09 Jun 2013 12:02 PM:

Quote: "I'm not convinced that a 3% rise can be called "a jump" in prices." - tamaraessex.

I agree, especially when that 'jump' is put into context. We are, and have been, in a volatile period for property prices. Stocks have been even more volatile but long-term, - very long term - the returns on both have been about equal - and both have tracked no more than inflation. 

http://observationsandnotes.blogspot.pt/2011/06/us-housing-prices-since-1900.html

http://monevator.com/historical-uk-house-prices/

However, as we have lived most of our lives during a period of unprecedented money printing and unsustainable debt levels, the prices of both have experienced huge bubbles. If that's all we've ever known, then it's all too easy to believe that they're inflation 'beating' investments when they're, at best, inflation 'trackers' and to believe that they will continue those exponential increases after a short breather. They won't.

All such bubbles revert to their mean and the most bubblicious always overshoot to the downside as they retrace. So far, there has never been an exception - but if you want to believe that this time is different, then you won't be alone in finding solace in that warm 'n' fuzzy place. So, history says we still have a long way to go before property prices rise sustainably. Absent some hyperinflationary disaster, it probably won't happen in our lifetime. Even if such a disaster did occur, that increase would only be nominal and there would be no 'real' increase when that inflation is taken into account. In fact, when inflation is taken into account over the last 30-40 years, property prices haven't actually increased in real terms as much as most think.

While prices of both Stocks and Property may have risen a little recently, it is again due to Central Banks and panicked Governments trying to kick-the-can down the road, just a little bit longer, rather than carry-the-can for not having created any fundamental improvements in our economies. While we do still have a long way to go, nothing goes down in a straight line. There will always be seasonal blips and rallies due to short-term government incentives like Spain's €160K citizenship inducement and the UK's recent idea to introduce mortgage guarantee schemes (How'd that work out for the USA when they tried it during the early 2000's?). Even the 1930's Stock market crash had about 10-12 rallies before it hit bottom. Every one of them was hailed as 'The Bottom' by people with an agenda and/or who should have known better.

I began to sell all my properties in 2005 and sold the last one in 2008 - most of them too early. And for anyone who thinks what I have written is just 'doom and gloom', I started to buy again in 2011 - again probably too early. There are always 'good' deals in any climate but this isn't about 'doom and gloom' - it's about the Maths.        

 

This message was last edited by JD01 on 09/06/2013.

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Thread: Housing prices are on the rise in some coastal areas

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13 Apr 2013 10:20 AM:

.....since she left all the following governments have had ample time to fix the problems,

I don't think anyone's disputing that the governments we've had since have been woefully lacking but why did they have the problems to fix in the first place. Who put those problems there that you so readily acknowledge existed after Thatcher?  With what commensurate windfall do they fix them as quickly as they were created if the assets from the first windfall have been squandered? 

e.g. If you inherit some money and spend it all on self-aggrandizement and gaining popularity (masquerading as being in the  country's and public's long-term interests), are you absolved of any and all blame when your heirs have nothing left to make the repairs that you didn't take care of, or retain a fund for? As the deficits (both in financial and human terms) continue to mount, is it really reasonable to expect a repair of the problems when the now, much reduced income, can't even service the debt?    

Yes, What a load of old tosh is spoken by those who can't join dots if they span more than two episodes of Eastenders. 

 

This message was last edited by JD01 on 13/04/2013.
Thread: The Iron Lady - Did you love her or hate her?

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13 Apr 2013 8:50 AM:

"However, her economic miracle was floated on a huge pool of North sea oil and it was that, that saved the country, not Maggies thatcher."

Nice to see that not everyone was fooled.

There's also the selling off every core industry and service and leaving a much reduced manufacturing jobs base for future generations. And no, they were not all unproductive by any means. It was a short-sighted decision to sell the family silver and have a politically expedient party rather than embark on the much more difficult, slow and politically suicidal process of cleaning it. 

How's that short-term gain to fund very ephemeral tax breaks and re-election campaigns working out for the UK now? Everyone who could and can leave - has and will.

By definition, they will be people with skills, money or both. Guess how that loss in skills, spending power and tax revenue has to be recouped and how many more unskilled substitutes are needed to make up those shortfalls? Answer: Too many.

So, the deficits that can't be rebalanced with Immigration, have to be made up with ever-increasing mountains of debt. That is then aided, abetted and fuelled by an increasingly irresponsible and now undeniably, criminal financial sector - which she unleashed  - and to which every successive government is now subservient.  

In short, give me a few £trillion that I can leave for someone else to repay and I'll show you a good time too.  It is NOT an achievement. Anyone could do that.

The party stopped but the repayment has even't begun in earnest yet. It's at least, the next two generations who will realise Maggie's real legacy - not us who will be long gone when the SHTF in full force. 

Cameron, when speaking about the rioters a couple of years ago, said: "These people have to realise that there are consequences to their actions which may not be felt for many years". Oh! The irony - or should that be 'The hypocrisy'? 

The fact that the full effects of the problems caused by previous governments do not filter down to the country as quickly as say, a Miners' strike or a riot, does not make their mistakes any more forgiveable or less painful. In fact, they do far, far more damage than any rioters or Miners could ever hope to do and are actually the 'cause' of that eventual and inevitable 'Blowback'.

I am not a Maggie hater. She did get some things right - e.g. curbing the Unions' abuse of power. But let's face it, it'd be hard NOT to get something right over a 10/11 year span in power. Nor am I a 'Lefty'. I find them just as offensive and in the case of Blair, even more so. He took Maggie's 'lust for power' and added 'spineless' and 'psychopathic'.  A pox on all their houses, if you will. However, both debit and credit should be given where they're due. The full debit account for Maggie has not only been miscalculated by her supporters but it will not/can not be fully reconciled for many years - if ever. 

 

This message was last edited by JD01 on 13/04/2013.

This message was last edited by JD01 on 13/04/2013.
Thread: The Iron Lady - Did you love her or hate her?

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23 Sep 2012 8:58 AM:

"A professor of theology, who was also an Oxford classisist told me that people who use more than A few words to explain themselves really have no idea what they are taking about as they are trying to impress. Btw he would have said what I said in 5 words, great man."

Yes, and I apologise for the length of response but unfortunately if you had read it, rather than any attempt to impress,  you'd have seen that most of it was just repetition of points already made but conspicuously not addressed with anything more than content-free drivel.

That's most probably because his argument was made of straw and had no answer of substance beyond an infantile "na na nana na - nice bottle of wine".  I'm sure your Oxford classisist would be very impressed

 

 

This message was last edited by JD01 on 23/09/2012.

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Thread: Is Now The Time to Buy or Sell ??

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22 Sep 2012 11:43 PM:

I will refrain from describing your contribution as nonsense - being terrified of name-calling women.

Aw - It was nothing personal. I only described it as nonsense because it deserved nothing less. It doesn't make you less of a person - man up . 

Also, I am not a name-calling woman. So, there is no need to be terrified. However, being so ignorant about the basic facts of a subject that you presume to debate is far more frightening -and is probably indicative the general level of mythology, swallowed by the uninformed, that got us here.

Simply point out that the opportunity to buy may be created by looser credit but it is still the resultant demand which creates the market.

You still don't get it. There is always a demand for housing better than that currently occupied - but it can't ever be satisifed without finances. Otherwise, if demand alone was necessary, as you incorrectly claim, countries with the largest populations (China, India etc.) would have the highest property prices because, by definition, their demand is greater than countries with smaller populations. That is clearly not the case.

The demand leading to higher prices can only come from more funds being available. You can have demand up the ying-yang but without the funds to satisfy that demand, prices won't - can't - move. As most people's readily available cash is limited, credit has become a substitute and it is that credit (in lieu of extra cash) which allows for higher bids. It is then unrestrained credit that leads to bubbles.

To believe otherwise requires an explanation of how the price rose in my example without ANY extra demand - something you have avoided addressing. But here is the example again:
Only two people bidding on a house. Buyer 'a' can only raise a £75K mortgage, Buyer 'b' can raise £80K. The house is on offer for £75K. Buyer 'a' offers the full amount but is outbid by Buyer 'b' who offers £80K. Upon returning home, Buyer 'a' receives a call from his bank informing him that they will increase his loan to £85K. He submits a new offer for that amount which is accepted.

I realise it's only an example but it is a very real world example which occurred thousands of times during this bubble. So, how did the price of the property rise from £75K to £85K when there was no additional demand? Something which you claim can't happen.

How can any argument put forth, that doesn't recognise the only element that changed in that transaction (i.e. the increased credit line) as being the cause of the price rise, be described as anything other than 'nonsense'?

I realize this may not accord with popular theory or the economic gobbledeygook of journalists but the principle was established long before the eighties. I tend to use more established sources for my economic theory than journalists whether they be populist, liberal or heavyweight.

Yeah, well, nice try - but by what principle is your conspicuously, unsubstantiated gobbleydegook any more valid? Which of your claimed, but unproven, principles were established long before the eighties and by which  'established' sources?  Inquisitive minds want to know. Simply making unfounded claims of 'principles' and deriding journalists and respected Institutes whose opinions don't support yours in no way adds legitimacy to your unproven claims.    

The summaries you quote describe how the credit boom developed and don't change the basic premise that more buyers than seller makes for higher prices while more sellers than buyers has the reverse effect.

More nonsense. First, it doesn't just describe how the credit boom developed but concludes that it was responsible for the property price bubble. It's hardly surprising that you would choose to ignore that finding but apart from you, I've never heard anyone conclude anything else.

Second, it is not a basic premise that there can be more Buyers than Sellers, At best, it's a woefully flawed premise and is probably more aptly described as gobbledeygook.

Every transaction has one of each - never more - never less. Whilst there can be Buyers who are willing to pay more or less for an item and/or Sellers who are willing to demand more or accept less for their inventory, there can never be more of one than the other and for a transaction to occur. And it is not just the willingness of the Buyers to pay more or the demands of the Sellers that leads to higher prices. The Buyers need the 'means' to pay higher prices. Without it, the Sellers can demand all they want, the price can't rise.    

Now I really must leave this discussion as a nice bottle of wine has my name on it and that#s much more important than playing wordgames with the boys and girls on a Saturday evening.

.... but not more important than to be condescending and patronising without merit or even a hint of substance to support your manufactured claims of supposed 'principles' - marvellous!   

 

This message was last edited by JD01 on 22/09/2012.
Thread: Is Now The Time to Buy or Sell ??

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