Housing market collapse.

Bad hair

Why shouldn't it be housing again, especially since it is still in short supply in the UK? Most people seem to have incredibly short memories and will keep repeating the same mistakes again and again.

M.

Isn't it just the size of the bubble that is different this time? In the 80's there was a big "pin" which burst the (smaller) bubble. Now the bubble is bigger it takes less to burst it.

M.

He hs to do at least another 22 years because I want a silver wedding anniversary.

Sod that for a game of soldiers. I want my dinner on the table when I come home.

Yup. A better "solution" would have been to remove the exemption for CGT on your main home. Although I can't see that being popular either (Actually I think it would be political suicide). But BTL has been in demand despite not having a CGT exemption.

Tim.

Most city centres are the same. Some large blocks of new flats have only 1 or 2 residents. However, developers seem to be holding on rather than making significant reduction in asking prices. One scheme went bust before it even got off the ground and it looks like investors will lose their deposits.

The real question - which most of the 'experts' have missed - is what will TV producers now use to fill the vacuum left by the demise of all those property programs..?

Really?

Try this for size. Using the opposition economic model in the late 80s it was possible to predict the drop in the housing market to within 3 months. Many people who believed Brown's economic modelling over that of the Treasury et al were able to make considerable amounts of money. All by using public domain information.

Simply moving house at the right time has pretty much funded my mother's retirement comfortably, and may yet cover that of myself and my siblings. There may even be enough to ensure that my nieces and nephews are able to leave university without crippling debts.

Long distance forecasting is nigh on impossible when it comes to either weather or economics. Medium and short term forecasting is possible. With a good (that is not an idealogically led) economic model it's possible to forecast the short term reasonably well.

The important thing is to understand that the purpose of most publicised economic forecasting is not to predict the behaviour of an economy. It is either to make a political point or to promote a particular economic theory. Most of the models being used for genuine attempts at forecasting are used by people who have absolutely no interest in letting anyone else know the results.

Oh God! Every damn musical in the country will have a TV show to cast the bloody leads. It's going to be horrible.

Erm - try doing the arithmetic again.

If house prices go down by 2.5% across the board, your downsizing gain goes down by the same amount (2.5%).

From what I gather, the fall is likely to bottom out a *lot* lower than 2.5%

Fine - I'll go for the Ninja market. Have I got Ninja for you. Police, Camara, Ninja. Diagnosis Ninja...

Given the success of the Piragtes of the Carribean films, I think a costume drama centred around buccaneers might work. I hereby copyright the entire concept, anybody making such a programme who can't show they dreamt it up before this date owes me money.

Following on from Life On Mars, a doctor gets timeshifted back a bit... or some other profession

Or they could just remake "All Gas And Gaiters"

Please, no. I have fond memories of that, along with Oh Brother.

And I'll have the furry rat section sown up. Newsrat; That Was The Rat That Was; Ready Steady Rat; Rats from Hell; Ratwatch; Rats at Night...

It just seems to be a rule of credit bubbles. Just as the generation that gets bitten by debt swears off it for life and teaches their kids to do the same, perhaps a certain folklore goes in with that concerning the Magic Money Token upon which they all foundered.

Look at Germany. They saw a 50% fall in house prices and their housing market is now as sensible as we could ever want it in the UK. People rent or stay with relatives until ready to settle down. Meanwhile they save for a deposit. Once they settle down they tend to stay put. No frantic trading and no expectation of year upon year house price inflation. If we're lucky, we'll transition to that.

The effect doessn't last forever though. Holland saw more flower bulb bubbles after the Tulip Bubble. However, they were never so large.

"Stocks" of some description feature in quite a few bubbles, but the details and credit mechanisms tend to vary.

FoFP

Clearly the housing cycle is larger, but I'd say that's because the last

18 year cycle coincided with the ending, blow-off phase, of the three-generational credit cycle. It doesn't take much inspection to conclude that the credit bust isn't just to do with housing. Various forms of credit are involved and the markets of many have already utterly collapsed. SIVs and Auction Rate Bonds have collapsed. CDOs are on their last legs. People wonder if mortgage-backs will survive this. Credit card receivables and auto loans now looks to be in trouble and the CDOs based on them are falling in value. The corporate bond insurance market is close to a "structural event". Corporate bonds themselves aree extremely volatile. Everyone is terrified that the 45 trillion CDS markets will collapse.

Nope. This is a credit cycle. What's unfortunate is that the primary asset, what I call the Magic Money Token, is domestic housing. What's more unfortunate for the UK is that the final collapse of the long credit cycle is precisely meeting the downturn of our 18 year property cycle. One can only think this will exacerbate price falls.

FoFP

It's possible to predict the 18 year cycle. Hell if you check google groups you'll find I did it myself. Credit cycles are a diffeerent thing entirely. I spotted this as the end of the cycle by 1997. I thought it would collapse in 1998 (perhaps it almost did with the LTCM crisis). Then I thought it would go with the Dotcom crash in 2000. Then pretty much every yyear since.

Since the credit cycle can break in a number of ways, and most depend on psychological factors, they're very hard to time. If it were otherwise, the professionals would get out beforre the peak, and the peak would be earlier...

What we do know is that thee longer they run, the more debt is run up and the more people are suckered in. That means that longer bubbles have a worse aftermath.

I agree that some will have timed this correctly, because some folks are always trying to. However thee fact that many hedge funds have over the past few years tried to sell short into this bust and failed (by being too early) shows how hard it is.

Similarly some will try to buy discount property thinking that a bottom has come. Many will be too early and go bankrupt.

Hmmmmm. Well, I guess we'll find out later who got rich and how. After all, Carnegie did it.

FoFP

I'd watch the latter two.

Property schadenfreude programs?

Seriously: after previous credit bubble busts, there's been a tendency for people's tastes to move away from reality. Look for romances, westerns, SF and fantasy to hit boom times.

At least hopefully we'll see the death of Reality TV.

FoFP