same procedure as every cycle
No doubt this guy will blame the devil for the downturn
(you may need to register to view - but its free)
history very much repeating, for all the reasons i outline in classes.
see also the 'house prices start to cool' story at
Markets will continue to climb the wall of worry on this one, a few
years to go yet, besides, with the Bank of England predicting house
price falls you can be certain it won't happen just yet.
The fall happens when it is least expected, when we all feel
comfortable. Whilst people are holding back their decisions it means
there is still cash on the table for the public, cannot have a peak
whilst this is the situation.
Collection of data going well now for past land price induced
downturns. Have a look how it happened way back in 1857, first cycle
for which there is good data. See attachments, should be read prior to
More to follow at a later date.
Looking back from 2010:
extraordinarily low interest rates fueled yet another bubble in asset
prices, this time in real estate (though it was due). Rates were kept
artificially low for an extended period by the Fed - though in fairness
to his rateness Chairman Greenspan (previously honorarily knighted by
the Queen for his services to the maintenance of economic stability) he
was probably under enormous pressure from the White house to keep rates
at all time lows to ensure economic recovery in time for the incumbent
president to get re-elected - plus the enormous issue of government
bonds issued in 2003 / 4 under the dictates of wartime finance resulted
in an explosive expansion of available bank credit. In 2008 that
un-looked for event - the one that shatters public confidence (see
below) - lived up to its reputation, undermining the expansion,
resulting in banks calling in loans to rebuild their balance sheets in
the face of prior lending to those with poorer credit ratings. A credit
squeeze, bringing on a short, but very sharp recession