Mike Morgan, quoted in Mish's, is now convinced that we are headed for outright economic depression. Builders, banks and the rest of us are going to be hit very hard. This is, of course, the view of a real-estate expert in Florida, but he sees this as hitting the whole country.
We in the UK will not be immune from the general economic malaise to follow, even if unregulated immigration and a slower past housebuilding program help keep our housing assets from falling quite so far.
Did you see the Soros comments reported by the Beeb today? I'm going to post them tomorrow - enough depression for one day.
ReplyDeleteSackers, I'm looking at you for admin of my blog so if you think it's poss - e-mail me.
"We in the UK will not be immune from the general economic malaise to follow, even if unregulated immigration and a slower past housebuilding program help keep our housing assets from falling quite so far."
ReplyDeleteAre you sure? How long can the government turn a blind eye to unregulated immigration if we are going into an economic downturn?
Its tax revenues will go down as economic activity slows, and unemployment rises, the cost of benefits will start to rise just as tax revenue is falling.
I fear it will make for an uncomfortable few decade.
Anon, I fear you are correct about a future budget crunch. Our politicians are fiddling happily while our productive capacity continues to move overseas. I don't see how we will persuade foreign countries to contribute to our social security system.
ReplyDeleteJames, will reply but I don't think I'm currently well-placed to caretake. What are these Soros comments?
Personally, I think the UK will follow a path similar to the US in terms of the bubble bursting. It's the writeoffs that come from these delinquencies and defaults that are going to be problematic. The likes of HBOS, RBS and Bradford and Bigley are all in need of fresh capital. This guarantees that less capital will be available to prop up the market.
ReplyDeleteAt creditwritedowns.com, I am particularly interested in the UK as the next place for the global housing bubble to take hold. I will be posting on UK events and appreciate your collective thoughts.
By the way, I also have posted a list of writedowns by institution including a section for the UK at
http://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html
Cheers.
Ed, thanks, will add your site to my list. I get the sense that the UK is at least as bad at handling money as the UK, maybe that's why the pound is following the dollar down.
ReplyDelete