OK, I was a little slow on the take, but I think I figured out culturally why the English are so incredibly housing-bubble obsessed. "Invest in overseas property", "Get on the housing ladder", "Get rich with buy-to-let" and "Real estate is the way to riches".
Property in the US went up 100% in the past 5 years, but in the UK it's 180% I've read. And parts of London are up another 20% this year.
So what is it about the British culture that makes them continue to rush into this housing fool's game? What is it that keeps them buying property when the fundamentals and economics are so glaringly bad?
Here it is:
They're obsessed with gambling.
Walk around London and you're bombarded with gambling. There are over 5,000 "betting shops" in the UK - Ladbrokes (2,000 location), William Hill (2,000 locations), Paddy Power and more. In addition there are mini-casinos with slot machines everywhere. With the stock market, buying and selling stocks is so last year. Now they have "spread betting" where you bet on a stock going up or down that day, like an NFL game.
It's sick I tell ya. And houses are the latest craps game sucking in the gambling-obsessed, problem-drinker Brits.
And we all know how compulsive gamblers end up. In the gutter.
September 08, 2006
Why are folks in England so housing ponzi scheme (aka "housing ladder") obsessed? I think I've finally figured it out
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18 comments:
Kieth,
How is Belfast this morning?
I am taking 8 to 5 that it is overcast today.
Americans are obsessed with glambling too (partypoker.com, Texas Hold 'Em, poker TV shows, etc...). Oddly enough all that shit didn't show up til after the housing bubble got going, so the poker obsession must be reinfocing the bubble mentality and now vice versa.
all the online gambling companies are run by brits
Where are you going to run to when the
UK is in the gutter Keith?
Belize?
The good thing about gambling is that the good ones become successful traders/financiers or whatever you call them. So that's a career, albeit for an elite few (top 5%) who knows the futures' plays. The 90-95% of the others, however, are just punters in for the ride. I think the average person is aware of this fact.
RE, however, is a joke. It will always be a place to live in, anything else is severe delusion because asset classes aren't poorly constructed depreciating structures. And unfortunately, this illusion of asset class is worldwide and will result in misery for a lot of people who'd never play the forex futures or horse tournaments.
I think southern italy will have some good rental deals. Maybe thailand?
we were in the UK not so long ago... astonishingly, there was at least one home renovation/real estate show being aired on their public spectrum...
I think the British simply believe that their dirt is priceless (pun), maybe soon it will be!
:America is following in the UK's footsteps. First came the lotteries, then the housing bubble
Dude, lotteries and casinos are well known, to greater society, as gambling dens.
The greater society, however, believes housing is a cultural talisman. That somehow, being a home owner is a symbol of being a good American and a decent, hard working individual along the lines of the Fourth of July fireworks, which is celebrated in every single major/minor city in the country w/o exception.
So, it's easy for a mainstreamer to poo poo lotteries and stock trading, however, it's nearly impossible to see the home as a financial death trap since it's a part of our identity. That's why this RE collapse is going to rip a major hole in the fabric of our society. Never before, in America's history has the home been the source of evil. Evil was always something else, Geronimo's raiders, Jesse Jame's gunslingers, Kaiser's (followed by Hitler's) Germanys, Stalin's Russia. Now for the first time, it's "RE"ally within.
"Never before, in America's history has the home been the source of evil. Evil was always something else"
That's unfortunate, but true.
In order to have a true correction
the sheeple must get sick of housing; equate it to a swear word.
We'll know it changed when the one word "homeowner" morphs to the one word "homedebtor"
That's what the younger Japanese think of their pathetic parents.
Their attitude is "why would anybody want to be stuck as a slave to their property?"
Now, it looks like even the post-Empire Britain is headed for a fall.
In the early days of the post-Empire, early 70s, the UK started shifting to services and became the financial intermediary between the US and continental Europe. Now, the EU is picking up the old task and doesn't really need a second middleman to do financial business with America. So what's England future? The realization of the Clockwork Orange vision but w/o the money to house the criminals.
London's claim to fame nowadays is that it's the financial hub of Europe. It's chock full of bankers and the hedge fund managers there are like rock stars, (and by definition, these are people who gamble for a living). Since these people set the social pace, it's no stretch to understand why the commoners are following, like sheep, to slaughter by buying into the property ladder. The telly is full of shows about property investing, home improvement, etc... it's become the national obsession. Only problem is, the bankers are well paid and can withstand the downturns. So, when things go south, they'll be the ones (along with their foreign investor friends) who will be sweeping up the crumbs and the poor punters who lost their shirts will be left crying into their fish and chips.
"Only problem is, the bankers are well paid and can withstand the downturns. So, when things go south, they'll be the ones (along with their foreign investor friends) who will be sweeping up the crumbs"
Also known as, the New York City of greater Europe. And like London, it's mainly based upon financial services but unlike London, it's not the only major city in the country, though an important one.
So if London's financial sector goes down, the whole of England is done because really, anyone can open up a hedge fund on the mainland of Europe with the Incorporation papers filed on the Isle of Man for tax purposes. In addition, places like Zurich and Amsterdam have high quality brothels, unlike London, which would appeal to someone flipping futures contracts for hundreds of thousands of dollars per turnover. What a way to celebrate one's winnings.
Oh Be-have!
:Look at gold over 30 years. It's been a terrible investment.
Gold's been in a 25 year secular bear market since the early 80s crash.
If one recalls, the 90s were the strong dollar decade where dollars and dollar denominated assets were king.
Also, after '77, gold shot into bubble territory when it broke through $200/oz like a rocket after a period of stagflation and no control over the future of monetary expansion. Before that, it was in a trading range of $75-$125/oz.
So, all and all, gold's not a bad investment especially in contrast to a weak dollar, however, whenever monetary confidence is restored, the most it does is go sideways which is why it's not for all types of investors. The average investor is better off trading commodities indices during stagflationary bear markets and stock indices during bull markets (w/ contained inflation).
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