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Debate House Prices
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House prices may halve warns Vince Cable
Comments
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I have a lot of respect for Mr Cable, He has a Phd in economics & became Chief Economist for Shell in 1995, he tells it like it is with non of the self interest spin we get of other politicians, his comments should be taken seriously because IMO he may well be right, no one really knows ofcourse, but with Unemplyment set to rise to nearly 3 million in the next 12 months...anything could happen !!0
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I don't think that the most likely outcome is that house prices will fall 70% but it is possible if banks don't sort themselves out. That is something that appears as distant as ever - Paulson is buring his way through that $700,000,00,000 but it seems to be having little to no impact.
Given how much imaginary cash was magicked into existence by the 'new financial instruments' that's hardly surprising.
The real problem is that the economy as we knew it, depended on that much credit being available to fuel consumer spending and business expansion and the likes of Brown don't appear to have any other ideas.
Hence the desperate policy of restoring 2007 levels of lending.
That will be impossible unless the credit returns. The credit can't return because the instruments used to create it are shown to be a crock of crap and their collapse has triggered a contraction of credit.
Therefore, they'll run the printing presses. This will provide a short term boost but since the money will be based on absolutely no useful product, it's doomed to failure. Anyone with any sense will be buying every hard asset that they can get their hands on with the cheap credit - a 'crack up boom'.--
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 -
What I don't understand was why these economic guru's could not see this coming 3 years ago or more. It was obvious to anyone with any understanding of economics/human psychology/finance/history. All markets are cyclical, otherwise they'd always be winners, which is never the case. There are always winners and they are always losers. Interest rates go down borrowers win, savers lose and vice versa. Companies .. hot weather .. air con units go up, heating suppplies go down. Bookies ... favourite at Goodwood wins .. bookies lose, punters win, outsider wins vice versa.
So the rules of investment are spread your risk.
CASH IS KING, always hold a cash or near cash equivalent slush fund for opportunities and to lower overall investment risk.
But the main rule of winning is TIMING, knowing when to get in and when to get out. Buy low and sell high, and by high I mean somewhere close to the peak when most of the gain is obtained, when I say low I mean close to the low as-well, as the absolute point is impossible to establish in advance.
That way you'll have plenty in reserve when the SH&t hits the fan, and you'll virtually always be the winner. Sheep don't win the only end up as Sunday lunch with Mint sauce. To many individuals in the Uk just follow everyone else blindly, shares going up lets buy those, houses going up lets buy those, when they go down lets panic. because we've not really looked at the details of the investment over a longer time frame.
I always make money out of all my investments, and usually a large percentage.
That is fine if you are a trader, for most people it is stay long and don't be panicked into selling at the bottom, markets/houses will recover. Although if you were to invest now in either, and LTH and you look back from the future you would probably find it was a great time to fill your boots.'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 -
Did they not drop by that much and more in Japan though?
But they didn't have Whirling Dervish thinking it may happen.'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 -
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Given how much imaginary cash was magicked into existence by the 'new financial instruments' that's hardly surprising.
The real problem is that the economy as we knew it, depended on that much credit being available to fuel consumer spending and business expansion and the likes of Brown don't appear to have any other ideas.
Hence the desperate policy of restoring 2007 levels of lending.
That will be impossible unless the credit returns. The credit can't return because the instruments used to create it are shown to be a crock of crap and their collapse has triggered a contraction of credit.
Therefore, they'll run the printing presses. This will provide a short term boost but since the money will be based on absolutely no useful product, it's doomed to failure. Anyone with any sense will be buying every hard asset that they can get their hands on with the cheap credit - a 'crack up boom'.
You mean like houses?'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 -
You mean like houses?
Yes.
I've already said that signs of surging inflation will be a signal for me to buy, irrespective of where I think houses should go price wise. Why would I want to sit back and see my savings decimated?--
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 -
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Yes.
I've already said that signs of surging inflation will be a signal for me to buy, irrespective of where I think houses should go price wise. Why would I want to sit back and see my savings decimated?
Good to see you have you changed your mind again?'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 -
Good to see you have you changed your mind again?
No, I'm repeating what I have said a couple of times in the last while since the 1.5% cut.
Maybe if you actually read my posts you'd know that.--
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
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