Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Wed Jul 12, 2006 9:36 am Post subject: (UK) 'City faces meltdown if debt crisis hits'
Quote:
The City could face a financial meltdown if the debt bubble bursts, with over a year's worth of bank profits - £40bn - potentially being wiped off balance sheets, the Bank of England warns today.
The Bank is issuing a stark warning about the potential damage a credit crunch and a collapse in asset prices could cause to the economy and financial system.
It says that a sudden jump in borrowing rates - potentially caused by a further surge in the oil price - could cause a 2pc fall in economic output and wipe out banks' annual profits, estimated this year to top £40bn.
In a worse-case scenario, a sharp fall in credit conditions worldwide would have devastating consequences for Britain, the Bank warns.
It could cause a 1.5pc contraction of the UK economy, a 25pc fall in house prices and a 35pc drop in commercial property prices over three years, according to the scenarios mapped out by the Bank. Other major countries would suffer similar effects, it says.
Posted: Wed Jul 12, 2006 10:00 am Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
I wonder if after the big mess that wil follow the inevitable economic crash people will be asking why wasn't there any laws about who could obtain credit.
Why are people being allowed to borrow way more than they could possibly pay back? Its not just the people lending the money who get screwed, it has allowed the economy to inflate way past where it should be. Just greed I guess.
Posted: Wed Jul 12, 2006 10:24 am Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
I agree the banks are at least half responsible. However, given the housing bubble burst in the early nineties I have little sympathy for anybody over 40 who gets burnt.
Another quote from the same article:
Quote:
The Bank of England is also increasingly concerned about the complex and risky financial instruments devised by banks and hedge funds, of which little is known.
The Bank is believed to feel that many institutions using these instruments, such as credit derivatives, are "sitting with their fingers crossed, hoping that the music doesn't stop".
Joined: Sep 06, 2004 Posts: 5315 Location: Smalltown New Zealand
Posted: Wed Jul 12, 2006 3:13 pm Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
Surely getting burnt is one of the many hailed benefits and freedoms of freewheeling capitalism? _________________ "Complex problems have simple, easy to understand, wrong answers." - Henry Louis Mencken
Posted: Wed Jul 12, 2006 3:23 pm Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
Andrew_S wrote:
Things do not look pretty for this Septic Isle.
The last line of the article says -
Other major countries would suffer similar effects
so I would not feel too smug.
If Britons and Americans default on their debts en masse then some people elsewhere in the world will not be getting their money back.
Property market booms and busts are pretty common occurrences in the UK. For example at the height of the 1980's housing bubble average home prices were £105,231. By the mid 1990's this figure had collapsed to £65911. This was a fall of over 33%. Millions were dumped into negative equity.
Posted: Wed Jul 12, 2006 3:56 pm Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
airstrip1 wrote:
The last line of the article says -
Other major countries would suffer similar effects
so I would not feel too smug.
Yes, the economic realignment would be fascinating to observe (I'm pretty confident that in a global economic downturn the Finnish economy will hurt more than some others).
However, the UK's economic position is looking weaker and weaker. What do the Brits have to export if financial services go to hell? How are they going to pay for natural gas imports for heating? And oil?
A recovery from a housing bust might be much harder than last time (when I lived there by the way) when the North Sea was not in decline.
Posted: Wed Jul 12, 2006 6:20 pm Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
UK trade defecit ballooned from 5.5billion to over 6.5billion last month, the UK econemy has not got much left in it. They are just an island that must have their food imported, energy imported, materials imported and in return I don't know what they export, besides paparazzi photographs of the royal family. They are one of the worst nations on earth regarding their housing bouble and the national obession related with it, nothing productive comes of it other than the nation thinking they can create wealth though property investment without working and nations lose moral insight on what is really needed in terms of productive work to create a thriving nation. _________________
Man's like a candle in a candlestick,
Made up of tallow and a little wick;
Joined: Sep 25, 2004 Posts: 4717 Location: Boston, MA
Posted: Wed Jul 12, 2006 9:01 pm Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
The UK housing bubble is in many ways worse than the American housing bubble.
The UK doesn't have the "petropound". The US can reinflate a popped housing bubble without becoming a banana republic. The UK doesn't necessarily have this luxury.
Also, it is my understanding that the UK housing bubble is a nation-wide event. In the United States, there are tens of millions of homes that are not overvalued by historical standards. The US bubble is mostly located in the coastal regions. In the UK, the whole country is overvalued.
I could be wrong about this, I have only been studying this passively. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: Sep 06, 2004 Posts: 5315 Location: Smalltown New Zealand
Posted: Wed Jul 12, 2006 9:13 pm Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
Tyler_JC wrote:
In the UK, the whole country is overvalued.
Including the North? The north-south divide is real, it starts at Watford Gap, not Watford. _________________ "Complex problems have simple, easy to understand, wrong answers." - Henry Louis Mencken
Joined: Mar 02, 2006 Posts: 1198 Location: England
Posted: Thu Jul 13, 2006 1:32 am Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
Almost everywhere in the South of England is VERY expensive.
Patches of the Midlands and North are now expensive too. Many cities have had their centre centres prettified so they have had housing booms.
There are some Northern industrial towns however which are hell holes and contain streets of broken empty houses.
The high price "ripple" has spread out from London and has reached most parts of the UK ... so it is VERY difficult to find a low priced rural house anywhere now.
The fashion for second/holiday homes also has increased prices outside London.
The hints that rural land may one day be released for building houses is also distorting the situation ... people with small amounts of land are not selling just in case they can build houses on it in a couple of years and make a fortune. This makes finding a low cost smalholding to buy very difficult.
Smallholdings are also difficult to find because of the "horsey set" ... any land (or house with land) with 3 - 5 acres is snapped up so that young Jemma can have somewhere to keep her pony.
If UK house prices ever plummet then there will be lots of pain ... _________________ Technology will save us!
Posted: Thu Jul 13, 2006 1:42 am Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
Quite frankly I don't care about the pain it will cause home owners who are relying on capital gains in property. I think it's better of these people to suffer and lose out and then allow the people who have been saving up money and renting a chance to buy a home. Young people getting into large debt just to own their own home is just prolonging the problem, new home buyers should just say "enough is enough, housing is too expensive, I am going to rent and if house prices come down, then I may buy". _________________
Man's like a candle in a candlestick,
Made up of tallow and a little wick;
Posted: Thu Jul 13, 2006 1:58 am Post subject: Re: (UK) 'City faces meltdown if debt crisis hits'
Dukat_Reloaded wrote:
They are just an island that must have their food imported, energy imported, materials imported and in return I don't know what they export, besides paparazzi photographs of the royal family.
Music. Not kidding. Music the main export of the UK.
Anyway, the UK isn't the only country that will be screwed when the economy crashes. When I look at Spain, there is a similar housing bubble. Haven't been following much debt but I've heard it's happening all over Europe (but maybe the UK is the worst case). And Spain may not need to import food, but certainly has practically no energy of its own (they went hydro big time a long time ago because it's about the only source of energy that is available locally, plus some coal). And all it exports is tourism and fruit, but what really balances the sheets is tourism. Any guesses what's going to happen to tourists when TSHTF?
The UK faces a cultural crisis if the government does not set up tax breaks to prevent important art going overseas, a government body has warned.
The government must work with the art trade and collectors to make sure important arts stays in the country, said Sir John Guinness, the chairman of the reviewing committee on the export of works of art.
"The objects that have been temporarily kept here, but then exported, invariably through lack of funds, greatly outnumber those that have been saved," Sir John told The Times.
Owners were tempted by the huge prices being offered by overseas buyers and the crisis could only escalate, he warned.
So England also has a booming export market in terms of selling off its cultural heritage. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
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