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About Meralti

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    I come here to read about investing, property, politics and economics.
  1. I agree. There is no longer a real market clearing mechanism in operation. Everything has been thrown at preventing nominal falls - the entire system is locked into the preservation of nominal values. The only way a significant nominal fall will occur across the board is through systemic collapse, which isn't inconceivable.
  2. You're witnessing an epic struggle between the market trying to correct and the government throwing everything they have at preventing it. All the rest is incidental. Foreigners are investing in London property because they see the government as a guarantor. Prices will fall, and dramatically, when the UK government finally run out of ammunition. The real question is not what the trigger will - all monetary policy has a component aimed at maintaining prices and levels of debt and all market forces are working against current prices. The question is when will the UK government fail. If debt levels can be maintained without destroying the rest of the economy then current policy will succeed albeit to the detriment of the real economy and everyone who works in it
  3. Meralti

    UK House prices: News & Views

    Historically Rightmove has been a reasonable leading indication of major shifts. What it really tracks is seller expectation (and EA influence there upon) when first marketing. It is a very poor indicator of actual selling prices. B.T.W I still haven't seen any direct coverage of these falls. They are only mentioned in the context of next years predicated rises.
  4. Meralti

    UK House prices: News & Views

    Delusion index revisited: Record monthly falls on the Rightmove index. I wonder how big an impact London is having on this index. Rightmove is a seriously flawed index as discussed above but it's a good indicator of sentiment and confidence. No news coverage of these figures on mainstream sources yet. Despite this they are forecasting a rising market next year as the headline to this report!
  5. Meralti

    UK House prices: News & Views

    It won't happen. The point of any devaluation would be to make the UK more competative. Halving the value of Sterling but doubling wages across the board would not achieve that objective. Sterling may devalue but no wage spiral would result from this, wages could rise eventually but certainly not immediately.
  6. Meralti

    UK House prices: News & Views

    London prices begin their long awaited decline. http://www.moneyexpert.com/financial-news/none/800581305/housepricesfallacrossenglandandwales/article.aspx Prices are broadly flat-lining but now falling in London.
  7. Meralti

    UK House prices: News & Views

    An rather odd conclusion. I think a better comparison would be between the Land registry's final sold prices calculated using the geometric mean and the geometric mean of the Rightmove series. The RM index would then need to be adjusted backwards in time to take account of the time lack of the LR series. As I stated RM tracks initial asking prices and takes no account of subsequent reductions or even whether a property sells or not. A property can easily be listed at a 50% premium and never sell. THe RM index would still count this datum as valid for the index. This and the fact RM uses the arthimetic mean is why the index is always much higher. I've seen houses listed at £500k and reduced to 475 to 450 to 425 to 400 and still sit unsold for over a year. RM will count the initial 500k as valid data. This property will never have reached the LR numbers. If it is possible to get hold of the RM data series it would be worth calucating the GM and from that calcuating the ration with the LR. You would then be comparing apples with apples and not allowing a few statistic outiers to skew the index. This would be a true delusion index. I would expect this to be around 15 -20 % higher than the LR number giving a ratio of 1.15 to 1.2.
  8. Meralti

    UK House prices: News & Views

    But I see asking prices falling. Rightmove takes no account of that. Thats why it's a poor index. It's also why it is higher. A relatively few very highly priced properties skews the index upwards, which doesn't reflect the behaviour of the majority. The geometric mean was invented to get round this problem.
  9. Meralti

    UK House prices: News & Views

    Rightmove tracks initial asking prices only (when a property is first put on the market). It uses a simple arithmetic mean and takes no account of subsequent reductions in prices. The other track either actual sold prices or mortgage agreements (so take account of any reduction in price needed to make a deal) and some (cannot remember which) use a geometric mean that take more account of the long right hand tail of house price distribution - so tend to be lower. The difference between rightmove and halliwide/LR gives a reasonable indication of the reduction from initial asking needed to sell the property. However, because of the different statistical methods used by rightmove it probably isn't that actuate but is indicative.
  10. Meralti

    UK House prices: News & Views

    Non-Seasonally Adjusted comes in at 0.1% for October. So pretty much flat. The seasonal adjustment is based on past sales data that is largely irrelevant in an environment of minimum 60% LTV mortagages with the traditional 1st time buyer having almost disappeared.
  11. Meralti

    UK House prices: News & Views

    The number of self-employed people increased by 35,000 to reach 4.20 million. the number of unpaid family workers (people who work in a family business who do not receive a formal wage or salary but benefit from the profits of that business) increased by 2,000 to reach 112,000. The number of people on government supported training and employment programmes increased by 13,000 on the quarter to reach 158,000″ Which, if you add them up, comes to a round 50,000. Self-employment and “government supported training and employment programmes” would seem have been behind much of the recent fall in unemployment. There doesn't appear to be any data on how much these new self-employed people are earning and they may have just switched from Job Seekers Allowance to Working Tax Credits. Few will be earning enough to reach the magical sum of 35 hours a week at minimum wage. This will be the required earnings threshold for self-employed people when Universal Credit begins next year. Unfortunately no current statistics for Working Tax Credits exist. Time to look behind the hype and headlines.
  12. Meralti

    UK House prices: News & Views

    Oh, and btw mortgage lending has fallen off a cliff http://www.independe...gh-8216447.html>
  13. Meralti

    UK House prices: News & Views

    A more sober look at the statistics reveals something rather less sanguine. Comparing June-August 2007 and June-August 2012: the number of people in full-time employment fell by 355,000 the number of people in part-time employment increased by 724,000 the number of unemployed people increased by 883,000 the number of economically inactive people, aged from 16 to 64, fell by 112,000 Household population aged 16+ increased by 1.853 million seasonally adjusted over the period The number of people in employment has not been higher since comparable records began in 1971, the employment rate of 71.3 per cent, for those aged from 16 to 64, is lower than the pre-recession peak of 73.0 per cent recorded for March to May 2008. Source: ONS: Labour Market Statistics October 2012 (pdf)
  14. Private company wholely owned by the Treasury. A smoke and mirrors construction to allow Gordon to disavow the consequences of his own policies.
  15. Meralti

    75% tax for France's top earners

    The effect of these sort of policies are well documented. The real question is "What is the root cause that makes it necessary to tax in this way?" The answer is the reckless expansion of money supply/devaluation of currency, that enables the continued expansion of unsustainable government spending. This has been implemented in such a way as to ensure the real redistribution of wealth upwards towards financial institutions while holders of currency are slowly dispossessed, all the while pursuing social policies that apparently redistribute wealth downwards - but somehow always fail.