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| The UK housing market: a bubble about to burst? |
Currency?
by SL
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#1000417
of 3278
 29 Oct 2002
01:04 PM |
If I take everyone's comments (thanks: useful, informative and worthwhile) and try to incorporate all of them in a likely picture of future events, I see the following: Overheated housing market continues a while. Economic growth is stagnant or deflationary. Debts increase to dangerous levels. Reductions in interest rates fail to stimulate economic growth. If I understand this correctly (as an complete amateur) the only real way out is to print money (which could not take place in Hong Kong, for example, as mentioned in previous posts). This eases deflation, but devalues Sterling - effectively reducing the price of houses in the UK without a reduction in their Sterling value. A possible scenario? It fits with the poor manufacturing and exports that we currently see. If this is a possibility, then those who don't own property at the moment and who earn in the UK, are in a terrible position.
Please tell me I'm wrong. |
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The Voice Of Doom Spake So:
by Rob G
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#1000416
of 3278
29 Oct 2002
12:58 PM |
http://www.observer.co.uk/business/story/0,6903,815230,00.html
Well, you can bet that the forecast is looking pretty grim when the head of Abbey National is saying:
'There are dangers, although I do not want to use the word "crash".'
...Which means that is precisely what he's thinking will happen if the other lenders don't reign-in lending pretty sharpish. I think this is a warning to them rather than to the public at large.
My guess is that they won't, or they'll be afraid of getting the blame for the price collapse instead of trying to palm it off onto the BoE who are also sitting on their hands at 4% ready to duck & cover. |
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To Extradry Martini
by Monitor_JDW
FT Administrator  |
#1000415
of 3278
29 Oct 2002
12:38 PM |
Your rephrasing is much better. Thank you.
As to why the comment was removed? To call someone's contributions "worthless" is to belittle their opinion and the right to express same.
Your rephrasing more directly addresses your opposing point of view without unnecessarily challenging someone's right to express an opposing view.
After all, if the posts you disagreed with were truly worthless, why would you respond? Furthermore, your opposition could just as easily say that your contributions are worthless, which, of course, wouldn't make you -- or anyone for that matter -- happy. You'd be much more likely to respond emotionally if the same comment were addressed to you specifically.
Granted, it was a minor turn of phrase, but when all we have is our words, one word can light an emotional fire or illuminate the room. In my opinion, your rephrasing better expresses your point and brings more light to the subject. |
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One of many.
by Horsefly
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#1000414
of 3278
29 Oct 2002
11:51 AM |
Curious has mentioned two sources: a popular newspaper, and "what we see and hear from friends and colleagues." These sources may be more indicative of the current mood of desperation and greed than future economic circumstances.
For house prices to have risen so far, and be still rising in most places, a lot of people must be thinking along the same lines as Curious.
Also, Curious mentioned his personal experiences. He is clearly a fairly shrewd property investor who has ended up with three rental properties. I don't know when he bought these properties, but he may have experienced the housing booms in the 70's, 80's and 90's. It is true that the 80's housing crash was just a blip to some people who were not forced to sell their properties. However, maybe his experiences don't go back far enough to be relevant to present circumstances. We have all seen many comparisons to the 1929 stock market crash and the present day. (For a chart of NASDAQ 2000 overlayed with DOW 1929:
http://lowrisk.com/nasdaq-1929.htm )
If inflation remains low in the future and prices peter out, then clearly buyers will also "peter out" because there will be no incentive to buy, just risk without gain. When buyers peter out, prices fall. |
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by loco
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#1000413
of 3278
29 Oct 2002
11:38 AM |
This forum is hardly worth reading anymore. It has turned into an arguement.
I have to ask the frequent re-posters just what their motivation is? Are you trying to persuade others to invest/sell property and single-handedly boost/undermine confidence or just very bored?
It is interesting to hear DIFFERENT points but if these people are so sure about the market why don't you make your fortune out of it?
For my 2 pennies markets to rise I'm afraid.
loco |
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UK Consumer Credit Rises Above Forecasts
by Rob G
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#1000412
of 3278
29 Oct 2002
11:22 AM |
http://news.ft.com/servlet/ContentServer?
pagename=FT.com/StoryFT/FullStory&c=StoryFT&
cid=1035872817335&p=1012571727085
...So there's still no slowdown in lending. The masses are queuing up to hurl themselves into the void.
"Interst rates are falling again, HEY EVERYONE, FREE MONEY!"
All it needs is a slight wavering in consumer confidence to tip the whole economy onto its back.
I'll give it until April next year (I'll be interested to see spending levels over the Xmas period) before the gravy train rolls into Repo-Town.
[edited to repair URL]
[This message was edited by Monitor_JDW on 29 Oct 2002 at 12:09 PM.] |
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Oops
by rev.hk
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#1000411
of 3278
29 Oct 2002
11:18 AM |
Dear FT.
I am surprised by your editorial line on disparagement. I think you might have mistaken Extradry Martini’s words as an accusation that Curious failed to leave the starting blocks in the race to explain the dynamics of the UK housing market. I for one do not believe that this is the case and I would like to offer him my support. He has made a valuable contribution to this forum by weighing in heavily to refute deflation (note #380) and by factually predicting a 8%-10% rise in UK property prices that is based exclusively on the very life breath to which we all owe our existence.
I hope this clears up the misunderestimation,
Yours as ever
Rev.hk |
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An argument needs to be supported by facts...
by Extradry Martini
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#1000410
of 3278
29 Oct 2002
10:59 AM |
Ah, apologies, I do now see what was taken out– I’m just very surprised that you thought it was offensive. I’ll rephrase the sentence:
Curious:
I have to agree with the Rev on this, you have not produced a single concrete fact or analysis to support your argument, and therefore your contribution so far has insubstansive. |
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FT Monitor
by Extradry Martini
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#1000407
of 3278
29 Oct 2002
10:34 AM |
FT Monitor:
As far as I can see, my last post is exactly as I sent it. You say that a disparaging comment has been removed - there wasn't one. If I am right, please say so as it makes it look like I have been rude when I haven't. If I did somehow write something disparaging without remembering it now, please let me know what I said by sending me an email to extradry_martini@yahoo.com
Thanks in advance. |
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Experience is worthless
by Extradry Martini
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#1000406
of 3278
29 Oct 2002
09:03 AM |
Curious said:
“Clearly, each of us have shaped our beliefs based on personal experience, personal circumstances and of course what we see and hear from friends and colleaugues etc”
Er…, no - Curious – that’s where you’re wrong. None of my beliefs are based on any of the above. If they were I’d be falling into exactly the same trap into which you and “considered wisdom” have fallen. My whole point is that those that base their view on experience (their own or other peoples) without studying what has driven the market in the past, and what is driving it now, are fools. What has happened in the past will not be happening this time for all the reasons that I, Rev, DJW, and others have already given you. You talk about the laws of economics as if they magically do not apply to the real estate market.
I have to agree with the Rev on this, you have not produced a single concrete fact or analysis to support your argument.
(BTW Rev, great link…)
[Disparaging comment removed.]
[This message was edited by Monitor_JDW on 29 Oct 2002 at 10:11 AM.] |
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Some market jabber for the inflationists
by rev.hk
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#1000405
of 3278
29 Oct 2002
02:04 AM |
Anyone interested in the future of their equity heavy pension fund - and therefore their ability to save for the future and pay their mortgage might like to read the linked article below. The author, Marc Faber, is a famous contrarian and has been in the markets for a long time. He might not be right, but you might not either if you ignore what the charts are saying.
http://www.quamnet.com/fcgi-bin/columnists.fpl?
par2=5&par3=2&par4=05&par5=09&par6=2002
(Edited by FT to break long url.)
[This message was edited by Monitor_JL on 29 Oct 2002 at 02:56 AM.] |
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Wealth, what is it?
by rev.hk
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#1000404
of 3278
29 Oct 2002
12:46 AM |
Hey rob,
In the Nationwide note, do you know what they use to define wealth? Does it include unrealised holdings of equities and properties. For if it does, then that debt-wealth chart is a lot more scary than it looks.
Rev. |
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Oooh, hark at them!
by Rob G
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#1000403
of 3278
29 Oct 2002
12:42 AM |
Sounds like handbags at dawn.
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Try Wasting Another's Time
by rev.hk
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#1000402
of 3278
29 Oct 2002
12:01 AM |
Curious,
Where's the reasoned argument or are you really just here to try to lure more first time buyers into the market so you can boast to your friends about how much you are worth without facing any of the risk that others do?
It's the last time I'll bother reading or replying to anything you ever write.
Goodbye and good-riddance. |
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Housing
by Curious
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#1000401
of 3278
28 Oct 2002
11:36 PM |
Thak you rev. Now we have three guesstimates in place. I have now said all I needed to say in previous postings. So we shall all have to wait and see what transpires as the months unfold, and who ultimately is proved right.But please,should it be the case,then lets not have the "historical analysis after the event" scenario as to why it did'nt happen as you forecast ; that really would be the last thing we would want to hear.
Goodbye. |
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