Tuesday, April 15, 2008

Iain Dale's Sting: Relying on Bookies for Forecasts

Pre-eminent Tory Boy Blogger relies on bookies' prices on housing market changes. Yes, Iain is reporting what the bookies "reckon" on house prices.

Has he not noticed the old phenomenon of bookies having five windows to take bets and just one paying out? The bookies reckon on making a profit from sentimental, greedy, sporting, gullible, calculating (delete as applicable) folk who fancy a flutter.

With the "value" of many homes in Manchester having gone up by 200% (i.e. now changing hands for three times as much) and indeed much more in some cases in the past eight years we can:
(a) probably afford a 20% dip if the bookies market are "right"; and also
(b) rely on betting markets to be orientated to buying Audi's for bookies.

Not being particularly reliable economic forecasters.

Even if the bookies ARE right this sort of overall fall could be accomplished by a big crash in the exchange value of buy-to-let properties - many held by inveterate gamblers - and a more modest and long expected adjustment in real home prices.

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