American banks wake up to reality.....

MacMickster

pqrdef wrote: »

Well it's not like the money people lay out on their mortgage payments is being stashed under the floorboards. Where do you think it's going?

It is being tied up in the bricks and mortar that they buy. Or dou you mean the physical money that they hand over to the lender each month? You need to understand that banks do not lend, pound for pound, only money that has been deposited with them. We have a system called Fractional Reserve Banking. With this system banks lend money which they "create" effectively as a bookkeeping transaction. As the loan is repaid the created money ceases to exist.

The idea of money being created is one that some people find difficult to understand. Imagine a brand new bank and their first customer deposits £1,000. Their first borrower comes along and borrows £1,000 which is initiall credited to a current account in that customer's name. At that point, both the initial account holder and the borrower have current accounts with £1,000 in, but there is only £1,000 in total in existence.

Have you ever heard the phrase "asset rich but cash poor"? Someone who has all of their personal wealth tied up in assets is unable to play a part in the wider economy.

crash123

I can give examples of both rises and losses where I am. especially ones that where bought in 2009.
I know someone who bought a house in 2009 for £440,000 and is selling it for £550,000 but he has spent £160,00 on it so yes his house has gone up in value but actually he is losing money.

geneer

HAMISH_MCTAVISH wrote: »

Absolute nonsense. That sort of mentality displays a breathtaking ignorance of economic reality.

:rotfl::rotfl::rotfl:

geneer

myhouse wrote: »

As you said yourself, prices in the UK have only fallen 10%. That's why volumes have fallen off a cliff - no one can afford them yet.

Actually about 13% according to the land reg.
Similar to nominal falls in the last crash.

Do remember that these are average prices.
They have fallen significantly more in different areas and markets.

For example, house prices in Aberdeen increased significantly
betweem Q1 and Q2 according to ASPC didn't they.

Not if you live in a flat.

geneer

HAMISH_MCTAVISH wrote: »

Grovelling apology to follow then, I presume.....

27, Carlton Place, Aberdeen, AB15 4BR
May 2011 £580,000
Oct 2007 £350,000

6, Berry Street, Aberdeen, AB25 1DL
May 2011 £185,000
Sep 2008 £155,550

58, Concraig Park, Kingswells, Aberdeen, AB15 8DH
Mar 2011 £221,000
Jan 2009 £192,000


112g, Constitution Street, Aberdeen, AB24 5DZ
June 2011 £182,500
Feb 2008 £175,000

17b, Dee Street, Aberdeen, AB11 6AW
Oct 2010 £155,000
Aug 2008 £110,000

6, Ferryhill Terrace, Aberdeen, AB11 6SQ
June 2011 £112,500
July 2006 £90,013

112, Grandholm Crescent, Bridge Of Don, Aberdeen, AB22 8BA
May 2011 £150,000
Jan 2007 £125,000

162, Forest Avenue, Aberdeen, AB15 4UN
-Dec-2009 £280,000
Dec-2006 £255,500

98, Union Grove, Aberdeen, AB10 6SA
Jun-2010 £130,000
Apr-2009 £91,500

305, Union Grove, Aberdeen, AB10 6TD
May-2010 £121,121
Oct-2007 £115,000

57, Chapel Street, Aberdeen, AB10 1SS
Jun-2010 £170,000
Mar-2007 £156,777

58e, Chapel Street, Aberdeen, AB10 1SN
Jun-2010 £145,000
Aug-2006 £110,000

398, King Street, Aberdeen, AB24 3BY
Jun-2010 £125,000
Dec-2007 £124,000

394, King Street, Aberdeen, AB24 3BQ
May-2010 £132,500
Oct-2007 £130,501

:rotfl::rotfl::rotfl:I do love how Hamish likes to flip flop between the blunt meaningless UK averages, and then a handful of cherrypicked houses in a handful of streets.

geneer

HAMISH_MCTAVISH wrote: »

And it's not just these examples of individual houses, although they do illustrate it's not a statistical skew.

The Aberdeen Housing Market Area has seen an 8% increase in
the average house price from £201,786 in the first quarter, to £218,326 in the second quarter of 2011. This is the highest average quarterly house price that the Aberdeen Housing Market Area has seen.

http://www.aspc.co.uk/Documents/HousePrices-2011Q1.pdf
http://www.aspc.co.uk/Documents/HousePrices-2011Q2.pdf


:rotfl::rotfl::rotfl:The ASPC results show clearly that it is in fact statistical skew.

Between Q1 and Q2 numerous areas and property types are down.

But the average semi detached has spiked 30% to £541000 so everything is peachy.

Good grief.

sabretoothtigger

Hamish is at least able to post supporting evidence.

a pretty good future for the American economy.

Buy Coca Cola shares!

Coke gets most income outside of USA which pretty much reflects USA best hopes in general, serving world needs not their own. Ditto for the UK. USA wont recover till they quit looking for self inspired stimulus.

Good point on property taxes, we dont tax empty properties and I think they do which is a stupid law apparently they have hundreds like this which are actively discouraging any wealth growth.
They need a free business area where all the stupid laws are suspended for companies making new jobs. Empty houses are an ideal starting point

This is why I dislike politics like Obama uses, he could be a force for good but half the stuff he says are twists on the facts to suit his political advantage at that moment. He may mean best but it will leave behind a cobweb of crappy laws to trip the people and economy up on

myhouse wrote: »

As you said yourself, prices in the UK have only fallen 10%. That's why volumes have fallen off a cliff - no one can afford them yet.

Over the time periods mentioned currency worth fell 20%. Alot of UK people will have much less to spend now which might explain why London is ok still or Aberdeen even with a flow of foreign money now worth 20% more

Turnbull2000

What an utterly moronic post. The origins of this ongoing Western crisis is in our unwillingness to deal with the rise of China, India and numerous other emerging nations. Rather than accept the deep structural changes necessary, government's and citizens instead deferred and borrowed on an unprecedented level - with unproductive investment in housing and rapidly rising prices being the perverse, perhaps destructive outcome.

To claim that housing is the key to dealing with these issues is just f*cking dumb.

DervProf

HAMISH_MCTAVISH wrote: »

You'r missing a 'W' in there.....;)

I'm going to take the P out of Hamish.

Actually there's no need for me to bother. If you read the quote above, you'll see ee's doing it for himself.

ebayqueen_2

Its the pride that the americans hold so dear that has brought this scenario. They pump billions upon billions into a war that they created and have overspent disgracefully and they are now reaping what they sow.