Repos up a staggering 92% iYear on Year

dopester

1echidna wrote: »

This may well be the case. Equally it is possible that with the trashing of the pound on the foreign exchange markets and quantitative easing inflation may rear its ugly head in a year or two. Bricks and mortar may be seen again as an asset with sound investment potential, or at least better than the alternatives. Who knows?

You really think the authorities will sacrifice the financial economy.. destroy it, to support house prices ?

Crazy notion imo.

mbga9pgf

1echidna wrote: »

This may well be the case. Equally it is possible that with the trashing of the pound on the foreign exchange markets and quantitative easing inflation may rear its ugly head in a year or two. Bricks and mortar may be seen again as an asset with sound investment potential, or at least better than the alternatives. Who knows?

QE will not lead to wage inflation. QE will prevent the banks collapsing, nothing more.

Without wage inflation, house prices cannot inflate. House prices will still collapse, Your widescreen TV will go back up to what it used to cost with any other imported tat (primark?)

Banks will not take risky assets onto their books (loans) until they know the bottom of the market is reached. We have a lot of sellers (60%?) on Rightmove advertising prices from JAnuary 2008. Banks will not lend easily without a 25% deposit. This is 25% of what the banks value the property at, not what the seller wants. I have heard annecdotals of some sellers getting nasty shocks from buyers banks who have significantly cut the mortgage available.

1echidna

dopester wrote: »

You really think the authorities will sacrifice the financial economy.. destroy it, to support house prices ?

Crazy notion imo.

As I said I am a simple man and don't pretend to understand these things. But I am not suggesting that the economy would be sacrificed to support house prices, just that the consequences of actions taken may have the byproduct of supporting house prices. There are eminent economists arguing the merits of these things and clearly all sorts of results are possible. Fires of infation or long deep freeze of deflation - not sure I or you know what would be best.

Really2

dopester wrote: »

It is only a terrible market to sell in because previous market conditions have changed.

I want to buy a car... (to give to a family member) but I recognise that asking prices, on the whole, are way-out-of-whack with prevailing economic conditions.

New car prices need to be slashed. This is deflation. Get used to it. Prices need to fall.

Second hand prices are through the floor

1echidna

mbga9pgf wrote: »

QE will not lead to wage inflation. QE will prevent the banks collapsing, nothing more.

I am glad you are so confident, I have heard that it can be difficult to judge how much monetary expansion is needed to make any difference and not to overdo it and cause inflation unless excess money is removed efficiently once it has served its purpose.

Really2

dopester wrote: »

Because if you sell and get out now (to rent) you'll probably bank a lot more money than your house will be worth in 1 year, 2 year... and some think in 10 years +.

By not selling... your house does not magically maintain it's value.

.

I personaly think it is to late to STR and if you did the hit you would have to take to sell could possibly wipe away any equity anyway. Add to that selling costs moving costs etc. Is it worth it if you do not need to? Add to that the very very low long term lending rates deflation would bring it could be cheaper to hold your mortgage than rent.


If it does happen like you predict you may as well hold on and shoot the looters as the bank won't bother with repos.

Really2

1echidna wrote: »

I am glad you are so confident, I have heard that it can be difficult to judge how much monetary expansion is needed to make any difference and not to overdo it and cause inflation unless excess money is removed efficiently once it has served its purpose.

The truth is the money that as gone as been destroyed, vanished in to thin air.
The argument to have to remove it would be a case if it was not going down a plug whole to stop more escaping.

If you buy worthless assets with it, it will be just repelacing money that was their but is not any more.

Really2

dopester wrote: »

You really think the authorities will sacrifice the financial economy.. destroy it, to support house prices ?

Crazy notion imo.

Is it not destroyed if we don't?

Was it the IMF who said we should have started it earlyer rarther than wasting money on bail outs?

1echidna

Really2 wrote: »

The truth is the money that as gone as been destroyed, vanished in to thin air.
The argument to have to remove it would be a case if it was not going down a plug whole to stop more escaping.

If you buy worthless assets with it, it will be just repelacing money that was their but is not any more.

The trick is judging how much of the money the govt gives for those dodgy assets finds its way into the wider economy in the form of real cash they lend out. It is here that the need for mopping up may arise.

Really2

1echidna wrote: »

The trick is judging how much of the money the govt gives for those dodgy assets finds its way into the wider economy in the form of real cash they lend out. It is here that the need for mopping up may arise.

It should give enough money to recapitalize them to 2007 levels.
They were highly geared and pherhaps lesson learnt?

But I think Trillions to much would be needed to cause hyper inflation.

But give me 5% inflation over 5% deflation.
It would cost £25,000,000,000 to add just £1000 to each property in the UK that gives some idea how much would need to be created for hyper inflation to be created over the whole economy.

I think the figure quoted to recapitalise the banks is around £87Bn