Worldwide House/Share price dip, did no one see it coming
Discussion
I'm flabbergasted all these clever people in banking and nobody saw it happening, anyone I know who has been in housing for at least 20 years knew that this upward trend was unsubstainable and have not purchased for the last couple of years . The last 15 years of house rises have been caused in the main by "buy to let" Landlords/ladies, who eventually run out of steam in the last year or the the one's who jumped on the bandwagon recently and forgot to factor in void periods/maintanence/refurb costs and Tax, the recent LL's were also seduced by a lot of builders of these glass fronted one/two bedroom apartments by cash back and other "offers" after completion to fund another overpriced looks nice for six months "investment" and so the domino effect starts.
Over to the US, played golf in Las Vegas two years ago and 50% of the courses where surrounded by row upon row of empty houses yet they where still building more, on most of these courses we were joined by a loose solo player who wanted to team up, in short he/attractive her were a sales rep who tried to flog you one of the units at "US$99/turn key/move in" after a couple of holes they would wander off as limeys were not the target market/yet talking to them it appeared 50% of the yanks bought them on the promise of fantastic rental returns that never happened because of over supply and just left them to rot like old tv's in an americans garage-least we throw them out!
We know these bankers/builders/investors are not stupid but the need to take a reality check every year is a must ! At the moment there's a lot of people s*****g themselves!
Over to the US, played golf in Las Vegas two years ago and 50% of the courses where surrounded by row upon row of empty houses yet they where still building more, on most of these courses we were joined by a loose solo player who wanted to team up, in short he/attractive her were a sales rep who tried to flog you one of the units at "US$99/turn key/move in" after a couple of holes they would wander off as limeys were not the target market/yet talking to them it appeared 50% of the yanks bought them on the promise of fantastic rental returns that never happened because of over supply and just left them to rot like old tv's in an americans garage-least we throw them out!
We know these bankers/builders/investors are not stupid but the need to take a reality check every year is a must ! At the moment there's a lot of people s*****g themselves!
snotsnfarts said:
I'm flabbergasted all these clever people in banking and nobody saw it happening, anyone I know who has been in housing for at least 20 years knew that this upward trend was unsubstainable and have not purchased for the last couple of years . The last 15 years of house rises have been caused in the main by "buy to let" Landlords/ladies, who eventually run out of steam in the last year or the the one's who jumped on the bandwagon recently and forgot to factor in void periods/maintanence/refurb costs and Tax, the recent LL's were also seduced by a lot of builders of these glass fronted one/two bedroom apartments by cash back and other "offers" after completion to fund another overpriced looks nice for six months "investment" and so the domino effect starts.
Over to the US, played golf in Las Vegas two years ago and 50% of the courses where surrounded by row upon row of empty houses yet they where still building more, on most of these courses we were joined by a loose solo player who wanted to team up, in short he/attractive her were a sales rep who tried to flog you one of the units at "US$99/turn key/move in" after a couple of holes they would wander off as limeys were not the target market/yet talking to them it appeared 50% of the yanks bought them on the promise of fantastic rental returns that never happened because of over supply and just left them to rot like old tv's in an americans garage-least we throw them out!
We know these bankers/builders/investors are not stupid but the need to take a reality check every year is a must ! At the moment there's a lot of people s*****g themselves!
You could see it coming in the US a while back - I guess that people didn't realise the global impact that the liquidity crisis would bring.Over to the US, played golf in Las Vegas two years ago and 50% of the courses where surrounded by row upon row of empty houses yet they where still building more, on most of these courses we were joined by a loose solo player who wanted to team up, in short he/attractive her were a sales rep who tried to flog you one of the units at "US$99/turn key/move in" after a couple of holes they would wander off as limeys were not the target market/yet talking to them it appeared 50% of the yanks bought them on the promise of fantastic rental returns that never happened because of over supply and just left them to rot like old tv's in an americans garage-least we throw them out!
We know these bankers/builders/investors are not stupid but the need to take a reality check every year is a must ! At the moment there's a lot of people s*****g themselves!
It shows the power of self delusion.
This was being talked about openly two years ago. The point however was that what was discussed was 'sub-prime' and everyone thought, what has that to do with me? In reality it has been about the destruction of all the phoney 'capital' businesses and dodgy investments that have been built up over the past twenty years.
This was being talked about openly two years ago. The point however was that what was discussed was 'sub-prime' and everyone thought, what has that to do with me? In reality it has been about the destruction of all the phoney 'capital' businesses and dodgy investments that have been built up over the past twenty years.
snotsnfarts said:
I'm flabbergasted all these clever people in banking and nobody saw it happening, anyone I know who has been in housing for at least 20 years knew that this upward trend was unsubstainable and have not purchased for the last couple of years . The last 15 years of house rises have been caused in the main by "buy to let" Landlords/ladies, who eventually run out of steam in the last year or the the one's who jumped on the bandwagon recently and forgot to factor in void periods/maintanence/refurb costs and Tax, the recent LL's were also seduced by a lot of builders of these glass fronted one/two bedroom apartments by cash back and other "offers" after completion to fund another overpriced looks nice for six months "investment" and so the domino effect starts.
Over to the US, played golf in Las Vegas two years ago and 50% of the courses where surrounded by row upon row of empty houses yet they where still building more, on most of these courses we were joined by a loose solo player who wanted to team up, in short he/attractive her were a sales rep who tried to flog you one of the units at "US$99/turn key/move in" after a couple of holes they would wander off as limeys were not the target market/yet talking to them it appeared 50% of the yanks bought them on the promise of fantastic rental returns that never happened because of over supply and just left them to rot like old tv's in an americans garage-least we throw them out!
We know these bankers/builders/investors are not stupid but the need to take a reality check every year is a must ! At the moment there's a lot of people s*****g themselves!
When you say they didn't see it coming did you mean to say they were inccentived in such a way to take greater risks than perhaps they should have done in the search of short term gains?Over to the US, played golf in Las Vegas two years ago and 50% of the courses where surrounded by row upon row of empty houses yet they where still building more, on most of these courses we were joined by a loose solo player who wanted to team up, in short he/attractive her were a sales rep who tried to flog you one of the units at "US$99/turn key/move in" after a couple of holes they would wander off as limeys were not the target market/yet talking to them it appeared 50% of the yanks bought them on the promise of fantastic rental returns that never happened because of over supply and just left them to rot like old tv's in an americans garage-least we throw them out!
We know these bankers/builders/investors are not stupid but the need to take a reality check every year is a must ! At the moment there's a lot of people s*****g themselves!
Easy money and lack of sensible caution.
Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
Fivepercent said:
Easy money and lack of sensible caution.
Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
"Some of us have been there before. I remember the FTSE at 200."Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
Which FTSE? The FTSE 100 started in 1984 at 1000
http://en.wikipedia.org/wiki/FTSE_100_Index
According to analysts last night, this latest round of panic from the collapse of Lehman could have been avoided if the bank had accepted a recent suitor's price of $X per share (forget what was mentioned). As a result of that, the Fed - so said the analysts - decided not to intervene as Lehman had previously rejected the opportunity to be saved by other banks rather than government intervention.
City people can comment on that from the position of knowing more than most of us but it seems short-sighted / counter-productive as those analysts were also saying that due to the potential seriousness of what may now happen, even moer intervention is likely. There was another set of comments that large investors such as banks and funds had no idea what the nature and value of their holdings really were / are.
Does anybody in the global financial sector have a f
g clue what they've been doing, and are planning to do? From an outsider perspective it looks like a total shambles with incompetent political interference trying to sort out incompetent finance. Surely somebody can tell us it's not so and a wrong inmpression has been given.
City people can comment on that from the position of knowing more than most of us but it seems short-sighted / counter-productive as those analysts were also saying that due to the potential seriousness of what may now happen, even moer intervention is likely. There was another set of comments that large investors such as banks and funds had no idea what the nature and value of their holdings really were / are.
Does anybody in the global financial sector have a f
g clue what they've been doing, and are planning to do? From an outsider perspective it looks like a total shambles with incompetent political interference trying to sort out incompetent finance. Surely somebody can tell us it's not so and a wrong inmpression has been given.At the time my ex-wife didn't want to be married any more (late '04), we had a property in the UK and a property in Florida, funded by equity release on the UK property. My ex offered to buy me out of Florida and I could keep the UK property but I honestly had no idea what was best to do, so I went and spoke to my old mans financial advisor (who, ironically, my ex spent years deriding).
He told me in late '04 that the best thing I could do was get out of Florida as it was going to crash, big time. He even described it then as unsustainable, so I had to drop all emotional ties to the place and let it go.
I did. Thankfully the value was pretty much its top value, and now properties in the same development are not selling for about half the value I shook on.
So this has been on the cards for some time now. Even when we were buying, the mortgage offers were pretty crazy.
He told me in late '04 that the best thing I could do was get out of Florida as it was going to crash, big time. He even described it then as unsustainable, so I had to drop all emotional ties to the place and let it go.
I did. Thankfully the value was pretty much its top value, and now properties in the same development are not selling for about half the value I shook on.
So this has been on the cards for some time now. Even when we were buying, the mortgage offers were pretty crazy.
NoelWatson said:
Fivepercent said:
Easy money and lack of sensible caution.
Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
"Some of us have been there before. I remember the FTSE at 200."Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
Which FTSE? The FTSE 100 started in 1984 at 1000
http://en.wikipedia.org/wiki/FTSE_100_Index
My limited understanding of this is that bubbles in the financial markets are partly a function of the way investment funds work.
The performance of investment funds is measured relative to the growth of the market that they operate in. If a sector of their market (e.g. property, sub-prime credit, IT stocks) starts to grow faster than the rest of the market, fund managers have no choice but to put their money into that sector or risk losing their bonus/house/wife/porsche at the end of the year. Unfortunately this tends to fuel more growth, and the bubble grows again...
Some people argue that hedge funds have an advantage in this situation because they do not measure performance in the same way, and so are able to take a more prudent approach.
As I said, I don't know much about this stuff, so feel free to tell me that I'm wrong...
The performance of investment funds is measured relative to the growth of the market that they operate in. If a sector of their market (e.g. property, sub-prime credit, IT stocks) starts to grow faster than the rest of the market, fund managers have no choice but to put their money into that sector or risk losing their bonus/house/wife/porsche at the end of the year. Unfortunately this tends to fuel more growth, and the bubble grows again...
Some people argue that hedge funds have an advantage in this situation because they do not measure performance in the same way, and so are able to take a more prudent approach.
As I said, I don't know much about this stuff, so feel free to tell me that I'm wrong...
Bankers are generally employees. They are using the companies money. If they win they get rewarded and if they lose then not much happens. An entrepreneur on the other hand is usually risking his own money. If he wins he keeps the rewards and if he loses then he might lose everything. The risk - reward relationship is broken in the western banking system and it needs to be restored. Its going to be painful for many people.
As someone who used to be part of it I think the financial system purely exists to make people within the system richer. The man in the street can benefit, but once your money is in the system it is working harder for someone else than the person who originally invested it.
As someone who used to be part of it I think the financial system purely exists to make people within the system richer. The man in the street can benefit, but once your money is in the system it is working harder for someone else than the person who originally invested it.
turbobloke said:
According to analysts last night, this latest round of panic from the collapse of Lehman could have been avoided if the bank had accepted a recent suitor's price of $X per share (forget what was mentioned). As a result of that, the Fed - so said the analysts - decided not to intervene as Lehman had previously rejected the opportunity to be saved by other banks rather than government intervention.
City people can comment on that from the position of knowing more than most of us but it seems short-sighted / counter-productive as those analysts were also saying that due to the potential seriousness of what may now happen, even moer intervention is likely. There was another set of comments that large investors such as banks and funds had no idea what the nature and value of their holdings really were / are.
Does anybody in the global financial sector have a fg clue what they've been doing, and are planning to do? From an outsider perspective it looks like a total shambles with incompetent political interference trying to sort out incompetent finance. Surely somebody can tell us it's not so and a wrong inmpression has been given.
Does anyone know what there doing? Doesn't look like it. Mess started by bankers and now ending as bankers, sadly lose their jobs. For once the city is taking a kicking like the rest of economy has had to get use to. The impact of 5000 well paid jobs going can't be understated.City people can comment on that from the position of knowing more than most of us but it seems short-sighted / counter-productive as those analysts were also saying that due to the potential seriousness of what may now happen, even moer intervention is likely. There was another set of comments that large investors such as banks and funds had no idea what the nature and value of their holdings really were / are.
Does anybody in the global financial sector have a f
g clue what they've been doing, and are planning to do? From an outsider perspective it looks like a total shambles with incompetent political interference trying to sort out incompetent finance. Surely somebody can tell us it's not so and a wrong inmpression has been given.I am sure now the banks see they wont just get bailed out, they will take offers on the table andseek help earlier as now saving their own skins has become the priority.
most people (on here who post on these threads and my family and some of my mates!) saw it coming. that's why i live in a small house with relatively meagre posessions and why I have been trying to reduce my debt since i bought said small house. it's why i have savings and it's why i have a st1 motorola on pay as you go and not an iPhone. it's why I made my sandwiches this morning and why I have a PVR and not skyplus.
the problem was the greed and arguably fraudulent selling of bad debt... which made the problem *much worse* than could have been expected (at least to those of us outside of a bank, no matter how risk averse we may be).
edited to add:
work pressures and lack of decisiveness led to us not selling last summer. I am actually rather pleased because we WOULD probably have bought an intermediate house at the tp.. maybe next year we'll be in a position to by an (almost) 'forever house'...
t1 motorola on pay as you go and not an iPhone. it's why I made my sandwiches this morning and why I have a PVR and not skyplus.the problem was the greed and arguably fraudulent selling of bad debt... which made the problem *much worse* than could have been expected (at least to those of us outside of a bank, no matter how risk averse we may be).
edited to add:
work pressures and lack of decisiveness led to us not selling last summer. I am actually rather pleased because we WOULD probably have bought an intermediate house at the tp.. maybe next year we'll be in a position to by an (almost) 'forever house'...
Edited by briSk on Tuesday 16th September 08:58
Who didnt see what coming?
Quite a lot of ppl have seen this coming. Have you not seen the many news stories over the last 2 yrs about ppl who sold up and were renting to take advantage of the inevitable crash? The news stories over the last year about the financial advice world split between saying a crash was coming to correct all the hype and overinflated bubble and those who said no it was fine and would continue.
House prices have been 0% for 12 months now, houses stopped selling last summer, a fact that a lot of people realised. Just because the media didnt (though amusing to *now* see a few commentators saying a similar thing, but were quiet back then) doesnt mean the general public missed it! I put my house up for sale last May/June, didnt get much of a sniff, realised the situation, took it off the market and went back to my tennants. I sold the expensive car and have generally spent the last 12 months clearing my debts because I knew what was coming. Most of my friends and work colleagues of the last 12-18 months in the South East, the Midlands and the West country have all been thinking along similar lines.
So the reality is that actually, *a lot* of ppl have seen this coming and taken steps to ensure they were ok when it went pear shaped.
Quite a lot of ppl have seen this coming. Have you not seen the many news stories over the last 2 yrs about ppl who sold up and were renting to take advantage of the inevitable crash? The news stories over the last year about the financial advice world split between saying a crash was coming to correct all the hype and overinflated bubble and those who said no it was fine and would continue.
House prices have been 0% for 12 months now, houses stopped selling last summer, a fact that a lot of people realised. Just because the media didnt (though amusing to *now* see a few commentators saying a similar thing, but were quiet back then) doesnt mean the general public missed it! I put my house up for sale last May/June, didnt get much of a sniff, realised the situation, took it off the market and went back to my tennants. I sold the expensive car and have generally spent the last 12 months clearing my debts because I knew what was coming. Most of my friends and work colleagues of the last 12-18 months in the South East, the Midlands and the West country have all been thinking along similar lines.
So the reality is that actually, *a lot* of ppl have seen this coming and taken steps to ensure they were ok when it went pear shaped.
Fivepercent said:
Easy money and lack of sensible caution.
Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
Its greed, pure and simple. The greed of the large banks feeds the greed of the traders on the floor as they know that they can command huge bonuses. I caught some of Newsnight last night and it reported that only last year the Lehman Brothers banks 25000 employees were earning on average $330,000 per year and that the bank paid out $6billion in bonuses!Everyone forgot about the inevitable cycle.
All asset values went silly.
How big is the world market for £100,000 cars?
Seriously, anyone spending that much on a mere conveyance that will lose 100% of its initial value over a few years has to be very seriously rich. Or stupid.
Even £50,000 on a depreciating asset is ridiculous.
So now we have the correction, and it is painful. Some of us have been there before. I remember the FTSE at 200.
Now people will pull back to a lifestyle they can actually afford and hopefully start saving money. A house is not a pension scheme.
The many millions who have over extended themselves are in for a shock. A period of austerity lies ahead as they dig themselves out of the hole which is of their own making. Reality strikes and at long last they have to pay up for all that consumer splurge.
And people will not be less happy or more happy. Owning assets and consumer spending do not make happiness. Friends and family are infinitely more important. Many will be discovering this over the next few years.
Meanwhile I see all those thousands of silver 911s in London, each losing at least £3K a month, and I feel sorry for their drivers. They have lost all grasp on reality and it is going to be a massive shock getting that grasp back.
Fivepercent, you are right about the consumer though. Everyone blames the banks but its the idiots that decided to mortgage themselves to the hilt in order to fund the lifestyle they thing they should have. Tools.
briSk said:
most people saw it coming. that's why i live in a small house with relatively meagre posessions and why I have been trying to reduce my debt since i bought said small house. it's why i have savings and it's why i have a st1 motorola on pay as you go and not an iPhone. it's why I made my sandwiches this morning and why I have a PVR and not skyplus.
the problem was the greed and arguably fraudulent selling of bad debt... which made the problem *much worse* than could have been expected (at least to those of us outside of a bank, no matter how risk averse we may be).
Scrooge - but very wiset1 motorola on pay as you go and not an iPhone. it's why I made my sandwiches this morning and why I have a PVR and not skyplus.the problem was the greed and arguably fraudulent selling of bad debt... which made the problem *much worse* than could have been expected (at least to those of us outside of a bank, no matter how risk averse we may be).
I think you must have studied the same economics books as me.
turbobloke said:
Does anybody in the global financial sector have a fg clue what they've been doing, and are planning to do? From an outsider perspective it looks like a total shambles with incompetent political interference trying to sort out incompetent finance. Surely somebody can tell us it's not so and a wrong inmpression has been given.
From the political perspective there is pressure from the voters not to waste tax payers money on saving financial institutions. If AIG go down it will spread enough pain among voters for them to realise that it actually might be a good idea to save them. In the long term a new reuglatory framework needs to be developed as it is obvious the banks cannot be trusted to regulate themselves. g clue what they've been doing, and are planning to do? From an outsider perspective it looks like a total shambles with incompetent political interference trying to sort out incompetent finance. Surely somebody can tell us it's not so and a wrong inmpression has been given.briSk said:
most people (on here who post on these threads and my family and some of my mates!) saw it coming. that's why i live in a small house with relatively meagre posessions and why I have been trying to reduce my debt since i bought said small house. it's why i have savings and it's why i have a st1 motorola on pay as you go and not an iPhone. it's why I made my sandwiches this morning and why I have a PVR and not skyplus.
the problem was the greed and arguably fraudulent selling of bad debt... which made the problem *much worse* than could have been expected (at least to those of us outside of a bank, no matter how risk averse we may be).
edited to add:
work pressures and lack of decisiveness led to us not selling last summer. I am actually rather pleased because we WOULD probably have bought an intermediate house at the tp.. maybe next year we'll be in a position to by an (almost) 'forever house'...
t1 motorola on pay as you go and not an iPhone. it's why I made my sandwiches this morning and why I have a PVR and not skyplus.the problem was the greed and arguably fraudulent selling of bad debt... which made the problem *much worse* than could have been expected (at least to those of us outside of a bank, no matter how risk averse we may be).
edited to add:
work pressures and lack of decisiveness led to us not selling last summer. I am actually rather pleased because we WOULD probably have bought an intermediate house at the tp.. maybe next year we'll be in a position to by an (almost) 'forever house'...
Edited by briSk on Tuesday 16th September 08:58
I remember arguing with someone called ATG that a recession was coming and the smart thing to do was limit debt exposure. I remember Tonker saying the same some time before that too.
As to the crisis, once the commodities led inflation numbers drop out of the system; the central banks can use all its measures to increase liquidity.
I'd say two to three months there. All that's happening is the music has stopped on musical chairs and it's a scrabble to cover one's seat. Let the free market decide who wins and loses and the quicker it will be over.
However, we will all experience a drop in real incomes, the next government will win on the back of tax cuts, reform to public services (which cost too bloody much) and getting the productive parts of the economy firing on all cylinders.
It'll take years to put right, there's no North Sea Oil this time to bolster the economy.
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