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sarkozys magic


woody2122

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Surely he is losing his magic and some commentators suggest that his weakness lies with the opposite sex.  Our French neighbours are now beginning to get worried about his almost daily pronouncements. Again of course he is short in stature like Napoleon.

Finally is his now wife the same lady with had flings with Mick Jagger and Eric Clapton they too had money and clout and exposure?

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[quote user="Llwyncelyn"]

...is his now wife the same lady with had flings with Mick Jagger and Eric Clapton they too had money and clout and exposure?

[/quote]

You can add Donald Trump. Kevin Costner and former French PM Laurent Fabius to that list (and there's more if you want).

France's current economic position is somewhat different from Britain's in 1997, and the world situation is vastly different too, so I can't really see the Bruni effect doubling the value of our particular bijou chateauette.

 

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I well remember the similar "Magic" of Heath-Barber in the early 70s: when the property market imploded, as did the banking and investment industries: and I lost a bundle!

I also remember the identical Magic of the wondrous Thatcher-Lawson period - when precisely the same thing happened.

Any fool can kickstart a synthetic boom, by falsely lowering interest rates.

The problem is, another fool did in 1997: and the UK is only now starting to experience the true depth of the potential downside.

I doubt people will employ the term "magic" to describe the UK economy and society in a few short months time........................

 

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[quote user="Gluestick"]

I doubt people will employ the term "magic" to describe the UK economy and society in a few short months time........................

[/quote]

I have to agree.  I am no economist but I remember 4 or 5 years ago people were talking about the economic problems being stored up for political short term gain at the time (the "Blair/Brown aren't we doing well talk" - and it was business people saying that rather than those who were anti the government policies.  And now we are seeing pretty well what they were saying happening close around when they said it would happen.

Things are going to start getting interesting in the UK.

Ian

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France's current economic position is somewhat different from Britain's in 1997, and the world situation is vastly different too, so I can't really see the Bruni effect doubling the value of our particular bijou chateauette.

Damn! :-)

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  • 2 weeks later...
It's fairly safe to expect house prices to double over a "period of years" - the difficulty is guessing how long that period may be.  Property in the western world has doubled in value every 10 years or so on average for about 1,000 years (remarkably) so I guess a 5-15 year period would be a fair bet, wherever you are.

When it comes to Sarko's (or any governments effect), the less they try to affect the economy usually the better I find.

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Hmmm................... I doubt our French house has increased by 50% in the last five years...................so if this is true, its got a lot of increase to achieve in the next five years!

Sure, our UK properties have more than doubled in probably a four year spectrum.

However, that's abnormal.

 

 

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[quote user="Gluestick"]

Hmmm................... I doubt our French house has increased by 50% in the last five years...................so if this is true, its got a lot of increase to achieve in the next five years!

Sure, our UK properties have more than doubled in probably a four year spectrum.

However, that's abnormal.

 

 

[/quote]

Come on now Gluey, you are expert enough to know that when you look at a 10 year investment window, you cannot half the return over half the term..........it doesnt quite work like that does it??

I had a conversation with my husband this morning regarding UK house prices and we both picked the same figure out of the air that Ian has quoted.  Ian can you back this up?

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Oh I agree such capital increases are rarely arithmetic.

However, if there is little capital appreciation in the first five years, then the appreciation in the last five would have to be almost exponential!

That said, I cannot buy in to Ian's suggestion that western European property will increase at the previous traditional rate: since it has performed far differently on a country-by-country basis.

France and  and Belgium, for example, haven't seen anywhere near the capital appreciation as Holland and the UK, for example.

At present, the residential property market in France is basically static. The main reason for this, of course, is that there is no shortage of developable land: unlike the UK.

Like you, Katie, I would much like to know from which source Ian gained the projection.

 

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When I returned to the big bad City in early 1970s, Katie, I worked as a Sterling Dealer in the then embryo Interbank and Commercial Sterling markets.

To say they were interesting times rather understates reality!

The then index was crashing: banks were toppling, as were commercial property investment companies like Lion and Stern Group.

It was the age of Slater Walker (Parodied so well in Python as the revered Slater Nazi!), John Bentley, Jim Goldsmith, Tiny Rowland and a host of City Bucaneers..

After this, I became deeply engaged in international finance on major projects and borrowings and travelled quite a bit.

In the whole of this period I came to realise that projected forward values were, as my American colleagues  were wont to say "Best Guestimates"!

The fiasco over Endowment Mortgages (which I decried at the time) illustrated succinctly how foolish it is to rely on any investment delivering estimated profits!

Today, I write on various economics and financial-business topics and have been a vociferous critic of  Derivatives. Which do make markets notoriously fickle and totally impossible to predict with any certainty.

As the recent Sub Prime nonsense has proven.....................................

Unfortunately today, there are far too many variables in play for anyone to accurately even estimate where any index or investment might be in a few years hence.

For this we can thank globalisation and financial engineering!

My money's with Buffet! The Sage of Omaha has rarely been wrong.

 

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Comparing "like for like" house prices is hugely difficult.  For example UK government figures show an "average" house cost £600 in 1931 - if that doubled in value every 10 years it would be worth only £80k or so today. And we are told that UK average house prices are around £100,000 higher than that in reality.

But the quality and fittings of a modern house are some way ahead of their equivilant 70 years ago. How do you judge?

Using UK Doomsday Book real estate values gives you an approximation of the double every 10 years stat (an average) over the last (almost) 1,000 years.  Other countries have similar (and yes, statistically flawed) historical documents that lead to the same ultra-long-term figure.

In the UK, house prices have only really been tracked with any degree of accuracy since 1973 when the Nationwide Building Society began their annual review.  Their average increase in house prices is just shy of 9% a year over this 35 year period: i.e. prices have doubled every 8 years on average. This is running ahead of our ultra-long trend and more recent years trends of doubling in the last 5 or 6 years suggests a correction will occur.

During this 35 year period we have seen house prices race ahead and indeed drop (just as they did between 1066 and the publication of the Doomsday Book published 20 years later).

A note on the word "average": remember the story of the economist who put his head in the hot oven and his feet in a bucket of iced water - he said "On average I feel just fine".

Long term price trends are fractal (with cyle upon cycle hidden within trends) and subject to considerable variation - though property prices show less variation than other assets prices such as equities.

The orginal poster asked will property prices double? The answer is Yes.  By when? that remains to be seen. I make NO PROJECTION on the timeframe - especially for any given single property.

But if anyone was to buy 10 real estate properties in each of the 27 EU countries plus the 3 official candidate countries today ... my guesstimate would be that the value of this 300 property portfolio will have doubled by (say) 2022...but don't listen to me, I sold my google shares when they reached $400

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Ian:

A number of years ago, the Investor's Chronicle published a reasoned analysis, which demonstrated that demonstrated building and construction had been going in Seven Year Cycles since Roman times!

I am always very wary of extrapolating ANY financial performance figures: as I just hate becoming a hostage to fortune!

I fear the UK is a wholly separate phenomenon, vis a vis residential property prices. The uniqueness is caused simply by the Post-Norman invasion era when Guilliame rewarded all his knights with massive land grants nicked from Saxon rulers.

The actual total developed land area of the UK (Including all infrastructure such as roads, ports airports etc), offices, factories, warehouses, government offices etc and houses is small, when compared to the total land area; which in the main has remained in the same familial hands since the year dot.

Exacerbating the problem is the further reality of a majority of the total population living in England: and a majority of that majority living in the South!

Thus the basic economic law of supply and demand comes into play.

All of that said, will interest rates remain at an historically low level (50 years) and will the underlying economy create such significant growth that individual earnings will advance so much on a post-tax basis, that people will be able to afford to debt service and repay principal on the current inane 8 or even 9 times earnings basis?

Will lenders still want to compete to see who can amass the greater losses after 2008?

I have my own view!

[Www]

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Extrapolation of trends, support lines, resistance lines and certainly cyles is fraut with danger and a subject of which I have only a working knowledge within limited spheres.  "And in the long run  ... we are all dead"

Without drifting into over-bought or over-sold indicators, I have read that European house prices tend to stabilize around 5 times average earnings (of the "local" population - whatever that means).  With this in mind much of Europe looks expensive and some looks about right - very little looks a bargain.

Sarko's ability to affect this remains to be seen.

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I think Sarkozy's ultimate dream aim is to pen a new constitution, never mind transform the economy. He is indeed a poor man's Napoleon.

I had to laugh when I saw his plan for revitalizing the French housing estates: buy your own council house and tons more police! A war on drugs - yeah because we all know how well that kind of thing works, don't we? Sounds very tired and familiar.

The changes he wants to make will bring the unions out and he'll try and crush them, it's a necessary part of his Thatcherite plan: he can't go straight into Blair mode, France isn't set up for it. He'll no doubt need a Falklands or Iraq to bag a second term, you can see he's already preparing for that when you take into account Kuschner's (illegal) bellicose comments on Iran.

 

If he goes ahead with things there'll be blood on the streets and eventually - if he wins and manages to hang on for years to come - France will resemble Britain: a nascent US with all associated social breakdown and insane consumerism.

Either that or he'll be a lame duck that we'll look back at and laugh.

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[quote user="Gluestick"]

Sadly, I fear that le petit Nicolas's chance to affect any meaningful change, has been frittered away in his totally evaporated credibility!

 

[/quote]

Yeah, but look at how they ridiculed Bush jr and he managed a second term...

He's very comfortable where he is and I predict a war of some sort if a strong centrist or socialist candidate surfaces. Surely that's his only remaining chance to appear Presidential?

Bora Bora is just asking for it! [:@]

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[quote user="Bones"]I think Sarkozy's ultimate dream aim is to pen a new constitution, never mind transform the economy. He is indeed a poor man's Napoleon.

I had to laugh when I saw his plan for revitalizing the French housing estates: buy your own council house and tons more police! A war on drugs - yeah because we all know how well that kind of thing works, don't we? Sounds very tired and familiar.

The changes he wants to make will bring the unions out and he'll try and crush them, it's a necessary part of his Thatcherite plan: he can't go straight into Blair mode, France isn't set up for it. He'll no doubt need a Falklands or Iraq to bag a second term, you can see he's already preparing for that when you take into account Kuschner's (illegal) bellicose comments on Iran.
 
If he goes ahead with things there'll be blood on the streets and eventually - if he wins and manages to hang on for years to come - France will resemble Britain: a nascent US with all associated social breakdown and insane consumerism.

Either that or he'll be a lame duck that we'll look back at and laugh.
[/quote]

I believe the one sovereign difference between France and the UK is the militant attitude of the average Frenchman.

With the sole exceptions of BL and NUM (Red Robbo and Arthur Skargill) and until Murdoch and Thatcher did their cloest deal, of course, the British Trades Unions were very weak and ineffective.

The British failed to stand up for their rights as they were gradually taken away over the years, now culminating in the almost Fascist actions of the police in the Anti-Capitalist demonstrations (If one remembers, a load of totally innocent women and kids on shopping trips were herded into an alley in high Summer and denied access to lavatories and water for over 4 hours) and BLiar's reaction to the first fuel protest. The second was halted before it had begun.

If Sarkozy was foolish enough to take on the French unions and the average workingman head-to-head, France would explode.

Both Lionel Jospin and Domenique de Villepin learned this lesson the hard way!

If anyone is to "Reform" France, then this has to be a piecemeal and gradual process, not the sweeping follies de grandeures beloved of media obsessed, egoist politicians.

Whilst it seems tempting to try and emulate Thatcher, the French economic and social state is wholly different to that of the UK in 1979 onwards.

France is still, effectively moving its society and economy on from an almost total preoccupation with an agrarian economy, post the end of WWII.

In 1957 when France signed the Treaty of Rome, circa 90% of its total workforce was engaged in agriculture. The results of that heritage linger still today.

To dismantle the social state and implement a market driven economic revolution will take many years.

And would change the face of France entirely.Personally, I believe most French citizens would resist.

Thatcher had no cogent or effective opposition: this is not so for le petit Nicolas!

 

 

 

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[quote]

Yeah, but look at how they ridiculed Bush jr and he managed a second term...

[/quote]

The USA is rather different!

Dubya was just a figurehead who represents the exclusive interests and concerns of Papa and the Carlisle Group amongst others.

The whole apparat of the state and its organs have been used almost exclusively to serve the narrow financial concerns of the Bush Snr power clique.

The electors have been an incidental item.

I don't believe it is possible to "Buy" the presidency in France in the same way.

Yet.............................

 

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Agreed, essentially, on both points Gluestick. However I don't think Bush needed to buy the Presidency, in fact I believe the Republican party doesn't actually spend that much on its campaigns. Tis the war that got him back in, despite the backlash, curious...

I think Nico might have a go at hurrying along the death of the unions in France anyway and has just the right amount of hubris to believe he could win.

In his favour, I feel that France is gradually closing that gap between its rickety old self and the UK/US and if Sarko thinks that the people who put him into power would side with him and his vision when it came to le crunch, then he'd give it a whirl. He seemed to weather the banlieue controversy ("I'll sweep this scum off the streets") pretty well given his subsequent election as Prez.

If you look at the recent employment changes they tried to implement for young workers (which, I didn't think was all that bad an idea given the state of things) it was Chirac who pulled the plug and the PM who took the fall. I just don't see Sarko pulling the plug quite so easily.

In fact, Sarko's 'vision' would require - one would think - exactly the sort of measures the above example alludes to; I doubt he'll shy away from at least one similar reform during his Presidency, do you? I mean, there's only so many times he can say, "look, I'll do it, just give me a little bit more time". Given that the already militant French will be just waiting for any such opportunity to bash Sarko on the streets I can see one hell of a battle coming up.

In short (if you'll pardon the pun) I think Sarkozy is more Bolshevik than  Menshevik.

Or perhaps you're right and I'm giving him far too much credit. He'll retire early with Carla, sit around in his presidential underpants all day. [+o(]

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