How did people not see it coming?

THE_GHOULS_OF_GREED

DrBubb was banned fro HPC this year for daring to speak the truth. He runs his own website and forum now.

Graham_Devon

THE_GHOULS_OF_GREED wrote: »

DrBubb was banned fro HPC this year for daring to speak the truth. He runs his own website and forum now.

Can't you go and do the same?

ceridwen

In my mind it boils down to the fact that for some years now our Western Societies have collectively believed the mantra "I want means I must have - and now". A lot of people have had an unrealistic assessment of their financial abilities ....and a lot of "salesmen" in banks, etc, have been making money out of handing over loans/mortgages to those clearly incapable of making accurate assessments of their financial abilities.

Its been an accident waiting to happen for some years now...

I dont think things will change unless and until peoples mindsets change to one where they stop and think whether they really DO need a loan/mortgage before they decide to go for it. From that - if their decision is that it is a necessity and not a want - then they need to be adult enough/sensible enough to fairly and squarely assess their own abilities in regard to paying these back.

Its not just financially - in regard to a lot of other things as well it has now become the norm for people to go "I want - so I must have" and then get a crowd of other people encouraging them to take whatever-it-is that they want regardless...

Unfortunately - I think this particular mindset looks like it will "stick around" for a while yet....:(. Most people still dont want to know about the concept of "personal responsibility"...

des_cartes

Graham_Devon wrote: »

I mean, all this mess....Ireland, insane property booms, the rest of the PIGS nations, our own problems.

I mean, taking a step back, and listening to some of the stuff coming from Ireland at the moment and where the blame lies (massive property boom for instance in ireland), it does make you wonder how on earth these people couldn't see the problem.

But could they? Was the euphoria far more important, and a blind eye was the order of the day?

It seems they all "know" what to do, and all these measures are suddenly put into place to save us all. So did they know what was going to happen...or did those running countries just hope it either wouldn't happen, or wouldn't happen on their patch?



It's also a little amusing listening to the recovery talk, from various nations....it's all based on more lending and more debt. Is there any other option?

I wonder if in 5 years time the BBC will repeat 'escape to the country' where Mr and Mrs average wage are looking for that dream home in the Cotswolds. You know the one, ' look, it's got a fifth of an acre, beams and a veggie plot and it's only 750 grand. These programmes will look as outdated as a rerun of TOTP featuring Bros and Rick Astley.

Hectors_House

JonnyBravo wrote: »

It's great how many experts saw everything coming and predicted it all.

I'll happily admit I didn't predict most of what has happened. I did see some house price falls coming and even bet on it, but the credit crunch and so much more was completely off my radar. Big deal.


Would the experts care to issue some detailed predictions for the next 5 years please.

(I won't actually act on this information as you are deluding yourself if you think of yourself as some kind of economic genius.... Yes Graham I'm talking about you)

I'm by no means any kind of expert but I did start to feel uneasy about things about 5 years ago.

I think a lot of the pain is coming from how strung out the whole reversal of the economy has been due to the last government fiddling around at the edges to try and keep the housing market going. This isn't surprising when we're being told that the average wage is £25k. I have several friends who earn in the £40k - £60k bracket and they had no idea this was coming.

In fact, it was only when they started to wake up to it by losing their jobs/realising they'd over-paid massively on their latest BTL investment and wiped out their accumulated portfolio equity in one go that I knew the crap had finally hit the fan.

Outside of London, how much of the innercity economy (pubs, clubs, eateries) of most UK cities was sustained by easy debt?

Try living in a city like Nottingham on the average wage (less then £20k here) and run an active social life WITHOUT putting it on a credit card. It can't be done cus all the new eateries expanded out of London and are charging London prices.

It's just been one big debtfest and how anyone didn't see it coming is beyond me.

I started pulling in my belt/paying off debts years ago and negotiated very hard when it came to buying my house 2 years ago and got them down from £120k to £72k cus I refuse to live beyond my means just to keep the whole junket going.

Now we all have to pay for the excess.

ILW

Sapphire wrote: »

I did see it coming, probably around 2006, but no one would listen when I told them that the population - and indeed the country - cannot borrow so much and expect not to pay for it in a big way later. It's just common sense. It makes me so angry. What the hell was the British 'government' doing in relation to our country? There are few countries that have amassed as much debt as Britain and its citizens.

Thing is though, many that did overborrow are now being rewarded with incredibly low interest rates and are laughing at those that tries to do the "right thing". Probably always been the same.

Hectors_House

ILW wrote: »

Thing is though, many that did overborrow are now being rewarded with incredibly low interest rates and are laughing at those that tries to do the "right thing". Probably always been the same.

With the chap in charge of the Bank of England starting to publicly talk about interest rates having to rise I wouldn't want to be anyone who overstretched themselves with a huge mortgage just because of low interest rates.

And those folks I know of who are 'saving' hundreds a month on the mortgage payments seem intent on using that money to keep up a lifestyle that has been hit by wage freezes over the last three years rather then paying down the capital.

HAMISH_MCTAVISH

ILW wrote: »

Try telling that to an Irishman who a bought 3 properties on 100% mortgages and now finds that he can neither rent nor sell the places and either has to keep making the payments or be declared bankrupt. That is where ever increasing prices can lead.

Only when it turns out you built 17% more properties than you have people for.... Ireland's housing vacancy rate is now 17%.

When you show me 4 million empty newbuild houses in 'ghost estates' in the UK, you'll have a point.

Until then..... Not so much.;)

ILW

HAMISH_MCTAVISH wrote: »

Only when it turns out you built 17% more properties than you have people for.... Ireland's housing vacancy rate is now 17%.

When you show me 4 million empty newbuild houses in 'ghost estates' in the UK, you'll have a point.

Until then..... Not so much.;)

True, but it does appear that prices in high demand areas such as the centre of Dublin havd also collapsed.

dunstonh

The "general" consensus pre credit crunch was that there could be a managed reduction in credit. i.e. turning the tap down slowly. However, the sudden turning off of the taps was not anticipated apart from those that called a crash every year and just updated their material once a year to change the dates. The problem with those that call it right beforehand is that they have often been calling it every year. They will be right sooner or later.

its a bit like those that try and predict stockmarket crashes. Lets say a crash of 25% occurs. you will often see those predicting it in advance. However, the markets may go up another 10-20% before the 25% drop occurs and if you did pull out, you may go back in too early or miss the early stages of the recovery and typically find out you end up losing more money than remaining invested through it. Trying to predict the unpredictable is a fools game. Nothing in economics is a science. With things being so global now, a 0.000000001% difference in a projection model can mean the difference between growth and recession.