A reader from the UK has noticed some parallels between the actions of US and UK banks. While the US banks and regulators have announced their support for the commercial property sector, the banks in the UK have taken steps to support families with repayment mortgages. These steps include allowing them to temporarily switch to “Interest only” payments without penalty for six months due to the increase in interest rates. The reader believes that the UK banks will likely review and extend this support further in six months.
Phil, the author of the article, agrees with the reader’s observation. He explains that this kind of support from banks is common during real estate cycles. The banks are able to be more supportive of people facing difficulties as the distressed commercial sector is not a systemic issue. Phil predicts that the real estate cycle will run 14 years up from 2012, and then four years down, taking it into 2026.
Another reader from the UK asks if the UK markets will crash faster than the US. Phil responds by stating that the US market is the one to watch for timing as it usually bounces back strongly after a down year. Based on the 60- and 100-year cycles, Phil believes that the UK and parts of Europe, such as Germany, will face more difficult issues compared to the US. He mentions that the UK’s challenges with rising interest rates and inverted yield curve will not heavily involve actual housing, allowing banks to be creative in supporting mortgage owners.
Phil also discusses the significance of the ancient lunar cycle, which is precisely 18.6 years in length. He explains that civilizations in various parts of the world, including Māori in New Zealand and some Australian indigenous peoples, understood and utilized this cycle for weather forecasting and predicting natural events such as flooding. Phil expresses his admiration for these ancient civilizations and believes that we can learn from their knowledge.
Overall, the article highlights the actions taken by UK banks and regulators to support the commercial property and residential sectors, and discusses the potential impact of the economic changes on different markets. Phil also touches upon the significance of the ancient lunar cycle in understanding natural events.
