Financial Times: Banks not to be trusted.

Woby_Tide

!!!!!!? wrote: »

So you mean *I* caused this by seeing some time back that house prices were going to drop (along with an economic crash) and warning other people on MSE about it :rolleyes:

Without excusing the previous poster there did seem to be a general asusmption amongst some posters that there would be some sort of 'happy' crash where house prices would drop 50% whilst at the same time we'd retain nice low mortgage rates and 95%+LTV and stable employment. Quite a few people you get the feeling didn't quite see the bigger picture that many on both sides of the fence maybe saw

Generali

amcluesent wrote: »

>Once the economy actually starts plunging then all bets are off.<

The message from the Mexican, Turkish, Argentinian, Russian, East Asian, etc. financial crisis from the last 20 years is that a decline of at least 10% in GDP in 2009 is highly likely. All their crashes were predicated on trade deficits, floods of easy money and banks handing the stuff out like sweeties. Sounds familiar!

The recession will be noticeably worse than 1991/1992, we won't see any return of house price increase until 2012.

There's an interesting piece in The Economist this week (link), the gist of which is that very poor and very rich countries don't get shafted by bank crises as a rule it's just middle income ones that do.

I have my doubts personally. We'll see.

PS - For !!!!!! While on the subject of The Economist, this is why I think we'll see deflation. The article covers most of my argument at least and far more eloquently than I can manage.

dopester

Woby_Tide wrote: »

Without excusing the previous poster there did seem to be a general asusmption amongst some posters that there would be some sort of 'happy' crash where house prices would drop 50% whilst at the same time we'd retain nice low mortgage rates and 95%+LTV and stable employment. Quite a few people you get the feeling didn't quite see the bigger picture that many on both sides of the fence maybe saw

Maybe to you but I've long been telling people to kiss goodbye to the welfare state and the NHS as you've known it. Welcome to mass-unemployment and repeated pay-cuts. Ring any bells?

Misallocation of investment as companies have chased the HPI boom, reinvesting over and over, gearing up more, in the expectation it would never end, and explained the Austrian economic way of how these companies suffer in the downturn. Big names alone don't survive if they have weak balance sheets.

The HPI sluts need dealing with decisively. Meltdown in the economy is part of the reversal of the crazy unsustainable HPI mega-boom. The BTL-er expected rents will plummet too, finding out all the people who bought on margin requiring a set rent to pay their BTL mortgage. Welcome to the crash.

StevieJ

dopester wrote: »

Maybe to you but I've long been telling people to kiss goodbye to the welfare state and the NHS as you've known it. Welcome to mass-unemployment and repeated pay-cuts. Ring any bells?

Misallocation of investment as companies have chased the HPI boom, reinvesting over and over, gearing up more, in the expectation it would never end, and explained the Austrian economic way of how these companies suffer in the downturn. Big names alone don't survive if they have weak balance sheets.

The HPI sluts need dealing with decisively. Meltdown in the economy is part of the reversal of the crazy unsustainable HPI mega-boom. The BTL-er expected rents will plummet too, finding out all the people who bought on margin requiring a set rent to pay their BTL mortgage. Welcome to the crash.

Dopester, are you drunk again?

GDB2222

neverdespairgirl wrote: »

Soddom is now a rather elderly holiday resort for mostly retired Israelis. OH's grandparents used to go there yearly. Rather than Bournemouth or Christchurch.

I think we all have a pretty good idea of what went on in Sodom, but does anyone know what happened in Gomorrah?

WTF?_2

Woby_Tide wrote: »

Without excusing the previous poster there did seem to be a general asusmption amongst some posters that there would be some sort of 'happy' crash where house prices would drop 50% whilst at the same time we'd retain nice low mortgage rates and 95%+LTV and stable employment. Quite a few people you get the feeling didn't quite see the bigger picture that many on both sides of the fence maybe saw

I think you'll find that most of the people here who have long been adamant that there was going to be a house price crash were fully aware that a huge economic crash was looming as well.

In fact, discussion of the wider economic situation (with which this house crash is inextricably linked) by said 'bears' is often criticised by the usual suspects here.

If anyone wasn't aware of the way the economy was going, it was those who seemed to think that house prices were going to rise indefinitely (or at least plateau as was the line trotted out until only a few months back) and were busy recommending others to go ahead and jump on board the property price train wreck.


The predictions of a crash were based upon an understanding that the system has been fundamentally 'broken' and out of control for years and that it was all going to end in tears. It's only as meltdown has loomed and the dominoes have started to topple that this way of thinking has become mainstream. House price 'bears' were well ahead of the curve.

WTF?_2

Generali wrote: »

There's an interesting piece in The Economist this week (link), the gist of which is that very poor and very rich countries don't get shafted by bank crises as a rule it's just middle income ones that do.

I have my doubts personally. We'll see.

PS - For !!!!!! While on the subject of The Economist, this is why I think we'll see deflation. The article covers most of my argument at least and far more eloquently than I can manage.

Thanks for the link. Very interesting. But you only have to look at the desperate measures being implemented by the authorities to realise that eventually they'll simply start printing money as a (misguided) way out of the mess. It's just too tempting to ignore as a quick fix.

They just aren't desperate enough to outright fire up the printing presses yet. Not so long ago, swapping mortgage backed securities for government bonds would have been unthinkable. Spending hundreds of billions of taxpayer dollars to buy the bad mortgage debt of the US financial system would have been inconceivable.

Once the actual economic recession hits (we currently have a financial system crisis but the economy is still relatively intact) a lot more stuff will suddenly seem quite reasonable in light of the 'grave circumstances'. Long term thinking is not the forte of the people running the governments or the financial systems, it would seem.

mircea

!!!!!!? wrote: »

I think you'll find that most of the people here who have long been adamant that there was going to be a house price crash were fully aware that a huge economic crash was looming as well.

In fact, discussion of the wider economic situation (with which this house crash is inextricably linked) by said 'bears' is often criticised by the usual suspects here.

If anyone wasn't aware of the way the economy was going, it was those who seemed to think that house prices were going to rise indefinitely (or at least plateau as was the line trotted out until only a few months back) and were busy recommending others to go ahead and jump on board the property price train wreck.


The predictions of a crash were based upon an understanding that the system has been fundamentally 'broken' and out of control for years and that it was all going to end in tears. It's only as meltdown has loomed and the dominoes have started to topple that this way of thinking has become mainstream. House price 'bears' were well ahead of the curve.

Really? Oh my apologies then. I must have posted on the wrong board. The board I menat to post on was always full of self-righteous t--ts stating how wonderful their life will be once the property crashes 50% during one year and how they will buy all these cheap properties at half price etc etc etc. And I also remember myself stating you can't have a crash of that amplitude without far reaching repercussions for the whole UK economy, how will you pay your mortgage if you can't find a job you short-sighted moron? Of course, the general consensus in the replies was that I am a BTL-er, got several properties, I am a property bull, etc etc etc. So I go back to my previous post and state again: You wanted a property crash - now you have it.

amcluesent

> Long term thinking is not the forte of the people running the governments or the financial systems<

No politician will tell the truth. Look at what happened to Darling when he let slip that prospects are the worst for 60 years! The best the elite fools can do is manage an orderly decline of the West and hand over power to the Islamics.

neverdespairgirl

GDB2222 wrote: »

I think we all have a pretty good idea of what went on in Sodom, but does anyone know what happened in Gomorrah?

There were the 5 Cities of the Plain, near to the River Jordan, Sodom, Gomorrah, Bela Admah, and Zeboim.

Both S and G were places of sin, partly sexual sin, but also full of avarice, greed, and people who didn't give hospitality, and neglected the poor.

When the angels of the Lord visited Sodom, in order to warn the one righteous man (Lot) to flee with his family, the men of the town crowded round his house and asked that the angels be sent out so that they might "know" them. Lot, charmingly enough, offered his daughters instead, and the Lord struck the men with blindness so that the Lot family could escape.

Ezekiel Chapter 16:

49: Behold, this was the iniquity of thy sister Sodom, pride, fullness of bread, and abundance of idleness was in her and in her daughters, neither did she strengthen the hand of the poor and needy.

50: And they were haughty, and committed abomination before me: therefore I took them away as I saw good.