UK house prices hold the key to economic recovery

penguine

From The Guardian:

Banks simply can't put a price on the sub-prime mortgage packages (called "asset-backed securities") that Wall Street conned the rest of the world into buying. Once house prices stabilise, then so will these toxic assets, and, the thinking goes, they could even be revalued upwards. Hey presto, banks stabilise and the crisis starts to fade.

Trouble is, there's no evidence yet that US house prices have hit bottom. They have fallen even faster than in Britain – already down 36% since their peak – and, as US unemployment climbs towards 10%, few are brave enough to call the bottom of the market.

The article states that as soon as the US housing market shows signs of recovery, that's when we can start to expect it here -- but that's now looking unlikely before 2010 at the earliest.

Generali

penguine wrote: »

From The Guardian:



The article states that as soon as the US housing market shows signs of recovery, that's when we can start to expect it here -- but that's now looking unlikely before 2010 at the earliest.

You might want to revisit the title of your thread.

Good article though.

hearts

Didn't we all know this? If not you should have ;-).

The trouble is a lot of people on here got what they wished for with no thought of the consequences.

Jonesya

hearts wrote: »

The trouble is a lot of people on here got what they wished for with no thought of the consequences.

Quite right, when will people and governments learn that every house price boom inevitably results in a bust, if only they had acted to moderate the boom.

thriftybabe

I think things are so bad over there that it will be at least another few years before it recovers in America! Lots and lots of unemployment and subprime lending!

stevetodd

But isn't QE ring fencing these 'toxic assets' would that not mean that we would be less dependant on the US house price recovery?

penguine

Generali wrote: »

You might want to revisit the title of your thread.

Yes, made a typo there. Can't figure out how to edit it though.

beingjdc

stevetodd wrote: »

But isn't QE ring fencing these 'toxic assets' would that not mean that we would be less dependant on the US house price recovery?

Ultimately we're dependent on the world economy. The government can do all it wants to keep UK businesses open and UK house prices up, but if everyone else is still screwed and there are no customers for our goods and services, it's just a castle in the air.

mewbie_2

hearts wrote: »

The trouble is a lot of people on here got what they wished for with no thought of the consequences.

I love this nonsense. Been wishing for a lottery win as well but it hasn't happened.

MrFonzerelli

stevetodd wrote: »

But isn't QE ring fencing these 'toxic assets' would that not mean that we would be less dependant on the US house price recovery?

We want the part nationalized (or guaranteed toxic) assets to be worth as much as possible. So we are still somewhat defendant on a US house price recovery.

stevetodd

beingjdc wrote: »

Ultimately we're dependent on the world economy. The government can do all it wants to keep UK businesses open and UK house prices up, but if everyone else is still screwed and there are no customers for our goods and services, it's just a castle in the air.

Yes I know and that is exactly why I said 'would be less' rather than let off the hook altogether