Property prices will have stabilised by this time next year. Yes or NO?

StevieJ

!!!!!!? wrote: »

Post of the week! :money::money::money::money:

That is what many of the 'cut cut cut brigade' here don't seem to get.

It's the market attempting to restore itself to something like equilibrium - it has been pumped to bursting point by more and more spurious credit creation over much of the last decade, and particularly since 2001.

Forget about trying to make borrowing as cheap and easy as it was until recently. Credit needs to be more expensive and harder to get than it previously had been at the peak of the bubble.

The priority is to let the fundamentals of the market get back to something approaching stability as quickly as possible, whilst averting total collapse as it snaps back from the breaking point caused by super-lax credit and irresponsible lending.

Easily pleased.

I have to repeat again the credit crunch was imported from USA on the back of duff CDO's wiping out the capital in UK banks.

chucky

StevieJ wrote: »

Easily pleased.

I have to repeat again the credit crunch was imported from USA on the back of duff CDO's wiping out the capital in UK banks.

yes but why don't we go on a tangeant and talk about something else (who do i sound like?)

WTF?_2

StevieJ wrote: »

Easily pleased.

I have to repeat again the credit crunch was imported from USA on the back of duff CDO's wiping out the capital in UK banks.

Yeah, we'd all have lived happily ever after otherwise because our credit-fuelled economy was so fundamentally sustainable, what with credit being almost unlimited thanks to those spiffy 'new financial instruments' powering it (which went so badly wrong when US house prices tanked) :rolleyes:

StevieJ

Austin_Allegro wrote: »

To paraphrase Scooby Doo, 'if it wasn't for that pesky credit crunch I might have gotten away with it'.

I don't believe the credit crunch is some kind of external phenomenon that somehow stopped HPI in its tracks, like a war or a volcano erupting. It's an inherent part of the whole HPI bubble.

HPI grew so much in the US that it collapsed under its own weight, loans went bad and this spread everywhere else via CDOs.

Even if the credit crunch were some external phenomenon that could be overcome, it would still not affect the fact that house prices in the UK had reached the peak of affordability. This peak was artificially raised via BTL and dodgy instruments like IO mortgages, shared ownership etc. Without concomitant wage inflation, prices simply could not have risen any higher, even if the banks had managed to survive such madness.

To put it simply, the credit crunch didn't cause the house price crash, because the credit crunch is the house price crash.

Yes it did, the market stopped increasing when banks withdrew credit, I aknowledge that it may not have carried on much longer but the general view (not including the HPC mob) was for a inflation adjusted soft landing.

StevieJ

chucky wrote: »

yes but why don't we go on a tangeant and talk about something else (who do i sound like?)

You read his mind, he has done it.

chucky

!!!!!!? wrote: »

Yeah, we'd all have lived happily ever after otherwise because our credit-fuelled economy was so fundamentally sustainable, what with credit being almost unlimited thanks to those spiffy 'new financial instruments' powering it (which went so badly wrong when US house prices tanked) :rolleyes:

it would have been more transparent if it was regulated, seeing what was coming and be prepared for the 'disappearance' of the cash buffers the banks had.

pickledpink

carolt wrote: »

Well, let's see:
we're heading into a recession, we've had 15% falls already before we've even had the recession and job cuts..... now my crystal ball may be cloudy but even so the outline of FALLS are pretty hard to miss.

Recessions take 2 years on average, so don't expect any stabilisation let alone rises for some time.

Looks like you'll never be able to buy then doesn't it? Not many mortgage companies would lend to someone of your age - you may as well keep paying for your lodgings.

WTF?_2

chucky wrote: »

it would have been more transparent if it was regulated, seeing what was coming and be prepared for the 'disappearance' of the cash buffers the banks had.

Our miracle economy of the 00ies was built on the back of the credit created by those 'new finacial instruments'.

Before 2000, the UK banks were loaning their 'own' (depositors) money.

After 2000 they relied on getting cheap credit, generated by 'New financial instruments' principally in the US market, and using that to make lending (including mortgages) cheap and easy in the UK.

So attempting to paint the effects of the US housing collapse (the credit crunch) as some sort of spurious external event that came out of nowhere and took down an otherwise solid economy and housing market is completely wide of the mark.

As AA said "the credit crunch is the house price crash". They are intertwined. The UK housing boom only really happened when stupid financial smoke and mirrors tricks in the US generated so much money that it became possible for our banks to move into borrowing massive sums cheaply on the global market and lending it in the UK to anyone with a pulse.

When that stopped, by definition the UK housing market had to crash - it was predicated on that sort of credit model actually being sustainable.

WTF?_2

pickledpink wrote: »

Looks like you'll never be able to buy then doesn't it? Not many mortgage companies would lend to someone of your age - you may as well keep paying for your lodgings.

The 'bulls' are really distinguishing themselves today :rolleyes:

chucky

!!!!!!? wrote: »

Our miracle economy of the 00ies was built on the back of the credit created by those 'new finacial instruments'.

Before 2000, the UK banks were loaning their 'own' (depositors) money.

After 2000 they relied on getting cheap credit, generated by 'New financial instruments' principally in the US market, and using that to make lending (including mortgages) cheap and easy in the UK.

So attempting to paint the effects of the US housing collapse (the credit crunch) as some sort of spurious external event that came out of nowhere and took down an otherwise solid economy and housing market is completely wide of the mark.

As AA said "the credit crunch is the house price crash". They are intertwined. The UK housing boom only really happened when stupid financial smoke and mirrors tricks in the US generated so much money that it became possible for our banks to move into borrowing massive sums cheaply on the global market and lending it in the UK to anyone with a pulse.

When that stopped, by definition the UK housing market had to crash - it was predicated on that sort of credit model actually being sustainable.

from this, i understand that you're saying that regulation would have done nothing at all to the current issues. banks would have still crashed if we knew the levels and what their debt was made up of.