Upcoming Events

National | Housing

no events match your query!

New Events

National

no events posted in last week

Blog Feeds

Anti-Empire

Anti-Empire

offsite link The Wholesome Photo of the Month Thu May 09, 2024 11:01 | Anti-Empire

offsite link In 3 War Years Russia Will Have Spent $3... Thu May 09, 2024 02:17 | Anti-Empire

offsite link UK Sending Missiles to Be Fired Into Rus... Tue May 07, 2024 14:17 | Marko Marjanović

offsite link US Gives Weapons to Taiwan for Free, The... Fri May 03, 2024 03:55 | Anti-Empire

offsite link Russia Has 17 Percent More Defense Jobs ... Tue Apr 30, 2024 11:56 | Marko Marjanović

Anti-Empire >>

The Saker
A bird's eye view of the vineyard

offsite link Alternative Copy of thesaker.is site is available Thu May 25, 2023 14:38 | Ice-Saker-V6bKu3nz
Alternative site: https://thesaker.si/saker-a... Site was created using the downloads provided Regards Herb

offsite link The Saker blog is now frozen Tue Feb 28, 2023 23:55 | The Saker
Dear friends As I have previously announced, we are now “freezing” the blog.  We are also making archives of the blog available for free download in various formats (see below). 

offsite link What do you make of the Russia and China Partnership? Tue Feb 28, 2023 16:26 | The Saker
by Mr. Allen for the Saker blog Over the last few years, we hear leaders from both Russia and China pronouncing that they have formed a relationship where there are

offsite link Moveable Feast Cafe 2023/02/27 ? Open Thread Mon Feb 27, 2023 19:00 | cafe-uploader
2023/02/27 19:00:02Welcome to the ‘Moveable Feast Cafe’. The ‘Moveable Feast’ is an open thread where readers can post wide ranging observations, articles, rants, off topic and have animate discussions of

offsite link The stage is set for Hybrid World War III Mon Feb 27, 2023 15:50 | The Saker
Pepe Escobar for the Saker blog A powerful feeling rhythms your skin and drums up your soul as you?re immersed in a long walk under persistent snow flurries, pinpointed by

The Saker >>

Lockdown Skeptics

The Daily Sceptic

offsite link What Did Belinda the Cat Do? Tue May 28, 2024 13:00 | Dr Roger Watson
Dr Roger Watson explores the weird and wonderful world of rejected petitions to Parliament, from serious issues like healthcare to letting "Belinda the cat back in Tesco".
The post What Did Belinda the Cat Do? appeared first on The Daily Sceptic.

offsite link Norway Has Given Succour to Hamas by Joining Spain and Ireland in Recognising the Palestinian State ... Tue May 28, 2024 11:00 | Kathrine Jebsen Moore
Norwegian journalist Kathrine Jebsen Moore explains why she's so ashamed that her country decided to join Spain and Ireland in recognising the Palestinian state, thereby rewarding Hamas for the October 7th massacre.
The post Norway Has Given Succour to Hamas by Joining Spain and Ireland in Recognising the Palestinian State ? and as a Norwegian I am Ashamed appeared first on The Daily Sceptic.

offsite link Leading Men of Britain Get Ordered About by Left-wing Newspaper Tue May 28, 2024 09:00 | Noah Carl
The Garrick Club has changed its membership policy, following a relentless campaign. Why did the members ? supposedly a powerful cabal of Establishment figures ? allow themselves to be ordered about by the Guardian?
The post Leading Men of Britain Get Ordered About by Left-wing Newspaper appeared first on The Daily Sceptic.

offsite link Mainstream Media Ignores Two Big Stories That Run Counter to the Net Zero Narrative Tue May 28, 2024 07:00 | Chris Morrison
From higher Chinese crop yields thanks to CO2 to the discovery that cows are net methane reducers, there?s lots of good climate news out there. But the mainstream media is too busy promoting Net Zero to report it.
The post Mainstream Media Ignores Two Big Stories That Run Counter to the Net Zero Narrative appeared first on The Daily Sceptic.

offsite link News Round-Up Tue May 28, 2024 00:54 | Richard Eldred
A summary of the most interesting stories in the past 24 hours that challenge the prevailing orthodoxy about the ?climate emergency?, public health ?crises? and the supposed moral defects of Western civilisation.
The post News Round-Up appeared first on The Daily Sceptic.

Lockdown Skeptics >>

Voltaire Network
Voltaire, international edition

offsite link Death of Ebrahim Raisi and Hossein Amir-Abdollahian Sat May 25, 2024 14:39 | en

offsite link ?Democracy?, European Union version, by Thierry Meyssan Tue May 21, 2024 07:19 | en

offsite link The Blood-Red Sunset of the West, by Manlio Dinucci Mon May 20, 2024 10:05 | en

offsite link Voltaire, International Newsletter N°87 Sat May 18, 2024 05:29 | en

offsite link Europa Viva 2024 kowtows to the Straussians Sat May 18, 2024 03:01 | en

Voltaire Network >>

Low yields turn off Irish Property Investors

category national | housing | opinion/analysis author Tuesday November 14, 2006 13:22author by The Unwelcome Guest - thepropertypin Report this post to the editors

- Market moves from Euphoria to Anxiety

Low Yields turn off Irish Property Investors

November 13, 2006

A new survey shows that the majority of investors in the buy-to-let market do not plan to purchase another property in the next year. The survey was commissioned by EBS and Gunne Residential.
Market Roller Coaster of the Mind
Market Roller Coaster of the Mind

Two thirds of those surveyed said they were not getting a better return on their investments as their rental income had not increased in the past year.

Of those planning to buy another property in the next year, only a fifth said they would use their SSIA to fund the deposit, while 57% would borrow against another property.

71% of investors said they were buying property to provide a pension, while 51% said it was to build up a nest egg for their children. Investors continue to quit Dublin, with less than half now owning their investment property in the city, compared with last year.

The Seven Stages Of A Financial Bubble

Stage One – Displacement

Every financial crisis starts with a disturbance. It might be the invention of a new technology, such as the internet. It could be a shift in economic policy. For example, interest rates might be reduced unexpectedly. Whatever it is, the world changes for one sector of the economy. People see the sector differently.

Stage Two – Prices start to increase

Following the displacement, prices in the displaced sector start to rise. Initially, the price increase is barely noticed. Usually, these higher prices reflect some underlying improvement in fundamentals. As the price increases gain momentum, people start to notice.

Stage three – Easy Credit

Increasing prices are not enough for a bubble. Every financial crisis needs rocket fuel and there is only one thing that this rocket burns - cheap credit. Without it, there can be no speculation. Without it, the consequences of the displacement peter out and the sector returns to normal.When a bubble starts, the market is invaded by outsiders. Without cheap credit, the outsiders can’t join in.

Cheap credit is the entrance ticket for outsiders. For example, gas prices have risen sharply in recent years. However, banks aren’t giving out loans so that people can store gas in their garages in the hope that the price will double in three months. The banks, however, are prepared to give loans to people with poor credit to hold condos in the hope that they can be quickly flipped.

The rise in easy credit is also often associated with financial innovation. Often, a new type of financial instrument is developed that miss-prices risk. Indeed, easy credit and financial innovation is a dangerous cocktail. The South-Sea Bubble started life as new-fangled legal innovation called the limited liability joint stock company. In 1929, stock prices were propelled into the stratosphere with the help of margin calls. Housing prices today accelerated as interest-only mortgages emerged as a viable means for financing overpriced real estate purchases.

Stage Four – Over-trading

As the effects of easy credit kicks in, the market starts to overtrade. Overtrading stimulates volumes and shortages emerge. Prices start to accelerate, and easy profits are made. More outsiders are attracted, and prices run out of control. Accelerating prices attract the foolish, greedy and the desperate to enter the market. As a fire needs more fuel, a bubble needs more outsiders.

Stage five – Euphoria

The bubble now enters its most tragic stage. Some wise voices will stand up and say that the bubble can no longer continue. They put together convincing arguments based upon long run fundamentals and sound economic logic. However, these arguments evaporate in the heat of the one over-riding fact – the price is still rising. The wise are shouted down by charlatans, who justify insane prices by the euphoric claim that the world is different and this new world means higher prices.

Of course, the “new world” claim is true; the world is different every day, but that doesn’t mean that prices run out of control. The charlatan wins the day and unjustified optimism takes over. At this point, the charlatans bolster their optimism with the cruelest of all lies; when prices finally reach their new long run level, there will be a “soft landing”. The idea of a gentle deceleration of prices calms the nerves.The outsiders are trapped in knowing denial. They know that prices can’t keep rising forever, but they rarely act on that knowledge. Everything is safe so long as they quit one day before the bubble bursts.Those that did not enter the market are stuck in a terrible dilemma. They can not enter but neither can they stay out. They know that they have missed the beginning of the bubble. They are bombarded daily with stories of easy riches and friends making massive profits. The strong stay out and reconcile themselves to the missed opportunity. The weak enter the fire and are damned.

Stage Six - Insider profit taking

Everyone wants to believe in a new brighter future but a bubble takes that desire and turns it upside down. A bubble demands that everyone believes in a brighter future, and so long as this euphoria continues, the bubble is sustained.However, as madness takes hold of the outsiders, the insiders remember the old world. They lose their faith and start to panic. They understand their market, and they know that it has all gone too far. Insiders start to cash out. Typically, the insiders try to sneak away unnoticed, and sometimes they get away with it. Other times, the outsiders see them as they leave. Whether the outsiders see them leave or not, insider profit taking signals the beginning of the end.

Stage seven - Revulsion

Sometimes, panic of the insiders infects the outsiders. Other times, it is the end of cheap credit or some unanticipated piece of news. But whatever may be, euphoria is replaced with revulsion. The building is on fire and everyone starts to run for the door. Outsiders start to sell, but there are no buyers. Panic sets in; prices start to tumble downwards, credit dries up, and losses start to accumulate.

Here is the paradox of all bubbles – everyone knows how the fatal combination of easy credit, overtrading and euphoria will affect prices. Minsky didn’t need to write down a thing about the madness of speculation. America’s investors have a lifetime of experience. Within the space of five years, America moved from the tech stock bubble into the real estate bubble.Today’s housing prices are grossly overvalued. Everyone knows that prices will collapse. It might be tomorrow, or it might be two years from now. One thing, however is certain, the longer it takes for the bubble to burst, the more painful it will be.

With thanks to StoppedClock, Green Bear & Duplex - thepropertypin

Related Link: http://www.thepropertypin.com

 #   Title   Author   Date 
   Property.     John    Tue Nov 14, 2006 13:53 
   Interesting Analysis     The Unwelcome Guest    Tue Nov 14, 2006 14:07 
   Complicated?     Simpleton    Tue Nov 14, 2006 16:15 
   Daft.     John    Tue Nov 14, 2006 16:43 
   Experts.     John    Tue Nov 14, 2006 16:58 
   Dear John     The Unwelcome Guest    Tue Nov 14, 2006 17:41 
   Excellent website.     John    Tue Nov 14, 2006 20:59 
   Expert quotes century average     Simpleton    Tue Nov 14, 2006 21:21 
   funny games     happy camper    Wed Nov 15, 2006 04:04 
 10   Interest Rates     John    Wed Nov 15, 2006 10:16 
 11   Fundamentals     JFH    Wed Nov 15, 2006 11:16 
 12   interest rate     happy camper    Wed Nov 15, 2006 13:19 
 13   London achieved 7% too     Simpleton    Wed Nov 15, 2006 13:43 
 14   Interest Rates.     John    Wed Nov 15, 2006 16:38 
 15   cant pay     happy camper    Wed Nov 15, 2006 18:44 
 16   House prices     John    Wed Nov 15, 2006 20:18 
 17   When the shoe-shine guy gives you stock tips, it’s time to get out     Janey Mackers    Wed Nov 15, 2006 22:17 
 18   Make up your own mind, here is the data     Green Bear    Wed Nov 15, 2006 23:33 
 19   Buying homes or investing?     Simpleton    Thu Nov 16, 2006 11:18 
 20   Crash     John    Thu Nov 16, 2006 11:23 
 21   Affordability.     John    Thu Nov 16, 2006 11:33 
 22   Ah, but John...     The Unwelcome Guest    Thu Nov 16, 2006 12:26 
 23   Crash     John    Thu Nov 16, 2006 13:04 
 24   C'mon unwelcome, less of the sensationalism     Chill    Thu Nov 16, 2006 13:12 
 25   Indeed lads, but reverse your own logic...     The Unwelcome Guest    Thu Nov 16, 2006 17:02 
 26   Londondublin     happy camper    Thu Nov 16, 2006 19:44 
 27   Minting in the property market     Simpleton    Tue Jan 02, 2007 18:19 
 28   ...     The Unwelcome Guest    Wed Jul 11, 2007 00:11 
 29   gloat     BertieBasher    Sun Dec 28, 2008 11:16 
 30   Chill said...     Sorted    Sun Aug 28, 2011 02:45 
 31   A view of ancient history     An Draigneán Donn    Sun Aug 28, 2011 03:32 


Number of comments per page
  
 
© 2001-2024 Independent Media Centre Ireland. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by Independent Media Centre Ireland. Disclaimer | Privacy