So why isn't this possible?

Graham_Devon

May be a really dumb question! Probably is, but I don't know much about the Japanese market, so bear with me.

Just wondering, why it would be impossible, going by some peoples posts on here, that this could happen here....



If it happened in Japan, what exactly is stopping it happening here.

For reference, our graph:



So, looking at the two graphs, and looking at how Japan panned out, why is it so impossible that this could happen here?

Edit: Not the best graph for the UK as it's old, but can't find another better one that ill go in the post ans also mess up the width!

97trophy

Graham I agree 100% with you.

I had this debate with a private equity guy last week and his opinion was that the key difference was Japan's ageing population.

Graham_Devon

97trophy wrote: »

Graham I agree 100% with you.

I had this debate with a private equity guy last week and his opinion was that the key difference was Japan's ageing population.

Well I'm not saying it can or can't happen here, I'm just wondering why it cannot possibly happen, according to some.

I.e. what makes us so different?

Do you know what he meant by the ageing population?

Graham_Devon

Can I also ask why it's not possible why just like the previous 2 bubbles on the UK chart, this time, we cannot see prices at 100k.

The previous 2 bubbles have bottomed out slightly above the previous bottom.

On this crash, that would put them, in line with the previous two, at about 100k.

Why is this so impossible now, yet the previous 2 times on the graph it has happend both times in the sam style?

Really2

It could but also the people on here than fail to accept if we did we would have IR at 0-1% for the whole period also.

People one here want asset defaltion and high interest rates. I think japan is a good example of what happens in deflation.

It could happen, it may not anything could happen but I dont think a period like japans (15 years) is the most likely, but it could be like that for the next year or so.

Thrugelmir

Different market Graham. No comparison.

Graham_Devon

Really2 wrote: »

It could but also the people on here than fail to accept if we did we would have IR at 0-1% for the whole period also.

People one here want asset defaltion and high interest rates. I think japan is a good example of what happens in deflation.

It could happen, it may not anything could happen but I dont think a period like japans (15 years) is the most likely, but it could be like that for the next year or so.

So can I get this right?

Your saying it could, you just don't think it will personally?

We are already in deflation on the RPI index.

Would like your take on the previous 2 crashes too. The reason I'm asking this, is because of the venom thrown and the laughing at people who predict or talk about 50+ etc.

Yet Japan shows us it's perfectly possible, and our own previous 2 crashes show it is perfectly possible. So why all the laughing and belittleing when history shows us actually, 50% looks more likely, and 20% from peak and then a recovery has simply never happened since records began.

globalds

What are you saying can't happen ?
The % drops or the amount of Years falls can continue for ?

Really2

Graham_Devon wrote: »

So can I get this right?

Your saying it could, you just don't think it will personally?

We are already in deflation on the RPI index.

Would like your take on the previous 2 crashes too. The reason I'm asking this, is because of the venom thrown and the laughing at people who predict or talk about 50+ etc.

Yet Japan shows us it's perfectly possible, and our own previous 2 crashes show it is perfectly possible. So why all the laughing and belittleing when history shows us actually, 50% looks more likely, and 20% from peak and then a recovery has simply never happened since records began.

Yes that is correct we could have 15 years of deflation, stagnation, inflation, hyper-inflation any but if i knew exactly I may not be on here telling you and actualy betting on the future.
Anything is possible I am not one who present I know the future.

70's crash high inflation high ir's (house prices never fell nominaly)
80's 90's crash high inflation high ir's (house prices never fell 50%!)

Just beacuse we have deflation it does not mean we will have it for 15 years.

I don't know how the hell you come to the bottom statement you say you know nothing about japan but you now know 50% is more likely.

I have said short term deflation for ages. I just don't see the deflationery presure here for the period like japan.
PS we didnt have 100 year mortgages either.

Venom thrown! your post does not sound that friendly does it.

tomterm8

What happened to Japan is somewhat different to what is happening in the UK. The main difference is the size of the bubble, which was absolutly huge... at one stage the land under the imperial palace was valued as worth the same amount as california (which would be the 7th largest economy in the world if it wasn't part of the US)

The second is pure demographics... Japan had a much older demographic profile at the time of the crash than us.

The third is that Japans savings rate allowed banks that were otherwise insolvent, and a drain on Japans economy, to remain in existance as Zombie banks for two decades... Japans banks are still insolvent.

The fourth is that we have engaged in a much more aggressive monetary stimulus much earlier in the process of the asset burst.

Despite all this, as a perma bear, I think the housing market is guaranteed to go down, because with the demolition of the shadow banking sector, there simply isn't enough credit available to sustain house prices at the current level.

mbga9pgf

what tom said.

40% from peak is the worst I can imagine happening. Any worse and tbh, not sure the UK will be worth sticking round for anyway.