MSE News: Halifax: House prices up again in August (+0.8%)

baileysbattlebus

Graham_Devon wrote: »

Julie petal, yes, I am. As of course it was a trigger. If we didnt have high house prices, we wouldn't have had problems here regardless of the US.

The US had problems with tent cities. We didn't because we have the welfare state. If we hadn't have had high house prices, I doubt we would have shared the US problems.

I have to disagree with you just a tad, high house prices in themselves didn't cause the crash in the US - it was lax lending, easy credit or whatever you want to call it. I personally would call it almost criminal lending.

The brokers and lending institutions were making to loans to people as long as they could draw breath. They didn't care if no more than one repayment was made. Why, because it was bundled up and sold off as a triple A rated securitization. And when that had been done - someone else held the baby, and that someone else had also supplied the wherewithall to lend even more money - to anyone who could draw breath - it was a circle.

So they were lending to people they KNEW wouldn't ever be able to pay the loans - did they care - no. Because at the end of the day it was someone else who held the debt - it could be a pension fund, a bank, your investment portfolio etc. A lot of the debt that was sold was actually worthless - because the loan would never be repaid and the lenders knew that.

So high house prices alone did not cause the crash.

And if we hadn't had high house prices we would have still had the same problems - just as most of the world has, including a lot of places that didn't have rampant or even moderate HPI.

Graham_Devon

baileysbattlebus wrote: »

I have to disagree with you just a tad, high house prices in themselves didn't cause the crash in the US -

I said trigger.

Why why why

baileysbattlebus

Graham_Devon wrote: »

I said trigger.

Why why why

Ok explain to me how house prices triggered the banking collapse. I'm interested in your view on this - as obviously it is very different from mine.

Graham_Devon

baileysbattlebus wrote: »

Ok explain to me how house prices triggered the banking collapse. I'm interested in your view on this - as obviously it is very different from mine.

No, you are not interested in my view at all. If you were, you would read my view instead of changing it.

Now you are turning this into "explain how house prices triggered".

I never said that either. I said it was a trigger. I explained further back the views you are asking for. I really don't see the point if all you are going to do is take what I say and make it into something different. This is all that seems to be happening at the moment, and not only to myself.

All this just drags the board down and must be so boring for anyone reading to see me repetatively say "did I say that".

julieq

Graham, you are digging a very big hole for yourself and you don't really understand the fundamentals of the US market. You can dodge and try to shift the ground, which is after all your normal tactic, but you said a few posts up that high house prices here were a trigger to the banking collapse:

"Julie petal, yes, I am. As of course it was a trigger. If we didnt have high house prices, we wouldn't have had problems here regardless of the US."

So that's pretty unequivocal isn't it?

The world banking problems had NOTHING to do with the UK housing market. The UK housing market would have corrected whatever, but most likely via stagnation and losses against inflation. That wouldn't have brought the banking system to its knees, it would have been a fairly normal cyclical correction.

As Baileys put it very well, the problems in the US were about criminal lending, giving money away (yours and mine, ultimately) to people in the US who weren't ever going to pay it back secured against valueless assets, because the lenders didn't have to carry the can.

Graham_Devon

julieq wrote: »

The world banking problems had NOTHING to do with the UK housing market. The UK housing market would have corrected whatever, but most likely via stagnation and losses against inflation. That wouldn't have brought the banking system to its knees, it would have been a fairly normal cyclical correction.

I see you have taken absolutely no notice of what I have said, and are yet again, turning the tables. Brilliant.

May I refer you to the below, post 157 on this thread.

Graham_Devon wrote: »

You'll note I never said high UK house prices, just high prices.

So sorry Julie, already corrected that one.

Anything else you wish to say I have said which I havent, you know, just so you can keep arguing away?

Valueless assets we are calling them now!? Oh, now thats pretty posh. Not too highly valued, just valueless!! LOL, what rot.

julieq

Graham, a wooden house by the side of a highway next to which you can build a dozen different houses without restriction is a valueless asset. I am talking about the US where the lending crisis took place. Baileys post is an excellent summary of precisely what the situation is.

You're doing your normal thing of bringing a discussion on a situation down to semantic games based on individual words so you can deny the thrust of what you're saying. That's no way to argue, it's really just dodging the issues. And also saying that anyone disagreeing with the thrust of your arguments, challenging them in any way, is bringing the board down. It is supposed to be a debating board, so really you should expect arguments. I'm sure that you can set up a PHPBB somewhere where those wanting nothing but agreement that we're all doomed and prices are set for 50% corrections can go, with any dissenters chased away, but this isn't it.

So restate your argument: are you claiming that high prices in the UK were a factor in the world banking collapse? If you are then you're wrong.

If the argument is that high prices generally were a factor in the world banking crisis, then state where they were high and why it was an issue. Certainly they weren't high in the US by absolute measures. Nice houses in nice neighbourhoods had value and still do. Shacks on the edge of a highway were overpriced (because essentially valueless on a supply/demand basis) but not high priced.

Graham_Devon

julieq wrote: »

So restate your argument: are you claiming that high prices in the UK were a factor in the world banking collapse? If you are then you're wrong.

No! My argument is still on here unchanged, and it did NOT say that. Re-read it, same still applies.

If the argument is that high prices generally were a factor in the world banking crisis, then state where they were high and why it was an issue. Certainly they weren't high in the US by absolute measures. Nice houses in nice neighbourhoods had value and still do. Shacks on the edge of a highway were overpriced (because essentially valueless on a supply/demand basis) but not high priced.

Yes, they were high. They had a boom. They were high.



Take the middle on that graph. The middle DOUBLED in 7 years.

The top of the graph nearly trippled in 7 years.

And according to Julie, thats not high, thats just "valueless".

This is absolutely pathetic. So argue amongst yourselves.

julieq

Actually, here is the structural composition of a Graham Devon argument

1) Make broad statement based on rehashing of received HPC wisdom
2) When challenged, scan his original post for ambiguity and use that to deny the original statement was what was made in any case
3) Claim he can't be bothered arguing with people who misrepresent his position, and become all indignant at people using a debating board to debate
4) Refuse to explain what he meant in the first place
5) Mutter about the "fundamentals"
6) Rinse and repeat

All good stuff.

julieq

Nice graph, but look at the dollar prices Graham, they were not high in absolute terms. They were higher in nice neighbourhoods where people are still paying their mortgages. They were much lower where reckless loans were being given on the back of essentially worthless assets.

If you look at the top locations, they are populous areas which are restricted in growth. As Baileys explained, it's a two tier market in terms of general and specific location in the US. And the absolute values are low in any case.