10 years since the start of the financial crisis.
Discussion
BMWBen said:
rufusgti said:
/snip bunch of interesting stuff
It does sound like the last 10 years have been good to you. On your point about how the young might not be hard done by, where do you think the money that has led to the increase in value of the homes you've bought has come from?Don't forget the first house I bought in 2007 is still worth less today. Not all areas have seen house price inflation.
loafer123 said:
MG CHRIS said:
Willy Nilly said:
loafer123 said:
BlackLabel said:
So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?
We are turning Japanese.I really think so.
At least we don't have a falling population.
I love Japan and have been a few times...there are worse outcomes.
https://www.ons.gov.uk/economy/economicoutputandpr...
This leads one to see any growth as potentially part of another bubble (as fuelled by consumer credit, car credit for example). In that regard I don't know if we are that comparable to the Japanese as 1) we don't give a s
t about making sure people have some form of job in society, like the servile roles they give people to make sure everyone has some form of job, 2) our productivity is pretty poor so we have plenty of scope for improvement just to catch up with most of our industrial peers.rufusgti said:
Where's it come from? Not 100% sure as I'm no economist. I'd say though, that it's most likely come from people ploughing savings into btl and pushing the lower end up. Along with boomers helping youngsters with big deposits. And also from inheritance money. Some will have come from the younger generations also.
And two people's wages is now the norm. And foreign investment. And low interest rates facilitating cheap mortgages. And...(I guess) inflation (? IANAE)Edited by PBDirector on Thursday 10th August 22:23
NJH said:
The problem for me is our very low to non-existent productivity growth.
https://www.ons.gov.uk/economy/economicoutputandpr...
This leads one to see any growth as potentially part of another bubble (as fuelled by consumer credit, car credit for example). In that regard I don't know if we are that comparable to the Japanese as 1) we don't give a st about making sure people have some form of job in society, like the servile roles they give people to make sure everyone has some form of job, 2) our productivity is pretty poor so we have plenty of scope for improvement just to catch up with most of our industrial peers.
We are increasingly making people work to get benefits in the same way as the Japanese, of course.https://www.ons.gov.uk/economy/economicoutputandpr...
This leads one to see any growth as potentially part of another bubble (as fuelled by consumer credit, car credit for example). In that regard I don't know if we are that comparable to the Japanese as 1) we don't give a s
t about making sure people have some form of job in society, like the servile roles they give people to make sure everyone has some form of job, 2) our productivity is pretty poor so we have plenty of scope for improvement just to catch up with most of our industrial peers.I am dubious about productivity stats...I don't think they get the services sector right. That view is backed up by our perfectly sensible GDP per capita rankings on a PPP basis, on which basis we are just above Japan.
There is also the point that this has been achieved at a time when the population has been rising rapidly, whilst theirs is declining.
I am not saying everything is rosy in the garden, but tales of impending doom are equally overblown.
loafer123 said:
MG CHRIS said:
Willy Nilly said:
loafer123 said:
BlackLabel said:
So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?
We are turning Japanese.I really think so.
At least we don't have a falling population.
I love Japan and have been a few times...there are worse outcomes.
loafer123 said:
NJH said:
The problem for me is our very low to non-existent productivity growth.
https://www.ons.gov.uk/economy/economicoutputandpr...
This leads one to see any growth as potentially part of another bubble (as fuelled by consumer credit, car credit for example). In that regard I don't know if we are that comparable to the Japanese as 1) we don't give a st about making sure people have some form of job in society, like the servile roles they give people to make sure everyone has some form of job, 2) our productivity is pretty poor so we have plenty of scope for improvement just to catch up with most of our industrial peers.
We are increasingly making people work to get benefits in the same way as the Japanese, of course.https://www.ons.gov.uk/economy/economicoutputandpr...
This leads one to see any growth as potentially part of another bubble (as fuelled by consumer credit, car credit for example). In that regard I don't know if we are that comparable to the Japanese as 1) we don't give a s
t about making sure people have some form of job in society, like the servile roles they give people to make sure everyone has some form of job, 2) our productivity is pretty poor so we have plenty of scope for improvement just to catch up with most of our industrial peers.I am dubious about productivity stats...I don't think they get the services sector right. That view is backed up by our perfectly sensible GDP per capita rankings on a PPP basis, on which basis we are just above Japan.
There is also the point that this has been achieved at a time when the population has been rising rapidly, whilst theirs is declining.
I am not saying everything is rosy in the garden, but tales of impending doom are equally overblown.
You may be right about the stats being blinkered, there is of course the bigger picture that economic policy is perhaps being driven by increasingly outdated and discredited models and stats.
Population growth may of course may be one of the key factors for why we have had economic growth i.e. we just made the economy bigger by adding people to it.
I am certainly positive, I am an Engineering Manager by trade and deal with quite a few companies across the UK in the aerospace/defence market. I see issues specific to some of those companies but incredible opportunities, aerospace and engineering services in particular. Many people have missed just how much the world has shrunk over the last 20 years, and the last 10 in particular, it happened and we are still catching our breath before properly exploiting it.
Mrr T said:
Look at the figures at some point matters in Japan will turn very nasty. Debt to GDP is 234% and rising, compared to Greece which is only 181%. Falling and aging population means that today only the BOJ is on the buy side for Gov’s. At some point default is inevitable.
The historical argument is that "Mrs Wanatabe", i.e. your stereotypical Japanese investor, would support the value of their bonds because they owned such a substantial proportion, but that has been changing more recently and the Japanese central bank has been buying a greater proportion to maintain inflation and keep interest rates low. They still have alot of zombie debts, so this is an important issue for them.Nevertheless, as such a high proportion is owned domestically and they can always just print their way out, default is unlikely. The BoJ already has assets (includes some shares, but mostly bonds) worth 90% of their GDP, so you could regard their net liability as being around 145% of GDP.
The other issue is over a declining population. Debt:GDP is the measure you rightly use, but the Japanese would argue that automation and robotics will enable them to maintain their GDP in spite of a declining population, meaning debt service and the Debt:GDP ratio do not further deteriorate.
There are also interesting parallels with our own QE, albeit to a much lesser extent. Our headline Debt:GDP is 89.3%, but of that, around 25% is owned by the Bank of England, so the net liability is 67%. Of course, there are also substantial PFI liabilities which are not in that number.
ruggedscotty said:
It will happen again, not to good this and were heading for another recession.
A recession sounds terrible and scary but GDP going down 0.1% two quarters in a row would be a recession. So everyone gets upset about it, but the vast majority of the economy is still going along pretty good. Why does everything have to be a disaster and how is the economy expected to keep growing forever? Obviously it is going to go down every now and again, everyone just needs to chill out about it
Edited by rossmc88 on Friday 11th August 12:49
Rovinghawk said:
Could you expand on that a little, please?
Simple example is two of our local defence firms, one is part of a large multi-national, the other a smaller parent company but both foreign owned (one French the other German). Going back about 10 years it looked really bleak for both sites, UK government funded R&D had dwindled to scraps, no real new projects. Currently both are recruiting heavily one of them in particular surprisingly well growing about 100% (our rough knowledge of head count) by basically selling like crazy to all 4 corners of the world, which in turn creates the space to do more R&D again. I guess what I am saying is that we are used to buying components and assemblies from all over the world but not necessarily selling back the other way, especially companies and industries that have had a very local focus often with a very small customer list.rufusgti said:
BMWBen said:
rufusgti said:
/snip bunch of interesting stuff
It does sound like the last 10 years have been good to you. On your point about how the young might not be hard done by, where do you think the money that has led to the increase in value of the homes you've bought has come from?Don't forget the first house I bought in 2007 is still worth less today. Not all areas have seen house price inflation.
Where I am you need at least 30 grand as a deposit to get something, and although I do earn a decent wage, the idea of being able to do that multiple times from savings seems rather remote!
BMWBen said:
rufusgti said:
BMWBen said:
rufusgti said:
/snip bunch of interesting stuff
It does sound like the last 10 years have been good to you. On your point about how the young might not be hard done by, where do you think the money that has led to the increase in value of the homes you've bought has come from?Don't forget the first house I bought in 2007 is still worth less today. Not all areas have seen house price inflation.
Where I am you need at least 30 grand as a deposit to get something, and although I do earn a decent wage, the idea of being able to do that multiple times from savings seems rather remote!
I'm trying to think what I was earning in 2007, I think it would have been around 27-28k the house was £112,500 and I think I'd saved approximately 25k if I remember rightly.
Obviously the next house was joint with my partner so two wages, and actually cheaper. Payed 110k for it but we had saved 55k deposit. The first is worth around £100K now and the second worth around 185k. Area is very important!
Edit to add, yes it's nothing like the south east of England. I feel for anyone who has to live there and struggle to get on the ladder. But at the same time, the U.K. Is a big place and an awful lot of it is very affordable and very pleasant. But it's not as easy as that for everyone. I moved around as a kid so moving around didn't bother me too much as a young man.
Edited by rufusgti on Friday 11th August 18:49
rossmc88 said:
Yeah everyone keeps comparing everything to the past, the future is new/different, its not like it was before
Yeah I remember that chap Gordon, who announced he'd abolished boom and bust.....People have short memories and we often fail to learn from the past, quite often the phrase there is nothing new under the sun is apt, the same mistakes and miscalculations caused by the "human condition" that afflicted previous generations will continue to happen over and over again in the future.
PBDirector said:
grumbledoak said:
No. Nothing was allowed to fail. So the whole system just got would back up even harder and left to toddle on, hoping that the low interest rates and the property bubble would somehow pay it all off. And it won't. The next bang will be bigger.
Note for anyone who's as daft now as I was In 2000: I listened to advice exactly like this and declined to buy a 4 bed detached house for £110k that recently sold for £475k.Different times tho , it's all feeling a bit knife-edge currently .
it all depends on ones situation at the time,a few of my old friends were buying in the late 80's ,early 90's.
1 bed studio flat in suburban east London,100k,i thought they were crazy and I couldn't really afford it then besides I was too busy enjoying myself.
there seemed to be a ramped up frenzy that if you didn't buy then it would be out of reach very quickly.
then the first crash happened and prices corrected,bought a gnd fl 2 bed flat for 26k albeit further out around woodford area so would be cheaper anyway.my wife had a small property in deepest Essex and we managed to sell both in about 4 months making a reasonable profit.
then bought our now current 3 bed semi in Essex in a desirable area for 110k in 1998 just before it started to go silly again,now probably worth around 400k.
I've seen 2 'crashes' or corrections now and I expect another to come along soon,so if you don't need to really buy now I would sit it out.
1 bed studio flat in suburban east London,100k,i thought they were crazy and I couldn't really afford it then besides I was too busy enjoying myself.
there seemed to be a ramped up frenzy that if you didn't buy then it would be out of reach very quickly.
then the first crash happened and prices corrected,bought a gnd fl 2 bed flat for 26k albeit further out around woodford area so would be cheaper anyway.my wife had a small property in deepest Essex and we managed to sell both in about 4 months making a reasonable profit.
then bought our now current 3 bed semi in Essex in a desirable area for 110k in 1998 just before it started to go silly again,now probably worth around 400k.
I've seen 2 'crashes' or corrections now and I expect another to come along soon,so if you don't need to really buy now I would sit it out.
Lots in the news about this at the moment. Are things really as bad as some are suggesting?
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