Not sure what took 'em so long, but the UKMSM is now putting the pieces together. Next step is for the housing-ponzi-scheme-obsessed-real-estate-never-goes-down UK "investor" crowd to get it too. That subtle change in psychology where doubt and then fear enters their minds, and the realisation that they need to 1) stop investing and 2) get out at the peak.
My 1-bedroom London flat would list for $1.2 million. I'd say it's fair value is around $350,000. You know the drill.
Here's the Telegraph article, a good first step, but the writer still doesn't understand it's not just the slowing economy that'll crush the UK - it's the end of the UK housing ponzi scheme, bigger than the US bubble, combined with the slowing economy, that'll bring the country to its knees.
If you'd like to help the author get it, you can contact him here (email@example.com)
US housing crash could bring UK down with it
By Edmund Conway, Economics Editor
Peter Warburton, who runs a small consultancy called Economic Perspectives, believes that the UK will slump into a full-blown recession next year, shrinking by some 0.3pc over the 12 months. This would be the worst economic performance since 1991, the last recession, which came amid Britain's ignominious ejection from the European Exchange Rate Mechanism.
Mr Warburton - a member of the Shadow Monetary Policy Committee - warns that the UK will be badly hit by a US housing market crash.
He says: "There is an increasingly large possibility of a scenario where, frankly, economic activity could fall quite materially. In short, I do not believe that the UK has become a more stable economy."
His thesis is that for the past decade, despite its stable growth rate and low inflation, the UK economy has been brewing up potential problems. These include the record level of debt taken on by the household sector, a similarly large jump in government borrowing and a fall in manufacturing output. If, as many experts predict, the US suffers a housing market collapse next year, this could trigger an even more dramatic downturn in the UK.
September 30, 2006
Now they're starting to get it over here - Telegraph UK: US housing crash could bring UK down with it
Posted by blogger at 9/30/2006