Van

I posted this in reply to Moneyweek's recent article: http://www.moneyweek...-property-23100 Agree/disagree? Factor in even some modest inflation and the numbers really start to rack up in your favour and you can make many times over your £25k outlay.

Didn't one of the big builders triple H1 profits and reinstate the dividend? The market is not collapsing, and in such an environment builders can find a way to make money. BDEV is probably a much better - but smaller - company than it was in 2006/2007. Disproves the inflationists' argument that you need ever rising prices to make profits.

AKA The Delusion index. Nice blog, good stuff.

18 month cyclical bear market, within a secular bull?

Yes.

Ahh, the curse of Time Magazine strikes again... 2011 : 2012: http://uk.reuters.co...E86U1H520120731 Facebook has lost more than 40 percent of its value since becoming on May 18 the first Americancompany to debut with a value of more than $100 billion (63.7 billion pounds).

But That is NOT capitalism. True Capitalism relies on a laissez faire approach between willing parties - voluntary, uncoerced exchange of private property for mutual benefit. That's all capitalism is. The political and monetary system in most "capitalist" countries is still nearer to fascism that true capitalism.

Osbourne's deficit elimination plans are going to be left in tatters by these GDP numbers. It's reasonable to suggest that we have been in recession since Q4 2010 when you consider than 4 of the last 6 quarters have now been negative. Think I'll hold on to my gold...

I disagree. It's VERY bad out there - it's just the socio-economic composition of those suffering from the recession has changed. In past downturns it was old industries that were phased out - this affected mostly older, blue collar workers. Now the brunt is falling on the young generation. Many loaded up with debt from worthless college degrees and have no real skills that our workforce needs, cannot barely afford a room to rent, yet alone dream of buying a house. This is actually a trend that started well before the HPC and financial crisis, and it everything to do with the Britain slowly becoming less and less competitive in the world. Worth a listen: http://www.bbc.co.uk/programmes/b01jqhly

I think just a failure of human nature - the present is ours; the future is someone else's problem. All great civilizations have collapsed due the debt they placed on their future generations, why should ours be any different?

+1! But somewhere down the line that was perverted to become an inter-generational theft of wealth from the future to the present.

Thanks, that's interesting. But I'm far more general - I believe seasonality in the UK housing market can be broadly divided into a strong H1 and a weak H2. It may be as simple as waxing/waning with the days getting longer/warmer & shorter/colder. The 7 biggest drops all occur in H2 - it's probably just a statistical fluke that Sept/Oct have not appeared in the list.

I reckon that'll be the seasonality that I keep going on about kicking in...

No, you'll find that prices fell in H2 2011 too, so to keep the YoY declines going prices have to fall by at least as much in H2 2012. Surely you know this by now.

But you predicted "between -5% and -10%" which looks like a pipedream. Reckon my forecast of -2% (159k eoy) is looking remarkably good.

Seasonal H2 weakness has started a month early

Time to invent a phantom bidder.

The fact that it is non-sovereign is one of it's virtues. It means it has been chosen by the people; the trading public, not the dictators. And gold IS money; it is the most natural form of money - that of a medium of exchange. Do not make the mistake of confusing Money for Legal Tender.

It's not fiat.

scenario: trading up from a 300k house with 100k equity to a 400k house. Buying --------- Stamp duty: 12k Covenyancing costs: 2k Moving cost: 1k Selling --------- EA fee @2%: 6k conveyancing cost: 1k Remortgaging fee: 1k Total: £23k I dunno about you, but 23 grand buys a lot of rent in the markets in which I operate!

Good point, but don't forget to factor in maintenance and repairs for homeowners!

These calculation comparisons need to be based in the real world. It's not realistic to live in the same place for 25 years. Indeed the reason that renters rent is that they like or are required to be highly mobile. Throw in the cost of moving home every 5 years from a buyers' point of view and let's see how the calculations come out.

No, it'll just get stuck in the balance sheet of the banks. You don't think the plebs will actually see any of the new money, do you?

They'll be waiting a LONG time.

The only thing that goes up in Pretchner's EW models is his ever increasingly detached ego.