".......the hard pro's that deal with Rixxy....."

I thought Rixxy was the hard pro!

TJ, having savings earning 18% sounds attractive - but what about inflation? Does it historically just cancel out the high interest earnings?

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Roberto

Lol

Yes unfortunately. High rates are to compensate you for high inflation. Currently we have the worst of all worlds, relatively low rates and high and riseing inflation. The higher rates come later as gov.s are forced to tighten the screws. Unfortunatly the people that bought property when rates were low can't change the fact that property was priced for the then low rates. The best time to buy property is of course during very high rates, things can and will get better.

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Many financial commentators have drawn parallels between now and 1929, it actually took the US two decades to recover from the great depression. Leading up to it there was a lot of euphoria, as the crisis took hold these were the comments made by the powers to be at the time -




1 "We will not have any more crashes in our time."- John Maynard Keynes in 1927 [NB: The authenticity of this one is a little suspect]

2. "I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future." - E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

"There will be no interruption of our permanent prosperity." - Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

3. "No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding." - Calvin Coolidge December 4, 1928

"When the financial and business history of 1929 is finally written, developments of the past fortnight will occupy a prominent place in what will doubtless be the chronicle of an exceptionally brilliant twelve month period." - The New York Times, July 1929

"It becomes increasingly evident that, in many respects, 1929 will be written into the commercial history of the country as the most remarkable year since the World War in point of sustained demand for goods and services." - The New York Times, August 1929:

4. "There may be a recession in stock prices, but not anything in the nature of a crash." - Irving Fisher, leading U's. economist, New York Times, Sept. 5, 1929

"Stock prices will stay at high levels for years to come, says Ohio economist" - The New York Times, II, Page 7, Col. 2, Oct 13, 1929

5. "Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher than it is today within a few months." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929

The market went into decline until Monday, October 21st, 1929

"He dismissed yesterday's break in the market as a 'shaking out of the lunatic fringe that attempts to speculate on margin.'" - Irving Fisher, The New York Times, Oct. 22, 1929

"Security values in most instances were not inflated"

"The nation is marching along a permanently high plateau of prosperity"

"any fears that the price level of stocks might go down to where it was in 1923 or earlier are not justified by present economic conditions"

- Irving Fisher, speech to a banking group, Oct. 23, 1929

"This crash is not going to have much effect on business."- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

Flashback to "Black Thursday," Oct. 24, 1929:

Stocks opened moderately steady in price, but traders whose margins were exhausted began selling heavily... at one o'clock the stock ticker was recording prices from half past eleven... stocks dropped 11% intra-day... After a bankers' consortium sent NYSE Vice President Richard Whitney to the stock exchange floor to offer to purchase in the neighborhood of twenty or thirty million dollars' worth of stock at the previous selling price [most likely above their quotations], the market eventually closed with only a 2% loss.

Ref: Only Yesterday: An Informal History of the 1920's, Frederick Lewis Allen, Chap. XIII.

Not long after, the stock market plummeted in two days of panic: October 28 became known as "Black Monday" (13.47% decline in the Dow), and October 29 as "Black Tuesday" (11.73% decline in the Dow). Between October 23rd and November 13th, 1929, the Dow fell by 39%.

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices." - Goodbody and Company market- letter quoted in The New York Times, Friday, October 25, 1929

"The fundamental business of the country, that is production and distribution of commodities, is on a sound and prosperous basis."- President Herbert Hoover, October 25th, 1929

"They have lost a few tail feathers but in time they will grow again, longer and more luxurious than the old ones." - The Wall Street Journal, between Oct 24 and Oct 29, 1929

"The investor who purchases securities at this time with the discrimination that as always is a condition of prudent investing may do so with confidence." - New York Times, October 28, 1929

6. "This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years." - R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

"Buying of sound, seasoned issues now will not be regretted" - E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom." - R. W. McNeal, financial analyst in October 1929

7. "The decline is in paper values, not in tangible goods and services... America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin." - Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

"Hysteria has now disappeared from Wall Street."- The Times of London, November 2, 1929

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before." Business Week, November 2, 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..." - Harvard Economic Society (HES), November 2, 1929

8. "... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall." - HES, November 10, 1929

"The end of the decline of the Stock Market will probably not be long, only a few more days at most." - Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"In most of the cities and towns of this country, this Wall Street panic will have no effect." Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

"Financial storm definitely passed." Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

9. "I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress." - Andrew W. Mellon, U's. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence." - Herbert Hoover, December 1929

"[1930 will be] a splendid employment year." - U's. Dept. of Labor, New Year's Forecast, December 1929

10. "For the immediate future, at least, the outlook (stocks) is bright." - Irving Fisher, Ph.D. in Economics, in early 1930

11. "..'there are indications that the severest phase of the recession is over..." - Harvard Economic Society (HES) Jan 18, 1930

12. "There is nothing in the situation to be disturbed about." -Secretary of the Treasury Andrew Mellon, Feb 1930

13. "The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity." - Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

"... the outlook continues favorable..." - HES Mar 29, 1930

14. "... the outlook is favorable..." - HES Apr 19, 1930

15."While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us." -Herbert Hoover, President of the United States, May 1, 1930

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..." - HES May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

16. "... irregular and conflicting movements of business should soon give way to a sustained recovery..." - HES June 28, 1930

17. "... the present depression has about spent its force..." - HES, Aug 30, 1930

18. "We are now near the end of the declining phase of the depression." - HES Nov 15, 1930

19."Stabilization at [present] levels is clearly possible." - HES Oct 31, 1931

20. "Executive Order 6102 Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates

By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled "An Act to provide relief in the existing national emergency in banking, and for other purposes", in which amendatory Act Congress declared that a serious emergency exists, I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order...

All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

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Now I know why they call it a depression.............it's all very depressing!
Well, as the song goes....."things, can only get better"..........

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"The best time to buy property is of course during very high rates"

Ah-ha!  So, now we know the answer to the question of how to know when the market has hit rock bottom. When interest rates hit 18%, we'll be able to snap up the bargains at 50% less than today's prices. Got it.

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RBS issues global stock and credit crash alert

By Ambrose Evans-Pritchard, International Business Editor

 

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets."I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names."Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

This message was last edited by TJ222 on 6/18/2008.

This message was last edited by TJ222 on 6/18/2008.

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Morning All.

Still the same sex hmmmm - now then, who knows how I started out...........

As for being a pro, well if it puts the food on the table....!

But yes there are many hard nosed investors out there, still holding back. It will be an interesting scenario and Im waiting to see what the banks will do. Apparently they have enough money to hold out and weather the storm, which the UL ones didnt have back in the 90's so maybe they wont have to let stock go cheaply. In which case buying from current desperate owners who will accept the hit may be the only way of buying a cheap property!!

I will keep you all updated as it comes in

Over and out (too early in the morning really!)

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It sounds like i shouldn't bother buying in spain at the minute then! It all seems very pessimitic from you all.
I would agree it does go in cycles, but if you buy at the right price that suits you and you aren't selling during the bad spells then you will be ok. We do have to contend with rising rates and costs, but so long as you can pay the bills and have enough left to buy beer its all ok! It is like it in England now, you can buy cheaper than the last few years and the properties will go down for next couple of years but they will recover and make you money. Even taking all the cycles into account on average a property doubles in value over 10-12 years.

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And its balancing it against life in general. If we all held back from anything when the going got a little tough then humans would hardly have advanced in the last thousand years!

If its right for you then go for it. People are still buying and there are more people that WANT to buy than CAN due to the banks effectively closing the dorrs.

Most buyers are lifestyle - they are not looking for profits, but mainly for own use over the years and eventually as an investment for their kids. That goes for english and Spanish

And on the Spanish ones, I have a client wanting to buy in an unlicensed development in Marbella. She is a lawyer, her father works at the town hall (no, wasnt arrested) and although she knows there will be a fine to pay, if she can get the proeprty at a good price - and which the owner is willing to sell at as he wants the money to start a business up - then she will buy. Despite banks not giving any finance on the place. Cash buyer.

Its not as bad as it seems, although it is tough.

 

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I have been looking at property prices including ones at bottom of Rixxys website and they have different rates Sterling to Euro that i have been informed. I am told 220,000 can transfer at 1.27 so £173,000. On various sites they state £170,000 would equate to 280,000+ euro. What is the truth!!

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John

The current FX rate is 1.26.

Respectfully I suggest if you cannot find this yourself, you have no place in the current property market, or adviseing others on the suitablity of investment. No offence etc.

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Never mind respectfully you arse. Who are you to make judgements on what i can and can't do. I didn't realise you had to be an expert (which you obviously are) to join in these discussions. I am looking to buy in Spain and was after reading others thoughts and get a bit of friendly advice, including why different web-sites have different exchange values. I read your postings and when i woke up i was non the wiser.  If you don't want to discuss thing with me then fine, but don't try to bully me out. You obviously like to inflate you head on forums like this but don't score points of me.

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John

I apologise, it was a disrespectful remark and I'm sorry.

"Who are you to make judgements on what i can and can't do."

Obviously you can do what you like its your money and will be your responsibility. I am trying hard to stop ordinary people from following in the footsteps of hundreds and thosusands of others before, and ending in financial disaster. I do this because I have compassion for others, no other reason. I am financially independent and my field of expertise is financial markets. I have no vested interest in Property in spain.

"You obviously like to inflate you head on forums like this but don't score points of me."

I'm sorry if thats how I come across, I'm not trying to score any points, rather the opposite.

The situation is the world economy is as bad as I have seen it in my entire career. Its much worse than the authorities are letting on, thats becuse they don't want people to know the truth. This property bubble was built on cheap debt, now its going to get very expensive if its available atall. Its a disasterous time to buy property in Spain, and I want to tell the truth and help people if I can. If people are proffessionals and have their own money and understand the risks then I wish them good luck. These are not the people that I am concerned about.

If the situation re valuations and the economy was not bad enough, just look down this "Spanish Agents Forum". Every second thread is a sob story about some developer going bust, or someone running off with their money, or not completing as required or illegal build etc. 

Its a miracle that anyone is still interested in buying in this country full stop. Wait for teh crash to play out and there will be a second huge benefit.

Spain will realise that as a country it has cooked its golden egg. Eventually the authorities will clean up the whole property arena wrt to legality and regulation, inorder to save an important part of their economy.

Then you will buy at half the price and with much better security.

Anyway what ever you do i wish you good luck!

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Ok, thanks for the reply. Tiff over now. 
It does sound like i am better waiting for a year or two until i buy so thanks for that advice. I will keep loggin in for advice, as i do like the west Del Sol area and will buy holiday home eventually.

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Please ignore the sterling on the website! My webguys are the ones who can change this and I have asked them to remove the facility as it doesnt update automatically! I have no idea what rate they have used but its a bloomin nuisance! I think I willpost a large notice on the front page warning everyone.

Our official currency is euro and anyone selling in Spain as an agent has to quote that - anything esle is a guestimate

Sorry to have confused you.

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"It is like it in England now, you can buy cheaper than the last few years and the properties will go down for next couple of years but they will recover and make you money. Even taking all the cycles into account on average a property doubles in value over 10-12 years."

No no and no. This is a myth - a terrible one at that.

Pls see the "Property nett zero" thread under Buying Property.

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Pls see the "Property nett zero" thread under Buying Property.

can you privide a link by any chance, did a search and c ouldn't find it

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http://www.eyeonspain.com/Secure/ForumPostsDesc.aspx?thread=4654&dev=FB5&name=Buying%20property 

This is the link you are looking for.

Noreen

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Global Property Guide recently updated their page on Spain. Has got great coverage

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http://www.eyeonspain.com/Secure/ForumPostsDesc.aspx?thread=4654&dev=FB5&name=Buying%20property 

This is the link you are looking for.

Noreen


Thanks, another great thread by TJ

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