To be completely cheesed off. More F-ing brexit chaos

[Theworldisfullofgs]

The European Medical Agency left their London offices today to relocate to Amsterdam.
900 jobs. Lost our leading role in evaluating medicines.

No clear pathway forward.

What they should of written on that bus

Step forward into chaos, we have no idea and we're just telling you what you want to hear: Vote Leave.

Boris,

Doing the same fairly arbitrary calculation with another flat is not really adding anything.

When I was talking about interest rates, I was not talking about obtaining the mortgage but about servicing it (and being able to live).

Getting on the housing ladder is not an end in itself if it leads to negative equity and penury as interest rates rise.

I think that you are missing the wood for the trees!

And the squirrels!

I think you are totally misunderstanding my point Larry.

I'm demonstrating that actually the BOE worst case scenario doesn't make things better for FTB, or anyone getting into the housing market, which was in response to your initial point of :

[a significant housing fall would be very good for those not on the housing ladder including teachers, nurses and doctors who, presumably, will still have jobs.]

It wouldn't, at all, as demonstrated.

A couple passing the eligibility criteria for a mortgage would of course be able to service principle, and are checked to be able to afford an increase in interest rate.

But then you changed from your initial point.

Boris,

If you choose to only deal with the superficial (mortgage lending criteria) you miss the big picture.

Asset price collapses are the way (non crony) capitalism redistributes wealth. The asset rich lose out and the asset poor are able to acquire assets at fire sale prices and, in turn, become asset rich as these appreciate.

IMO, in 2008, when the system was bailed out, interest rates were reduced to real negative levels and currencies were debased by QE, it was the start of the global protest vote of which Brexit is a symptom.

@larrygrylls/@Clavinova
You both seem to be well informed advocates of the leave policy.

Can you explain how you see the UK not just surviving but going on to thrive after we leave the EU? While there may be some benefits to some people soon after we leave (i.e. possibly first-time-buyers who keep their jobs after a downturn that substantially reduces house prices), how will the wider country thrive? Or is the primary gain to bring the middle 60% of households closer to the bottom 20% of households economically, thereby increasing equality? If so, this seems quite a destructive way to go about achieving this - is this a specific intention of leaving the EU?
There seem to be many long-term as well as short/medium term disadvantages to leaving the EU; for example, no collective bargaining in international negotiations - including trade, inability to participate in cross-border JIT manufacturing processes due to non-tariff trade barriers, lack of opportunity to gain from and control collective defence projects (e.g. galileo) etc ... How do you envisage the UK over-coming these disadvantages?

Indistinct,

I neither think that I am especially well informed and my personal preference would be NOT to leave. However, I don't think it is this nirvana/despair trade off that a lot want to make it.

I am not sure the EU will not collapse in the next 10-20 years anyway. I know that the Euro is not sustainable long term and that, for me, if the Euro goes, so does a lot of the EU project.

In the short term 5-10 years, it will be painful, I cannot disagree with that. Longer term, however, we will rebuild a trading relationship with the EU and other countries.

I really cannot say how it will play out but, as I said, the people who feel the EU is nirvana and outside is hell are too extreme,

{I am not sure the EU will not collapse in the next 10-20 years anyway. I know that the Euro is not sustainable long term and that, for me, if the Euro goes, so does a lot of the EU project.}
The principal reason for the union is to prevent war within Europe. While the Euro is a useful 'tool' in the box, it is nor the overriding factor and if it was felt that rejigging aspects would help the unity, it would be done.

‘Tis,

That is not what any European of any significance has said about the Euro. They all feel that it is a central part of the project.

In addition, the long felt resentment of the rich North by the poor South would be amplified in a resonant way by a Euro collapse.

The idea that it could go and the EU could continue (maybe the northern countries at a push) is not realistic (IMO).

"The asset rich lose out and the asset poor are able to acquire assets at fire sale prices and, in turn, become asset rich as these appreciate."

But as pointed out, even in a massive 30% fall in assett prices the assets asset not more affordable, because the asset poor need to borrow money in order to buy them. Deposits required are going to be significantly larger, which limits the amount that someone can benefit.

What you are advocating is that the asett price falls, and everything else remains the same, from the size of the deposit, to the amount banks are willing to lend, to the criteria under which they will lend.

That doesn't happen.

The "fire sale prices" don't occur because only those who are forced to move, due to redundancy, death or divorce actually sell their homes. Everyone else stays put, creating a shortage of properties on the market.

What happened the last time, and the time before that, and before that, is that the cash rich are able to snap up the properties that are available and out compete the asset poor.

They are the ones that benefit, not your average Joe.

Like I said, your idea requires everything else other than house prices crashing to stay the same. It doesn't work like that.

I hate the fact that strawmen are constantly built like this: "I really cannot say how it will play out but, as I said, the people who feel the EU is nirvana and outside is hell are too extreme,"

This is not what people are saying, although there are massive risks to leaving including food shortages, no one is saying that it is this black and white. It simply makes it easy for you to dismiss counter points by putting it in these simplistic terms.

Pots, kettles...black?!

With the enthusiasm to be in the EU varying between 60 and 80 percent to retain the union it is pretty strong. With the 'Brexit experience' they are likely to review and think very hard about why they might want to leave.
Even the far right groups don't want their countries to leave the union, but they would like to be in power.

"Pots, kettles...black?!"

Except I've directly addressed your points and not made any "you said" strawmen.

Sorry. Its just incorrect your statement about a house price crash helping the asset poor.

Here go have a look at what happened at the levels of mortgage in the last crash.

Boris,

All you have done is given me two illustrations of mortgage criteria for your specially chosen hypothetical couple.

At the beginning of a recession all credit is frozen but that phase ends and lending unfreezes. This can be a sweet spot.

Also the ‘cash rich’ includes anyone who invests in any pension.

It would take a book for a detailed analysis. Sure my arguments are, by necessity, simplistic...as are yours.

larrygrylls
I cant think that many people would think the EU represents or is the path to Nirvana but do see long term disadvantages to being out (probably not despair inducing but pretty bad). Agree the Euro has structural issues but can’t see how UK leaving helps at all. Overall seems better to push for reform/change from within.

"All you have done is given me two illustrations of mortgage criteria for your specially chosen hypothetical couple."

No, I've given you two illustrations of how

a) Your hypothetical situation would not work for a couple seeking to buy a flat currently priced at the London average after a 30% price crash.

B) How it would not work for a couple earning the London average, buying a flat priced considerably lower than average, following a price crash.

They were both specifically chosen as the average price, and average salary to demonstrate that your point was erroneous. If I was going to attempt to be disingenuous about it I would have chosen other figures.

Its hilarious that you accuse me using very specific situations, where of course yours is reliant on a couple working for the public sector so they still have jobs during the downturn that would occur following this level of crash, and then them having the right amount of deposit necessary when the "sweet spot" occurs.

Look at what happened to mortgage approvals after the last crash, it has not yet recovered:

tradingeconomics.com/united-kingdom/mortgage-approvals

"Also the ‘cash rich’ includes anyone who invests in any pension."

Not really because a pension is an asset not liquid cash.

Shall we what conditions are necessary for our hypothetical couple earning the London average to buy the averagely priced flat after a 30% fall?

So the price is now £294.7k.

Lets say we hit the sweet spot where the bank are allowing deposits of 10% again.

So £29,470k needed by our couple (which is about the same as they'd currently need for the lower price flat discussed above btw)

This brings us to a total mortgage value of £265, 230, for which our London couple on the average salary need a mortgage of 4 times their salaries.

So this demonstrates my point very neatly.

For your price drop that benefits the FTB or asset poor, everything else has to stay the same, except for the fall in prices.

That's not how it works, and never has been.

It also does beg the question, why were this couple waiting for a house price crash when they could afford a flat at current prices anyway?

House price crash = Recession, its how our consumer economy works, few spend when they see falling house prices.
Larry, yours is a stupid argument.

Build council social housing, affordable secure rents, as we used too.

Jasjas,

So our economy works by house prices endlessly rising faster than inflation until we have a land owning aristocracy in perpetuity.

Interesting.....

"So our economy works by house prices endlessly rising faster than inflation until we have a land owning aristocracy in perpetuity."

There is your straw man again.

No one said that at all.

Larry, i didn't say that at all BUT if you have evidence that our GDP grows during a house price crash, i'd like to see it.

We've chosen to reduce council house stock in the pursuit of property ownership, which causes above inflation house price rises and a endless housing benefit bill.

It’s worth remembering that every corporation in the country will be looking to vindicate themselves of any blame over bad news by attributing to Brexit. Loss of profit due to poor strategy? Blame it on Brexit. Job losses due to digital transformation? Blame it on Brexit. A restructuring due to automation? Blame it on Brexit. CEO sexually assaulting? Blame it on Brexit. It makes perfect sense and any organisation would be stupid not to take this opprtunity to do what they’ve been waiting years to do but couldn’t (because of damage to brand backlash/bad press). Plus the hysteria is the thing that is bringing down confidence and that is having an affect on house prices, growth etc. The more people panic the worse things will get. That’s not Brexit. It’s peoples REACTION to Brexit that’s the problem.

It’s peoples REACTION to Brexit that’s the problem.

Thanks for clearing that up.

Every time a Remainer thinks negatively, a Brexit fairy dies!

So if the Sunlit Uplands don't arrive, it's not because Brexit was a bad idea, it's all the fault of Remainers. If jobs are lost, or prices go up, or companies leave, or the economy tanks, none of that would have happened due to Brexit, but due to lack of positivity and faith amongst Remainers spreading gloom.