The Shills Are Back

From the accomodation & property forum:

Is it just me or do you get the impression that anyone who uses the phrase “Doom and Gloom” merchants is a VI who wants things to go back to the way they were in the good old days of 2006?

Was this poster was swimming against the tide back then and advising caution?

If not then it’s just more of the same “It’s always a good time to buy”.

Is this poster actually buying anything themselves at the moment?

If not then it’s just someone wanting other people to take risks that they’re not taking themselves.


Positive thinking comes in many forms, but some thoughts are better than others - before the 2004 tsunami, when the sea was first drawing right back, some positive thinkers thought oh look, free lunch, and raced out to pick up the stranded fish; other positive thinkers thought, oh look, the sea is drawing right back, it’s time to head for the hills!
Both groups were thinking positively, but only one group has survived.

A third group saw the sea pulling back and said “Oh look! naked swimmers”


I love the smell of desperation in the morning :slight_smile:

A few more on the Daft discussion boards.[discussion_id]=113312

I wonder if this is the same masterful troll from AAM? :smiley:[discussion_id]=113334

These guys sound like the type of EAs I have been dealing with. Couldn’t be though, they’d be too busy selling bargains to “in the know” investors.
Someone should tell these guys to keep all the bargains to themselves, other wise it’ll be a goldrush.

A lot of people with single digit post ‘contributing’ to that thread. Is this how EAs are now filling their days, pimping property ?

The UK bubble of the early 90s had a very quick recovery relative to other property bubbles that deflated and the bubble burst for very specific reasons unique to the UK at the time. Thatcher had basically kicked off the ability of people to borrow 80% for the first time in history and the UK took to it like fish to water. However, they took it a little too far, add in the ERM debacle and you had a very specific crash…

The UK was lucky though, because not only did they just begin to reap the benefits of significant oil wealth from the North, but also coming the other way was the beginnings of a “global” credit bubble. Globalisation and its effect on global interest rates / inflation, a spiralling Japanese savings rate with money flooding abroad etc. The UK was bailed out by the ability to borrow seemingly limitless sums from Asia and from a burgeoning securitisation market…

In any case, we are now suffering the hangover from that second wind. One has to ask oneself now what catalysts could possibly come around the corner to bail us all out now. The decade long collapse of interest rates is over, the securitisation market (aka. the ability to turn dog poo into gold) will never be as stupid as its has been for a very long time.

Throw in the fact that houses are now much more expensive relative to incomes than they were 10 years ago etc

I find it very hard to see anything better than a scenario where house prices are at best the same 5 years from now. With some serious risks that they are alot lower.

Looking at history is useless. Yes one could point to the UK recovery in the 90s OR one could point to the Japanese example which has never properly recovered…One needs to look at the hard facts now…where we are, how we got here, the mistakes that have been learnt and as such what forces we are facing. It doesn’t look that rosy and definitely not rosey enough to pick up a ‘bargain’ 15% from the bubbles highs!

hee hee

I’m really starting to resent these shills hijacking the agenda and referring to increasing affordability of shelter as ‘doom & gloom’.

Though maybe it’s time to embrace the term and take it back.

Hmm… might get one of these bracelets as some sort of ‘pride’ display!

I was in the UK for the bust of 1989/1991, and I have to say we have a long way to go here yet. Not only that but we will go much deeper into the red than the UK did. Our dependence on Construction and house price boom is much greater than the UK in those years. We need to defalte to become competitive again…lots of reasons.

UK house prices graph

Looking at the above graph I wouldn’t say that the recovery came quickly. Perhaps in comparison to Japan it was relatively quick but you can see that it was stagnant prices and inflation that did most of the work.

May 1989 - Average price £70,246
Jan 1998 - Average price £70,296

Somehow, i don’t see the ECB allowing similar rates of inflation, e.g 9.5% in 1990.

And we’ve a lot further to drop, so we’re either going to have to take bigger nominal drops, or a significantly longer time, likely both.

And he says 95% of professional investors and bond experts expect the next move of the ECB to be down.

I’m not in agreement, particularly about his vision of rents going forward. It’s going to be much messier than that. But on the ECB, does anyone have any comments?

Market is pricing in about 15% chance of a cut by December, and is fully pricing in a cut by April.

Mind you, the market has changed its mind at short notice a couple of times this year. Dan McLoughlin was spouting futures as his own predictions earlier this year when he was talking about cuts coming up.

Sentiment seems a little fragile in either direction.

There’s been a massive change the yield curve. 3 year swaps went from 4.4% in May up to 5.4% in June and July, now they’re back down at 4.55%. That’s why the banks are reducing their fixed rate offerings. Although it’s portrayed as them getting more competitive.

They’ll sit tight and talk tough. If they move down soon, their “single mandate” mantra will be undermined and they’ll be accused of reacting only to German and French problems. If they move up, Germany and France will tank further and that’s a no-no.:wink:

So they have to stay put until at least early next year, hoping that falling commodity prices and the global recession will give them the inflation cover they need.

If we get a serious financial crash this autumn all bets are off.