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Debate House Prices


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Moneyweek - Don't be fooled - house prices have a long way to fall yet

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Comments

  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    tomterm8 wrote: »
    I don't see much connection between house prices and share prices, to be honest.

    There is a link, if house prices bottom/rise the banks liabilities can be quantified, the bank shares will rise, the govt gets its money back (by floating the bank shares it owns), finally the banks can start taking more risks with the loans to small and large business :beer:
    '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 Thatcher
  • luvpump
    luvpump Posts: 1,621 Forumite
    Part of the Furniture Combo Breaker
    A common sence Article ..Ofcourse they have a long way to fall .. Its not really a debate, even with IR at 0.5% !! But Still some just dont get it ..:rolleyes:
  • tomterm8
    tomterm8 Posts: 5,892 Forumite
    Part of the Furniture Combo Breaker
    StevieJ wrote: »
    There is a link, if house prices bottom/rise the banks liabilities can be quantified, the bank shares will rise, the govt gets its money back (by floating the bank shares it owns), finally the banks can start taking more risks with the loans to small and large business :beer:
    But thanks to the last 12 months, banks shares are such minor parts of the FTSE & other indexes that they have very little effect on the index.
    “The ideas of debtor and creditor as to what constitutes a good time never coincide.”
    ― P.G. Wodehouse, Love Among the Chickens
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    tomterm8 wrote: »
    But thanks to the last 12 months, banks shares are such minor parts of the FTSE & other indexes that they have very little effect on the index.

    Not talking about their effect on the index, I am talking about their effect on liquidity i.e. loans to business and their customers.
    '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 Thatcher
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