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city experts get it horribly wrong

They predicted -0.8% and it came out at 0%.

 

Also the inflation stat that does not include housing costs ROSE and was unexpectedly higher than last month and well above the government target of 2% at 3.2%.

 

The moral of this story is no one knows!  And it got me thinking.  Does it really matter?  What is being reported is Macro economics.  This is the economics of the country as a whole.  Large population data aggregated and averaged so we get a general idea of what is going on.

 

Micro economics is all about what happens directly to us.  Meaning YOU!

 

So what are you interested in:

 

Macro Economics or Micro Economics?

 

Easy question to answer is it not?

 

So how is your personal situation?  If you were reading the FT which was all about you what would your headlines read like?  Would it be:

 

"JOHN'S SALARY GETS EATEN UP AGAIN FROM EXCESS SPENDING ON THE HIGH ST AGAIN!"

 

Or would it be:

 

"JOHN HAS DECIDED TO ENTER THE RESIDENTIAL PROPERTY MARKET AS HE THINKS IT IS UNDER VALUED"

 

I know which one I would prefer it to be!

 

So do not take too much notice of the macro data.  They talk about 15% decline in property values. However I have seen properties priced at £15,000 in England.  I have not seen properties that cheap since 2004.  The micro economic picture for that property in that street is a 60% decline.  These are the stats I am interested in and you will not find reported about on Sky news.

 

So at £15,000 with a rental value of £3,600 per year my headlines would read:

 

"AJAY FINDS STREET WHERE PROPERTIES YIELD OVER 20% AND PLANS TO BUY THE WHOLE STREET!"

 

Ajay


Posted on: 24th Mar 2009




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