The Social Blog

We're having some work done on the chimneys at the side of the house at the moment (or at least, we have the scaffolding up, ready for the work to start), so I decided to nip up the ladder to see what the view is like.

The view is actually pretty dull, but stitching some of the pictures together makes this panorama:


See if you can spot Fawley oil refinery, the Itchen Bridge, the roof of St Mary's football stadium and easiest of all, the top of Highfield Church. Zooming in as far as I can over the water towards Fawley, I think I can see the Rowridge television transmitter on the Isle of Wight. Looking at Google Maps I think maybe it's on the wrong side of the Fawley chimneys though :-/

I used to be able to make a website that had little thumbnails of pictures with links to previews and full size versions, but I've lost my template that I made to do it :-(

Can anyone recommend a better way to show off some photos than this:

I went to the Centre for Banking, Finance and Sustainable Development Inaugural Evening Seminar last night (it was free, and on my cycle route home ...):
Centre for Banking, Finance and Sustainable Development Inaugural Evening Seminar

The title for the Seminar was "The Banking Crisis: Causes, Consequences and Solutions". We heard Charles Goodhart (a monetory economist), Richard Werner (an "academic" economist, I guess, Centre Director) and Stewart Wallis (ex IMF, Oxfam, now Exec Directory of the New Economics Foundation) talk.

I picked up a couple of interesting points and opinions - probably all economics 101, but I think some of the speakers had non-mainstream opinions about the best responses to current problems. Boiling the two hour event in to just the nuggets that I took away:

One statement that Werner made was that most trained economists are too optimistic about the current situation because they know that government could take action to fix the problem quickly - but then showed two lists of government interventions over the last 100 years or so; the list of unsuccessful interventions was rather bigger than the successful efforts (Germany 1933 a success?)

He didn't seem impressed with the current (UK led) response to the situation, and to me seemed to be suggesting that the central banks should simply create more money to use to buy the unpopular assets. Werner pointed out that private banks "create" money (credit creation) they don't "lend" money; in fact they create 95% of money in circulation. He stated that the central banks should start creating money rather than giving the private banks that monopoly because it would be cheaper for the tax payers. Kind of makes sense, but left me thinking "What's the catch?"

The causes of the current problems were laid out by Goodhart and Werner with different emphasis.

Goodhart:

• Very high loan-to-value ratios were allowed
• Loans were sold on in a way that the owners of the debt had no visibility or understanding of the source of the debt (but, the actual CDO products are not that complicated, it is the lack of transparency that is the problem.)
• Banks abandoned the highest quality of asset in favour of the higher yielding but riskier assets.

Werner:

• The myth that asset prices (specifically US house prices) only go up took hold (leading to the high LTVs mentioned by Goodhart)
• Speculative Credit Creation (money created and used to buy non-productive assets) was favoured over Productive Credit Creation (money created and used to increase GDP)

This was presented so clearly that I had to wonder why it had been allowed to happen, but Goodhart made the point that booms are incredibly popular while they are happening, and that interest rates are the only method given to central banks to manipulate the economy. He stated that interest rates were not an appropriate way to bring the situation under control, and that a way to limit leverage was needed to ensure the stability of the systems, whereas the current regulation is focussed on Capital Asset Ratio which is only good to ensure the stability of individual institutions.

I obviously didn't quite understand the interest rate statement, because I'm left wondering why interest rates weren't in fact set higher to cool the situation down. Perhaps it would have been irrelevant because the myth that asset (eg house) prices only ever go up had taken hold?

Wallis took the opportunity to talk at the beginning of the seminar session. His emphasis was that the environmental and social "assets" are completely missing from current economic theory, and as such that made any text book on the subject "fiction". This is bad because policy is being based on an incorrect theoretical foundation, and so we are not managing those resources properly. He then made very interesting points that deserved to be a seminar all of their own regarding how credit could be better directed.

I picked up a pretty big diversity of views in the panel members - Goodhart seemed to be making a point of looking at his finger nails while Wallis spoke, and I wonder if he felt that his concerns were less relevant during the "crisis" that has been recently and narrowly avoided. (Has it been avoided?)

It would have been interesting to hear Goodharts views on the statement that the central banks should be creating credit buy both lending and buying unpopular assets.

However, the popularity of the event seemed to have taken the organizers by surprise*, and the time lost registering visitors at the beginning of the event meant that there was no time to put these questions to the panel.

Any views? Please leave a comment!

* Perhaps because of the note about the event at www.portswood.info ?, but there were obviously a lot of university students present too, practically hanging from the rafters!

Portswood news for everyone:
http://portswood.info/

This is not quite so local - I'm not even sure where Bitterne Park is: http://bitternepark.info

There doesn't seem to be a version for Shirley, an area of Southampton famous for its slow internet connections.

Our house (now with curtains, internet connection, boards and a ladder to get to the loft, secondary glazing at the front, a door in to the en-suite bathroom, TV aerial, ...):

We've been living in our "new" house for about a year now, but our solicitors (Footners) have just emailed to say that the (hopefully) final loose end is tied up: we bought the freehold today (before we only had the remainder of a 999 year lease. At least I think that the lease is 999 years, but unlike previous times we've bought a house the solicitors haven't bothered to give us the photocopies of the lease.

The freehold cost us £150 to buy, plus £800 in legal costs and fees.

I've taken a week off work and discovered that Dilbert is not the only comic on the internet.

Em is going down to the bank tomorrow to transfer all of our money to our solicitors so that he can pay for our new house. We've started putting our things in boxes (the things that weren't still in boxes from our last move), and it finally feels like we're actually going to move. So, here are some pictures of our new home:

This is a few months ago, before it went on sale. We had already met the builder doing the rennovation, but he told us it was going to go up for sale with Goadsby Estate Agents.

This is more recent, but still lots of work to do.

Work in progress in the giant kitchen.

Tiles in the bathroom, not grouted yet ...

The garden, with space for a big shed at the back.

The house was built in 1906, was recently 2 flats, and is now one house again. I disagreed with the people who gave me quotes for the wiring about how much it should cost, so I ended up having to put in data cabling myself (well, me and Graeme, and it wouldn't have been done without his help!), so I've been in the house a few times now. I'm a bit nervous about how the builders are going to get the real work finished in time for Tuesday when we pick up the keys.

Labels: welbeck avenue

Contracts exchanged. There were niggles over when various certificates for work on the house would be provided, and also we needed the seller to get an insurance policy to cover some nasty wording in the (1000 year) lease on the house, but it's all happened. I now have a window of opportunity to get ethernet cable put under the floor boards by the end of Friday. Grr.

OK, Plan A stalled, and I haven't kept this blog up to date with the current thinking, which I'll call "Plan B".

Plan B is this house http://www.rightmove.co.uk/viewdetails-9710946.rsp?pa_n=2&tr_t=buy

Plan A was a very nice house, but we haven't been able to prise the current owners out of it, but plan B is being sold by a builder, and so in theory it's a nice easy transaction. It's been renovated, so the theory is that we won't need to do any work.

So much for theory. Right now I'm not happy that the house is supplied with no wiring for ethernet or a burglar alarm, and also pretty stressed. Maybe we'll exchange contracts later today, and then at least the stress will go away.

I was secretly hoping I would be able to avoid any more vacuum cleaning by moving house, but that's not going to happen now, so if anyone wants to visit, come now, the carpets are clean again.

For the last few weeks I've been phoning the vendors Estate Agents, our building society and Footners (our solicitors) to check if there are any problems with exchanging contracts on September 17th. This week (now only a little more than a week away from that date), the estate agent suddenly started seeing problems, and it seems the solicitors did not have as comprehensive set of documents as I'd believed they had from the vendors.

On Thursday last week everything seemed to be coming together, and I was making myself unpopular at the solicitors by asking them when they were actually going to pass on any of the information that they been gathering. I'd been asking them every other day for over a week why the promised letter or phone call from the solicitor them hadn't arrived, and what we got suggested that the vendors solicitors were still waiting for freehold documents from "the lenders". That's odd, because there is no lender mentioned on the title abstract.

Footners have been like an information black hole, and not returning my phone calls and suggesting I'll receive letters from them that never arrive has been frustrating, so now I've just made an appointment to see them in person now. We need to show ID in person at some point before the exchange of contracts anyway, so it will be a chance to actually peer in to our file to see what actually has arrived. Except that they apparently have two files for our transaction because Pearsons Estate Agent mis-spelled our name in the initial letter to Footners.

Pearsons have been a bit confused about the vendors situation too. They've initially said that there shouldn't be any problem with our exchange date, but then started talking about the vendors survey being too late for our exchange, and then dropped the bombshell that a survey had been done but had shown that the house had been underpinned. The vendors have decided to pull out - so now we're not in a chain any more, and certainly don't have a move date. Boo.