People Begging for a House Price Crash

Your area must be much more "reasonable" than mine. Gordon posted about his friend who is renting a 2-bed house for well under the 1-bed house LHA rate. In general LHA rates allow rental of reasonable places in the vast majority of areas all will continue to do so under the new rules.

What is your area then?

I presume you mean "do less well".

Of course they do. But poverty is not the "cause" as all the hand-wringers claim. Poverty, and performance at school, are both effects. Someone who doesn't do well at school, either through lazyness, lack of interest or inability, is more likely to end up poor and as a result more likely to have children who, through genetics and upbringing, are likely to be the same.

They don't "invent" CVA scores. There's no point looking at end results without looking at the start point.

And you really think that's because the "poor" have been excluded? Are you that much of a snob?

My kids' secondary school is also "outstanding" despite serving a large council estate. I'm not scared of the poor as you seem to be. Many of my kids' friends are "poor".

That's down to the school, not the area it serves.

When choosing a primary school there was quite a stark choice for us between a school half a mile away in the posh area and a school half a mile away on the council estate. Wife and I, having been brought up in "nice middle class" families, instinctively applied to the nursery of the "posh area" school. We didn't get a place. So our daughter went to nursery of the school on the council estate. Getting to know other parents at both schools we quickly realised we were actually at the better school and when it came time for applying for the main school we didn't hesitate to put the "council estate" school first choice.

So even more reason to choose a school in a poor area. One of the reasons our kids' primary school does so well is that is has a large proportion of "special needs" pupils. At first this put me off, but in reality it is a hell of an advantage, as many special needs pupils get a one-on-one teaching assistant. In reality the pupil rarely actually needs one-on-one help all the time and so their allocated teaching assistant helps out with the whole class. It's like having several teachers in the class. At one stage my daughter a teacher plus six teaching assistants in her class.

Er, yes. Now maybe we can get back to the real world...

In the vast majority of cases they won't. Anyway you seem to be quite glad the poor are excluded from your area.

Or maybe your case is "unrepresentative". What is your area?

Or maybe we should bring back concentration camps. That's usually where strawmen lead to...

Yes indeed, but this debt added to their deficit. Had they lowered their deficit more, they may not have lost the market's confidence and might have been able to manage bailing out the bank debts caused by property speculators.

Perhaps we need large taxes on property capital gains to discourage speculators in the future.

There doesn't now look like any risk of a soverign debt crisis in the UK. There might have been if Labour had won...

Except they'll do exactly the same in a different country. The effect of what they do on us will be the same except that they'll be paying their taxes to (eg) the Swiss government and spending their massive bonuses supporting the Swiss economy instead of the UK economy.

They most likely have the bulk of their wealth located abroad already. About time their bluff was called.

If only working people could have organised themselves globally the way Big Business did, instead of being parochial, we might have a better balanced economy. Just think what a few billion trade unionists in the Third World could do for their working conditions. They could double their income to two do$$ars a day and we would still be making electrical consumables and British cars. ;-)

Their deficit is IIRC 17 Bn, that's insignificant in comparison to the almost 100 Bn that they are borrowing

50% of properties should be under the current limit. Of course they are not necessarily available, but it's a problem that affects *everybody* with finite resources who's looking for somewhere to live.

You're saying a chunk of the population should be given special dispensation.

(Most kids at my school were bussed in from eight miles away. I don't think it's essential that you live right next door to a school.)

Not all parents get their first choice of school. Again, you expect me to send *my* child to a school with poor ratings, while you also expect me to subsidise, through my taxes, your rent so that you can remain within the catchment area of a 'better' school. Yeah, that sounds fair...

With the tougher rules on HB, some (not all) might learn to be more self-sufficient in future (by spending a bit less and saving a bit more; some people have even been known to take in lodgers when money is a bit tight).

Yes. Typo.

It's much more complex that this IMHO and it is not easy to determine cause and effect. There is very little social mobilty in this country so this problem goes back generations. A child of a poor family is likely to have lower ambitions than a child of a rich family since this is what they see. They are also less likely to go to a good school, have adequate parental support etc.

Exactly - this shows that these things make a difference.

No. I'm not a snob. It's just that in most areas the best schools are in the wealthy areas. I would say your case is unusal. I would not want to send my children to a school with a "satisfactory" OFSTED result.

I'm not scared of the "poor". I'm far from rich myself.

There's a lot of factors but the area served is very important. I don't like this but it is true.

I'm glad you got a good school. The situation here is rather different though.

That's very unusual. The schools I have dealt lose money over SEN children for many reasons which are probably OT for this ng. They certainly can't afford to have TAs doing more than the minimum.

Amen!

Not at all. See above.

Godwins Law ;-)

Mark gurgled happily, sounding much like they were saying:

Umm, surely half of all rented properties available within your local authority area are priced at or below the current limit, and about a third under the new one?

The 17Bn is an annual amount, the bank bailout is a one-off. Amortised over a 10 year period (as they were planning) the bank bailout is less significant.

As do genetics.

Indeed - and a child whose parents rely on benefits and don't see the point in working, will be more likely to rely on benefits themselves as that's what they see.

But they don't necessarily *cause* the difference.

Oh really? "I'm glad that I live in an area where the less fortunate have to go to different schools" sounds pretty much like "I'm glad I don't have to mix with oiks".

Where "best" is usually measured by pure results not CVA. A bit like an investment fund manager being rated on the size of his fund rather than the percentage increase in funds under his management.

Nor would I, so I don't.

But you're glad that you "live in an area where the less fortunate have to go to different schools".

The pure results can be down to the area, the CVA isn't usually.

Yes. Because the type of area makes little difference to the real quality of the school (except in those cases where the good school attracts richer people to the area and pushes house prices up, ie the reverse effect - good school *causes* a richer area rather than richer area causes a good school).

It does make a difference to the perceived quality as schools in rich areas will produce better results simply as a result of having more able pupils. But that doesn't mean an individual pupil will get better results as a result of going to such a school - you need to look at CVA to determine that.

The "minimum" being the amount of hours the LA will fund - yes the school will be unlikely to pay for more than that, but the child is unlikely to actually need all the hours they are allocated one-on-one. The reality is that the SSAs will help out with the whole class for much of the time. Certainly the SSAs in our primary school do. We were always talking to the SSAs in my daughter's class who were fully aware of her progress, any problems etc as they used to be involved in her teaching, even though they were supposedly only in the class to look after children with statements of special needs and even though she was one of the brightest pupils in the class.

The answer is to simply require the bondholders and shareholders of their defunct banks to take the hit. That is after all what both were paid to do and what they willingly risked.

However, Britain's, Germany's and France's banks are owed a great deal by the Irish banks. If the Irish banks are admitted to be insolvent then the same crises will arrive at the doors of these countries. They'd rather that didn't happen and are therefore prepared to assist the Irish government in forcing Irish taxpayers to pay in the stead of the speculators.

Why is the Irish government willing to go along with this?

They allowed the economy to become too dependent on property speculation and the taxation gleaned thereby. Now that the credit bubble has burst, there's a hole in their budget where those taxes used to be. That means they'll need to continue to take out new loans to cover the hole as well as roll over the loans they'd already undertaken.

Since forcing the speculators to cover their own losses would mean that they'd immediately reprice new loans to cover these previously (rather stupidly) unforseen risks (they'd raise the interest rate on any money they'd still loan to the Irish government), the Irish government is afraid they'd be unable to borrow at a rate they could pay and their budgetary recklessness would be exposed for all to see.

Thus deadbeat bankers and politicians, inside Ireland and out, are conspiring to force Irish taxpayers to cover the debts run up by idiot speculators.

Will it do any good?

Highly unlikely. The Japanese have been bailing out their deadbeat banks for twenty-one years after their own property and credit bubble burst. The banks are still zombies, property has crawled back up to less than

50% of its peak price, shares have managed to get to around 23% of their peak price and the economy has been moribund for two decades and counting.

That's probably the best the Irish can hope for out of all this sacrifice. However, borrowing cash to pay the interest on the loans of insolvent banks is simply delaying the inevitable. The other three countries may be able to use the time to find a way to offload their bad Irish loans, but meanwhile Ireland will be throwing more money into the maw of the monster, and running up debt with the IMF and ECB. The most likely outcome is that the banks will go under anyway in some future crisis and take yet more wealth down with them.

What would the Irish be best to do?

Let the zombie banks go under and the shareholders and bondholders take their medicine. That would at least leave the taxpayers able to truly support themselves and the Irish economy with their money. The government would need to balance its books very quickly to avoid the need for new debt. That would hurt of course, but would also prepare the Irish economy for new growth as the less necessary functions of the state released resources and people to become available for it. the government should also hike rates to match what the markets require. That way savers would be rewarded and savings are what's needed after credit bubbles have depleted them and increased debt so much. It would also wring out the last of the bad debt in the economy, again preparing the way for new growth.

Chances of this happening until there's a new crisis to put a stake through the hearts of the zombie banks: close enough to zero as to make no difference.

FoFP

Our grandchildren won't be stopped from making this mistake in the future unless human nature itself changes. They'll also select a different Golden Ticket.

FoFP

50% of properties which may be /somewhere else/ are under the current limit. For many people this is not particularly near where they actually live. For example I looked up a previous address of mine and it listed the 50% level for a city 10 miles away, not the level that rents would be there. Many people would be forced to move leading to "social cleansing".

No. I am saying that everyone should have the same chance of being able to afford to stay in the same area as where they currently live.

I agree in the case of a Secondary School. However the chances of getting into a particular school are much smaller the futher away you live. For example, the school I am thinking about you are unlikely to get in if you live more than 1 mile away.

Personally I am opposed to the current funding formulae for all schools which creates this problem in the first place.

I doubt the current benefit levels would allow people to save any money even if they are frugal. If they did there would be calls to reduce benefits even further.

People are assessed on the basis of their family size. Therefore it is very unlikely that a family could afford to live in a house and have spare room(s) available for rent.

I work for our union and sadly I think you're deluded. Rather than helping their dues-paying members, most trade union activists seem to become quickly enamoured of the idea that they're part of the governments of Israel and Palestine and then start jumping up and down because things in those countries aren't being done the way they'd like them to be.

Perhaps "Boycott Israel Now" marches would provide more entertainment in the Thirl World than they're used to, but I'm less than convinced it'd bring about a doubling in wealth-generation.

FoFP

Yes, although IME there are more important genetic factors than intelligence in determining how rich or poor you'll end up. Personality traits such as whether you "live for now" or "invest in the future" are far more relevant. Working hard at school is of course an investment for the future, as is taking a low paid job which doesn't make you much better off than benefits. Some people just can't see the point in doing anything which they don't get immediate gratification from, and will do things which give them immediate gratification even if causes them long term damage. Which is why poor people are more likely to smoke, for instance, as both being poor and choosing to smoke can be the result of a "live for now" personality trait. But again, it's (mainly) genetically inherited.

It's like the chavs who get a big lottery win and a few years later all that's left is a wrecked mansion and mangled cars all over the place, and then they're back to being penniless for the rest of their lives. And as the chances of winning the lottery are so minute, you know that for every one of them there's maybe 100,000 who'd act in the same way if they'd won.

In message , tim.... writes

Yep, their borrowing is about 700% of their GDP according to a speaksman today on R4, compared with about 1:1 in Britain.

Unless someone can contradict him, it kind of puts things in perspective.

In message , Andy Pandy writes

One problem, expressed by yet another talking head on R4 today, is that the debts are being whizzed around like Pass The Parcel. We borrow £7B (gov bonds?) to give to Oireland. One day there'll be a nasty shock when the music stops...

In message , M Holmes writes

Like Lehmans? That sorted it all out, innit?