On the eternal topic of “Bottoms” Eddie Hobbs was on Eamon Keane today.
Eddie never called a bottom, he called the structure of a bottom. He never insulted Morgan Kelly either. This is good.
He only said that the bottom would be close or at hand when “capitulation” was with us. Eddie carefully said that bottom was 6-8 years after the top…which was 3-4 years ago as we know and would correspond to “capitulation”. This is wrong but is closer to reality than …say… Marian Finnegan.
Sadly Eddie never mentioned “Despondency” and needs to be taken up on it if anyone is out for pints with him.
Don’t you ever mess with Hyman Minsky Eddie…and the invoice is on its way.
I think overall people and banks have accepted that prices have fallen and will continue to fall, there is very little denial.
Those who keep their asking prices at 2006 or close levels, on the whole either can’t afford or psychologically refuse to take a loss, that’s why there is a withdrawal of properties for sale on Daftwatch. A combination of death, debt, mortgage interest rates, taxation, unemployment and better opportunities elsewhere will eventually move them on. I think they see inflation as the solution to their problems (at least in nominal terms), however, while they continue to keep the existing debt structure in place, then any such attempts to re-flate are doomed to failure as most extra money supply goes to paying down existing debt, or paying yet more interest on the roll-over debt the government is taking on.
I agree with your comment…finally entering fear phase…HOWEVER…it is emotions we are talking about. The point for many people on this forum is whether/when/how might these phases translate into market pricing. As we have seen, the so-called market here is extremely slow to adjust.
Think what would have to happen here for us to reach “capitulation”…sovereign default scenario?
I think its desperation as people wonder about their jobs and making mortgage payments, those who are in arrears pray for a “bailout” and small businesses continue to fail for lack of lending/cashflow. People know at this point FF are out of their depth and hiding crap all over the place so we’re only a small step away from panic but it’ll come soon enough as the market cycle seems to be moving now having been in limbo for quite a while due to a strong sense of denial.
Still loads of denial out there…every day I hear people say things like “Yes, property has fallen recently BUT [insert wild-eyed theory here] means they’ll be going back up by 2011, it’s just a blip, hang in there for the long-term and I’ll be quids in”
I honestly can’t say we’ve left Denial until a clear majority finally accept that 2002-6 prices were abnormal, a bubble, something that will not be repeated for decades if ever. And that just isn’t the case, I feel.
There is no way we can be in the panic or desperation stages as long as there are no repos or firesales. They can only kick in at the end of the moratorium, which I think is early next year.
So we’re still somewhere between denial and fear IMO.
And don’t forget that if we are talking about averages, there are still people out there who are only *approaching *denial - 5 minutes looking at Boards.ie or even AAM will show you the level of ignorance out there. The effect of this will keep the aggregate national emotion more positive than it should be.
Denial/Fear for everyone, I believe that we are going to be hit with the next phases in rapid succession rather than the drawn out saga that was denial. The guarantee only stalled the inevitable and the pressure has only increased. We’ll hit panic when everyone realises that he government is shooting blanks and that we are been administered by elsewhere rather than government.
Be careful what you wish for, you might not want to live here when you see how things are in two years time. I’d prefer to be wrong.
Between denial and fear, still plenty of denial out there, reflected in bubble asking prices -people who don’t have to sell and are looking for a bigger fool to pay 2007 prices. For those who’ve lost jobs, are in NE etc and are trying to sell at reduced (if not entirely realistic) prices I’d say the fear is very real.
the majority either believe NAMA will sow some sort of magic beans and restore us to bubble peak or, worse case situation, a social NAMA will be initiated. The “ah sure, we’ll be grand” mentaility.
People have still to “wake up and smell the coffee”. Coming out of a deep slumber at the moment trying to figure out whether it is time to get up time or still sleeping through a bad nightmare. Many yet to realise that it is reality, the weather isn’t very pleasant outside and we are all going to take a drenching.
Went for a couple of last night in Limerick, (local sports club Bar) many of the older customers were saying that they were encouraging their Sons and Daughters to get out of the Country. I think last Tuesday has woken up quiet a few people to the seriousness of the crisis facing the country.
Last time around I thought we had moved into fear/desparation, but I think we’ve actually gone back to the warm soft embrace of denial. The figure are now too great, the drops too staggering, the reality too painful, that people are reverting to the last comfortable position, which was denying that there was any problem.
I wonder if we will ever get out of that funk.
Also, I wonder should there be a pin cycle of emotions, as it seems to me that pinsters (myself included) have become increasingly gloomy about prospects for the economy, and I fear that it won’t be long before there is a pin capitulation event where we all learn to stop worrying and to love big brother.