LauraB Posted August 29, 2011 Report Share Posted August 29, 2011 I'm sure he will give a balanced view then His "Glacier Fund" wouldn't happen to make lots of money if prices fell would it? Oi Vey JD! To counter a decade of almost nothing but VI bull, we now require a decade of almost total VI bear. Only then will balance be restored. How do I check out his fund? Link to comment Share on other sites More sharing options...
John Doe Posted August 29, 2011 Report Share Posted August 29, 2011 Oi Vey JD! To counter a decade of almost nothing but VI bull, we now require a decade of almost total VI bear. Only then will balance be restored. How much more bearish do you want? To quote a certain fella that goes by the name of John Doe With the serious slowdown (again) now being observed in the Western economies, I really don't think inflation will stay high either, as even with the printing and ZIRP, a credit crunch, by definition, is deflationary, and the deleveraging hole they have to fill is still bigger than the printing (so far). I think beneath the surface, things are extremely bad How do I check out his fund? Sorry, you have to be a real bear for that info, walking the walk, not just talking the talk Link to comment Share on other sites More sharing options...
drbubb Posted August 30, 2011 Report Share Posted August 30, 2011 I think we might soon see more gov intervention. Did you hear Lagardes latest speech as IMF head? Wow! More mortgage let offs, new lower rates for mortgage holders, capital injection into the banks etc etc http://www.bbc.co.uk/news/business-14699093 EXCERPT: 28 August 2011 IMF chief Lagarde in warning on economic recovery Christine Lagarde took over from Dominique Strauss-Kahn The head of the International Monetary Fund (IMF) has said the global economy is not growing at a fast enough pace and faces a number of risks to recovery. Christine Lagarde warned a threat of global recession remained and called for coordinated policy action. She said this should include the mandatory recapitalisation of European banks. Ms Lagarde was speaking at a US Federal Reserve meeting at Jackson Hole, US. "Developments this summer have indicated we are in a dangerous new phase," she said. "The stakes are clear; we risk seeing the fragile recovery derailed - so we must act now." === === == I would say the reverse : You must NOT act now. A good recession and restructuring is what the world truly needs. But Christine does not agree. "Put simply, macroeconomic policies must support growth," Ms Lagarde said in her first major policy speech since taking the IMF reins in July. "Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation," she added. No wonder stock markets around the world rallied... They see a global QE3 coming. But I reckon they may be disappointed. Link to comment Share on other sites More sharing options...
John Doe Posted August 30, 2011 Report Share Posted August 30, 2011 EXCERPT: 28 August 2011 IMF chief Lagarde in warning on economic recovery Christine Lagarde took over from Dominique Strauss-Kahn The head of the International Monetary Fund (IMF) has said the global economy is not growing at a fast enough pace and faces a number of risks to recovery. Christine Lagarde warned a threat of global recession remained and called for coordinated policy action. She said this should include the mandatory recapitalisation of European banks. Ms Lagarde was speaking at a US Federal Reserve meeting at Jackson Hole, US. "Developments this summer have indicated we are in a dangerous new phase," she said. "The stakes are clear; we risk seeing the fragile recovery derailed - so we must act now." === === == I would say the reverse : You must NOT act now. A good recession and restructuring is what the world truly needs. But Christine does not agree. I used to think that way, and still think government spending should be cut, but now I think the problems we have are so great that a "good" recession now could spiral down far deeper than anyone would actually want, with severe consequences. For example, on a smaller point, I used to think a quick public sector cull would sort out the deficit, but now I see no point in making compulsory public sector redundancies when the tax payer ends up paying for these people anyway, while they are unemployed. Rather, use voluntary and natural wastage over a longer period. "Put simply, macroeconomic policies must support growth," Ms Lagarde said in her first major policy speech since taking the IMF reins in July. "Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation," she added. No wonder stock markets around the world rallied... They see a global QE3 coming. But I reckon they may be disappointed. I'm not sure if it means the expected QE3 (bond buying) or rather stimulus packages, which if directed into infrastructure etc, would not be such a waste and not so inflationary. The deleveraging hole is a b**dy big hole to fill. Link to comment Share on other sites More sharing options...
Van Posted August 30, 2011 Report Share Posted August 30, 2011 JD, I've never seen you present an argument outside of: Britain is a small island, land - they aren't making any more of it. Immigration will continue to boost demand Housing benefit keeps rents high and underpins capital values. Money Printing/ bank bailouts. We're a nation of house buyers/ Pent up FTBers and investors UK housing provides a yield the only thing left in the UK that has value. These arguments have been done to death in various fora over the years. Most have been should to be false when fully analysed yet you continue to select any evidence that superficially supports any of the above, included the Laguarde speach. Your sound like a broken record and deserve to be mocked. The availability of credit is what drives the market. Low interest rates means vendors are not under duress to sell. The rest really is irrelevant, it would be easier to just admit it. Howabout: + Lower real interest rates + Increasing life expectancy and longer working life + Increasingly firm rents (this encapulates all the misargument about supply/land etc etc) Link to comment Share on other sites More sharing options...
Meralti Posted August 30, 2011 Report Share Posted August 30, 2011 Howabout: + Lower real interest rates This simple means that vendors don't have to sell and keeps them in a zombie state. + Increasingly firm rents (this encapulates all the misargument about supply/land etc etc) This is a result of people not buying. This is highly oportunistic of landlord (not that I blame them for it) and I fully expect this to be tempory. In fact I am already seeing a softening in comparison to be rises seen in the spring. Link to comment Share on other sites More sharing options...
John Doe Posted August 30, 2011 Report Share Posted August 30, 2011 This simple means that vendors don't have to sell and keeps them in a zombie state. This is a result of people not buying. This is highly oportunistic of landlord (not that I blame them for it) and I fully expect this to be tempory. In fact I am already seeing a softening in comparison to be rises seen in the spring. But Meralti, the fact is that the UK has not seen anything like the falls in other countries. I think there are several reasons, low IR's being one of them, however, there are low IR's in the US and Eire and Spain also, so that really doesn't set us apart does it? I have put forward several other possibilities. You rubbish them and mock me, yet when I ask you for your reasons, you ignore the question. The arguments you say have been done to death have not been shown to be false when analysed at all. For every person saying they don’t show a correlation, there is another who shows they do, and I’m sure you are aware of this if you really are researching the field. If you don't like the reasons I think has stopped bigger falls, that's fine, but please don't dismiss them out of hand unless you have better ones. Do you have better ones? Link to comment Share on other sites More sharing options...
LauraB Posted August 30, 2011 Report Share Posted August 30, 2011 How much more bearish do you want? To quote a certain fella that goes by the name of John Doe Yes, but he is not a high profile msm article writer........... or is he? Or a Ray Boulger who leans the other way? Link to comment Share on other sites More sharing options...
John Doe Posted August 30, 2011 Report Share Posted August 30, 2011 Yes, but he is not a high profile msm article writer........... or is he? Who knows where they get their crazy ideas? Or a Ray Boulger who leans the other way? Madame, please! One can take the slights to far sometimes! Joking aside, these guys have been spot on for the vast majority of the crises (and before) so when they come out with things like this, I do worry (more). The chief economist of the Bank for International Settlements (BIS) has warned: "Debt problems facing advanced economies are even worse than we thought." http://uk.finance.yahoo.com/news/Britain-In-Debt-Danger-Zone-skynews-3750095640.html?x=0 Link to comment Share on other sites More sharing options...
Meralti Posted August 30, 2011 Report Share Posted August 30, 2011 But Meralti, the fact is that the UK has not seen anything like the falls in other countries. I think there are several reasons, low IR's being one of them, however, there are low IR's in the US and Eire and Spain also, so that really doesn't set us apart does it? I have put forward several other possibilities. You rubbish them and mock me, yet when I ask you for your reasons, you ignore the question. The arguments you say have been done to death have not been shown to be false when analysed at all. For every person saying they don’t show a correlation, there is another who shows they do, and I’m sure you are aware of this if you really are researching the field. If you don't like the reasons I think has stopped bigger falls, that's fine, but please don't dismiss them out of hand unless you have better ones. Do you have better ones? There are some attributes that set the UK apart. The ones that count for this argument are the fact we have our own currency and the boe can set the base rate as it chooses, while other countries like the US also have these attributes, the market in that country is also far greater in size and the degree of polical interference in it far less. Countries such as Canada and Australia also have their own currencies and set their own rates - these two have also avoided housing melt down - so far. As you yourself have noted the nominal crash has been avoided, or is it just delayed, by devaluing the currency and maintaining ultra low rates so that property owners do not come under real stress. This has worked so far. I, and others, have noted many times that this was done for two reasons. To prevent collapse of the UK banks in 2009. To give Gordon Brown a fighting chance of winning the 2010 election. While the first reason still has validity the banks have been recapitialised to an extent and could in most cases survive a decrease of 25% in nominal terms, although not without some loosing their bonuses. The second is now irrelevant. The real question is how long will the current situation continue. Nothing more nothing less. As soon as it changes significantly a crash will be back on the cards. You've admitted this already. Why continue to spout the same old arguments about why property only ever goes up. Or are you just trolling? Link to comment Share on other sites More sharing options...
John Doe Posted August 30, 2011 Report Share Posted August 30, 2011 Why continue to spout the same old arguments about why property only ever goes up. Or are you just trolling? Why spoil a half decent post with this last line? Nowhere have I ever said property only ever goes up, indeed, quite the reverse. All my posts say falls are ahead. I really don't know why you persist in these attempts at baiting, when we are actually agreeing on quite a few things. The simple fact is what really sets us apart is that the US, Eire and Spain all had huge oversupply. If you keep ignore this (amongst other things), then you are not looking at the whole picture. Did Canada and Australia have a big oversupply? If not, then my arguments are actually given more weight. Also they have s**t loads of commodities, or do you think that has no effect as well? The real question is how long will the current situation continue. Nothing more nothing less. As soon as it changes significantly a crash will be back on the cards. You've admitted this already. That's right, but the current situation could go on for many, many years, slowly reducing the amount of outstanding debt, or do you not accept that is a possibility? Remember the old saying "Markets can stay irrational longer than you can stay solvent"? Link to comment Share on other sites More sharing options...
John Doe Posted August 30, 2011 Report Share Posted August 30, 2011 It seems the evidence just keeps on mounting. The housing market will be plunged into "crisis"' without government action to address the "chronic under-supply of homes", The National Housing Federation (NHF) said it risked locking an entire generation out of the housing market.It predicted further falls in home ownership rates and even higher rents. http://www.bbc.co.uk/news/business-14708841 Of course the supply of credit has a big effect, but over the long term the more houses built = lower prices. Less house built = not so low prices. (Note I never said higher) Do people really think that the banks have all learnt their lesson, and that credit will never return? Really? If the extra homes are not built now and over the next several years, this will most likely create another boom and associated problems in the future (albeit after a possible bust in the meantime). Link to comment Share on other sites More sharing options...
tallim Posted August 30, 2011 Report Share Posted August 30, 2011 It seems the evidence just keeps on mounting. http://www.bbc.co.uk/news/business-14708841 Of course the supply of credit has a big effect, but over the long term the more houses built = lower prices. Less house built = not so low prices. (Note I never said higher) Do people really think that the banks have all learnt their lesson, and that credit will never return? Really? If the extra homes are not built now and over the next several years, this will most likely create another boom and associated problems in the future (albeit after a possible bust in the meantime). Come on JD, you can't call press releases evidence and bold a bit of soundbite as if it's worthy of serious consideration. We're better than that. I caught a house builder spokesman on BBC news this morning saying that they have more than enough land to build on to meet targets, they just won't build while FTBs can't afford the prices they want to sell at. He didn't say it exactly like that, but it's what he meant, I think the exact phrasing was something like "Until FTBs can join the market without our support". There was then some bleating about how the Government could chuck money at FTBs so they can give it to their favourite house builder. Grant Shapps the UK housing minister then came on and said something dull about cheap mortgage rates and how they'd get builders building again, I hope they're real conservatives and won't intervene in markets in any meaningful way. What I did think though was that there could be a mechanism to stop land banking by the big builders so that there is a more consistent supply. The house builder spokesman said they had more than enough land, so we've granted permission, but money is so cheap they can sit on it. There's thousands of people who'd build a house tomorrow if the land was made available, but the big boys just bank it. What about planning permission being an ongoing payment until you've completed the build, would there be serious unintended consequences? Link to comment Share on other sites More sharing options...
tallim Posted August 30, 2011 Report Share Posted August 30, 2011 ... He says house buying more than 40% more expensive than renting. WRONG, it is buy all accounts now, cheaper to buy than rent in 80% of the country. Even if it was equal, this 40% statement is nonsense. He is basing over-value on earnings and not affordability. In this ZIRP environment, this is the WRONG comparison. He says what s**t we are in, then how Osborne is the darling of the market, then thinks rates are going to go up Big mistake. Rates ain't going nowhere for a long time (and that is because things ARE bad). Please ladies and gents, let's have some balance Ratios between prices : rents and prices : earnings are useful. The question you have to ask yourself is if ZIRP is the new normal forever, or if the cost of money will revert back to a more normal range? At best the cost of buying is roughly the same as renting if you assume mortgage funding is available and that it costs ~4%. Is that assumption valid in the medium to long term? In fact, is it even valid today for the bulk of people choosing between renting or buying, could they get 4% mortgage funding? If mortgage funding reverts to a more normal ~6%, you've just added ~25% to the cost of a 25-year mortgage repayment and renting becomes much cheaper again. Link to comment Share on other sites More sharing options...
John Doe Posted August 30, 2011 Report Share Posted August 30, 2011 Come on JD, you can't call press releases evidence and bold a bit of soundbite as if it's worthy of serious consideration. We're better than that. It was actually taken from a report from the National Housing Federation, however, that aside, I didn't even highlight the bullish bits of the report, like the 20% rise in prices predicted over the next 5 years, as I thought that was rubbish. But, if you want more evidence, worthy of serious consideration, then read one of the most comprehensive studies into the supply and demand effect over the long term, from HM Treasurey (written by Kate Barker, ex BoE) in 2004. http://www.barkerreview.org.uk/ Are we better that that? Where are the serious reports that deny these conclusions? I caught a house builder spokesman on BBC news this morning saying that they have more than enough land to build on to meet targets, they just won't build while FTBs can't afford the prices they want to sell at. He didn't say it exactly like that, but it's what he meant, I think the exact phrasing was something like "Until FTBs can join the market without our support". There was then some bleating about how the Government could chuck money at FTBs so they can give it to their favourite house builder. Hehe, and you tell me to "come on". Should I treat that "soundbite as if it's worthy of serious consideration". What I did think though was that there could be a mechanism to stop land banking by the big builders so that there is a more consistent supply. The house builder spokesman said they had more than enough land, so we've granted permission, but money is so cheap they can sit on it. There's thousands of people who'd build a house tomorrow if the land was made available, but the big boys just bank it. Again, it doesn't matter why they aren't being built, it's just the fact that they aren't being built that matters (and will matter). I have also said many times, it's the planning laws that don't help, in particular for self builders. Then again, a report later on 5 live drive had all the negative arguments about land banking and empty homes (made by the Campaign to Protect Rural England in this report) absolutely trashed. http://www.bbc.co.uk/programmes/b013ywkh Roughly about 6.05pm from memory. What about planning permission being an ongoing payment until you've completed the build, would there be serious unintended consequences? Sounds like a good idea to me. Link to comment Share on other sites More sharing options...
tallim Posted August 31, 2011 Report Share Posted August 31, 2011 ... Hehe, and you tell me to "come on". Should I treat that "soundbite as if it's worthy of serious consideration". ... Touche! Link to comment Share on other sites More sharing options...
tallim Posted August 31, 2011 Report Share Posted August 31, 2011 ...But, if you want more evidence, worthy of serious consideration, then read one of the most comprehensive studies into the supply and demand effect over the long term, from HM Treasurey (written by Kate Barker, ex BoE) in 2004. http://www.barkerreview.org.uk/ ... That's quite a tome to get through, I've read the executive summary though, a couple of notes for now while I remember... 1. At least one of the numbers I'm using is wrong for population, houses or household density. We can't have a population increasing above the number of houses by a ratio greater than the household density and at the same time a falling household density. The report talks about an apparent lack of supply back in 2003, so something is wrong. We either have hidden house supply or hidden rising household density. Possibly compounded at one end by a more unequal distribution i.e. more old folks becoming single person households, so to average out, the remaining households become more dense? 2. It mentions increasing housebuilding to reduce the real rise in house prices, what mechanism should we expect for a continued real rise, how can households pay more for housing? We had mechanisms I could understand in the past, single-income to dual-income, high mortgage rates to low mortgage rates. I don't think we can move to more than dual-income and rates can't get lower. All we're left with is wages rising faster than the inflation rate used to adjust prices to a real scale, or an ever increasing proportion of wages being used to pay for housing. Link to comment Share on other sites More sharing options...
John Doe Posted August 31, 2011 Report Share Posted August 31, 2011 That's quite a tome to get through, I've read the executive summary though, a couple of notes for now while I remember... 1. At least one of the numbers I'm using is wrong for population, houses or household density. We can't have a population increasing above the number of houses by a ratio greater than the household density and at the same time a falling household density. The report talks about an apparent lack of supply back in 2003, so something is wrong. We either have hidden house supply or hidden rising household density. Possibly compounded at one end by a more unequal distribution i.e. more old folks becoming single person households, so to average out, the remaining households become more dense? Yeah, I know what you mean. I read some of it some years ago, but to be honest, not all. That, (amongst other things, not least the IR drop in 2005) convinced me to jump back into the market after STRing a year or two before. STR'd again after NR went down (got out just in time). 2. It mentions increasing housebuilding to reduce the real rise in house prices, what mechanism should we expect for a continued real rise, how can households pay more for housing? We had mechanisms I could understand in the past, single-income to dual-income, high mortgage rates to low mortgage rates. I don't think we can move to more than dual-income and rates can't get lower. All we're left with is wages rising faster than the inflation rate used to adjust prices to a real scale, or an ever increasing proportion of wages being used to pay for housing. Yep. Can't see nominal rises for a long time, unless of course they start lending 100% to everyone at 2.5% (Wouldn't put it past them mind ). But one day, maybe many years yet, the lending will start again. It's their nature. Link to comment Share on other sites More sharing options...
drbubb Posted August 31, 2011 Report Share Posted August 31, 2011 But Meralti, the fact is that the UK has not seen anything like the falls in other countries. I think there are several reasons, low IR's being one of them, however, there are low IR's in the US and Eire and Spain also, so that really doesn't set us apart does it? Yeah, but ZIRP came too late to "save" the property market in the USA, Eire... Prices had already fallen too far, and "the back" of market psychology had already been broken. While it was well-tested in most of the UK, and probably "broke" outside London, the property Bulls were not given a long enough drop to break their bullish complacency. And then Mr Brown's corrupted regime added the further support of generous and indiscriminant Housing benefits. It will be more painful for the market when the props are pulled away one-by-one Link to comment Share on other sites More sharing options...
LauraB Posted August 31, 2011 Report Share Posted August 31, 2011 But one day, maybe many years yet, the lending will start again. It's their nature. I shall tune-in to the cosmic lunatic asylum from my home planet just to see what the inhabitants of a tiny, far-too-self-important island are up to. I wonder what they will be calling their currency Link to comment Share on other sites More sharing options...
John Doe Posted August 31, 2011 Report Share Posted August 31, 2011 I shall tune-in to the cosmic lunatic asylum from my home planet just to see what the inhabitants of a tiny, far-too-self-important island are up to. I wonder what they will be calling their currency Why gold, of course Yeah, but ZIRP came too late to "save" the property market in the USA, Eire... Yeah but, No but (Vicky Pollard voice) ,because actually the US hit ZIRP Dec 08, that's 3 months before the UK (March 09), and the EU was only 1 whole month behind. As for Brown policies, the US had a fair few of their own too. Link to comment Share on other sites More sharing options...
drbubb Posted August 31, 2011 Report Share Posted August 31, 2011 Why gold, of course Yeah but, No but (Vicky Pollard voice) ,because actually the US hit ZIRP Dec 08, that's 3 months before the UK (March 09), and the EU was only 1 whole month behind. As for Brown policies, the US had a fair few of their own too. JD, You have to count as follows: MONTHS AFTER THE PEAK,: + USA was: July 2006 + UK's was Aug. 2007 That's not enough time (just over a year) in the UK to "break the Bull psychology" Link to comment Share on other sites More sharing options...
John Doe Posted August 31, 2011 Report Share Posted August 31, 2011 JD, You have to count as follows: MONTHS AFTER THE PEAK,: + USA was: July 2006 + UK's was Aug. 2007 That's not enough time (just over a year) in the UK to "break the Bull psychology" Not sure about that as we had a deep fall over nearly 2 years. I think a lot of bull s**t themselves Also, if you look the falls in percentage terms, they are about the same up to mid 2009 yes? Also, the US started reducing rates a long long time beofre the UK. (Old Merv held out for quite a while). Link to comment Share on other sites More sharing options...
malvern hills Posted August 31, 2011 Report Share Posted August 31, 2011 Yeah, I know what you mean. I read some of it some years ago, but to be honest, not all. That, (amongst other things, not least the IR drop in 2005) convinced me to jump back into the market after STRing a year or two before. STR'd again after NR went down (got out just in time). Yep. Can't see nominal rises for a long time, unless of course they start lending 100% to everyone at 2.5% (Wouldn't put it past them mind ). But one day, maybe many years yet, the lending will start again. It's their nature. 100 year mortgages anyone? Link to comment Share on other sites More sharing options...
drbubb Posted September 1, 2011 Report Share Posted September 1, 2011 Not sure about that as we had a deep fall over nearly 2 years. I think a lot of bull s**t themselves Also, if you look the falls in percentage terms, they are about the same up to mid 2009 yes? Also, the US started reducing rates a long long time beofre the UK. (Old Merv held out for quite a while). Both countries fell at "crash cruise speed" from their peaks, and: By late 2008: + After a July 2006 peak, the US was down about 33%, and + After a Aug. 2007 peak, the UK was down about 20% (less in London) ...When ZIRP was introduced. A 20% drop is easier to recover from, obviously. Especially when it is suddenly cheaper to own than rent, and BTL landlords are coining it after ZIRP. Brown's "sneak attack" on the Housing Bear market worked, but the magic is fading fast now. Link to comment Share on other sites More sharing options...
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