Panorama tonight - Bursting the house price bubble.(merged)

brendanh

MissMoneypenny wrote: »

A lot of EU framers would got out of business it we had a free market. We can import for a lot cheaper. Just look at the coal market. Drax power station imports coal from Australia at a cheaper price it could buy coal from Selby Coal mine. The coal mine is next to Drax.

Yes it's churlish to say BTLs are the cause of 3rd world famine, etc, but for farmers it is actually true. Why can't africa develop? Because our govts undercut the 85% of 3rd world workers who are employed in agriculture by paying huge subsidies. They can't develop because we effectively block them from our markets by running a farming gravy train. Around 2% of our economy is in agriculture, we can live without it. Next time you want to help the 3rd world, don't go to a rock concert, instead write to our EU Trade Commissioner (http://ec.europa.eu/commission_barroso/mandelson/contacts_en.htm) and demand an end to needless farm subsidies, it will do much more good.

roddydogs

Wish the presenter would smarten himself up-scruffy clothes, long girls hair, dirty old scarf. Lord Reith would turn in his grave.

SquatNow

Generali wrote: »

Don't think that your pension fund will have been p1ssed away on US sub-prime mortgages. Pension schemes aren't allowed to concentrate their assets like that.

Actually they are. Pension funds arn't allowed to put a their money in high-risk assets/markets. That's why CDOs were created in the first place... they are tripple-A rated, investment grade... 100% guaranteed no risk whatsoever.

Thus pension funds can buy as much/many a they want.

Pension funds can also put as much money as they want in SIVs, which can then buy CDOs.

The best one is CDSs... basically, pension firms are acting as insurance companies... insuring the debt that banks can't sell, often insuring debt equal to many times the funds assets... and CDSs are treated as ASSETS rather than as RISKS because they pay an annual premium but are again, tripple-A rated.

I agree... Pension funds SHOULD NOT HAVE BEEN allowed to throw all their money into CDOs/CDSs. Explicit rules were put in place to prevent pension funds risking all their capital in the Property Loans market... but that's why CDOs/CDSs were invented... to get around those rules you talk about.

People like to beleive their pension money has been safely invested in government bonds etc, but there is no way any low-risk investment can provide a high enough return for the pension funds to be viable.

If you want simple proof, look at how big the pension fund black holes were 5 years ago and loko at them now. There is NO WAY they could have made that much money, filled in those black holes, without taking massive risks.

Sorry to burst your bubble.

[Deleted User]

IveSeenTheLight wrote: »

So are you out campaining against : -
Testco, Asda, Sainsburies etc etc etc
Any Mortgage Lender
Any local water authority, electricity provide, gas provider etc etc
The government (council tax).

Man you must live a very busy schedule

No actually Tesco, Asda and Sainsburys are all competing with each other on prices at the mo, thus driving prices down..not over inflating them..

Mortgage lenders provide mortgages based on your credit file so their services arent availible to anyone..

Do i need to go on?..

Generali

SquatNow wrote: »

Actually they are. Pension funds arn't allowed to put a their money in high-risk assets/markets. That's why CDOs were created in the first place... they are tripple-A rated, investment grade... 100% guaranteed no risk whatsoever.

Thus pension funds can buy as much/many a they want.

Pension funds can also put as much money as they want in SIVs, which can then buy CDOs.

The best one is CDSs... basically, pension firms are acting as insurance companies... insuring the debt that banks can't sell, often insuring debt equal to many times the funds assets... and CDSs are treated as ASSETS rather than as RISKS because they pay an annual premium but are again, tripple-A rated.

I agree... Pension funds SHOULD NOT HAVE BEEN allowed to throw all their money into CDOs/CDSs. Explicit rules were put in place to prevent pension funds risking all their capital in the Property Loans market... but that's why CDOs/CDSs were invented... to get around those rules you talk about.

People like to beleive their pension money has been safely invested in government bonds etc, but there is no way any low-risk investment can provide a high enough return for the pension funds to be viable.

If you want simple proof, look at how big the pension fund black holes were 5 years ago and loko at them now. There is NO WAY they could have made that much money, filled in those black holes, without taking massive risks.

Sorry to burst your bubble.

I've not seen a single UK pension fund with more than 5% in CDOs. I've not looked at that many (maybe 10-ish). Can you give an example or 2? I'd have thought that I'd have heard about write downs by now.

vivatifosi

Interesting one Generali. I'm a trustee of a pension scheme and we've never even been offered CDOs as an investment vehicle (thank goodness), can't remember them coming up in trustee training either.

SquatNow

vivatifosi wrote: »

Interesting one Generali. I'm a trustee of a pension scheme and we've never even been offered CDOs as an investment vehicle (thank goodness), can't remember them coming up in trustee training either.

The fact that you've never been "offered" them doesn't mean you don't "have" them.

A great example is in the US where one of the schools district turned out to have half it's money invested in CDOs through various investments... no-one knew they had CDOs, there was nothing on the balance sheets. All their investments were through companies/funds who only dealt with tripple-A rated investments.

That's the problem... with SIVs etc no-one knows who's holding what.

This is why it's going to be so big when people find out.

Someone somewhere has a few trillion $ worth, and the pension funds are really the only funds with the kind of wonga needed.

melancholly

i actually shouted at the TV yesterday when this was on! i wish just once these programmes would show people with half a brain who got in trouble for reasons other than their own stupidity.

incidentally, i don't think all BTLers should be considered evil - i've been renting for the last 5 years, moving around and on a low income. even if i had enough money to buy, i wouldn't want to beacuse of the hassle involved when i can't guarantee that i'll be living in the same city in 18 months time. there has to be some level of housing available to rent, and i'd sooner it wasn't all owned by the same person (competitive market and all that). a lot of BTL has been greedy and has helped to inflate prices, but there is a genuine need to have rented accommodation out there.

Lotus-eater

melancholly wrote: »

i actually shouted at the TV yesterday when this was on! i wish just once these programmes would show people with half a brain who got in trouble for reasons other than their own stupidity.

I agree, just watched it online and couldn't even get to the end of the show, boring..

SquatNow

melancholly wrote: »

incidentally, i don't think all BTLers should be considered evil - i've been renting for the last 5 years, moving around and on a low income. even if i had enough money to buy, i wouldn't want to beacuse of the hassle involved when i can't guarantee that i'll be living in the same city in 18 months time. there has to be some level of housing available to rent, and i'd sooner it wasn't all owned by the same person (competitive market and all that). a lot of BTL has been greedy and has helped to inflate prices, but there is a genuine need to have rented accommodation out there.

That requirement should mostly be filled by social housing.

A land tax would resolve the issue... there would be a small number of professional landlords offering high quality properties at reasonable prices.

Most of the "rental demand" would be resolved by a land tax, which would stop house prices rising and add enough fluidity to the market that most people planning to stay somewhere more than 6 months could easily buy.

The problem is everyones desperate atttempts to get as much for their house as possible... it drags the purchase and sales processes out over months. If houses were VERY cheap, people would buy and sell them like cars. Put enough tax on the land owner and this is what will happen... no-one will buy houses simply for the sake of buying them because they would attract lots of tax.

The current system is stupid... you work hard and spend half your money on some stupid thing called "rent" or "mortgage", which gives you nothing more than the right to stand still! Why should anyone pay half their earnings to SOMEONE ELSE just for the right to stand still?