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Debate House Prices
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Didn't last long.....
Comments
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It closed down 7.16% at 4079.59Never mind better luck tomorrow only 2% or 84 points out and 8 mins before it closed (based on 15 Min Lag)
I take it you won't be predicting house prices--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Thanks but the 4 points hardly changed his guess. (I did post after the close but not before all transactions had been done)It closed down 7.16% at 4079.59
Ok lets put it as he predicted around 9% drop it was around 75 so only just over 20% out.
I dont think I would have him looking after my pension. Not mocking him but forcasting stocks is for traders, thats what they are paid to do.0 -
It'll open tomorrow morning below 4000.No reliance should be placed on the above! Absolutely none, do you hear?0
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It may well do, but the nikkei is up at the moment.
Anyone who predicts stocks at the moment and gets it right should get wizard or witch status if correct.;)
Do you mean Nikkei futures? their market doen't open until around 1 am.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I think he looked at yesterday's Nikkei, which was up 1%, even though the rest of the Asian markets were down.No reliance should be placed on the above! Absolutely none, do you hear?0
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If it's any help, here is my understanding of what is happening:
The banks have made huge loans for house purchase. The sub-prime loan crisis is behind us, but the prime loan crisis is only just beginning. House prices are extremely high in the UK and some parts of EU, and still a bit high in the USA. There is no sign of any recovery of prices anywhere for many years. Loan defaults will just keep on for years until house prices recover. However, as long as default costs are within 1% or 2% of the loan books, that's sustainable. We are seeing that now, with mortgage rates about 2% above base rate. The extra 2% pays for the defaults, and eventually the banks will trade their way out of trouble. All the authorities have to do is declare the banks solvent, so they can keep on trading. Abolishing mark-to-market was a step in the right direction. OK, it may look like a giant ponzi scheme, but eventually everyone can get paid out.
The problem is, though, that wehereas we had previously credit that was too cheap, we now have credit that is too expensive (to pay for past mistakes). That will put the kibosh on the economy generally, which is why we are headed for a recession.
Any comments?
The stock market is reflecting that plus huge uncertainty about the future - for example, what is going to happen about the Lehman CDSs and will they all net off or will someone get left holding the baby?
the CDS issue is just an excuse to cloud the issue - to me it's not as bad as made out. the other off balance sheet assets are the issue.
don't forget that each CDS trade is bilateral and when a buyer takes that risk from seller using a CDS they will spread that risk further so as not to over-expose themselves. i did not want to use the word hedge, as technically it isn't, it's partially selling that risk.
this means that and credit defaults will be between a number of firms and will probably mean that net settlements are not as bad as some media make out as they will not be the reponsibility of only one firm.0 -
the CDS issue is just an excuse to cloud the issue - to me it's not as bad as made out. the other off balance sheet assets are the issue.
don't forget that each CDS trade is bilateral and when a buyer takes that risk from seller using a CDS they will spread that risk further so as not to over-expose themselves. i did not want to use the word hedge, as technically it isn't, it's partially selling that risk.
this means that and credit defaults will be between a number of firms and will probably mean that net settlements are not as bad as some media make out as they will not be the reponsibility of only one firm.
I was aware that CDS is bilateral, so for every winner there's a loser, and vice versa. The net sum is zero, and I expect that a lot of it will net out between firms.
Care to elaborate?the other off balance sheet assets are the issue.No reliance should be placed on the above! Absolutely none, do you hear?0 -
Originally Posted by GDB2222
It'll open tomorrow morning below 4000.It may well do, but the nikkei is up at the moment.
Anyone who predicts stocks at the moment and gets it right should get wizard or witch status if correct.;)
So, how do I collect my wizard status?No reliance should be placed on the above! Absolutely none, do you hear?0
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