Where did all the money go?

Oakman

fat_boy wrote:

Yes, the UK will recover, people are like that, but dont think for one minute that house prices will get back to the same dizzying heights they did in 2007

Why is that a bad thing? Once the mortgages adjust accordingly (and they will, either by fiat or because the banks are ready to settle for half a loaf) how will it make a difference? If my house costs 1 X and your house costs 10X, you can still lord it over me for any value of X. And both of us will still exist in only one room at a time.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

Oakman

Dalek Dave wrote:

Hmm 1914, 1939, 2009(?)

Well, it's your business, of course, but this time don't ask us to help. Last time all we got in return was a bunch of snooty French waiters.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

Lost User

Oakman wrote:

I note in passing that implicit in what you are saying is there are strong protectionist barriers placed by the EU when it comes to trade with non member countries.

Well you can read this PDF United States Barriers to Trade and Investment Report for 2007[^]. Both US & EU are not "whiter than white" in terms of trade barriers.

Oakman

fat_boy wrote:

We are closer to Europe in this respect, a lot closer.

You are, but I don't think Britain is. (Not so sure about Scotland.)

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

Oakman

Dalek Dave wrote:

producing as much milk and meat and grain as it could and therefore selling it far cheaper than anyone else in Europe

You could even sell twisty carrots!

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

Dalek Dave

We speak German?, drink like the Spanish?, eat like the French?, bank like the Dutch? The only thing we have in common with the rest of Europe is that we fought them. (Except Portugal, never been to war with them) You should read Winston Churchill's book, The History of the English Speaking Peoples. Very informative and apposite for these times.

------------------------------------ "Your manuscript is both good and original. But the part that is good is not original, and the part that is original is not good." Dr Samuel Johnson

Dalek Dave

We aint sure about Scotland either. I wish they would go independant and save the English thousands. (They could take back Gordon Brown, Tony Blair and Alastair Darling too)

------------------------------------ "Your manuscript is both good and original. But the part that is good is not original, and the part that is original is not good." Dr Samuel Johnson

Lost User

Rob Caldecott wrote:

Negative equity is nothing new - plenty of people had £25,000

What are the relative repossesion rates now compared to the early 90s? I havent looked into it, but given that we are only abouta third into this recession its going to get worse. Also take a look at the number of firms going to the wall currently. I am sure that in the 90s it wasnt anywhere near as bad as now.

Rob Caldecott wrote:

but the money and confidence will reappear sooner or later.

Oh yes, I it will. I think it will take many years though, depending on how the govt acts, and whether they can stop a collapse. But for sure when the credit comes back, its going to be tighter. Heck, I hope its gopng to be tighter, they dont want to dig a hole as big as this one under the UK again.

Morality is indistinguishable from social proscription

Dalek Dave

Similar note, look at house prices in spain! Dropping like a stone, there is a glut and no market.

------------------------------------ "Your manuscript is both good and original. But the part that is good is not original, and the part that is original is not good." Dr Samuel Johnson

Lost User

Oakman wrote:

Why is that a bad thing?

I didnt say it was. The issue is if the banks need cash, and start foreclosing, which is what they would normally have started doing (but I suspect the govt is prohibiting this (as part of the bail out miney)), then the houses go to auciton, and its only those with cash who can buy, thus setting house prices at about 20% of their current value. This is the extreme case, no credit, no govt bailout, banks foreclosing, houses auctioned for whatever a bank can get, and only cash buyers available with the ex owner left with a negative equity debt of 89% of the previous value. This is one end of the stick, the other end is govt intervention so they effectively own the banks and lend regardless of profit, but only for social reasons, in order to maintain structure and stability. The UK is currently somewhere between these two extremes.

Morality is indistinguishable from social proscription

Lost User

I agree things are bad, but predictions of social collapse are just scaremongering mate. It is the sort of thing the right-wing rags love to stoke up the fear with. There are no grounds in reality and, to be honest, it comes across like you're gloating a little - 'Hey, I'm in France and it's paradise!, ha ha UK!' (and I apologise now if this isn't the case, but that's how it looks to me). There is no evidence that either revolution or anarchy is just around the corner. This isn't France you know! :) FWIW I think Europe is ... gasp ... a good thing! I also think that, if it's good for business, we should join the Euro ... double-gasp! I'm no little Englander. However, Europe IS flawed and corruption is rife which I feel must be addressed. We are all going to suffer in this recession to one degree or another, and we are stronger together. Others have pipe-dreams of some US/UK/Canadian/etc. (call it Oceania if you will) alliance that will be more effective but it's pie in the sky. People in this country need to let go of their xenophobia and prejudices - too many people in Britain want us to punch above their weight and I believe we are stronger in the EU than outside. However, it may take us to leave before people realise that, which could make the current recession look like a walk in the park. Anyway, I digress. I am a sceptical pro-European really, although it is easy for people to get caught up with flag-waving nationalist sentiment, especially when jobs are scarce and people are skint. Perhaps this recession will be the bitter pill we all need to swallow. Personally I see a house as a home and not as an investment, and as long as you can afford to pay your mortgage, then negative equity isn't actually a big deal. There is a good chance that my house won't be worth what I paid for it, but who cares? My mortgage is easily affordable and we have no plans to move! What's the problem?

Oakman

fat_boy wrote:

Our UK house has halved its euro value in the last 12 months. I fully expect it to drop another 20% in sterling, and if sterling devalues as I believe it must and it has already by 40% against the euro) then take off another 20% in euros terms.

I've owned a few houses in my life, but I never bought one assuming that it was guaranteed to increase in value, (or that I should buy one on a Russian-roulette type of mortgage.) As a result I've seen the putative value of my property go up and down, but it has always remained mine, complete with four walls and a roof - which is what I wanted when I bought it. I'm not saying that you did any different and at the same time it's obvious that a lot of people bought unwisely and that we, especially in the west, have to figure out a way of making that right. Just remember that the house you have in the U.K. is the same house it was a year ago and be glad it keeps the rain off.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

Rob Graham

Dalek Dave wrote:

We may have our obligations to Europe, especially our obligations to save France from German domination.

Let the Germans have France. It will only give them indigestion, and the French will actually have something valid to bitch about, for a change.

Lost User

I'm pretty sure the current rate of repossessions is nowhere near early 90s levels simply because back then interest rates were MUCH higher. As for businesses going to the wall, I'm not sure it's as bad yet either and nowhere near the early 80s recession (remember when the Friday night News at 10 had a list of all the businesses that had gone tits up that week?). This year will be brutal for sure, but remember that confidence is king.

Lost User

fat_boy wrote:

negative equity

I agree that house prices are over valued presently but assessing their true value is troublesome at best. And those with negative equity will either bare the pain whilst in that condition or surrender their house and bare the pain of being sued for the difference by their finance provider. Negative equity will no doubt focus the mind but should home owners still be generally employed then such home owners will need to learn how to budget their finances better. That of course means lowering their spending on non-essentials but people being people will still want their little luxuries. However, if those home owners do lose their jobs and become unemployed, there is some salvation there insofar that Jobseekers Allowance conditions do permit a level of Government finances to support mortgage payments. But whatever value the house prices are, or will be, negative equity will sooner or later be eliminated. So not is all lost.

Lost User

Rob Caldecott wrote:

as long as you can afford to pay your mortgage, then negative equity isn't actually a big deal

How many firms a day are closing? 100 I heard for some small business consortium chappy on the news. If the bailout doesnt work, and banks stop lending and start foreclosing instead then house prices will collapse. And that will leave people massively in debt, by anywhere form 50,000 to 100,000 pounds. Just what sort of discussion do you think prompted a rate cut so drastic as seen last autumn? A scary one, believe me.

Morality is indistinguishable from social proscription

Pierre Leclercq

Oakman wrote:

Okay. We'll stop trying to bankrupt your major software companies if you'll stop trying to bankrupt ours.

hum, hum, it should not be necessary nowadays... :sigh:

You can't turn lead into gold, unless you've built yourself a nuclear plant.

Rob Graham

Ka?l wrote:

a growing number have no access to health care.

Really? So there are EU countries that would turn someone away at the Emergency Room Door? What happened to Universal Health Care in the EU?

Lost User

Dalek Dave wrote:

We speak German?,

Yes we do actually. English is a Germanic language.

Dalek Dave wrote:

drink like the Spanish

Michelob is a nice beer.

Dalek Dave wrote:

eat like the French?

Ever seen an Ebglish menu? 'en croute' 'au poivre' etc etc etc

Dalek Dave wrote:

bank like the Dutch?

You mean walking into a big building with lots of desks and giving them money to keep for you?

Dalek Dave wrote:

The only thing we have in common with the rest of Europe is that we fought them.

And the US.

Dalek Dave wrote:

You should read Winston Churchill's book

He was a pugalist.

Morality is indistinguishable from social proscription

Lost User

Rob Caldecott wrote:

I'm pretty sure the current rate of repossessions is nowhere near early 90s levels simply because back then interest rates were MUCH higher. As for businesses going to the wall, I'm not sure it's as bad yet either and nowhere near the early 80s recession

We will see.

Rob Caldecott wrote:

when the Friday night News at 10 had a list of all the businesses that had gone tits up that week

Yes, it was grim. Perhaps its just age. I recall the miners strikes, the garbage strikes, the ambulance strikes. I guess then to a 40 year old it looked like the UK was falling apart. I hope the situation isnt as bad as I suspect it could be. Of course I do. I have interests in the UK too. But right now, I wouldnt buy, and I wouldnt keep cash in sterling. (I did buy a pile of cheap UK stocks though last october that over 5 to 10 years should start to do OK)

Morality is indistinguishable from social proscription