"The Recession" is Still On Track - House prices to fall

nembot

Cleaver wrote: »

As a genuine question then, and not to cause trouble. You're obviously quite well known on here for being certain the property would fall on average by 50% by Christmas 2009. I'm not sure of the exact figure, but I think it fell by about 15% or something by that point. And obviously you're quite well known for predicting mayhem and carnage generally in financial areas.

I think a lay person (or at least someone who doesn't study risk) would be able to assess how this country thinks, how its government works, the culture of the public and come to a reasonable conclusion that if house prices started to fall then a lot of people would do their best to stop them falling, especially in light of the rises we've seen in the last decade. And indeed, this happened. Prices started falling and we saw stamp duty suspended on some houses, interest rates lowered (for a variety of reasons of course), mortgage protection, schemes to get banks lending, QE, pressure not to reposses etc. etc. Obviously some of these helped the housing market indirectly, some directly.

How come someone who studies risk, and therefore is presumably trained in assessing how risks are mitigated, avoided and worked though, managed to not factor in these factors and came up with a prediction that turned out to be around 3 times worse than the actual scenario?

I work with risk at work and one major thing occurs to me. And that is if I came up with a very severe risk which turned out to not as risky as first thought, I would start to change the way in which I perceived and rated risk so that I was more accurate in predicting risks and their severity in the future. As someone who studies risk, do you do this?

I'm not holding my breath for any reasoned debate on this of course, so feel free to respond with a picture of a pin popping a bubble around a house if that's easier.

I too do some risk management in work and often fingers are pointed in the direction of others, when steps were not put in place to mitigate risk. However the BOE has taken massive steps with 200 billion QE and historically low IR's which are the two major factors which softened the blow in 2009 - surely this is obvious, even to the layman as you say.

Really2

nembot wrote: »

IHowever the BOE has taken massive steps with 200 billion QE and historically low IR's which are the two major factors which softened the blow in 2009 - surely this is obvious, even to the layman as you say.

Low IR was forecast for the recession (maybe not 0.5% but 1%ish)
How could the QE money turn a 30% ish fall in to a 10%ish gain?

QE could be argued to have made no difference to the average person yet as most of it is plugging a hole where debt used to be on bank ballance sheets.

I can't see anyone making a forecast in a recession and not taking in to account at least some stimulus. IR Dropping through floor was a given.

nearlynew

Really2 wrote: »

QE could be argued to have made no difference to the average person yet as most of it is plugging a hole where debt used to be on bank ballance sheets.

I see you have swallowed the government lies hook line and sinker.

And since you are probably in a majority, we really are fukced.

nembot

It's a little naive to believe the economic stimulus and that's what the government called it, has made no difference.

Think there are some other factors here, like denial for a start.

Really2

nearlynew wrote: »

I see you have swallowed the government lies hook line and sinker.

And since you are probably in a majority, we really are fukced.

So where is the QE money, I am not aware that is how the government described it has going?

I watched a program on 9/11 conspiracy theorists the other day.

The conclusion.

Any Conspiracy you rationalise means you are in on it.

No matter how concrete the evidence against the conspiracy, the thorists will still discount it.

Conspiracy theorists need the world to be black and white, they can not allow for the unknown. So trying to put a story behind any act makes it some how easier for it to swallow.

So basically conspiracy theorists make up story's because they can not believe the truth. and they say the world is mad.

nearlynew

I don't believe you.

Really2

nembot wrote: »

It's a little naive to believe the economic stimulus and that's what the government called it, has made no difference.

Think there are some other factors here, like denial for a start.

Cant seeing it making a 40% difference personaly so don't throw your toys out.

The main factors for prices not falling were.

The recession mainly hitting the young. So the vast majority unemployed were not home owners.
Better housing benefit making less repos.
People taking advantage of low IR by either buying or lowing debt to be able to service there debt better.

Where is the denial? the only denial I can see is people not showing how they calculated a 30%+ fall in 12 months.

Really2

nearlynew wrote: »

I don't believe you.

Make up a story then

brit1234

Remember when Alister Darling said we were facing the worst economic crises since the great depression. He was called a doommongeror laughed at. A few months latter the trueth was revealed and he was proved right. Now the govornment have a good idea what is happening however they are likely to say it with an election coming. Remember Alister Darling kept his mouth shut before accidently letting the trueth out last time, he is doing the same.

Caroline fint did the same by accidently showing the document on housing prices.

The facts are the econonomy is highly unstable with the root problems still there but don't expect ministers to openly talk about it.

Radiantsoul

That document seems to show that there is a short term issue with credit supply, but the long term fundamentals are good(in terms of rising prices).