Nick Clegg today is proudly announcing a coalition housing policy which is perhaps the maddest thing the government has come up with yet (though that is a tough competition). Apparently the answer to housing problems is to find ways to enable people to take on yet more debt, being helped by government to find deposits which they will however ultimately have to repay in addition to the ordinary mortgage.
In effect the government thinks that the only problem with the housing market, is that it is not as it was in early 2008. The government supports ludicrous inflated house prices, giving the economy an entirely fictional huge monetary value asset base, sustained by mortgages of 100% or more on the inflated value, amounting to many multiples of the debtor’s income.
The answer to housing availability is not for the government to find ways to enable young people to take on unrealistic amounts of debt so they can afford fake prices. The answer in the owned sector is for house prices to crash down to realistic levels which people can actually afford.
These government proposals are the precise opposite of what is needed.
The primary answer in the rented sector is for local councils to build public housing and rent it to people at genuinely affordable prices. There are a huge number of brownfield sites which can be utilised and a huge number of empty buildings ripe for conversion – including many of those empty shops. 50% of the “printed” money created by the Bank of England in the last round of Quantitative Easing exercise, and given to the banks, would have built 400,000 family homes if given to local authorities for that purpose. Think of the employment that would have created.
The UK is every bit as indebted as Greece, both as a per capita absolute and as a percentage of GDP. The difference is that Britain has more private and Greece more individual debt. But it is equally impossible to pay it back in the long term. That incredible mountain of personal debt is what has sustained Britain’s ludicrous house prices. Just as the bamks have had to take a 50% haircut on Greek debt, so also they are going, in the end, to have to take a massive haircut on their UK mortgage portfolios.
The extraordinary thing is, that those mortgages – based on totally unreasonable house valuations – constitute not liabilities but “assets” on a bank’s balance sheet, and the banksters have been able to “leverage” those assets to make speculative financial transactions – or bets – to the valuse of 12 times the “asset”.
These are some my policy prescriptions:
Give local authorities money to build 400,000 new council houses for truly social rent levels, using cash from quantitative easing
nationalise all housing association property and give to local councils as council housing
wipe off 50% of all outstanding mortgages
watch house prices crash, and cheer!
That may sound extreme to some of you. But I promise you it is infinitely more sensible than the incredible folly the government has just produced.
Nothing to do with the above – for general interest
Tag: Matthew Stephen Gould.
http://cryptome.org/mi6-list-276.htm
Scroll down.
OT: Human Rights watch confirms US-funded Egyptian military regime now using live fire.
Off Topic:
http://www.huffingtonpost.co.uk/2011/11/22/iraqi-civilians-win-abuse-inquiry-bid_n_1107120.html?ref=uk
House prices positively correlate to rising loan to value and salary multiples. It is just like any other bubble, you need to find new buyer to prevent it from popping. Hence the latest policy to support higher LTV’s again. It was the same in the US when the sub prime buyers became the buyers of last resort.
Evidently the military don’t want to jeopardise the danegeld the US pays them for keeping the Rafah crossing safely closed.
http://www.imemc.org/article/62543
…see?
O/T
BBC Radio 4 Programmes http://www.bbc.co.uk/programmes/b0174gly
File on 4
Coroners Under Scrutiny: Listen now (40 minutes)
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Synopsis
Are families getting justice in the coroner’s court?
Ann Alexander investigates concerns about the conduct of inquests in England and Wales and asks why there is so much variation in behaviour of coroners and the rigour of their investigations.
Under the current system, it is up to the coroner what evidence he or she relies on, but this can leave families unhappy at the verdict and with little hope of appeal. The Coroners and Justice Act 2009 included long awaited reforms to the coronial system. At its centre was the role of Chief Coroner, but the coalition Government said the post was unaffordable and want it scrapped. So are Ministers missing a chance to ensure judicial oversight, enforce national standards and increase accountability?
Presenter: Ann Alexander
Producer: Paul Grant.
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No mention of no inquest (so far!) for Dr Kelly.
OT. El Baradei being asked to become PM by military, he is reportedly to be reluctant. Who would not be. This is either a ploy to make him unpopular by giving him the kiss of death, or a short circuit within SCAF itself, they’re rattled by the ferocious opposition they encounter.
meanwhile those who fostered this illegitamit set up and paid for Mubaraks extra judicial torturing and excesses are lying to their people about the US deficit. All in a sudden the donkey can come to an agreement with the elephant on doing nothing. We are striding furtively towards the perfect storm, and the armageddonists are whooping with delight.
http://www.aljazeera.com/indepth/opinion/2011/11/2011112271316280749.html
If its rupture you’re asking for, rupture it is, voila die Scheisse has hit the fan, and you can smell it everywhere.
I’ll leave aside some of the bizarre economics put forward by Craig and others as life is just too short to try and correct all that. But a few points on the housing market:
– lending for people to put their money into housing or anything else for that matter isn’t necessarily a bad thing – what is a bad thing is lending which is unaffordable for the borrower.
– their have been sharp increases in private sector rentals – which means that for a lot of young people buying property is now more affordable than current rental levels if they could just get a mortgage.
– the government should be kicking the arses of the banks to make sensible lending which is affordable for the borrower – they should not be turning away sensible lending propositions (as they now are in both the personal and corporate sector), the govt should not be providing the banks with guarantees/subsidies to make banks do what banks should be doing rather than diverting their capital to what they see as more profitable investment/casino banking. The idiots who agreed that the bank’s lending targets should be based on gross rather than net lending, in return for taking a more lax approach on bonuses – should resign as they are clearly not up to it. (that means VInce Cable as the no. 1 culprit btw)
– in the UK people like owning their own homes in preference to having private/social/local authority landlords
– UK Banks loan to value ratios for mortgage lending in aggregate are not anywhere as bad as some point out – from memory the average is something like 35% (the Council of Mortgage Lenders have some statistics) and the overall figure as well as the level of high LTVs has been declining in recent years. So no need yet for a massive panic – although some here clearly like stirring up unnecessary panics.
– the real issue to try and do something about the supply of housing to the market – but this isn’t just about getting housebuilding going (where nearly all this govt’s policies have had the opposite effect), but also about making better use of the housing stock that we actually have. There are rather a lot of well off older people who have houses that are far too big for them – perhaps one way of improving housing supply would be to tax such people for the damage they do to the general housing supply and the environment.
– it would be political suicide for the Lib Dems and the Tories to undertake policies that would reduce house prices rapidly
– if changes are made with regard to housing policy they should be introduced gradually, the UK experience is that rapid changes in the housing market usually have pretty disastrous and unanticipated knock on effects to the rest of the economy.
BTW I actually think that the recently announced measures are unlikely to have little practical effect, and their real purpose was really just propaganda to give the impression that the govt is actually doing something. Take up on these and similar schemes is usually pretty marginal.
Excellent analysis, Craig.
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Would you not also nationalise the Bank of England?
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That would in very short order wipe out our national debt.
Glenn follow the money trail and you will see where it all goes.
The Zionists have already started screaming anti-semitism when we attack banks with out even mentioing Israel.
There is a reason for it.
Attacking usurious banking is attacking Zionism.
O/T Who are the dozens and dozens of people sitting looking at screens at the Leveson ‘Inquiry’. How much is this farce costing? As much as the Chilcot inquiry said to be $2.5 million so far and counting.
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http://www.iraqinquiry.org.uk/news/20110721-costs.aspx
And now we have Gaddafi son a violent sex cheat says ‘wife’ and is a poopy pants, as well as an oik!
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Photo showing Saif standing with a glass of probably some expensive Bubbly in the box in Vienna opera ball, now why on earth anyone should want to waste time listening to some obese harridan screaming her tits off, and speaking in tongues, surrounded by a bunch of mincers, going about their mincing? Why not choose a heavy metal concert, with lots of amiable chicks whom can be lots of fun? Huh that is the curse of the rich pretentious tossers isn’t it?
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I digress, the poopy pants offensive is the first line of defence in case Saif lives long enough to manages to give evidence that could be somewhat be an eye opener, exposing most of the mercenaries in the establishment.
“I Slept with Tony Blair”, Claims Crazed Gay Ghaddafi Son.
Tabloids may use this headline on condition of a large donation to the Komodo Fund.
Is it now a case of Don’t… Book It Thomas Cook It.
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http://www.bbc.co.uk/news/business-15832438
OT
“Dublin man denies receiving funds from US to assist overthrow of Gadafy”
http://www.irishtimes.com/newspaper/world/2011/1122/1224307948175.html
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Half way down: “A report in the Sunday World newspaper claimed that Mr Harati had told gardaí investigating a burglary at his Dublin home in early October that a significant sum of money taken by the thieves had originally been given to him by US agents. The paper did not interview Mr Harati.
“The story was picked up by some media outlets in Libya and swept Facebook and Twitter, prompting Mr Harati to issue the denial …”
Hmmmmmmm
As usual, your analysis is spot on. The inflation in house prices is another obvious bubble, and a continuing escalation serves no-one’s interests aside outside of those in the financial services sector. A collapse in house prices would however become a problem for those who have overstretched, but in truth I don’t think this is likely to happen. Previous housing bubbles led not to collapsing prices but to a stagnant housing market, the reason being, presumably, that most people simply won’t sell their property until they can make a small return of their investment. I don’t see any problem at all in allowing the market to stagnate, and thus allowing ordinary inflation to gradually catch up. Meanwhile, as you say, let’s use government money to build the new housing that is desperately needed. We will need a ‘New Deal’ approach in order to turn around this depression, and that means investment in useful production and an end to the impossible bail-out of the banks. Money has to be reclaimed as a helpful tool for social development instead of being used as a weapon that holds humanity hostage.
O/T Back to July and Anders Breivik. I wrote to the PCC about the disgusting coverage by the Sun and have just received a reply. Too long to post and there is no link so this is the gist of the complaint and their response.
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Dear ….
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Further to an email from my colleague Simon Yip, as you are aware the Commission has investigated the concerns you raised through a lead complainant, which is our standard procedure when we receive multiple complaints about one issue.
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The Commission has now made its assessment of the complaint under the Editors’ Code of Practice. The Commission members’ decision is that there has been no breach of the Code in this case. A full explanation is below.
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If you are dissatisfied with the way in which your complaint has been handled – as opposed to the decision itself – you should write within one month to the Independent Reviewer, whose details can be found in our How to Complain leaflet or on the PCC website at the following link: http://www.pcc.org.uk/about/whoswho/independentreview.html
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Thank you for writing to us about this matter.
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Yours sincerely
Charlotte Dewar
Commission’s decision in the case of Various v The Sun
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The Commission received twenty-eight complaints about coverage in The Sun newspaper on 23 July 2011, the day after at least 77 people were killed in an Oslo bombing and a shooting rampage at a summer camp for young political activists on Utøya island. Anders Breivik, a Norwegian man, has been charged with the crime.
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The newspaper published three editions through the course of the evening. The 1st edition front page headline read: “Norway’s 9/11: ‘Al-Qaeda’ Massacre”; inside the newspaper, the lead headline across page 4-5 said “Rampage of the blue-eyed assassin: ‘Al-Qaeda convert’ shoots teens as bomb hits capital”. The 2nd edition front page headline read: “Norway’s 9/11: Bomb and gun massacre”; inside the newspaper, the lead headline said “Rampage of the blue-eyed assassin: ‘Lone terrorist’ bombs city & shoots youngsters”. The 3rd edition front page headline read: “Hunter killer: Norway’s nightmare”; inside the newspaper, the lead headline said “Rampage of the blue-eyed assassin: Lone maniac’s bomb and gun slaughter”.
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The Commission selected a lead complainant to investigate the matter.
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Craig drew attention to the Sun’s coverage http://www.craigmurray.org.uk/archives/2011/07/why-murdoch-is-not-a-fit-and-proper-person/
“O/T Who are the dozens and dozens of people sitting looking at screens at the Leveson ‘Inquiry’. How much is this farce costing? As much as the Chilcot inquiry said to be $2.5 million so far and counting.”
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who needs to hack phones when the celebs are sitting a a row …
“OT: Human Rights watch confirms US-funded Egyptian military regime now using live fire.”
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interesting that the egyptians are complaining of a poisonous more toxic tear gas being used … this was also reported by palestinians in gaza and in bahrain.
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seems its made in the US and severely restricts normal breathing.
I’ve never understood why we regard inflation as bad, but when it comes to house prices, it’s good
Arsalan – it’s not the Israelis who are screeching “antisemitism” when it comes to the Wall Street occupiers, it the banksters themselves and their apologists on Faux News, desperate to say anything to discredit the protestors. They’re also calling them dirty hippies, terrorists, communists and everything else a teabagger might hate.
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Come to think of it, the Israelis would probably support the protestors – “Wall Street ‘occupiers’? We rather like the sound of them!”
“The Last Whistleblowers”
http://warisacrime.org/content/last-whistleblowers
Extract
“Monday’s event was an annual presentation of Sam Adams Awards, in this case to Drake and Radack. Previous awards have gone to Rowley, Wilkerson, Katharine Gun, Sibel Edmonds, Craig Murray, Sam Provance, Frank Grevil, and Julian Assange. The award is named for the Sam Adams who in 1967 discovered that there were over 500,000 Vietnamese Communists under arms, over twice the number the Pentagon would admit to. Dan Ellsberg leaked the story to the press in 1968. Six days after the story ran, President Johnson complained bitterly about it. Six more days later he paused the bombing, opted for negotiations, and announced that he would not run for reelection.”
wonderful .. now ive been banned from the guardian cif pages … and i dont know why .. everything posted was innocuous considering the alternative rants of neo con – far right types
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if you thought it was already bad – maybe we’re entering a new political phase ..
Past tense Wendy…we have entered a new political phase. The Fascists have taken power.
Mods I have one comment waiting for moderation ? above here. Reply from the PCC on the complaint I made to the Sun on their coverage of the Breivik shootings which Craig covered on
http://www.craigmurray.org.uk/archives/2011/07/why-murdoch-is-not-a-fit-and-proper-person/
Thanks in anticipation.
Good one from Pepe Escobar on how freedom of speech is being silenced, access to the usual channels denied to journalists who step outside the boundaries and how protesters are smeared.
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Exposed: US Press “Freedom”
by Pepe Escobar / November 22nd, 2011
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Last week, independent journalist Sam Husseini went to a news conference by Prince Turki al-Faisal of Saudi Arabia at Washington’s National Press Club — where Husseini is a member.
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Then he did something that is alien to United States corporate media culture. He behaved as an actual journalist and asked a tough, pertinent, no-holds-barred question. Here it is, as relayed by Husseini’s blog:
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I want to know what legitimacy your regime has, sir. You come before us, representative of one of the most autocratic, misogynistic regimes on the face of the earth. Human Rights Watch and other reports of torture, detention of activists, you squelched the democratic uprising in Bahrain, you tried to overturn the democratic uprising in Egypt and indeed you continue to oppress your own people. What legitimacy does your regime have – other than billions of dollars and weapons?1
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Prince Turki, former Saudi intelligence supremo, former pal of al-Qaeda leader Osama bin Laden, former Saudi ambassador to the US, reacted by changing the subject.2
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Were this to happen in the Middle East, Husseini would have been duly kidnapped by Saudi intel, tortured and snuffed out. Ask the remains of Colonel Muammar Gaddafi. For much less — saying out loud in an Arab League meeting that King Abdullah was a traitor because he was encouraging the George W Bush administration to invade Iraq — the House of Saud did everything in its power, for years, to make sure Gaddafi was taken out.
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Turki exhibits all the trademark democratic credentials of the House of Saud. He refers to the push for democracy in the Arab world as “Arab Troubles”.
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After the Turki shoot
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According to Husseini, on the same day of the news conference he received “a letter informing me that I was suspended from the National Press Club ‘due to your conduct at a news conference’. The letter, signed by the executive director of the club, William McCarren, accused me of violating rules prohibiting ‘boisterous and unseemly conduct or language’.”
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Husseini, communications director of the Institute for Public Accuracy, which showcases critical journalism from all over the world, is a calm, thoughtful man with impeccable credentials. The accusation is not only bogus — it is downright pathetic.
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Was this a one-off? Obviously not. Flashback to January 2009, at the same National Press Club, during a news conference by then-Israeli foreign minister Tzipi Livni. When Livni was asked a tough question — once again by Husseini — the mike was cut, and the conference abruptly terminated. My cameraman, Sebastian Pituscan, was there with me.3
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So this is how the much-lauded “freedom of the press” myth in the US actually works. If you perform the job of an actual journalist, telling truth to power, forget about attending press conferences at the White House, Pentagon or State Department. You won’t even be admitted in the building.
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If you are an official from a “valuable ally” — such as the House of Saud or the regime in Israeli — you are assured a tough question-free pulpit anywhere you choose, especially if you’re fluent in English.
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But if you are an official from a “rogue” regime, the maximum you can aspire is to be humiliated in public, as it happened to Iranian President Mahmud Ahmadinejad at Columbia University in New York. Especially if you don’t speak English, and most of what you say is lost in translation.
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On the other hand, if you are a travelling US corporate media hack, you can get away with murder.
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Example. During the Asian financial crisis, in 1997 and 1998, I went to countless press conferences where parachuted US hacks intimidated Asian leaders as if they were a bunch of hooligans (the hacks, not the leaders). Perky chicks emerging from some two-bit journalism school in the flyover states treated then-Malaysian prime minister Mahathir Mohamad as if he was a child rapist, because he had established capital controls.
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Mahathir turned out to be right — as Malaysia overcame the crisis much earlier than those, such as Indonesia, Thailand and South Korea, that surrendered to the International Monetary Fund’s dreadful “adjustments”.
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In 1989, Chinese students protesting in Tiananmen Square were hailed by US media as heroes standing up to tyranny. In 2011, American students protesting all across the country against financial tyranny are “lazy”, “bastards”, both, or downright criminalized.
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United States corporate media could not possibly admit that repression in Tahrir Square by Egyptian riot police is exactly the same as repression in New York, Oakland, Portland or Boston by American riot police.
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Still there’s no word from the North Atlantic Treaty Organization about setting up a “humanitarian” no-fly zone over selected Occupy sites in US cities. They are still consulting with the House of Saud.
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http://dissidentvoice.org/2011/11/exposed-us-press-freedom/
http://news.nationalpost.com/2011/11/22/george-w-bush-tony-blair-found-guilty-of-war-crimes-in-malaysia/
“now ive been banned from the guardian cif pages ”
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The Gurudian offers the same state-inspired propaganda as the BBC, which is not surprising since, as explained here, it is owned by the Scott Trust which is headed by Liz Forgan, a former Director of Programmes at Channel 4 and Managing Director of BBC Radio.