If house prices fall rents will rise. Why don't crashtrolls get this?

Crashy_Time

westernpromise wrote: »

So This Time It's Different?

I don't think so.

There won't be a crash, but a correction would be a nice buying opportunity.

Have you got a link to the guy who was calling 90% crash in 1996, that sounded interesting, early-ish days of the WWW and all that.

westernpromise

Crashy_Time wrote: »

Have you got a link to the guy who was calling 90% crash in 1996, that sounded interesting, early-ish days of the WWW and all that.

Look for anything written by M Holmes in uk.finance. Here's a 1996 thread:
https://groups.google.com/forum/#!searchin/uk.finance/fofp$201996|sort:date/uk.finance/ziECfUDSCFM/NXy3chIX2wcJ

In case that link's too long here's the general URL:
https://groups.google.com/forum/#!forum/uk.finance

- search in that for "fofp 1996" and you'll get to the right place (fofp was his sig).

He suggests that "Rising interest rates, I suspect, may be the trigger for phase two of the housing bust" and that "the annual trend is still down. Six monthly rises may raise hopes but it'd be a foolish person who made a bet based on it. The fact that volumes are low when compred even with the period before the boom indicate that houses are still overpriced."

This is a staggering misjudgement for 1996, and is about as wrong as it was possible to be, on every count.

He was still active on that group as late as 2011 and he was still waiting for that crash.

Throughout, he had a little amen chorus of fans - HPCers avant la lettre - hanging on his posts and agreeing with him.

The most prescient poster was an estate agent named Richard Faulkner who called everything exactly right.

Crashy_Time

westernpromise wrote: »

Look for anything written by M Holmes in uk.finance. Here's a 1996 thread:
https://groups.google.com/forum/#!searchin/uk.finance/fofp$201996|sort:date/uk.finance/ziECfUDSCFM/NXy3chIX2wcJ

in which he suggests that "Rising interest rates, I suspect, may be the trigger for phase two of the housing bust." and that "the annual trend is still down. Six monthly rises may raise hopes but it'd be a foolish person who made a bet based on it. The fact that volumes are low when compred even with the period before the boom indicate that houses are still overpriced."

This is a staggering misjudgement for 1996 and is about as wrong as it was possible to be on every count.

He was still active on that group as late as 2011 and he was still waiting for that crash.

Throughout, he had a little amen chorus of fans - HPCers <i>avant la lettre</i> - hanging on his posts and agreeing with him.

Cheers, will give him a look. World of difference between 1996 and today though in economic/banking terms, won`t take much to upset things that people (sheeple) think are set in stone.

antrobus

Crashy_Time wrote: »

Cheers, will give him a look. World of difference between 1996 and today though in economic/banking terms, won`t take much to upset things that people (sheeple) think are set in stone.

Absolutely. The population is growing even faster now than it was in 1996 and we're building fewer houses. The chances of a house price crash are therefore significantly lower.:)

westernpromise

The thing was, he wrote in a way that sounded terribly authoritative. He was some sort of Scots academic. It was all a big myth, houses were the new tulips, Japan, 90% crash, they're just an arbitrary token that is not worth anything really. Etc.

Yet he admitted that he had the cash to buy a house, he was just waiting for the Kondratieff Wave crash that was going to be so big the deposit would become the price.

In other words he was a property speculator, but he was shorting it rather than amassing it.

This has been literally the dumbest call about personal finance that it's been possible to make in the last 19 years. As well as being wrong every single day, he'd still lose, even if he were proven right today. A 70% price crash would take prices only to what he could have paid in 1996. But had he done so then, he'd now be 80% of the way through a mortgage term in which rates have only fallen. Instead he's paid rent for all that time, and has not even begun to own it. What a mug.

This is why I worry about some of the nuttier crashtrolls. There is a bloke called Venger on HPC who is so angry, malicious and bitter it's clear that rage at his own hopeless lack of judgement is impairing his mental faculties and ability to function as a proper person. He is so barmy he blocks people who present an alternative view of the world - they're "anti-HPC", you see. How far gone are you when you can't stand the expression of a different view?

Our crashtrolls would do well to have a look at the archives of uk.finance and consider that all their tickboxes were being ticked in 1996. EAs, VIs, ZIRP, TPTB, Japan 1990. It's all there - and it was all wrong. And as you say, this time it's not different, it's the same; only more so.

Jack_Johnson_the_acorn

westernpromise wrote: »

The thing was, he wrote in a way that sounded terribly authoritative. He was some sort of Scots academic. It was all a big myth, houses were the new tulips, Japan, 90% crash, they're just an arbitrary token that is not worth anything really. Etc.

Yet he admitted that he had the cash to buy a house, he was just waiting for the Kondratieff Wave crash that was going to be so big the deposit would become the price.

In other words he was a property speculator, but he was shorting it rather than amassing it.

This has been literally the dumbest call about personal finance that it's been possible to make in the last 19 years. As well as being wrong every single day, he'd still lose, even if he were proven right today. A 70% price crash would take prices only to what he could have paid in 1996. But had he done so then, he'd now be 80% of the way through a mortgage term in which rates have only fallen. Instead he's paid rent for all that time, and has not even begun to own it. What a mug.

This is why I worry about some of the nuttier crashtrolls. There is a bloke called Venger on HPC who is so angry, malicious and bitter it's clear that rage at his own hopeless lack of judgement is impairing his mental faculties and ability to function as a proper person. He is so barmy he blocks people who present an alternative view of the world - they're "anti-HPC", you see. How far gone are you when you can't stand the expression of a different view?

Our crashtrolls would do well to have a look at the archives of uk.finance and consider that all their tickboxes were being ticked in 1996. EAs, VIs, ZIRP, TPTB, Japan 1990. It's all there - and it was all wrong. And as you say, this time it's not different, it's the same; only more so.

Are you purposefully describing crazy, sorry "crashy"???? His first post to me was about tulips, in crazies eyes you're a debt junkie, hpi loving loser whenever you buy, no matter what the circumstances are.....

He's the definition of a crash troll.

westernpromise

:-) perhaps...

HPC and the whole subject generally does seem to attract the looniest trolls. They are literally unhinged by rage. I recall a conversation on HPC between a crash troll and a landlord - someone they presumably banned. The landlord observed that he had a £200k mortgage at 1.something %, on a flat bought for £250k in 1999 and now worth about a million, that was letting at £30k a year.

The crash troll informed him that this had been "an absolutely appalling investment".

I just thought, what? What? What could the troll point to that was better?

But they're not rational.

lukeh23

westernpromise wrote: »

:-) perhaps...

HPC and the whole subject generally does seem to attract the looniest trolls. They are literally unhinged by rage. I recall a conversation on HPC between a crash troll and a landlord - someone they presumably banned. The landlord observed that he had a £200k mortgage at 1.something %, on a flat bought for £250k in 1999 and now worth about a million, that was letting at £30k a year.

The crash troll informed him that this had been "an absolutely appalling investment".

I just thought, what? What? What could the troll point to that was better?

But they're not rational.

So one opinion defines all?

byjimini

An excess of supply outside London? Is that why the 200 homes built across the road from are standing empt... oh wait no, they all sold within weeks.

LydiaJ

byjimini wrote: »

An excess of supply outside London? Is that why the 200 homes built across the road from are standing empt... oh wait no, they all sold within weeks.

Some people who live in London (a minority, but some) don't really believe in the existence of life outside London. I mean, they would give intellectual assent to the theoretical idea that some people live outside London, but their gut feeling is that outside the M25 is a strange and lonely place, sparsely populated by weird and probably sub-human creatures who haven't the intelligence to realise that London is the centre of the universe, and therefore have no opportunity to get a job, instead subsisting on benefits paid for by "normal people" (ie Londoners), and almost completely uncharted - just a white space on a map with "Here be dragons" written in gothic characters.