MoneyWeek RSS - Comments

Our man in London

Sun, 12 Feb 2012 13:05:18 GMT

@131 Ha ha! Nice try d.andre, but if you can't sell your £500,000 house in Kennington, I suggest you cut the price significantly (30-40%) if you want to bail out of London property. It's all 'for sale' signs in so-called up-market parts of London.

PattiA

Sun, 12 Feb 2012 12:29:34 GMT

I was reading a thoughtful analysis of the US housing market only yesterday which reached a similar conclusion to that of Professor Schiller. The analysis looked at employment in the US and I found this section to be very revealing.

"In addition the US Bureau of Labor Statistics has done its own analysis of this recession and compared it (unfavourably) to the past.

In contrast, 47 months after the start of the most recent recession (November 2011), employment was still over 4 percent lower than when the recession began.

Put another way non-farm employment peaked at 138 million in January 2008 and then fell to 129 million in February 2010 but has only risen back to 132 and a half million"

http://www.mindfulmoney.co.uk/wp/author/shaun-richards/

So there you have it employment has not improved much and so how will buy the houses to kick-start things? If you argue the other way round you hit the same problem...

cdchi1

Sun, 12 Feb 2012 12:13:53 GMT

I am definitely a big fan of the fundamentals of graphite over the next few years!

Curious about how you found out about Syrah Resources though, given its a fairly obscure little company in Australia. I am a shareholder and reckon you've spotted a beauty...just a bit surprised that you picked up on it.

d.andre

Sun, 12 Feb 2012 11:29:28 GMT

Well my advice will be to find a nice young lady to share your life and your mortgage, and I will recommend Kennington.
It is so underrated and you can get a nice small house for under 500,ooo. There is an area near the old Lambeth hospital where there are new houses ; it is nice and quite away from any main roads.
I am sure you can find something there. Lots of MPs live round there!

Gary Cook

Sun, 12 Feb 2012 04:15:30 GMT

I think Moneyweek are trying to talk the UK Stock Market down and Tim Price is a King Bear who is probably shorting the market,while the US will always control the worlds stock markets,who cares if Greece defaults.Not the UK,s problem.Look at comments by Jim O,Neill of Goldman Sachs and others.

sancho panza

Sat, 11 Feb 2012 23:20:46 GMT

Another question is: For how long will people continue to put up with this?

Will they continue to endlessly vent their spleen in comment columns about the injustice and exploitation of the system - (the easy not- to-say fruitless response) - or will they miraculously realise this is getting them nowhere and decide on a more direct approach?

Will they have to wait until they reach a Greek-type crisis and hope for the backing of the police, whose powerful union yesterday announced "that its members refused to "stand against our parents, our brothers, our children or any citizen who protests" and threatened to arrest members of the troika – officials from the EU, the ECB, and the IMF – for "blackmail, covertly abolishing or eroding democracy and national sovereignty".

sancho panza

Sat, 11 Feb 2012 23:20:31 GMT

Boris MacDonut

Sat, 11 Feb 2012 22:37:55 GMT

Greeks are culturally pre-disposed to not tell the truth or pay taxes. They don't trust each other, so are unlikely to trust outsiders offering solutions.
The only country in the EC without a Land Registry and with no official body responsible for monitoring national debt, Greece is effectively a third world economy that used cheap German loans to create a pretence at being a modern democracy. It is sad, but the Greeks are simply waiting for someone else to come and run the place for them. Then they can target their ire on their new masters.

Paul from Worthing

Sat, 11 Feb 2012 21:43:59 GMT

We escaped London 4 years ago to get better schools and have been renting in Worthing. But just decided to buy.
Why? I gave all my best arguments to an estate agent for why house prices were still going to fall (recession coming, interest rates going to rise, historical ratio between average earnings and house prices), and he countered them all with another one. There is simply nowhere else for the relatively rich (top 20%) to put their money. Forget about saving (low interest rates) or shares (too risky). But buy a house and let it out: now there's a way to maintain your capital - even if it doesn't appreciate much - and get some income. So there are hundreds of thousands of forced 'buy to letters' ready to put a floor under the market.
This has serious implications. We are going to quickly transition from a property-owning society to a renting society. And the division between the owners and the renters is going to be very big (and generational).

NR

Sat, 11 Feb 2012 21:31:01 GMT

Oh, and remember no one holds gold for ever - at some point you want to use the stuff to do something with it, such as buy a house. When that happens, what happens to house prices, especially if a number of gold/silver bugs do it at the same time?

NR

Sat, 11 Feb 2012 21:27:53 GMT

OK, my two cents worth. I feel gold and silver are being talked up using fear mongering. Yes, fiat currencies are not the place to be, but then neither is gold, as it has no use or income stream. It is as subject to the dangers of optimism raising its ugly head!

I have a candian friend who preached gold and silver (especially silver) to me about 9-10 years ago. Sure, I could have invested and made money in that. However, I made a lot more by investing in a flat on borrowed money which saved me rental income, makes me an indexed stream on rental now as a rental property and has gone up in value on the leveraged amount I initially put in. And I have paid it off, so it is net income that has become part of my pension.

By the way, my canadian friend also sold off quite a bit of his silver to buy a house in canada around 2006/7. He decided it was a good buy, knew the people who built it and thought of it as a long term buy for his family.

Nikwil

Sat, 11 Feb 2012 21:04:01 GMT

The whole of the article and majority of comments relate to - yes the centre of the universe. London. That godforsaken overpriced over populated,crime ridden hell hole that is the south of England.
I would suggest that some of you try different UK areas to earn a living and buy, you may find that cheaper houses and a better quality of life are well worth the move. Where I live if you don't drop the asking price you don't sell, and plenty do sell - at sensible prices - that is the situation in the real world ex London!
In a few months time when that other pantomime (Olympics) starts you may have difficulty paying both rent / mortgage owing to "transport issues". Get a life get outa there!

bengt

Sat, 11 Feb 2012 20:26:59 GMT

Tony
Very good question. I.e. what do you pay in financing for your spread bet.

Strangely enough right now it needn't cost you anything. The March future on silver trades at much the same as the spot silver price. (It has been trading lower too - something called backwardation).

On other positions, from what I can see, the spread bet companies work on an implied finance charge of around 2%p.a.

Seems very reasonable to me...

But where they'll often 'get you' is if you use over-leveraged positions. That is you can't keep up margin payments and get prematurely closed out. In that case the house always wins!

Only use spreadbetting if you have deep pockets and can keep up with margin payments when the bet goes the wrong way.

Also watch out for roll-over charges - especially where there's a wide margin.

Bengt

Dinu

Sat, 11 Feb 2012 19:57:44 GMT

Many people are aware that the Governments are trying to devalue their currencies and QE is the tool they think is the only answer.Obviosly the consequences of it for the ordinary folks and savers are higher inflation & low returns on savings.
What I dont understand is why do the Bankers or anyone else have to be given Bonuses.When a person is employed theyare required to a good job (like all employees) & the employees agree to do so.And they receive appropriate remuneration.If not they would not take the job.So why bonuses?
Regards Goowin,King,etc. what is it about UK that we are so hung up on Titles.Is it the idea to create divisions in the Society?Other countries seem to be doing ok without this anti-democratic tradition.Are we the only modern country to follow this unequal
system?Doctors.Nurses,Teachers,Engineers,etc essential to the Societyare doing good work without Titles.
Like many others I am becoming a cynic & I dont like it.

Neil

Sat, 11 Feb 2012 19:51:26 GMT

Dominic
The reason houses have accrued value over the years is due to the devaluation of the pound, they are printing billions of pounds devaluing the currency further. If you buy now then it is presumable there will be a dip when interest rates rise and the cycle will then continue, by then you will have quite a bit of equity built up in the property you own, the price will rise exponentially when the cycle's wheel comes around again. Never in history, to my knowledge has so much money been printed, it will end up somewhere, probably back where all this malarky began. Property.

Amanda

Sat, 11 Feb 2012 19:43:04 GMT

Mr Ross is bending over backwards to buy Cosalt and take it private regardless of the private investor shareholders who will loose tens of thousands. At the very least an investigation should be carried out regarding Mr Ross's hand in the companies failings, the cashburn rate etc. Mr Ross's great interest shows this company does have a future unfortunatley a future he is unwilling to share.
www.savecosalt.com

BabyBoomer

Sat, 11 Feb 2012 18:58:19 GMT

Well we all know that the Govt has been trying to keep house prices up, but what happens when it can no longer do so?
I live 25 mins from London & there are hundreds of houses sitting empty - yet people are still hanging on... sooner or later there's going to be a stampede to the exits.

I own my own house and I don't really care what the market does - its better for a homeowner if they go down because costs will be less when you eventually move.

I don't save in a bank anymore, and I wouldnt buy to let in the UK either - the yield is less than 5% and prices are far too high.

I get a far better return from Zopa.

The financial world is undergoing a revolution. Things change, then again they always will - we're an innovative lot!

Brown's bottom

Sat, 11 Feb 2012 18:15:31 GMT

If you are a UK resident you should only consider buying sovereigns or britannias as they are the only gold not getting taxed on the capital gains. The profits you save here more than offset any premiums initially paid which shouldnt incidently be more than 10%. Buy physical and store in a safety deposit box (not a banks box).

Norma

Sat, 11 Feb 2012 18:14:11 GMT

"highly skilled bankers" !! They are hardly Einsteins, skilled surgeons or research scientists! If we are invaded by aliens, suffer a global disaster or world -wide health crisis I'm pretty sure we will not be looking to these "talented individuals" for an answer! Give the men/women who are trying to find a cure for cancer etc millions, the aid workers who risk their lives to help others etc These bankers just play with other peoples money with no risk to their own finances , give them - a Monopoly board game and let them "play" to their heart's content.

Julia

Sat, 11 Feb 2012 16:45:01 GMT

Slightly off the wall comment, but I as I was hoping for an insight into your thoughts on the property market, I was pretty disappointed to read an inarticulate piece that seemed to use the word 'hate' every other sentence. I tell my kids not to say hate and I think you should be a bit more imaginative too!!!!!!!!!!!!! It made really miserable reading.