My top read: Home truths from the economist
"Very often there is too much emphasis on the losers from falling house prices and too little on the winners. A fall in house prices is not bad for everybody. In an important sense, a house is much like any other durable good: a fall in prices is a boon for those consumers who have yet to buy one. "
One obvious implication; central banks shouldn't try to prop up a falling market with excessively low interest rates.
Time to own up
"Psychiatry suggests that people hit by catastrophe begin in denial, become angry, then try to bargain their way out of the dilemma, then get depressed, before finally accepting their misfortune and resuming their lives. One year on, the villains of the credit crunch haven't moved past denial." Indeed, there are a lot of people denying a pile of nasty problems.
Estonia’s economy is not yet facing decline
I know what you are thinking: "Remind me again, where is Estonia?" It is one of those vulnerable Eastern European bubble countries. When one goes, they will all go. Will tiny Estonia start the ball rolling?
Spanish growth at 15-yr low
I am surprised that Spain is still growing.
Morgan Stanley issues alert on Spanish banks
Continuing the Iberian theme.....
"Morgan Stanley, the investment bank, has issued a major alert on the health of Spanish banks, warning that a replay of the ERM crisis in the early 1990s could wipe out the capital base of weak lenders exposed to the property crash."
Explaining the credit crunch
I thought that was my job! Anyway, the Times has a go.
Australian central bank thinks that the worst is now over
Here is one of those embarrassing articles that wil haunt the Reserve Bank of Australia for a generation. "But you said it was all over bank in August 2008". Dream on!
US Job Losses Continue
Unemployment is rising, while inflation is at a 19 year high. I thought 2 percent interest rates was going to stop all this nonsense.
US Houses go for a $1
Do you think we will ever see the $1 house here in the UK?
I doubt it but I'm sure there are people who would offload their negative equity for $1 given the chance, Alice.
ReplyDeleteAll those people telling us it could never happen. Who'da thunk it ?
I can see why you loved that economist article.
ReplyDeleteSpain= bubble desolation
ReplyDeleteI wouldn't touch the spanish property market - a bit too risky for my taste.
ReplyDeleteThose in prolonged denial will fall for the bull trap on the way down; see the psychiatry diagrammed on the economic curve at:
ReplyDeletehttp://www.housepricecrash.co.uk/graphs-bubble-lifecycle.php
B. in C.
Repossessions etc. 1986-2002 on this 'ONS' graph.
ReplyDeletehttp://www.statistics.gov.uk/STATBASE/ssdataset.asp?vlnk=7341&More=Y
Current figures look bad by comparison - maybe the £1 house is not a dream in parts of Tyneside or in Salford, and a few other places.
B. in C.
There used to be £1 houses in Tyneside around the shithole West End about 15 years ago. You had to pledge a few thousand in repairs and live in it about five years before you sold.
ReplyDeleteThe West End being what it is, that made them difficult to shift even at £1 a go.
Nick
The West End of Newcastle; I remember it well; Cruddas Park, the Jubilee estate, Benwell, and the far reaches of Fenham. Brighton Grove and the Westgage Road; the horror!
ReplyDeleteIt has been a while since I was in Newcastle, but what is the area just below Benwell called, as you go down towards the Tyne?
Ten worst holes in the NE:
ReplyDelete1. Blyth
2. Bensham Bank (I believe Gazza crawled out from that sh1thole(
3. Peterlee.
4. Byker
5. Jarrow.
6. Gateshead.
7. Benwell
8. Cruddas Park
9. Pelaw
10. Scotswood
"what is the area just below Benwell called, as you go down towards the Tyne"
ReplyDeleteElswick?
Nick
Yes, Elswick. I had a girlfriend who briefly lived there back in the mid-1980s. She kept getting burglared. Although the rent was cheap.
ReplyDeleteThanks Nick.