycle a distinctive character.Yet another reason why the cycles are irregular. Stage 1: Trough We can identify three characteristics of a trough. First, there will be evidence of surplus shipping capacity. Ships queue up at loading points and vessels at sea slow steam to save fuel and delay arrival. Secondly freight rates fall to the operating cost of the least efficient ships in the fleet which move into lay up. Thirdly, sustained low freight rates and tight credit create a negative net cash flow which becomes progressively greater. Shipping companies short of cash are forced to sell ships at distress prices, since there are few buyers. The price of old ships falls to the scrap price, leading to active demolition market. Stage 2: Recovery As supply and demand move towards balance, the first positive sign of a recovery is positive increase in freight rates above operating costs, followed by a fall in laid up tonnage. Market sentiment remains uncertain and unpredictable.Spells of optimism alternate with profound doubts about whether a recovery is really happening. As liquidity improves second-hand prices rise and sentiment firms. Stage 3: Peak/Plateau When all the surplus has been absorbed the market enters a phase where supply and demand are in tight balance. Freight rates are high, often two or three times operating costs. The peak may last a few weeks or several years, depending on the balance of supply/demand pressures. Only untradeable ships are laid up; the fleet operates at full speed; owners become very liquid; banks are keen to lend; the press report the prosperous shipping business; there are public flotations ofshipping companies. Second hand prices move above ‘book value’ and prompt modern ships may sell for more than the newbuilding price. The shipbuilding orderbook expands,slowly at first, then more rapidly. Stage 4: Collapse When supply overtakes demand the market moves into the collapse phase. Although the downturn is generally caused by fundamental factors such as the business cycle, the clearing of port congestion and the delivery of vessels ordered at the top of the market, all of which take time, sentiment can accelerate the collapse into a few weeks. Spot ships build up in key ports. Freight rates fall, ships reduce operating speed and the least attractive vessels have to wait for cargo. Liquidity remains high.Sentiment is confused, changing with each rally in rates. /source: http://marinepedia.blogspot.com/2009/09/sh...ket-cycles.html == == Search : "HAMPTON Long+and+Short+Shipping Cycle" References from above: Fayle, E.C. (1933) A Short History Of the World's Shipping Industry (London, George Allen ... Hampton, M. (1986)'Shipping cycles', Seatrade, January. Hampton, M.J. ... Long and Short Shipping Cycles (Cambridge:Cambridge Academyof Transport),3rd edition1991. .

Halifax reported a big jump in prices for October. Time to get excited again? I use Non-seasonally adjusted, averaging H&N. October is a slightly down month on that basis, as M. has said. This keeps me from getting overly excited about those big moves up & down in a single index.