Re: Don't bother saving for your retirement : Thu Nov 14, 2013 12:01 pm  

Mintball wrote:

:D

It hardly takes a rocket scientist to see that there's another bubble/crash coming, since none of the conditions that caused the 2008 crash have particularly altered, but since most economists and politicians don't seem capable of seeing it or don't want to see it, a sane voice is welcome.

After all, you would think, wouldn't you, that no government would actively contribute taxpayers' cash toward another housing bubble?

Absolutely, but its ok because thats not what they are doing, they've called it a different name and so its all ok.

Truth is that without the money going around in circles then no-one makes any more money, so it goes around and around again and again and then it goes "pop" again like endless games of musical chairs where some kids get hurt and some kids get all the prizes.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 12:59 pm  

JerryChicken wrote:

Absolutely, but its ok because thats not what they are doing, they've called it a different name and so its all ok.

Truth is that without the money going around in circles then no-one makes any more money, so it goes around and around again and again and then it goes "pop" again like endless games of musical chairs where some kids get hurt and some kids get all the prizes.

Aye.

Mind, on only a slightly different note, it's wryly amusing to see some economists and commentators, in the last few years, finding themselves musing that, after all, Marx might not have been entirely wrong.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 1:29 pm  

Mintball wrote: Aye. Mind, on only a slightly different note, it's wryly amusing to see some economists and commentators, in the last few years, finding themselves musing that, after all, Marx might not have been entirely wrong. There have also been calls to change the economic curriculum in schools and colleges (or universities as they are wont to call themselves - The Royal Agricultural University doesn't have the same ring), they are still teaching free-market economics as the only way, despite the numerous occasions in the past where socialism has had to rescue the market from itself. Owen Jones writes on the role of the state in Today's Indy. Thankfully he has the grace to credit Economics professor Mariana Mazzucato and her excellent book "The Entrepreneurial State"

Mintball wrote: Aye. Mind, on only a slightly different note, it's wryly amusing to see some economists and commentators, in the last few years, finding themselves musing that, after all, Marx might not have been entirely wrong. There have also been calls to change the economic curriculum in schools and colleges (or universities as they are wont to call themselves - The Royal Agricultural University doesn't have the same ring), they are still teaching free-market economics as the only way, despite the numerous occasions in the past where socialism has had to rescue the market from itself. Owen Jones writes on the role of the state in Today's Indy. Thankfully he has the grace to credit Economics professor Mariana Mazzucato and her excellent book "The Entrepreneurial State"

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 1:35 pm  

Mintball wrote:

:D

After all, you would think, wouldn't you, that no government would actively contribute taxpayers' cash toward another housing bubble?

The "Help to Buy" scheme has SUB-PRIME writ large all over it. The sensible answer is not to help people get into ever more debt, it is to help reduce the price of the desired item (a house) to an affordable level. That can only be done with a massive building programme.

It's worth a look at last night's Newsnight on iPlayer. Professor David Blanchflower (ex member of the BoE Monetary Policy Committee) was on and basically said that the whole of the miniscule UK "recovery" is built on debt and it wouldn't take much of a shift in economics to bring the whole down around our ears again.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 1:44 pm  

cod'ead wrote:

The "Help to Buy" scheme has SUB-PRIME writ large all over it. The sensible answer is not to help people get into ever more debt, it is to help reduce of the desired item (a house) to an affordable level. That can only be done with a massive building programme.

It's worth a look at last night's Newsnight on iPlayer. Professor David Blanchflower (ex member of the BoE Monetary Policy Committee) was on and basically said that the whole of the miniscule UK "recovery" is built on debt and it wouldn't take much of a shift in economics to bring the whole down around our ears again.

One sensible answer would be to stop interest relief being avaiable in respect of funding residential property purchases. There is a huge market distortion - individuals borrowing to buy a home don't get relief but buying to let or via an offshore company allows interest to be offset against rental income arising as you suddenly have a property lettings "business." Why is it socially desirable for a few people / companiesc to own multiple properties? If it is, why should they be allowed tax relief, which effectively subsides them? It's effectively the same as the power companies / railways - taxpayer subsidy for a relatively to make gain at the expense of a captive mass market.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 3:21 pm  

cod'ead wrote:

The "Help to Buy" scheme has SUB-PRIME writ large all over it. The sensible answer is not to help people get into ever more debt, it is to help reduce the price of the desired item (a house) to an affordable level. That can only be done with a massive building programme.

This is true, its pure supply and demand theory in practice.

There is one thing that puzzles, nay annoys me more than anything and if I were Prime Minister would be the first issue to be addressed - that of the lenders attitude to long term investments, such as house mortgages.

It probably wasn't always the case when only mutual societies would lend against properties but it seems during the Thatcher recessions and to a lesser extent this one, that mortgage providers are quite happy to shelve any pretense that lending against property is a very long term investment (25 to 30 years) and immediately put pressure on the borrower to repay or get out of the property as soon as they experience problems not of their making, redundancy for instance.

Most mortgagees WANT to work and they actively WANT to continue paying their mortgage in order to chase the dream of asset ownership, we've been told for a couple of generations now that its the way to go, and any lender who lends against a property value should have the nounce to understand the market and to have knowledge of the value of THEIR asset whether or not they own 95% or just 10% of it - so why can't they support their borrowers through periods of recession in what is normally just a few years out of a repayment period of many ?

To speak up for Nationwide here I was very pleased with their reaction a few years ago when my wife was out of work and I rang to see if there was any way that we could reduce our mortgage repayments even for a short while, they simply extended the term thus dropping the monthly repayment - now I aren't stupid enough to think that they aren't screwing at least five more years worth of interest out of me but now that the good times are returning (chortle) its up to me to overpay now and reduce that term again - sensible win/win solution from a lender who is still based on the mutual blueprint of lending for housing - if I happened to be a 25 year old struggling it may have been different but really need not be as the 25 year old should have at least 40 more employment years left in which to extend a repayment loan against the value of a property ?

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 6:40 pm  

Mintball wrote: Hidden in reports of David Cameron's announcement of permanent austerity, comes this little gem: "The Prime Minister said the biggest threat to the cost of living was if Britain allowed its debts to get out of control, driving up interest and mortgage rates." If this is correctly reported, then Cameron is saying that interest rates need to stay low. So, how will that encourage anyone to save? Besides, house prices are on the rise again anyway, but it's difficult to see how, even if interest rates were to rise, that would change much, given the rate at which interest presently is and the rates at which the likes of transport and fuel costs are going up. Presumably, his 'point' is that interest rates need to stay low to encourage people to spend. Now I could be wrong, but hasn't everyone decided that cheap credit was a bad thing, and didn't even Cameron's Tories suggest that the economy needs rebalancing? Have they not also suggested that saving is a positive thing to do? Or was that all rhetoric, as opposed to the 'truth', as fed to him by big business and big finance? Such a shame that amongst all the good news on the economy this week, falling inflation, falling unemployment you chose to take a snippet of a speech from David Cameron and try to twist it into a negative to pursue your anti capitalist agenda - as evidenced by the final sentence in your rant. But to address your 'point'. Prudent people will save for retirement and make pension provisions as soon as they can - despite what interest rates are doing.

Mintball wrote: Hidden in reports of David Cameron's announcement of permanent austerity, comes this little gem: "The Prime Minister said the biggest threat to the cost of living was if Britain allowed its debts to get out of control, driving up interest and mortgage rates." If this is correctly reported, then Cameron is saying that interest rates need to stay low. So, how will that encourage anyone to save? Besides, house prices are on the rise again anyway, but it's difficult to see how, even if interest rates were to rise, that would change much, given the rate at which interest presently is and the rates at which the likes of transport and fuel costs are going up. Presumably, his 'point' is that interest rates need to stay low to encourage people to spend. Now I could be wrong, but hasn't everyone decided that cheap credit was a bad thing, and didn't even Cameron's Tories suggest that the economy needs rebalancing? Have they not also suggested that saving is a positive thing to do? Or was that all rhetoric, as opposed to the 'truth', as fed to him by big business and big finance? Such a shame that amongst all the good news on the economy this week, falling inflation, falling unemployment you chose to take a snippet of a speech from David Cameron and try to twist it into a negative to pursue your anti capitalist agenda - as evidenced by the final sentence in your rant. But to address your 'point'. Prudent people will save for retirement and make pension provisions as soon as they can - despite what interest rates are doing.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 6:45 pm  

JerryChicken wrote:

So he was warning about a crash for five years before it happened ?

Let me start predicting here and now that there will be another financial crash just like the one in 2007/08 at some point in the future, I'll repeat this prediction four times a year until it becomes true.

Meantime, there will be another natural disaster like the typhoon in the Philippines, some time...

Indeed. Boom and bust is part of a normal economic cycle and there will no doubt be a bust again.

Hence why it was a ridiculous statement and one which was always going to come back and bite him when Brown claimed 'no more boom and bust'.

What needs to happen is that a country needs to be in the best position possible when the bust happens. Labour gave us a great example of how not to do this pre-2008 by building up deficits in boom years and overspending. This is why the Tories are more trusted on the economy and probably will be for the foreseeable.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 6:52 pm  

Ajw71 wrote:

Such a shame that amongst all the good news on the economy this week, falling inflation, falling unemployment you chose to take a snippet of a speech from David Cameron and try to twist it into a negative to pursue your anti capitalist agenda - as evidenced by the final sentence in your rant...

I have an "anti capitalist agenda" [sic], do I?

Evidence, please.

And not just evidence of where I think that the current way that capitalism is going is wrong/geared against the majority etc.

I suggest you find places where I've declared myself, for instance, a 'socialist' (I'll give you a clue – I haven't) and where I've called for revolution etc etc.

And for goodness sake – time and again you've had your backside handed to you over your fawning, desperate attempts to claim that there is a meaningful recovery.

Ajw71 wrote:

But to address your 'point'. Prudent people will save for retirement and make pension provisions as soon as they can - despite what interest rates are doing.

People's ability to do that will be hampered by the rising cost of living and 30 years of declining wages.

When you're grown up you may come to understand this.

Re: Don't bother saving for your retirement : Thu Nov 14, 2013 7:03 pm  

Ajw71 wrote: What needs to happen is that a country needs to be in the best position possible when the bust happens. Labour gave us a great example of how not to do this pre-2008 by building up deficits in boom years and overspending. This is why the Tories are more trusted on the economy and probably will be for the foreseeable. Oh yes, we all agree, including this fekkwit ... http://news.bbc.co.uk/1/hi/uk_politics/6975536.stm

Ajw71 wrote: What needs to happen is that a country needs to be in the best position possible when the bust happens. Labour gave us a great example of how not to do this pre-2008 by building up deficits in boom years and overspending. This is why the Tories are more trusted on the economy and probably will be for the foreseeable. Oh yes, we all agree, including this fekkwit ... http://news.bbc.co.uk/1/hi/uk_politics/6975536.stm