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Euro Prediction Thread

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JMOT said:
Edwin they are up to their eyebrows in it tho with their exposure. Its too late to get out or hedge anything to limit their losses. They lent money with borrowed money that was borrowed and borrowed again.
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Reminds me of one of those property workshops popular in the early 2000's at the height of the property bubble when they said 'buy off-plan homes at cheap rates using other peoples money'.

Fine when your investment increases to a capital worth more than the debt. Not when the investment is junked and the other people want their money back!
 
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JMOT said:
Edwin they are up to their eyebrows in it tho with their exposure. Its too late to get out or hedge anything to limit their losses. They lent money with borrowed money that was borrowed and borrowed again.
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Not exactly. Exposure down 13% in the last 12 months (to the whole of the "shaky group" of countries - probably far more than that to Greece alone) and from other accounts I've read they're reducing it still further just about as fast as they can write stuff down...
http://www.thisismoney.co.uk/money/news/article-2154574/Banks-step-plans-possible-break-euro.html

In other words, it will hurt lots - but with every passing day it will hurt a little tiny bit less...
 
Thats a bit like saying every day we leave amputating your rotten leg off the less real flesh there is to feel the pain...

I think we're in agreement :)
 
The outstanding difference between our current recession and past recessions is that property prices have generally held up in the UK, they have been underpinned by low interest rates and increased benefits for rental housing ( In past recessions you would have expected prices to fall by as much as 30% ) and I think this is the largest contributory factor as to why our economy has not nosedived over the edge of a cliff. Other countries have seen property prices fall by as much as 70% and this is almost armageddon levels for individuals who are highly vested in property aswell as with the banks that have loaned recklessly. Property prices here are now at an inconceivably high level for recessionary circumstances, but hopefully, though not certainly, will defy the historic economic laws of recession and help to land us safely the other side of these worrying times. We are not immune to the domino effect of other countries defaulting but we are less exposed to the problems that we had domestically in the 80s. A lot of course depends on the spirit and tolerance of the people and you can gauge the likelyhood of the public to accept long periods of low growth and austerity and my view is that generally the UK population will support the governments measures and avoid a downgrade of our credit rating, and while that's not a cure for the problems we face it avoids us slipping backwards.
 
websaway said:
The outstanding difference between our current recession and past recessions is that property prices have generally held up in the UK, they have been underpinned by low interest rates and increased benefits for rental housing ( In past recessions you would have expected prices to fall by as much as 30% ) and I think this is the largest contributory factor as to why our economy has not nosedived over the edge of a cliff. Other countries have seen property prices fall by as much as 70% and this is almost armageddon levels for individuals who are highly vested in property aswell as with the banks that have loaned recklessly. Property prices here are now at an inconceivably high level for recessionary circumstances, but hopefully, though not certainly, will defy the historic economic laws of recession and help to land us safely the other side of these worrying times.
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Not sure where you live but in my experiences that's not the case.

My parents' house value has dropped by about 40% (north west).

My house value dropped by about 10% (east midlands, where property prices have never moved much in either direction anyway because they are so cheap to start with).

My dad bought a shop and flat pre-recession for £200k(ish) which was a massive bargain. He's spent at least 50k doing it up, yet it's worth less than when he bought it in 2007/8ish. He rented the restaurant out to a guy who then went bust and literally ran away with his family after defaulting on rent for months. He put it up for auction with a starting price of 150k and yet didn't get a single bid, even though the flat is rented. It's been on the estate agents' books for forever. He has other shops that he's trying to sell and had several interested buyers, none of whom ever manage to get the bank's support to be in a position to actually follow through.

My dad is completely screwed because his tenants (commercial & residential) can't afford to pay and there's no one to replace them and actually keep up with payments even if he could find other people and had the heart to kick young families out of their homes. His staff are stealing from the tills. He had one member of staff take him to court over unfair dismissal; this guy tried exactly the same thing with 3 other employers just to get some money. This is a guy who begged my dad for a job because he'd otherwise have been homeless.

People who used to get full-blown family takeaways from shops on a regular basis now ask if they can buy pizza by the slice or share a portion of chips between 3.

My dad himself is working 12 hour days plus, including ripping out and fitting kitchens, bathrooms, remodelling flats, all physical work etc. etc. at 62 as he's always done; he wants to cut back but there's no way he can afford it.

It's hard out there. I think it's easier for people in technology sectors at the moment, but this stuff with HP worries me because it's the first sign that technology is being significantly affected.
 
Hey Blossom, a bit like the saying a recession is when people are losing their jobs, a depression is when I'm losing mine.

I was generalising when I said UK property prices have held up.
 
central london house prices are whats holding up the average price in the UK.

As soon as rich investors stop buying up property here because they think the UK is a safe haven for their money it will all come tumbling down as there will be nothing left to fudge the figures with.

More smoke and mirrors.
 
JMOT said:
central london house prices are whats holding up the average price in the UK.

As soon as rich investors stop buying up property here because they think the UK is a safe haven for their money it will all come tumbling down as there will be nothing left to fudge the figures with.

More smoke and mirrors.
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Yes I agree, it's the same with any investment vehicle.

How could it be different ?

My point is that if average house prices hadn't held up, for whatever reason, we would not as a nation be looking at riding out this recession.
 
JMOT said:
central london house prices are whats holding up the average price in the UK.

As soon as rich investors stop buying up property here because they think the UK is a safe haven for their money it will all come tumbling down as there will be nothing left to fudge the figures with.
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Why will they stop buying? Plenty of overseas money still rushing into the UK market, and with other places looking worse and worse by the day...
 
Edwin said:
Why will they stop buying? Plenty of overseas money still rushing into the UK market, and with other places looking worse and worse by the day...
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because whats keeping central london prices high is rich investors are using it as a hedge. if the euro breaks up london will most likely see a rise in prices as even more rich investors use it as a safe haven for their wealth. What will happen then is once the other euro nations currencies have been greatly devalued there will be nothing to keep the money in london and it will be re-invested in a land grab elsewhere in the EU for greater longterm gains.
 
JMOT said:
because whats keeping central london prices high is rich investors are using it as a hedge. if the euro breaks up london will most likely see a rise in prices as even more rich investors use it as a safe haven for their wealth. What will happen then is once the other euro nations currencies have been greatly devalued there will be nothing to keep the money in london and it will be re-invested in a land grab elsewhere in the EU for greater longterm gains.
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a lot of undefined assumptions in coming to that conclusion.
 
Edwin said:
Why will they stop buying? Plenty of overseas money still rushing into the UK market, and with other places looking worse and worse by the day...
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If sterling goes up enough and others go down enough, it would make sense to cash in, sell London and buy Paris or New York. Probably.
 
I actually feel England can get out of the group stages in second place but beyond that I don't see much hope for us unfortunately. I really fancy Germany, France, Spain and Netherlands for the semi-finals. If I was a betting man that would certainly be my bet at least.. :)
 
domainmandave said:
I actually feel England can get out of the group stages in second place but beyond that I don't see much hope for us unfortunately. I really fancy Germany, France, Spain and Netherlands for the semi-finals. If I was a betting man that would certainly be my bet at least.. :)
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Pick your teams better than your thread tho ;)
 
Edwin said:
Why will they stop buying? Plenty of overseas money still rushing into the UK market
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You can say that again, every Greek I know with money is moving it out of Greece and into UK (mainly London) property. Some of my old Arab friends are doing that too.

Not sure what I should do with my savings. Hang on - problem solved - you can't buy any property for £12.63! Not even a flight home! :shock:
 
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