Complete systemic failure imminent – PROTECT YOURSELVES NOW!!

ruggedtoast

Well I wanted to get your attention…

The HPI debate both here and over in the other place seems to have degenerated into something akin to two teams of football supporters jeering at one another when they score a “goal”.

The goals in this case being fluctuations in monthly hpi data. The fact that the spike in house prices is based on a small number of transactions based on methodology that is not statistically robust shows that the data is questionable.

The fact that the previous recent falls in hpi were based on a small number of transactions based on methodology that is not statistically robust shows that the data was questionable. Everyone knew that when Nationwide said prices had fallen by 1.5% or whatever it didn’t mean all the houses in your area had fallen by 1.5%, because they were not comparing like for like.

It is not like being able to look at the price of stocks and buying or selling at that price at that moment.

Land registry data is the closest thing we have to a robust analysis of hpi and even that is significantly skewed by inflation, improvements over time that aren’t factored in, environmental changes, and a significant number of properties that are excluded. On the whole most of the analysis we have is quantitative data based on qualitative theory, a weak analytical model over low volume and short amounts of time.

Why are people getting so excited / upset by this? It makes no sense and totally obscures the real debate about the economy and the place of house prices within it.

Globally the world is in recession. Countries that are in recession due to debt (net importers like the UK and USA) are trying to borrow their way out of it. Countries that are in recession due to hoarding capital reserves to manipulate their currencies (net exporters like Japan and China) are trying to save their way out of it .

Billions of people globally are facing austere economic times led by governments whose economic policies usually have two conflicting goals, and are attempting to appease two economic factions with conflicting interests (people who prosper from lending and people who prosper from saving).

Finance has had a huge amount of borrowed taxpayer money poured into it to stave off collapse, the effects of this indebtedness on inflation, tax rises, cuts in public spending, and steeply rising job losses have yet to be felt.

It is possible that the UK is bucking the global trend, that there will be a new asset boom based on British people selling one another the same houses at increasing values, underwritten by spiralling government debt, inflation and overseas funding. And that we are in that stage.

It seems unlikely to me but I would be happy to discuss these issues with people who want to talk about them.

Unfortunately this kind of discussion seems to have abandoned this forum and degenerated into a ‘yaa boo’ tit for tat based on linking to articles and cutting and pasting paragraphs randomly (every article I have read about the recent rises says more falls are likely to come so what is the value of just pasting the bit you want to believe?), and users personally abusing each other.

This isn’t a “bull / bear” issue as these terms are commonly used in trading to describe some kind of investment professional who has made a reasoned analysis of a given market and is making a prediction on it based on justifiable (usually to their boss) criteria. There is very little of this on this forum. Just two groups of people who really want house prices to go one way or the other and are willing to abuse one another in the process.

I just think that this “topic” has become so emotive and personal that there isnt anything worthwhile left to add.

This is a long post from me but I cant honestly see myself contributing in this bit of the board much again, so in a sense it’s a tentative farewell, rather than being one of those posters who peters out and disappears.

I hope anyone who has bought property and is holding on in these difficult times does ok in the end. I hope those renting and wanting to buy who are priced out of the home they want to buy manages to get the place they need, either by buying or finding a secure reasonably priced rental (of which there are many).

Most of all I hope that the UK doesn’t end up a nation of selfish property obsessed people cajoled by an elite ruling class that seems to have found one of the most effective forms of population control in living memory.

Very few people are going to “get rich” out of Britain’s schizophrenic attitude to housing. Whatever you “make” in the short term trough will be paid for 3 times over by you or someone elses children in the longer term peak. All housing cyclicity has achieved is to swap one kind of destitution for another and contribute to the social alienation and unrest that is making the UK a sorry place to live for many people, rich and poor.

Toast over and out.

bendix

Usually your posts are a bunch of utter nonsense, ruggedtoast.

This one, however, is spot on.

Really2

Good post.

I know what you mean it is no longer discussion it is two gangs at war.

Good luck and don't lock the door I may need an escape route.

PS where did you cut and paste that from

Out,_Vile_Jelly

A shame that such a well reasoned and argued post stands out as an exception.

Our continental colleagues would no doubt be very confused as to why we work ourselves up into such a foaming frenzy over who pays rent to their own bank and who to someone else's bank. They would surely advise us to purchase some of their quality wine and chocolate and to chill out a bit. Or maybe go on strike.

dazeruk

I'm a maybe FTB.

I'm not really that in touch with what is happening in the economy at large. I come here to try and gather as much information as I can and then hopefully make an informed decision.

At the moment trying to find those facts from amongst all the noise is difficult. I don't know your views on this issue ruggedtoast but you sound the kind of person I should be talking to.

Best wishes

cocktail

many years ago as a child i used to play monopoly with my brother. when the bank ran out of the printed money we used to handwrite more on pieces of paper and continue playing. neither side wanted to lose the game or to call a truce. this carried on till we eventually got bored of it but in many cases this used to be after several days....
similarly, in the present scenario, the show must go on. this is unfortunately capitalism, along the way some lose and some win. losing is bitter, and the winner takes it all. i hope we do not reach a stage when people get bored of the game as then people would be desperate and desperate times call for desperate measures. not doom mongering but as i said the show must go on.

bluey890

It's a pleasure to read this intelligent and well thought-out post on house prices.

Bump.

ruggedtoast

dazeruk wrote: »

I'm a maybe FTB.

I'm not really that in touch with what is happening in the economy at large. I come here to try and gather as much information as I can and then hopefully make an informed decision.

At the moment trying to find those facts from amongst all the noise is difficult. I don't know your views on this issue ruggedtoast but you sound the kind of person I should be talking to.

Best wishes

I think on a personal level if you can find a place you want that suits your needs, can sensibly afford it without jeopardising yourself financially, and are happy to live there for some time, then nows not a bad time to buy.

Otherwise, now isnt a bad time to rent either.

penguine

Thanks, ruggedtoast, for a reminder of the bigger economic and social picture. I agree with you that if HPI continues we're all going to be losers, in one way or another. If the crash continues to unfold, there needs to be a wider debate about how we can genuinely, this time, avoid another property boom.

mewbie_2

I'm going to be honest here. Great OP of course, and I understand where you're coming from. But from my own selfish perspective I like the game of football, of two halves, the jousting, sparring and frankly underhand goading that some bulls and bears (seem to) enjoy. I like the scoring, the own goals, the personal attacks, the laughs, and the occasional meeting of minds.

If it was all sensible I wouldn't be here. Perhaps a contradiction? If I wasn't here it would be more sensible? Oh well, sorry about that.

Dan:_4

penguine wrote: »

Thanks, ruggedtoast, for a reminder of the bigger economic and social picture. I agree with you that if HPI continues we're all going to be losers, in one way or another. If the crash continues to unfold, there needs to be a wider debate about how we can genuinely, this time, avoid another property boom.

We wont avoid another property boom. There is no escaping boom and bust, it's just mother nature.