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They should call it a "Housing Elevator", and make it clear that the BofE (amongst others) has its finger poised over both the Up and Down buttons

 

Have people noticed the move in Barratt?

 

BDEV ... update

BDEV-jul.gif.jpg

 

Further downside may be dead-ahead, with a CROSS confirm a bigger move down in BDEV, to be followed by a break in UK house prices

 

I noticed this and an excellent call. I expect imminent falls. Asking prices are just starting to be reduced. Properties are sticking for ages and buyer interest appears to be low. Vendors who want/need to sell will have to get real, otherwise their properties will hang around for ages.

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They should call it a "Housing Elevator", and make it clear that the BofE (amongst others) has its finger poised over both the Up and Down buttons

 

Have people noticed the move in Barratt?

 

BDEV ... update

BDEV-jul.gif.jpg

 

Further downside may be dead-ahead, with a CROSS confirm a bigger move down in BDEV, to be followed by a break in UK house prices

 

You might be surprised to find that not everyone agrees.

 

The group sold 11,171 units over the year, with the average selling price for each property rising to £204,000, up from £195,000. It sees volumes rising 5pc to 10pc in the new financial year, based on improving trends in the second half. This will be the highest level for three years

 

http://www.telegraph.co.uk/finance/markets/questor/8638604/Questor-share-tip-Barratts-margin-plan-is-built-on-strong-foundations.html

 

Questor is tipping them as a buy! (Although, to be fair that’s no great endorsement :lol: )

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One in three house sales are failing to complete due to fears of new recession

 

QUOTE

Nearly a third of house sales collapsed in the first six months of this year as nervous buyers and sellers pulled out of deals, according to a report.

 

A leading firm of property lawyers said 29 per cent of deals fell through in the first half of the year – up from 21 per cent in 2009.

 

The figures highlight the moribund state of the housing market and the reluctance of many would-be buyers to splash out in uncertain economic times.

. . .

First-time buyers have been particularly hard hit with banks demanding chunky deposits in exchange for a home loan.

 

Government figures show that 173,000 houses were sold in the first three months of the year – well down on the 459,000 sold in the last quarter of 2006 as the housing market reached its peak.

The 1st Property Lawyers report said that 39 per cent of failed deals collapsed because sellers took their homes off the market.

 

It put the figure down to the scrapping of Home Information Packs, which cost the seller hundreds of pounds.

 

Not for sale: The report said that 39 per cent of failed deals collapsed because sellers took their homes off the market

‘Sellers are now able to test the market without having to pay any upfront costs,’ said Mr Montgomery.

UNQUOTE

 

/see: http://www.dailymail.co.uk/news/article-2015192/One-house-sales-failing-complete-fears-new-recession.html#ixzz1SFapkLwi

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The report said that 39 per cent of failed deals collapsed because sellers took their homes off the market

‘Sellers are now able to test the market without having to pay any upfront costs,’ said Mr Montgomery.

[/i]

UNQUOTE

 

/see: http://www.dailymail.co.uk/news/article-2015192/One-house-sales-failing-complete-fears-new-recession.html#ixzz1SFapkLwi

 

Well, I think this is a useful excuse that they would like to believe.

 

But I think their reasoning is rot. Sellers are pulling out of deals because they cannot add their MEW, stamp duty and agents fees to their new mortgage deal. This means, unless they are earning more and can borrow more, they cannot move to a house of the same price as the one they are selling. A £500,000 house is £25,000 in stamp duty, and maybe £15,000 in agents,lawyer and moving costs. Basically, it costs 8% to move to a same value house. LTVs are reducing not increasing, so, many vendors cannot afford to move - except downwards.

 

My ex has had three sellers pull out and her cash/non chain offers were not insulting. Every reason was the same - the vendors could not afford to move.

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Well, I think this is a useful excuse that they would like to believe.

 

But I think their reasoning is rot. Sellers are pulling out of deals because they cannot add their MEW, stamp duty and agents fees to their new mortgage deal. This means, unless they are earning more and can borrow more, they cannot move to a house of the same price as the one they are selling. A £500,000 house is £25,000 in stamp duty, and maybe £15,000 in agents,lawyer and moving costs. Basically, it costs 8% to move to a same value house. LTVs are reducing not increasing, so, many vendors cannot afford to move - except downwards.

 

My ex has had three sellers pull out and her cash/non chain offers were not insulting. Every reason was the same - the vendors could not afford to move.

 

Agreed. I think that this is also one reason why I'm seeing houses sitting on the market for months (often more than 12) unsold. People just cannot afford to sell at the prices that are buyers are willing to pay. Yes, there is some wishful thinking in testing the market but if they are really serious about selling then they will lower prices - and I mean by more than 5K.

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Well, I think this is a useful excuse that they would like to believe.

 

But I think their reasoning is rot. Sellers are pulling out of deals because they cannot add their MEW, stamp duty and agents fees to their new mortgage deal. This means, unless they are earning more and can borrow more, they cannot move to a house of the same price as the one they are selling. A £500,000 house is £25,000 in stamp duty, and maybe £15,000 in agents,lawyer and moving costs. Basically, it costs 8% to move to a same value house. LTVs are reducing not increasing, so, many vendors cannot afford to move - except downwards.

 

My ex has had three sellers pull out and her cash/non chain offers were not insulting. Every reason was the same - the vendors could not afford to move.

Your reasoning is sound and I’m sure some of the numbers are down to this, but I personally know of several people that used to put their house up now and again to see if they got a "tempting offer".

 

I have even done it once myself in the past (and sold that time actually :lol: ).

 

However, this practice stopped dead once hips came in, and since its gone, it would be reasonable to assume that it has made a comeback.

 

As for your ex's sellers puling out, it is just as likely that they didn't want to say that they were just testing the market and that really they had been wasting her time (and possibly messing with her emotions).

 

One of the reasons I sold mine was that the buyer had fell in love with the place. The other reason was that they offered way more than I had expected :lol: :lol:

 

Agreed. I think that this is also one reason why I'm seeing houses sitting on the market for months (often more than 12) unsold. People just cannot afford to sell at the prices that are buyers are willing to pay. Yes, there is some wishful thinking in testing the market but if they are really serious about selling then they will lower prices - and I mean by more than 5K.

 

This is happening in some places, but overall time on market has been reducing (i.e. the Home.co.uk report)

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You might be surprised to find that not everyone agrees.

 

Regarding home builders specifically, there are two things I see poised to distort the share/asset price correlation.

 

First is the governments pushing of shared ownership. Every young couple who can't afford a new house but feel they have to get on the ladder at any cost are being guided towards shared ownership. These schemes generally run through the builders with government support, so essentially there will be a bias towards young buyers purchasing exclusively from builders rather than the wider market.

 

Distortion No 2. There is a lot of talk about the UK government relaxing planning regulations in order that more homes be built. I'm presently undecided about the outcome of this action on builders shares, but I imagine large scale building decisions could only be good for them.. even if more building leads to lower asset prices.

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Regarding home builders specifically, there are two things I see poised to distort the share/asset price correlation.

 

First is the governments pushing of shared ownership. Every young couple who can't afford a new house but feel they have to get on the ladder at any cost are being guided towards shared ownership. These schemes generally run through the builders with government support, so essentially there will be a bias towards young buyers purchasing exclusively from builders rather than the wider market.

 

Distortion No 2. There is a lot of talk about the UK government relaxing planning regulations in order that more homes be built. I'm presently undecided about the outcome of this action on builders shares, but I imagine large scale building decisions could only be good for them.. even if more building leads to lower asset prices.

 

There is a fair bit on this Radio 4 Money Box about the new schemes from house builders and government which will mean FTB's will only need 5% deposit. Like many of these, they will probably only help a limited number of potential buyers.

 

http://www.bbc.co.uk/iplayer/console/b012jbpd

 

Ray Bulger (mortgage broker) seems to think mortgage lending is loosening up and that the 95% LTV offered by a couple of minnow lenders might actually cause some of the bigger players to loosen a bit in order to meet targets this year. (Although, that sort of smacks of limited demand if they have to do that to attract customers?)

 

More interestingly though, is HPC's & GEI's very own Financial Planner frothing at the mouth again, even though what he says makes sense. He really doesn't help the case by sounding like he is going to explode, then again, you don't forget him and if it gets the message across. :D

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More interestingly though, is HPC's & GEI's very own Financial Planner frothing at the mouth again, even though what he says makes sense. He really doesn't help the case by sounding like he is going to explode, then again, you don't forget him and if it gets the message across. :D

 

Unfortunately, he sounds a bit hysterical - yet he is talking, on the whole, sense. Whereas the other guy is spouting the usual nonsense - and he comes over as sane and measured.

 

However, his blanket assertion that selling prices are 40% below asking prices is just wrong - makes him an easy target. In my area sales are few and far between but those that do sell are going for between 5% and 15% below asking.

 

He could make the point that the market is underpinned by unmanageable debt - certainly unmanageable when interest rates rise.

 

He could make the point that the government has thrown the kitchen sink at keeping the housing market up - and has failed.

 

He could make the point that the only way the market can be sustained is by trying anything and everything to entice youngsters into taking on suicidal debt levels at the lowest base rate for 300 years.

 

He could make the point the market is unsustainably overvalued.

 

He could make the point that the economy would be far healthier if people had to pay less for housing - by way of smaller mortgages and/or smaller rents. But he lets that go too.

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They should call it a "Housing Elevator", and make it clear that the BofE (amongst others) has its finger poised over both the Up and Down buttons

 

Have people noticed the move in Barratt?

 

BDEV ... update

BDEV-jul.gif.jpg

 

Further downside may be dead-ahead, with a CROSS confirm a bigger move down in BDEV, to be followed by a break in UK house prices

 

 

Barret down 3.6% today so far and now just under 101.

 

Looks like we've broken below the neck-line of the head-and-shoulders pattern that we've seen emergee over the last few weeks.

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GF's graph lines... If houseprices in gold go the way of your GS ratio lines all it would take is a doubling of gold here, regardless of nominal prices.

My own feeling is for a slight move down-at least-in nominal and continued move up with gold. Target of 80-120 oz for the average UK house. With gold at about GBP 1000/per oz, at least the calculation is easy!

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GF's graph lines... If houseprices in gold go the way of your GS ratio lines all it would take is a doubling of gold here, regardless of nominal prices.

My own feeling is for a slight move down-at least-in nominal and continued move up with gold. Target of 80-120 oz for the average UK house. With gold at about GBP 1000/per oz, at least the calculation is easy!

 

that is my thinking too. With gold just about £1000/oz now, the we may only have 20%-30% left before we reach extreme (ie >3 standard deviations) bottom-type levels, in a market that is already up 600-700%. I know there are good reasons for gold to still be going up, but frankly I wonder how much is left, and if gold is already at the same stage as houses circa 2005 or techstocks circa 1998. I know also that gold/dow ratios still say gold is cheap, but franky I do *not* expect a return to bottom-forming levels - much more sensible to draw a long term average through the ratio and then see how far we have deviated from that.

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Barret down 3.6% today so far and now just under 101.

 

Looks like we've broken below the neck-line of the head-and-shoulders pattern that we've seen emergee over the last few weeks.

 

Don't write them off just yet, they seem to be (slowly) learning from their past mistakes (well some of them) and are now looking to shoulder less risk.

 

Barratt is one of the UK's largest housebuilders and is seeking joint venture deals as a way of increasing housing developments without being fully exposed to the risks of a fragile economic recovery

 

http://uk.finance.yahoo.com/news/Barratt-Developments-agrees-tele-3399071442.html?x=0

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Barret down 3.6% today so far and now just under 101.

 

Looks like we've broken below the neck-line of the head-and-shoulders pattern that we've seen emergee over the last few weeks.

BDEV couldnt make it thru 100p on the first try.

But if this action spreads, it will soon have another go

July House price index: 70% of this year's sellers are still seeking a buyer

 

The July edition of the Rightmove.co.uk House Price Index is now available. Based on circa 90% of newly marketed property, the Rightmove House Price Index is the leading indicator of residential property prices in England and Wales.

 

% Change in month / % Change Past Year Ave house price

July HPI : -1.6% / 0.1% £236,597

 

/more: http://www.rightmove.co.uk/news/house-price-index/july-2011

 

Mo.: Rt'mov : London : Hometrack %/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

J. : : 240,394 : 438,622 : 153,550 - 0.1% / 168,205 = n/a = 163,049 163,642 : £165,924 :+ 0.70%

Jl : : 236,597 : 432,641 :

=====================================

mom: - 1.58% : - 1.36% : Est.DI: 142.6% / +0.60% := n/a = :+1.58% :+0.80% : + 0.70%

 

Crash Cruise speed may be back soon.

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UK HAS RECORD DEBT LEVELS

 

It’s pretty scary to have such a giant debt overhang at a time of economic and financial calamity. Historically, what tends to happen after a big debt build up of this sort is that there is a crisis followed by a prolonged period of “deleveraging”, during which debt is brought back into alignment with lower asset values. This process will inevitably be a big drag on growth.

Based on analysis of 45 different historic episodes of such deleveraging, McKinsey’s finds that it usually lasts six or seven years and ultimately ends up reducing debt to GDP by a quarter on average. To comply with the historic pattern, the UK would therefore need to reduce its debt mountain by the equivalent of more than a whole year’s GDP. That would be a huge drag on output. And here’s the scary bit; for the UK and most other advanced economies, the deleveraging process has barely begun. Any reduction we’ve seen in private sector debt has been matched by rising public indebtedness. The real consolidation, together with its negative impact on output, has yet to occur.

 

http://www.housepricecrash.co.uk/forum/index.php?showtopic=166855&st=0

 

this is different from the us, which has already begun to reduce private sector debt levels

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From Business Insider

 

Has Housing Bottomed?

 

A Simple Explanation For Why Housing Hasn't Bottomed Yet

Charles Hugh Smith, Of Two Minds | Jul. 21, 2011, 6:04 AM |

 

Charles Hugh Smith is a novelist and economic commentator

 

Has Housing Bottomed? Here's How to Tell

 

Housing has been propped up by Central State intervention. As that ends, Phase II of the retrace to pre-bubble valuations is at hand.

Has housing bottomed? Here is the sure-fire way to tell:

 

Stories titled "Has housing bottomed? Here's how to tell" have vanished for lack of interest.

 

The absence of stories about the bottom in housing will mark the final nadir, because the real bottom can only be reached when everyone has abandoned housing as a pathway to easy money. Only when the public and investor class alike have completely lost interest in real estate as a "sure-fire" investment can the real trough be reached.

 

This destruction of long-held habits and beliefs takes a long time. The closest analogy might be the stock market in the last secular Bear market. Stocks topped out in 1966, though the economy lumbered on until 1969 before faltering. Stocks then meandered for 13 years of stagflation, losing 66% of their inflation adjusted value in 1966 by 1982.

 

People gave up on stocks. I call this loss of faith "when belief in the system fades:" note how household participation in stocks topped out in 1969, three years after the peak in the market. Participants clung to their belief in stocks for about four years after 1969, at which point participation cratered as they finally abandoned their faith in a "permanent Bull market."

 

continues

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UK HAS RECORD DEBT LEVELS

 

this is different from the us, which has already begun to reduce private sector debt levels

 

Actually the process has started here. Haven't you seen the 80% funding cut for students (as just 1 example), or the local councils budgets that have been cut, or the services being cut, or the councils that are sacking all their staff and taking them back on again with a pay cut, or the army loosing 18,000 soldiers?

 

I would say we were actually far further along the road than the US. Far from cutting their debt, they are about to raise their "ceiling" again.

 

It's also very different from the US as their debt has an average renewal time of 4 years.

 

In the UK, it's 14 years.

 

Big difference.

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UK HAS RECORD DEBT LEVELS

 

It’s pretty scary to have such a giant debt overhang at a time of economic and financial calamity. Historically, what tends to happen after a big debt build up of this sort is that there is a crisis followed by a prolonged period of “deleveraging”, during which debt is brought back into alignment with lower asset values. This process will inevitably be a big drag on growth.

Based on analysis of 45 different historic episodes of such deleveraging, McKinsey’s finds that it usually lasts six or seven years and ultimately ends up reducing debt to GDP by a quarter on average. To comply with the historic pattern, the UK would therefore need to reduce its debt mountain by the equivalent of more than a whole year’s GDP. That would be a huge drag on output. And here’s the scary bit; for the UK and most other advanced economies, the deleveraging process has barely begun. Any reduction we’ve seen in private sector debt has been matched by rising public indebtedness. The real consolidation, together with its negative impact on output, has yet to occur.

 

http://www.housepricecrash.co.uk/forum/index.php?showtopic=166855&st=0

 

this is different from the us, which has already begun to reduce private sector debt levels

 

I'm under the impression, although I cannot quote a source, that private sector debt in the UK is reducing. I know I have read that, overall, mortgage debt is being paid down.

 

And, from what I can see, the government is doing something - unlike Brown and Co. - who could not get their heads far enough into the sand.

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I'm under the impression, although I cannot quote a source, that private sector debt in the UK is reducing. I know I have read that, overall, mortgage debt is being paid down.

 

And, from what I can see, the government is doing something - unlike Brown and Co. - who could not get their heads far enough into the sand.

 

Can't find the BoE report, but this article from July 2011 says:

 

http://www.independent.co.uk/money/mortgages/mortgage-debt-reduced-by-58bn-2306511.html

...Homeowners paid £5.8 billion off their mortgages, which was down on the record £7.1 billion the previous quarter, according to the Bank of England.

 

Householders have now been paying down their average mortgage debt for three years in a row...

 

I think other lending to households is growing slowly. The BoE July 2011 trends report has a couple of tables that appear to back this up, secured and consumer credit, but I'm not sure how to interpret them;

 

http://www.bankofengland.co.uk/publications/other/monetary/TrendsJuly11.pdf

 

I'm also going to stick my neck out and call a reversal in rental prices, does anyone have a particular flavour of rental price index they prefer?

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Actually the process has started here. Haven't you seen the 80% funding cut for students (as just 1 example), or the local councils budgets that have been cut, or the services being cut, or the councils that are sacking all their staff and taking them back on again with a pay cut, or the army loosing 18,000 soldiers?

 

I would say we were actually far further along the road than the US. Far from cutting their debt, they are about to raise their "ceiling" again.

The Private sector in the US has been cutting debt since 2007-8. The US public sector continues to raise debt levels.

 

UK private households are now massively exposed with near record debts (even if mortgage debts have come down a bit), reckless complacency, and ultra-high home prices. The hammer will descend soon. Good luck.

 

I think this article may have it wrong...

 

Labour MP Chuka Umunna highlighted at the Treasury Select Committee earlier today, it shows that household debt is set to rise from £1,560bn in 2010 (160% of household income) to £2,126bn in 2015 (175% of income) – an increase of 36.3%. By 2015 UK households will have amassed over two trillion pounds worth of debt.

 

The household debt-to-income ratio (the best measure of how manageable the debt burden is) fell from 2007 until 2010. It is now forecast to start rising again. Osborne described pre-crisis household debt-to-income ratios as unsustainable – and yet the ratio is forecast to hit a new all-time high in 2015.

 

More damagingly for Osborne, the OBR forecast for June 2010 (pdf) – before his first budget – predicted that household debt in 2014 would stand at £1,718bn. But following two Osborne budgets that number has now been revised up to £1,963bn – an increase of £245bn. In other words as a result of Osborne’s policies the direct debt burden on UK households is set to increase by nearly a quarter of a trillion pounds in the next three years.

 

Back in June last year, before Osborne’s policy changes, the OBR forecast (pdf) that public sector net debt (government debt) would be £1,294bn in 2013/14. After two budgets and a spending review they have revised that (pdf) to £1,251bn – a reduction of only £43bn.

 

Here we can clearly see the impact of Osborne’s changes over the next three years: public debt down by £43bn BUT private household debt up by £245bn – five times as much.

 

This shouldn’t come as a huge surprise. In today’s Financial Times one city economist notes that:

 

'With real household disposable income set to fall this year through a combination of flat employment, negative real wages, tax rises and benefit payment cuts, the only way we are going to see spending grow in 2011 is if the savings ratio falls.'

 

/source: http://falseeconomy.org.uk/blog/household-debt-up

 

I do not think "spending will grow", but rather fall, as both the public and private sectors try to cut debts

 

Here's a comment from the same source...

 

This is ideology gone mad: He probably quite-firmly believes that consumers are forward-looking rational, just as those in the rational expectations school insist they are--a contestable thesis at the best of times--but in so-believing, he's indirectly committing the state as-of-right to accept a decline in the economy. Consumers understandably seem to be heading towards a retrenchment in spending to go with the axing of public services. But instead of leveraging the relative health of the public balance sheet to help consumers do so, whilst maintaining aggregate demand sufficient to grow the economy, Osborne wishes to ensure both happen simultaneously--and crush us all in the process. It's cutting off your nose to spite your face.

 

The truth is that, behind the scenes, he'll hope that the Bank of England will keep it easy for the public to borrow--despite the already over-leveraged position of the average UK household and despite the already over-leveraged financial sector--and that this borrowing will directly translate into higher spending and higher GDP. Good luck with that; here's looking at an ever greater balance sheet recession and a decade of stagnation!

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ANOTHER comment...

 

"George Osborne talks of rebalancing the economy away from debt-fuelled government and household spending and towards exports and investment but the OBR's figures show his austerity programme will force households to take on ever more debt just to make ends meet. The future growth in the economy that is needed to bring unemployment down will only come about if we choose to live beyond our means."

 

The OBR now expects debt as a percentage of household income to increase from 160% in 2010 to 175% in 2015, where last June it was forecasting a small decline. Real personal disposable incomes are forecast to increase by 1.3% over the next four years.

 

/see: http://www.guardian.co.uk/politics/2011/apr/02/family-debt-burden-government-figures

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US Debt is Falling

 

Here's an interesting blog post at Time.com that points out how overall US debt is falling:

 

The U.S.'s overall debt - which is government debt plus individual household debt plus corporate debt and bank debt - when compared to our GDP, which is how most economists look at these things, is actually much lower than many other developed nations. Overall, the U.S. and its citizens owe a little over $41 trillion. That, of course, is a lot of money. But when compared to the U.S. GDP, it's not a shockingly bad number. In fact, it's pretty good, when compared to other nations. The U.S.'s debt is equal to 275% of our GDP. That percentage for the United Kingdom is over 450%. Japan's overall debt-to-GDP is about the same as the U.K. Spain comes in at nearly 350%, and France's debt is above 300%. Our debt level is about the same as Germany, which everyone think is pulling off economic miracles these days. But more importantly than that, the U.S. appears to be the only developed country where the overall debt level is falling...

 

Of course, the reason our overall level of debt has been falling is because of individuals and not government. Government debt is continuing to rise. Private household debt has been falling, in large part because people have been losing those households, and the debt that goes with them. Consumers have also reigned in spending and are now saving at the highest level in years. And that is one of the reasons that the economic recovery has been slower than expected.

 

But Charles Roxburgh, who did the study for McKinsey, says his point, at a time when there has been a lot of focus on government debt, is that overall debt matters. Private debt - what individuals, banks and companies owe - can become public debt, as we have seen from the bailouts. So the fact that our private debt is falling is a positive in the government debt debate.

 

Read more: http://curiouscapitalist.blogs.time.com/2011/07/18/surprise-u-s-debt-is-falling/#ixzz1SZlZPQmN

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The U.S.'s debt is equal to 275% of our GDP. That percentage for the United Kingdom is over 450%. Japan's overall debt-to-GDP is about the same as the U.K. Spain comes in at nearly 350%, and France's debt is above 300%

 

Ah but don't these levels include bank bailouts etc as well (which is a much greater percentage of UK GDP than in the US etc and as they are generally considered to be safe (i.e. the money will be recovered in the future) they are not included in the “official” debt figures.

 

Looking for example at UK debt measured in the traditional sense (public sector net debt), it is ~62% of GDP. (Yes I know that doesn’t include pension liabilities and PFI etc, but all the countries do this)

 

So comparing like with like, the UK doesn't seem in such a bad situation at all. Although the deficit is larger than many at present and this is what is being addressed.

 

Although 60% of GDP is a lot it is worth bearing in mind, that other countries have a much bigger problem. Japan for example have a National debt of 194%, Italy is over 100%. The US national debt is close to 71% of GDP. [see other countries Debt]. Also the UK has had much higher National Debt. e.g. after the second world war it was over 180% of GDP.

 

http://www.economicshelp.org/blog/uk-economy/uk-national-debt/

 

 

I think overall the bottom line is that we are all essentially bankrupt, so only inflation, default or debt jubilees will sort out the mess one day.

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...comparing like with like, the UK doesn't seem in such a bad situation at all. Although the deficit is larger than many at present and this is what is being addressed.

"The U.S.'s debt is equal to 275% of our GDP. That percentage for the United Kingdom is over 450%."

 

450% looks rather bad to me, and the UK banks have hardly begun to address London's property bubble. When it bursts, there will be hell to pay

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"The U.S.'s debt is equal to 275% of our GDP. That percentage for the United Kingdom is over 450%."

 

450% looks rather bad to me, and the UK banks have hardly begun to address London's property bubble. When it bursts, there will be hell to pay

Sorry, but I think you might still be missing the point. (Although yes, the main point is we all have s**t loads of debt).

 

We, like the US, bailed out our banks, but that money is assumed to be coming back (for both us and them).

 

It is because the UK banks are a much larger percentage of UK GDP than the US bank are to their GDP that makes the headline figure which includes this, look so bad.

 

Hence the distortion (which is far far worse for Eire for example).

 

When these figures are taken out, I think we are much more similar.

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