|
|
| The UK housing market: a bubble about to burst? |
Misunderstood
by Rik
|
#1001389
of 3278
 06 Dec 2002
03:55 PM |
Jack,
thanks for the welcome, good to be here!
I think you may have misunderstood me with regard to the 15% interest rate. I am aware that 15% was a spike unlikely to be seen again, or at least for a long time. Furthermore I do not believe that interest rates are likely to get anywhere near that for many years. I would question your comment that they are liekly to go down, however, expecially given the signals coming from the BOE and Merv, but really that is by the by.
The main point I was trying to make in the second part of my post was that interest rates are so low because inflation is so low. If inflation is low then the real value of the debt will not get eroded.
So, the old story of "my parents bought their property for £2000 25 years ago and its now worth half a million" only happens as a result of inflation as I am sure you are aware.
If, as so many people (but not necessarily me), you predict that inflation is likely to remain low, say 2.5% - gordon's target, then the real value of that debt is going to remain. Furthermore, if you have low inflation you will not get inflation busting pay rises because low inflation implies low spending therefore no booming economy therefore no money for payrises so once again, that debt remains a large proprtion of your income. Then you have kids and they cost a lot but you are still paying the same for your property.
My point with regard to the 15% interest rate was that i believe the situation then was slightly better. If you can stretch yourself when rates are high you pretty much know that the monthyl payments will become more affordable because either rates will come down or, if they remain high it is because of inflation, therefore your monthyl payments will be decreasing in real terms.
Stretch yourself when inflation and interest rates are historically low (40 years!!!) then what have you got to look forward to? A rise in interest rates or very low inflation. Either way those monthly payments aren't going to get easier.
I was basically questioning the constant mantra of optimists who believe that there is no reason for a decline/crash/slump call it what you will, because borrowing is so much more affordable now. We have all lived through periods of reasonably high inflation but what if it wasn't there or what if it was low.
Interesting fact that prices in this country remained virtually static for about 500 years up to mid 1800s I think. Inflation is a 20 century phenomena. Is deflation a 21st century phenomena?
Look forward to readin this board again soon.
Rik |
|
Housing
by Mr X
|
#1001388
of 3278
06 Dec 2002
03:50 PM |
Mr Britain # 1383 Please do some more sums based on your data, before you can comment that this state of affairs can no longer continue. Observe- your data - 1990 price £70,000 with 41.55 % of take home pay in mortgage payments at 11 % repayment over 25 years. 2000 price £217,000 with 44.80 % of your take home pay in mortgage payments at 4 % repayment over 25 years. Your data.
Now lets extrapolate. To keep interest rates at 4 % we need inflation at 3 % [your data] Therefore, in 5 years time 3 % compound to the 2000 take home wage of £31,000 becomes £35,937. Then apply the same 44.80 % in mortgage payments giving payments of £16,100 per annum. At 4 % the amount you can borrow is then £251,500. If we used the 1990 % at 41.55 % then the amount you can borrow will be £233,000.
Conclusion - by keeping the same affordability levels in both the 1990 and 2000 examples, the amounts have still increased from the current price of £217,000 to either £251,000 [based on 2000 affordability ratio] or £233,000 [at the 1990 affordability ratio of 41.55 %.
In fact, to keep the same £217,000 price in 5 years time at salary compounded at 3 % to give £35,937 your mortgage payments of £13,890 per annum represents 38.65 %.
Either way, there is still room for price increases in the future and / or interest rates rises for a price stagnation to remain at £217,000.
I still maintain based on my previous posts many postings ago, that at best we will have a price stagnation in the coming years, but likely to have a further small price increase to maintian this correction.
Anyone care to dispute these figures ? |
|
separating faith from fact
by Jeff Morgan
|
#1001387
of 3278
06 Dec 2002
03:37 PM |
I'm catching up after almost a week out completing the sale of my mother-in-law's apartment (at a price about 120% greater than she paid for it, after 10 years).
I just read a contribution from TheRealFake Elvis (#1206) who wrote, in a long post, '...saying that prices won’t fall because I won’t sell is a bit like believing that holding on to your Cisco shares has prevented a tech stock price collapse.'
Now I will apologise for quoting completely out of context but I am doing that to illustrate a problem I sometimes have with postings in this forum.
I listen with interest and occasional amusement to the religious and economic wars between the doomsayers and the optimists. The posts often help me to understand what is going on and to see both sides of the debate. The fact that the two sides will never reach a concensus only adds to the spice.
But when the debate misuses terms that are clear I part company with the poster. TheRealFake Elvis's quote does that. The point is that no price exists unless and until someone makes an offer to buy that is then accepted. The notion of price has no reality outside of that transaction. I can ask for offers of £10,000 or £1,000,000 on a property (to posit an extreme case) but until I get an offer - an accept it - there is no price for the sale.
It is therefore abundantly clear that the housing market can and will only be tracked by the prices struck on housing deals. And while so far I am not convinced by the arguments of the doomsayers or the optimists - with honourable exceptions both sides seem to regard insult and emotion as persuaders when in fact they have no part in a sensible debate - I regard the postings from those such as ExtraDry, Andy B and Hoogstraten (mostly) to be the ones of value. At least they do try to separate out reasoned debate from emotion. |
|
"Prices are sticky on the downside" - J.M.Keynes
by Jack Straw
|
#1001386
of 3278
06 Dec 2002
03:32 PM |
Good morning, nice to see the forum is back open. Last night it was closed due to a series of postings from JJ. Now I’m not one to judge him, but what was that all about?
KIP, I have been to Australia in the past, as my brother works there. Anyone who has been to Sydney knows why there is a bubble in the Australian housing market. The reasons I would assess are as follows: -
1. The population increase, since the 50’s, is 122%. This is the highest rise in population globally. Now I’m sure I don’t have to go on and talk about the further housing pressures of this, as it surely is inferred.
2. The actual land available, in the Sydney - the engine of the aussie boom, is limited; therefore they are building up, more than out. Thus housing pressure increases; you’ll find river/sea views there are like gold dust.
3. There is still an aggressive approach to increasing the population, and capital. I was offered 3 jobs while I was there on holiday, and those were from people I met on the golf course and watching the rugby.
4. “If they say Australia's due for a 'correction (what a lame word you economists choose!). Let me rephrase that: If they say Australia's Housing market is gonna crash & burn, what makes the UK safe.” – you say. But you have to understand that demand exceeds supply, sound economic concepts that confirm that prices do not drop without govt intervention. If you reviewed this scenario the person, a chartist, is looking at previous financial indicators and saying the price must drop. These are the same people who told people to sell Microsoft shares when they reach a market capitalisation of $1million dollars, as they’d never surpassed that. My are their faces red!
5. “NEVER UNDERESTIMATE PUBLIC OPINION” – you say. People are sheep, you tell them “war in Iraq(or Vietnam) is good”, “Death’s will be caused by fire fighter strikes”, “Fox hunting is a bad thing” and they’ll believe you. Beyond the short term, that’s why I added Vietnam, only the informed changed their opinion and it is then up to them to change the majorities views. Look at the foxhunting ban; this old chestnut comes out every time our govt is in trouble, hiding issues such as EU membership and war in Iraq. It is the emotive ill informed argument that clouds issues, and never gets acted upon! After all then it can be dusted off and used again at a later point! Karx Marx once said, “religion is the opium of the people”, I would argue that, “Human interest stories are now the opium of the people.”
6. “Let me rephrase that: If they say Australia's Housing market is gonna crash & burn” – you say. But why do you believe this?
Now we have put the Australian property market to bed, can we get back to the UK market?
Mr Britain, you financial calculations are quite interesting and a good approach to take.
“1990 Price £70,000 Interest 11% Take home pay £20k Inflation 10% Ratio 3.5X
2000 Price £217,000 Interest 4% Take home pay £31k Inflation 2.5% Ratio 7X
Since it is only interest rates that have halved and wages have not doubled then how come
Prices have more than doubled”
In theory these figures give us doubt in the future markets…. But I would argue the following-
1.Affordability, which is the key indicator you have missed off this calculation. Although you compare house prices to salaries you do not compare to the disposable income figures. An OECD figures link is on my previous comment, I will not go over this again as I have previously illustrated this point.
2.To assume interest rates are going to rise because of inflation is crazy. Why? Inflation is the relative rise in prices of all goods and services over time. At present we are struggling to make 2.5% inflation, with 25.5% housing price rises, the BoE target. Of the last 45 months of this target they have been under target 41 times. With the EU cutting rates and the US also it is mad to assume that we will take a divergent course. Our economy is but a puppet of these 2 stronger and larger economic zones and has been since WW2.
3.Can you confirm how you produce your future housing figures? My point is that there is enough lag for rises of 10% for the next 2 years. Are you assuming that we will increase 25% pa? If so why are you arguing against points no on is arguing?
4.Where is the counter to my point over the predicted increase in housing, due to a new interest policy post EU migration?
5. I agree with one point of the figures. Given current thinking the figures appear unaffordable…BUT! What is to say current thinking is right, over my last number of emails I have continually pointed this out.
For a start salary to house calculations are wrong. Its disposable income to house prices that are the true figure. Again, and again, and again, and again, and again but it don’t stick. How can we look at the relative cheapening of housing debt, to historic figures, and the future cheaper euro denominated debt if we are looking at producing an informed opinion? I tell you one thing for sure I’m happy I’m lending now and not 20 years ago!
Rick,
Secondly, lets look at the last time there was a housing boom/bust. Affordability problems are cited as the reason for the crash and high interest rates were the cause. But if you think about it, last time was actually a much better period to buy a house than now. Call me crazy if you will, but here is why (all IMHO of course). A 30k mtg on 15% is expensive (for the time), however, the actual amount you owe is manageable, therefore, when interest rates come down, as they did, your monthyl repayments come down. You can stretch yourself but common sense tells you that with inflation high and interest rates high the amount you are paying WILL decrease
Hi, welcome to the forum. I’m sorry to see you are a doom monger
You say call you crazy? Your crazy, tongue in cheek of course!
15% interest rates were an exception to the norm; to argue that we should run on a policy of psuedo 15% rates is wrong, when referring to affordability. With the downward pressures on current inflation targets interest rates are heading down not up. I’d argue there’s a case for Freddie Mac style rates over here, as per my previous message, to bring an end to all affordability questions long term. This would boom housing further as virtually all risk is removed. As per my previous points chartist’s work on a theory of perfect knowledge and a homogenous market – to quote Gecko this is “a dog with fleas”.
My final comment would be I expect 10% pa for the next 2 years. I cannot assess further than that until we see economic factors then. Again I can confirm that I can only respond to reasonable responses, conducted with due diligence. |
|
Bristol property Boom
by Mr Britain
|
#1001385
of 3278
06 Dec 2002
11:22 AM |
Bristol must be due for a property boom since Cherie Blair has just purchase two properties in the area and apparently was able to get them at £67k below value. Today Tony visited the area. My guess is the government is about to announce a massive redevelopment for the area so get in now and buy buy buy.
For the trusting public do you not think that Tony Blair knew about her dealings with a convicted Fraudster Mr Peter Foster or about her personal finances. (Ho honey I forgot to tell you I’ve picked up two flats when I was out shopping for toys last week) Obviously a misunderstanding between the governments number one man and the public. Some do you still think governments can be trusted. |
|
Try this out
by Knowledge is Power
|
#1001384
of 3278
06 Dec 2002
10:52 AM |
Guys,
The Beeb has a 'reasonable' mortgage calculator for quick figs:
http://www.bbc.co.uk/homes/property/mortgage_calculator/
I agree, the rates of increase bear no relation what so ever to any economic principles.
In the 90's after the last crash HP were (with regard to long term trends) low. But setting asside this recovery & a modest 7% annual rise, There is no reason for the increased rises in the market.
Let me try to explain my logic here. In the mid/late '90s the financial markets were a gold mine. As a consequence the housing market boomed too. But starting in '98 & onwards, the markets fell. Net result, loads of investors moved the money out of the markets & into the housing market. Providing if you life a second continued boom to the housing market. But, IMHO it's put off the inevitable.
If they say Australia's due for a 'correction (what a lame word you economists choose!). Let me rephrase that: If they say Australia's Housing market is gonna crash & burn, what makes the UK safe.
Why is the UK's market not due for a 'correction' too? The affordability argument is weak and pathetic, it's an illusion created by the lenders & the Gov. The BoE knows this but can't do anything. Bottom line it's up to us. NEVER UNDERESTIMATE PUBLIC OPINION. If the public feel the market is due for a crash, it will crash. I think this event horizon is just round the corner.
And as astute posters have noted, inflation ain't gonna come to the rescue.
40-50% fall on current prices by the end of 2003 (thus 25% below 2000 prices). That's my prediction.
Incidentally I think the market will be falling round the time of the new budget. |
|
Whats this i see a green FTSE
by Mr Britain
|
#1001383
of 3278
06 Dec 2002
10:34 AM |
Lets say that in London over the last ten years this happened
1990 Price £70,000 Interest 11% Take home pay £20k Inflation 10% Ratio 3.5X
2000 Price £217,000 Interest 4% Take home pay £31k Inflation 2.5% Ratio 7X
Since it is only interest rates that have halved and wages have not doubled then how come
Prices have more than doubled. So lets continue and say interest stays at 4% so we need inflation at less than 3% else Mr Brown will put interest rates up to fight inflation. This in turn means that wages over then next 10 years can only go up by a compound rate of about 40% so in 2010 the take home pay would be £42k and even if the sucker was to borrow 7X income the maximum he could afford for the house in London is £294,000 but by that time the house on current trends would be valued at well over £1/2m
It’s as clear as day that this can not continue no matter what interested parties tell you. |
|
Pessimistic in an optimistic sort of way
by Rik
|
#1001382
of 3278
06 Dec 2002
10:14 AM |
Forgive me as this has probably been said before, however, I cannot face checking through 88 pages of replies to check.
People keep saying how "affordable" it is to borrow at the moment. Is this really true?
First of all lets assume that one can actually borrow. This obviously is in question as FTBs are finding it increasingly hard to do but lets assume anyway.
So you take out a mtg for approx £110k on an interest rate of, lets say 5%. Reasonable SVR I think. Assume we go repayment (because endowments don't seem to popular at the moment). At a rough guess that mortgage would cost you approx (I stress approx) £680-700. Average wage is £24k, so after tax approx £1400 per month. SO your mtg payments are half your take home pay. (Please bear with me, I am basing these figures on Brighton, where I live and obviously it will be different in other parts of the country). Now half your monthly salary seems like a lot to spend on your mtg. And this is at a time when interest rates are the lowest they have been for 40 years. OK,, now in the past this has not been a problem because inflation has eroded the real value of this debt (My parents bought their house for £2000 etc etc), however the situation is different this time (sic) as so many people keep saying interest rates will remain low because inflation is low. if inflation remains low then the real valyue of the debt will not decrease and wages will not go up so people will be saddled with this debt for much longer.
Secondly, lets look at the last time there was a housing boom/bust. Affordability problems are cited as the reason for the crash and high interest rates were the cause. but if you think about it, last time was actually a much better period to buy a house than now. Call me crazy if you will, but here is why (all IMHO of course). A 30k mtg on 15% is expensive (for the time), however, the actual amount you owe is manageable, therefore, when interest rates come down, as they did, your monthyl repayments come down. You can stretch yourself but common sense tells you that with inflation high and interest rates high the amount you are paying WILL decrease. As has happened, even if you bought at the peak of the last boom, providing you could get by paying the high interest rates, you don't really have a problem now because you have very low interest rates.
My extremely long and rambling point is this....
It is not a good idea to pay inflated house prices when interest rates and inflation are low becaues you will be saddled with the real value of that debt for some time UNLESS inflation goes up, in which case interest rates will go up in which case your mtg payments will go up and so you will still be saddled with it.
In brighton studio flats are going for £100k +. Garages go for 50k. Insanity. Surely common sense must step in at some point.
IMHO buying now, in the South East as a FTB would be crazy!
Thats all
Thanks
Rik |
|
let me finish that!
by Knowledge is Power
|
#1001381
of 3278
06 Dec 2002
08:20 AM |
| As I’ve said before, the emotive foundations will be its downfall – people will panic, prices will fall – it’s as simple as that! |
|
So how does this restricted supply argument work then?
by Knowledge is Power
|
#1001380
of 3278
06 Dec 2002
08:14 AM |
Ok,
House prices have risen dramatically due to 1)big demand, and 2)reduced supply, 3)limited planning/building. The solution in the UK, as some posters suggest is to build more houses. But, oh no tree lovers cry out, leave our countryside alone. So it’s a catch 22 waiting for something to give.
So, how (please explain I’m really finding this hard to understand) does the 6th largest country on earth have such a big housing boom. I’m talking about Australia here, see link;
http://news.bbc.co.uk/1/hi/business/2548591.stm
Yep, I know that a lot of the country is desert, but it’s population is very small & the land for building on must be huge. If restricted potential supply is not an issue, why the growth?
I think this relates quite strongly with the UK, and suggests to me that in actuality the housing market is governed by greed, not by logic.
As I’ve said before, the emotive foundations |
|
"Money dont make my world go around, I'm reaching out to a higher ground" - As per the Office
by Jack Straw
|
#1001379
of 3278
06 Dec 2002
12:35 AM |
Zorro,
Thanks for the response, I’m just gonna do a back of the envelope response to your posting, it’s a little late now. The concept of 3.5 times salary is just an arbitrary, rough formula used to calculate mortgage levels. Below, on a quick google search on “uk salary mortgage 5 times” I got the following :-
“The latest new deal is from Newcastle Building Society. A week ago it announced that it will lend borrowers up to eight times their salary”
“Borrowing six times your salary…. some lenders argue that with interest rates so low, the mortgage is still affordable. And they argue that this is hardly irresponsible lending if they are only prepared to forward these sums to customers who will see steep salary increases over the next five years.”
Daily Telegraph 27/02/02 - Help at hand for first-time buyers
http://www.telegraph.co.uk/money/main.jhtml? xml=/money/2002/02/27/cmfirst27.xml
US business organisational analysts claim that productivity levels, in the US, are better than the UK because of rigid, industrial revolution style hierarchical structures. This lack of fluidity can, they claim, can lead to a problem being able to respond to an active market, backed by Tom Peters. Examples of such businesses are British Airways and IBM, I know it’s a Us company but I could help it! My theory, backed by economic fact, is that the term of 3.5 time salary is outdated. You see over the duration of a mortgage what is expensive at the inception of a mortgage is ridiculously cheap by the end,
“In times of high inflation, your salary will rise fast and start to look increasingly large compared with your debts. For instance, the average mortgage in 1992 of £34,000 now looks quite manageable compared with today's average salary of £23,600 and average London house price of more than £200,000.
The average mortgage advance of 1982 of £12,000 seems small in comparison, and the average 1972 mortgage of £3,500 looks tiny. Inflation in double figures helped eat away those debts. The average 1972 salary was £1,670 a year, so a £3,500 mortgage loomed large at the time. The average 1982 annual salary was £7,100 - rising to £15,800 in 1992.”
http://education.guardian.co.uk/staffroom/story/0,12150,811696,00.html
Using the guardian figures above, the average salary in 1982 was 7.1k. 5 times this salary would be 35.5k. For 1992 the figures are 15.8k and 79k. Neither of these figures looks large in today’s terms, therefore you see it is the affordability of the loan that is in question. Given a period of low interest rates, and low inflation it is hard to see a trigger to increase rates, in fact the ECB cut their rate today. How do we solve this risk question? Well in the US Freddie Mac, the mortgage-lending rate, is set for 15 or 30-year terms (see below). Thus the affordability question is settled, obviously you are exposed to decreases, but all increase risk is taken out of the system.
December 5, 2002 30-yr 15-yr 1-yrARM
Average Rates: 6.19% 5.60% 4.21%
Fees & Points: 0.5 0.6 0.6
http://www.freddiemac.com/learn/cgi-bin/dLink.cgi? jp=/PMMS/display/PMMSOutputYr.jsp&ENV=PROD#Historical
With regard to socio economic issues you ask,
“You accept the government figure of 50% of the population going to university”
Well why not? But the crux of my point is that there has been a relative increase from 20% of the population. If this figure is 35% or 45% or 55% is really immaterial, what we are seeing is a gradual improvement in the overall education of the population. If you do not agree with this I would point out that 50 years ago people left school at 15. 50 years before that people left schools for factories at 12 or 13. Infact, in Bourville, there were occasions where people were paid in tokens to use in the company shop. This was due to the fact that there was no alternative, today’s education system which is almost double in duration to 100 years ago clearly gives new options, now is that,
“Freedom to choose?”
Milton Friedman
I would question why the most liberal people promote the continance of the UK manufacturing industry. Since it is the manufacturing industry that has produced the most authoritarian approaches to labour management in the UK’s history – assembly lines, puch cards and tokens for payments rather than monies.
But back to housing. There must be a dynamic approach to housing funding; you now have my answer to the question of risk.
Further we look at labour speak -
“It is merely another example of New Labour newspeak where exactly the opposite is true, as in 'shortening admission queues in the NHS' actually means 'expect to die on a hospital trolley'. Similarly, Tony Blair is trying to divert attention from the fact that by trying to raise university fees he will actually dramatically curtail the numbers of those going university. “
I have a closer knowledge of govt policy than you think, and its not that my username is jack straw. I can confirm that Mr Blair truly is trying to make the UK a better place, I’m a Tory through and through but I do recognise that. The health services, in this country, are of a high standard, as is the provision of education. To criticize the system that gave you the words to do so, MA in English, makes me lament on Caliban’s quote to Prospero in “The Tempest”,
"You taught me language,
and my profit on't Is I know how to curse.
The red plague rid you For learning me your language!”
But, of course my quote is tongue in cheek, the advantage of a libertarian society is the ability to criticize. I always look on anarchists with a smile, since the main anarchists always tell you what they will do when they are leader of that revolution! The fundamental failure of socialism, communism and anarchism is that they ignore the approach of self interest. As an aside, Marx ironically idealised the replacement of the capitalist with the worker, i.e. all profits are filtered back to the worker. Again the communist structure, and a socialist one to, has only taken monies from the capitalist and reassigned these monies to the bureaucrat not the worker. This historically has been the failure of the labour party in this country.
“ Oh, dog biscuit when you get happy don’t get snappy”
Dutch Schultz
With regard to social housing, I feel a new market was actually produced by the release of council property. For most working class families this was the “leg up”, or opportunity to own and set there own future. This has been a definite success and the figures, in my previous mail, prove that there is still more than adequate provision for social housing. The main problem appears to be, I note from my own councils advertising, that all applicants want the largest home available.
With regards to immigration, and also the UK job market, most availability is within the low skilled level. Both markets match each other! Infact I would suggest that the manufacturing industry, you lament the loss of, would not exist without this cheap supply of labour. I previously worked in investment banking, along side south Africans, Italians, germans, French, yanks, kiwis and aussies and some more I guess, there’s never much trouble getting skilled staff when the money is there – that’s the advantage of the capitalist system over the communist.
I believe we are in a “Brave New World” , but one of progression and not regression, as you and Mr Britain suggest. The very media we are communicating on, the Internet is one example of a “great leap forward” (by Englishman I may add), but not one chairman Mao planned. I would lament that the irony of our society is that today’s activist is tomorrows conservative, look at Jack Straw – he used to be head of the NUS!
If we discuss your mother country, Poland, there to we see a housing shortage. The Polish govt has a building plan of 120k homes per annum to meet demand. Their eventual inclusion into the EU, our old boys club, will lead to a richer society. Just you watch the new wealth will bring an interest in new industries, in 10 years some of the 47% arable land will be replaced with the tools of the demon capitalist regimes of the west comrade.
[This message was edited by ftmonitor on 06 Dec 2002 at 12:49 AM.] |
|
Housing
by Mr X
|
#1001378
of 3278
05 Dec 2002
11:50 PM |
To Jack Straw # 1350. What an
excellent assessment !! As I have already posted several weeks ago [ property market will not decine] JS has encapsulated in a nutshell.
To all the doom mongers, regretably there is no clear evidence of a falling market.
Sorry !! |
|
haves and have not’s
by Mr Britain
|
#1001376
of 3278
05 Dec 2002
11:08 PM |
I don’t see that the gap between the haves and have not’s is expanding over the long term because booming house prices just means that the same house costs a lot more so the working person need to earn more money and the Tax man is then able to take more. Stamp duty and all the costs associated with moving provide yet more revenue. Tony Blair simply takes this money and using his own word “redistribution of wealth” is able to fund the unemployed or students and those on back to work schemes. Is the man who owns property really better off. ?. No he’s worse off unless he sells and does a bit of profit taking.
So many Students (mentioning no names) looking to go university will help maintain rental values but at the same time they are a drain on the economy since many are not looking for a job at all but are after an easy ride. Yes sure I’ll take some flack for this but I’ve been there, seen it and got a degree.
American Airlines lost 2/3 of it’s share value today and may well go bankrupt. Eleven of our top football teams were valued not so long ago at over £2Bn but today they are worth only a quarter of that. Seems to me that companies that only loose half there stock value are the lucky ones and I can see the same happening with house prices because just like the shares in theses companies they are over valued. Many of these companies were trading at 20-30 times Price Earning Ratio (PE) and when you look at it property is doing just the same thing. |
|
Monitor
by CoCo
|
#1001375
of 3278
05 Dec 2002
10:26 PM |
You know what I post, and you how I post it. I,m serious, I'm light, and I'm up for it against 2nd year economics students taking the mince out of the FT and these forums.
Go to the behaviour site and put me straight.
CoJoCo |
|
by ftmonitor
FT Administrator  |
#1001374
of 3278
05 Dec 2002
10:07 PM |
If folks want to exchange email addresses they would be welcome to forward a note to ftmonitor@ftnetwork.com and I'll forward them in private.
Jojo, agreed on many points, not just this one. Have to look back in records and see what's happened. I know there's been a lot of nonsense that may have created confusion. |
|
|
