Hi all
Somebody showed me this and I thought it was worth posting.
Funny and interesting view of UK market. Some similarities with Aust
***********
Many people have been comparing the housing market bubble to previous market bubbles such as pre-the 1929 Wall Street Crash, the 1997-2000 “tech stocks” bubble, the south sea bubble and the tulip bubble. Of course this is absurd. There are clear differences between the two, which I shall now demonstrate in a comparison between the 1929 bubble and the present housing market:
Past Bubble: Prices of stocks soared to record levels with no sign of coming down again
Present Housing market: Prices of houses soared to record levels with no sign of coming down again
Past Bubble: Everyone and his aunt got involved in the market, even the shoe shine boys were buying stocks
Present housing market: Everyone and his aunt got involved in the market, even the shoe shine boys were buying to let
Past Bubble: The market became a national obsession, with whole sections of newspapers filled with watching its every move and bestselling books written on how to get rich quick from the market
Present housing market: The market became a national obsession, with whole sections of newspapers filled with watching its every move and TV programmes made such as “property ladder”, “location location location” and “the million pound property experiment”
Past Bubble: In the early stages of the boom it was emphasised that stock values were based on fundamental underpinnings such as real companies, and at the end of the day people would always buy the products of these companies
Present housing market: In the early stages of the boom it was emphasised that house values were based on fundamental underpinnings such as real estate values, and at the end of the day people would always need somewhere to live.
Past Bubble: It became common to buy stocks on margin without having to pay the normal price
Present housing market: It became common to buy houses on 100%+ mortgages or using self certification loans without having to fill in the normal forms
Past Bubble: Then when margin wasn't enough derivatives were traded to allow investors to gear up even more.
Present housing market: Then when mortgages weren't enough off-plan deposits were traded to allow investors to cash in even quicker.
Past Bubble: In the middle stage of the boom stock prices were justified by a new paradigm
Present housing market: In the middle stage of the boom house prices were justified by a new paradigm
Past Bubble: Investment trusts were created to help people cash in on the boom without buying actual shares.
Present housing market: REITS, and SIPPS were mooted to help people cash in on the boom without buying actual shares.
Past Bubble: It was claimed there was a shortage of suitable stocks which justified both the bubble and the bringing to the market of dozens of useless new ones.
Present housing market: It was claimed there was a shortage of desirable houses which justified both the bubble and the building of tens of thousands of identikit new build Georgian style houses in Ashford.
Past Bubble: In the later stages of the boom it became more important that stocks went up, than whether they paid dividends or that they had any fundamental value whatsoever.
Present housing market: In the later stages of the boom it became more important that house prices went up, than whether the tenants paid any rent; or that they had any fundamental value whatsoever.
Past Bubble: Companies without any redeeming features, or even a business plan, came to the market and were given wildly optimistic valuations.
Present housing market: New build flats without any redeeming features, apart from being open plan, came to the market and were given wildly optimistic valuations.
Past Bubble: Biased commentators appeared in newspapers, talked up the market and denounced the naysayer's
Present housing market: Biased commentators appeared on television, talked about loft conversions, and denounced the naysayer's
Of course there are some similarities:
Past Bubble: The government did nothing for fear of causing panic.
Present housing market: The government did nothing for fear of causing panic.
Past Bubble: It was all the Federal Reserve's / Banks / Governments fault
Present housing market: It was all the Federal Reserve's / Banks / Governments fault
Past Bubble: It wasn't my own greedy self's fault
Present housing market: It wasn't my own greedy self's fault
But at the end of the day the key difference is this:
Past Bubble: The market crashed and burned, causing misery to millions.
Present housing market: The market gently slowed down, and we all lived happily ever after
Somebody showed me this and I thought it was worth posting.
Funny and interesting view of UK market. Some similarities with Aust
***********
Many people have been comparing the housing market bubble to previous market bubbles such as pre-the 1929 Wall Street Crash, the 1997-2000 “tech stocks” bubble, the south sea bubble and the tulip bubble. Of course this is absurd. There are clear differences between the two, which I shall now demonstrate in a comparison between the 1929 bubble and the present housing market:
Past Bubble: Prices of stocks soared to record levels with no sign of coming down again
Present Housing market: Prices of houses soared to record levels with no sign of coming down again
Past Bubble: Everyone and his aunt got involved in the market, even the shoe shine boys were buying stocks
Present housing market: Everyone and his aunt got involved in the market, even the shoe shine boys were buying to let
Past Bubble: The market became a national obsession, with whole sections of newspapers filled with watching its every move and bestselling books written on how to get rich quick from the market
Present housing market: The market became a national obsession, with whole sections of newspapers filled with watching its every move and TV programmes made such as “property ladder”, “location location location” and “the million pound property experiment”
Past Bubble: In the early stages of the boom it was emphasised that stock values were based on fundamental underpinnings such as real companies, and at the end of the day people would always buy the products of these companies
Present housing market: In the early stages of the boom it was emphasised that house values were based on fundamental underpinnings such as real estate values, and at the end of the day people would always need somewhere to live.
Past Bubble: It became common to buy stocks on margin without having to pay the normal price
Present housing market: It became common to buy houses on 100%+ mortgages or using self certification loans without having to fill in the normal forms
Past Bubble: Then when margin wasn't enough derivatives were traded to allow investors to gear up even more.
Present housing market: Then when mortgages weren't enough off-plan deposits were traded to allow investors to cash in even quicker.
Past Bubble: In the middle stage of the boom stock prices were justified by a new paradigm
Present housing market: In the middle stage of the boom house prices were justified by a new paradigm
Past Bubble: Investment trusts were created to help people cash in on the boom without buying actual shares.
Present housing market: REITS, and SIPPS were mooted to help people cash in on the boom without buying actual shares.
Past Bubble: It was claimed there was a shortage of suitable stocks which justified both the bubble and the bringing to the market of dozens of useless new ones.
Present housing market: It was claimed there was a shortage of desirable houses which justified both the bubble and the building of tens of thousands of identikit new build Georgian style houses in Ashford.
Past Bubble: In the later stages of the boom it became more important that stocks went up, than whether they paid dividends or that they had any fundamental value whatsoever.
Present housing market: In the later stages of the boom it became more important that house prices went up, than whether the tenants paid any rent; or that they had any fundamental value whatsoever.
Past Bubble: Companies without any redeeming features, or even a business plan, came to the market and were given wildly optimistic valuations.
Present housing market: New build flats without any redeeming features, apart from being open plan, came to the market and were given wildly optimistic valuations.
Past Bubble: Biased commentators appeared in newspapers, talked up the market and denounced the naysayer's
Present housing market: Biased commentators appeared on television, talked about loft conversions, and denounced the naysayer's
Of course there are some similarities:
Past Bubble: The government did nothing for fear of causing panic.
Present housing market: The government did nothing for fear of causing panic.
Past Bubble: It was all the Federal Reserve's / Banks / Governments fault
Present housing market: It was all the Federal Reserve's / Banks / Governments fault
Past Bubble: It wasn't my own greedy self's fault
Present housing market: It wasn't my own greedy self's fault
But at the end of the day the key difference is this:
Past Bubble: The market crashed and burned, causing misery to millions.
Present housing market: The market gently slowed down, and we all lived happily ever after
