Rationalist logic = poor predictions. Why the uber bears will be wrong.

sabretoothtigger

Lotus-eater wrote: »

That is so cool being called a uber bear. What are you? I'm an Uber Bear!


Back to topic, every year that house prices aren't rising, they are falling with inflation. My prediction is for falls of over 30% Thats pretty easy to say tbh, we've had falls of around 20% last year, in truth it was more than that I would guess.
Add on inflation and we're already tapping at the door of 30%

40% average is not much further and I can see its a probability.

Yea I think this proves the OP wrong and correct in that we may not see it in the outright figures as such but an actual 40% fall in worth or value is highly likely.

If you consider the London markets for example and foreign buyers we may allready have reached 40% average falls as in their terms that is how much the price has altered.



The libor 3month rate is 2.2% and the 12month rate is 2.5% The point about cheap mortgages is a negative because if banks are not making significant profits they lack the incentive to lend

sarkin1

Conrad wrote: »

Truth rarely lies in the extremes.
The middle way is bound to be the most likely.

My prediction then is for average falls of around 25%.:T

Seeing as Halifax say the average is down about 19% now and with monthly falls averaging 1.5% does this mean you are calling the bottom sometime in August?

abaxas

As ever the OP misses the elephant in the room.

No-one has the right to finance. Everything bought with units of debt are priced in units of available credit.

StevieJ

dopester wrote: »

I seem to remember you went ahead, but pulled out and lost your deposit. It was in the first link.



I've just reviewed the first thread you made pushing ahead with the big-plan. I'm not sure you'll want to remind yourself of it.. as it is cringe-worthy.

http://forums.moneysavingexpert.com/showthread.html?t=1228743&highlight=sell+profit

No Conrad.. I'm not being nasty... I just think your as deluded with your justifications for why the crash won't be so bad, as you were back then with an apartment you thought you were getting a super-deal on.

I am sure he has been a Uber bear in between, I remember acusing him of attempting to talk the market down maybe it eas someone else.

Conrad

JayScottGreenspan wrote: »

So do you recommend we think irrationally, or illogically, or both?

Rationally, but with the all important feel for changes at the coal face.

We can't simply use past crash templates and try and transpose them onto this one.

Just as economists did not spot this comming, they wont spot it going either.
You simply cannot plunge your face into historic numbers and come up with a time line.
At best, rear view economics is a crude indicator only.

I'm not saying a boom is around the corner either, just that we must factor in all the soft facts and sublte societal trends before we can state it's 50% off by 2010!:D

Conrad

StevieJ wrote: »

I am sure he has been a Uber bear in between, I remember acusing him of attempting to talk the market down maybe it eas someone else.

Yes I do find I waiver somewhat, but I'd rather that than attempt to foist my fixed world view onto reality.
There are a lot of shrill voices at both extremes.:eek:

StevieJ

My view has always been that this housing correction was created by a removal of credit and will bottom on an injection of credit. It was not a gentle slowdown over a period of time, it happened virtually overnight, I can see the turnaround happening in exactly the same way.

Conrad

abaxas wrote: »

As ever the OP misses the elephant in the room.

No-one has the right to finance. Everything bought with units of debt are priced in units of available credit.

On the contrary, I make this point all the time to optimists.

At the same time though we ought to take a look at the reaction to rationed credit. I'm seeing people making a concerted effort to reduce debt, save, spend less and seek parental help.

25% drop should mop up lost credit availability and at the same time attract more of those that can buy, for example those with cash a plenty earning zilch in interest
I recognise credit take - up is down by much more than 25% right now, but that will slowly change.

BTW - before SELF CERT, people still excagerated earnings. Self cert was merely a lender response to latant demand. Self cert will fall away, but all those millions that used it wont suddenly become long term renters.

Conrad

StevieJ wrote: »

My view has always been that this housing correction was created by a removal of credit and will bottom on an injection of credit. It was not a gentle slowdown over a period of time, it happened virtually overnight, I can see the turnaround happening in exactly the same way.

Steve, right now a handful of adverse lenders are selling mortgage deals at around 9%.
There will come a point where world wide investors want a piece of the action.
Not through toxic CDOs and paper, but none the less thier cash will seek a piece of the action.

This is an absolutely classic piece of info the economists wont have on thier rear view radars right now.

Also when we all talk about the UK having titanic personal debt mountains, I saw figures that showed we have titanic asset mountains too, at a ratio of 70% assets to debt, although this was a year ago.

macaque_2

StevieJ wrote: »

My view has always been that this housing correction was created by a removal of credit and will bottom on an injection of credit. It was not a gentle slowdown over a period of time, it happened virtually overnight, I can see the turnaround happening in exactly the same way.

This is a somewhat naieve analysis. Credit dissapeared when people woke up to the reality that the emperor was as naked as a Jay bird. The emperor is still naked.