Reply to: Bank idiots blame government idiots…

[Bagpuss]

The government let the banks get away with it when everyone knew what was going to happen.

To me it's no different than someone who gets bitten by a dog they failed to control, don't blame the dog.

That logic implies politicians are more inteligent than businessmen, who are somehow retarded in comparison

[minestrone]

The government let the banks get away with it when everyone knew what was going to happen.

To me it's no different than someone who gets bitten by a dog they failed to control, don't blame the dog.

[sasguru]

Just because prices are falling doesn't mean the pent up demand isn't still there and even increasing all the time. But if people can't get loans, or daren't because of their precarious jobs, there will be few buyers until prices are reduced sufficiently by desperate sellers.

But falling prices or a deflationary spiral also discourages buyers, because obviously having purchased a property there's the prospect of getting into negative equity if the price falls even further.

Also, quite a few people *are* leaving the UK, including some immigrants such as Poles. Not sure what the net immigration figure is, but if negative then that also tends to support my argument.

But I'd be the first to agree it's not cut and dried, and there are loads of factors.

I will go so far as to state that immigrants have nothing to do with it at all.
I "do" data for a living and we say "correlation doesn't imply causation". In this case there's no correlation let alone causation.
Whatever caused the housing boom of 1987-1989, it certainly wasn't immigration which was negligible at the time.
And in the last year hundreds of thousands of immigrants have entered and yet prices have fallen 10-15%.

Falling prices imply people aren't buying for whatever reason. That means they don't need to buy to live somewhere. And that in turn implies that buying a property is an artificial demand, stoked up by cultural factors rather than anything else. Basically we had a pyramid scheme whereby prices rose and everyone wanted in because it was seen as "free money". That creates a self-perpetuating cycle.

I strongly recommend you read one of the many good histories of financial booms and busts to understand this one. Doing so in the 90s certainly helped me profit from it.

[OwlHoot]

Utter nonsense.
I don't see a mass exodus of immigrants out of London, yet prices are plummeting. So what happened to this excess demand they supposedly caused?

Just because prices are falling doesn't mean the pent up demand isn't still there and even increasing all the time. But if people can't get loans, or daren't because of their precarious jobs, there will be few buyers until prices are reduced sufficiently by desperate sellers.

But falling prices or a deflationary spiral also discourages buyers, because obviously having purchased a property there's the prospect of getting into negative equity if the price falls even further.

Also, quite a few people *are* leaving the UK, including some immigrants such as Poles. Not sure what the net immigration figure is, but if negative then that also tends to support my argument.

But I'd be the first to agree it's not cut and dried, and there are loads of factors.

[sasguru]

OK, but why did the indigenous flipwits borrow too much?

Because property prices kept rising, due to demand stimulated in large part by mass immigration, and because they could borrow too much (as Governments had relaxed the rules).

I'm not saying a lot of borrowers weren't greedy and stupid. But it's not unreasonable to want to get on the property ladder if rents are sky high and the ladder is rapidly being hoiked up out of your reach.

Utter nonsense.
I don't see a mass exodus of immigrants out of London, yet prices are plummeting. So what happened to this excess demand they supposedly caused?

[d000hg]

All we have at the moment is a long term plan to keep increasing debts, in an attempt to try and put off short-term pain, which is so f**king stupid it is unbelievable. It's like taking increasing doses of aspirin for a stomach ulcer.

On the other hand, deliberately infecting people with cowpox immunises them against smallpox. These metaphors are all pointless, you can find one to support whichever bias you have.

[OwlHoot]

Sorry but that's complete bollux.
Nothing to do with indigenous flipwits borrowing too much and the mainly indigenous bankers lending to them for a quick buck, then?
I reckon most immigrants would have more of a savings ethos than otherwise.

OK, but why did the indigenous flipwits borrow too much?

Because property prices kept rising, due to demand stimulated in large part by mass immigration, and because they could borrow too much (as Governments had relaxed the rules).

I'm not saying a lot of borrowers weren't greedy and stupid. But it's not unreasonable to want to get on the property ladder if rents are sky high and the ladder is rapidly being hoiked up out of your reach.

[PM-Junkie]

I'd vote for a party that laid out a realistic long-term plan for the government to pay off all its debts, and for the banks to rebalance their books.*

Having such a plan would bring some confidence back to the economy, get things moving for business, and rekindle employment and growth.

All we have at the moment is a long term plan to keep increasing debts, in an attempt to try and put off short-term pain, which is so f**king stupid it is unbelievable. It's like taking increasing doses of aspirin for a stomach ulcer.


*This could never be the Labour party of course, since they have demonstrated at every time of asking that they are fiscally incompetent. But it could be anyone else, even the Monster Raving Loonies.

The problem is that the fractional reserve banking system relies on people borrowing money, which is why things are going so pear shaped now. People are not borrowing/banks are not lending....so the whole system has gone belly up.

I have yet to hear anyone admit that or propose a solution. They are just desperate to get mugs borrowing again so the gravy train can get moving again.

When you think about it, the whole thing stinks. We're in a mess partly because too much money was borrowed/lent (and not just by people who couldn't afford it) - so the solution from politicians is to get the banks lending again so people can borrow more money??

Time to vote for Snoopy I think...

[Peoplesoft bloke]

How about the party that couldn't really give a toss as long as we all get pissed? The Official Mosnter Raving Loony Party. Unfortunately, they're not half as funny since Lord Sutch died.

They would surely do less harm than Labour and the Tories.

[sasguru]

. But I still reckon mass immigration was somehow the original cause of this.

Sorry but that's complete bollux.
Nothing to do with indigenous feckwits borrowing too much and the mainly indigenous bankers lending to them for a quick buck, then?
I reckon most immigrants would have more of a savings ethos than otherwise.

[Doggy Styles]

I'd vote for a party that laid out a realistic long-term plan for the government to pay off all its debts, and for the banks to rebalance their books.*

Having such a plan would bring some confidence back to the economy, get things moving for business, and rekindle employment and growth.

All we have at the moment is a long term plan to keep increasing debts, in an attempt to try and put off short-term pain, which is so f**king stupid it is unbelievable. It's like taking increasing doses of aspirin for a stomach ulcer.


*This could never be the Labour party of course, since they have demonstrated at every time of asking that they are fiscally incompetent. But it could be anyone else, even the Monster Raving Loonies.

[PM-Junkie]

How about the party that couldn't really give a toss as long as we all get pissed? The Official Mosnter Raving Loony Party. Unfortunately, they're not half as funny since Lord Sutch died.

Absolutely. A great loss.

My favourite policy was to make parliament more accessible to the people....by virtue of putting on wheels and towing it round the country. Classic.

[Mich the Tester]

Well the war in Iraq wasn't cheap but I believe the Conservatives supported that too. On most Macro economic policies the parties were very similar.
The difference is only really becoming apparent now.
On a personal level I would vote for a party willing to reform welfare and taxation of low income workers, which could be the Conservatives (although they need ot try harder). Or the only party who thought the housing boom would end is disaster 4 years ago (Liberals)

How about the party that couldn't really give a toss as long as we all get pissed? The Official Mosnter Raving Loony Party. Unfortunately, they're not half as funny since Lord Sutch died.

[Spacecadet]

* 12 million immigrants pour into US

Wasn't just immigrants, it was the "poor underclass" who could be empowered through home ownership

[Bagpuss]

Monetarist? That was all about balancing the books. This government has paid no heed to balancing the books.

Well the war in Iraq wasn't cheap but I believe the Conservatives supported that too. On most Macro economic policies the parties were very similar.
The difference is only really becoming apparent now.
On a personal level I would vote for a party willing to reform welfare and taxation of low income workers, which could be the Conservatives (although they need ot try harder). Or the only party who thought the housing boom would end is disaster 4 years ago (Liberals)