Merged: Is the worst of the Global Financial Crisis behind us?
Very VERY well said......
A year ago he stated that Australian residential property WILL and MUST drop 40%. Commercial property similar. He was not the only one.
This is classic Cassandra Syndrome. And when confident predictions of doom don't eventuate it is put off with inevitable and logical excuses- such as Chinese buyers deserting the market.
Can I scratch below the surface on this one?
Chinese buyers? Singapore Chinese? Hong Kong Chinese? Malayan Chinese? Mainland Chinese? The Chinese have been active buyers of Australian property for decades. The mainland Chinese are the predicable new players.
Wherever there is emerging developing nation wealth, interestingly, they seem to become buyers of Australian property. Why? It is a beautiful and relatively stable market that is a fine place to park wealth. The Russians were top-end Gold Coast buyers recently.
Foreign investment in Australian property was restrictive and yes has been opened up some- as long as the property is new a foreigner can buy it. Makes sense as it supports the building industry, state coffers and susbsidizes rental housing and alleviates the chronic Australian housing shortage.
So, more and more, our property market is becoming multi-faceted.
So, the new players, the mainland Chinese, have economic hiccups. Will they desert the Australian housing market driving prices down 40% as per Cassandra's predictions? Doubt it. These uber- wealthy individuals will syphon more money out of the country. At the moment, they are enjoying strong property appreciation due the AUD- currency hedging away from the USD etc.
Do your own homework. Be wary of flamboyant writings of the Cassandras. It could cost you a lot of money as the multi-faceted, Australian property market chugs along.
My prediction- good Australian property will appreciate modestly as investors move back into the market and demand continues. Local investors, foreign investors and expatriate investors.
If you have any unique Australian property- lifestyle, seaside or inner city etc hang on. In a prospering but dirty Asia, demand is inevitable.
Gnadenburg
Residential and Commercial property investor in Australia.
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The Australian Today
One-third of nation at risk of loan default
Adele Ferguson | September 07, 2009
Article from: The Australian
ONE-THIRD of the country -- including battlers' suburbs and some of the wealthiest urban areas -- has entered the danger zone for financial distress, despite signs that economic conditions are improving.
Dunn & Bradstreet found that 33 per cent of postcodes had fallen into the "high-risk" category of financial distress, with Victorian suburbs facing the highest risk of defaulting on debts. This is up 30per cent on the same time last year.
The research, released exclusively to The Australian, lists the Melbourne outer suburb of Frankston North as the postcode with the highest risk of default, followed by two of Sydney's most exclusive eastern suburbs, Bellevue Hill, the home of Ros Packer, and Woollahra, the address of former premier Neville Wran.
Of the 50 most financially stressed suburbs, 29 are in the first-home owners belt, which includes the outer Melbourne suburbs of Chirnside Park, Cranbourne and Carrum Downs and Sydney's western suburbs Mount Druitt and Auburn. These areas have seen a sharp rise in credit obligations since the increase in the first-home owners grant.
Last week's GDP figures showed the economy had gained pace, driven by increased spending on equipment and by households, which helped to make up for falls in private investment.
There are concerns about the next phase in the economic downturn as interest rates start to rise towards the end of the year and the Rudd government's stimulus package starts to wear off.
Dunn & Bradstreet chief executive Christine Christian said the rising risk of loan defaults underlined the potential for the global financial crisis to become a personal credit crisis in many Australian homes. "If you scratch the surface, there are still problems in the economy," Ms Christian said. "As a country, we have amassed a lot of debt. Each person has $160 of credit for every $100 earned. If unemployment rises or interest rates increase, we will see a significant fallout."
Aussie Home Loans chairman John Symond was not surprised some of the nation's top suburbs ranked as the highest risk.
"People overstretch themselves in these suburbs. The wannabes pay the double rent and pay much higher prices going shopping at Woolworths in Double Bay than Blacktown. Many are living on credit," hesaid.
"Between the last recession and now, we have over-borrowed as a nation. Consumer debt has increased 400 per cent and 500per cent for NSW. That is where the risk is."
The Geographic Risk Indicator assesses the likelihood of default on a credit obligation based on demographic data. Those suburbs categorised as a high risk are 340per cent more likely than average to include households that have experienced previous negative credit defaults. The GRI reveals that 33 per cent of suburbs are rated a high risk, with Victoria having the most significant percentage of such postcodes, 46 per cent. This is followed by Western Australia with 35 per cent and NSW with 30per cent.
D&B defaults analysis reveals the path to financial difficulty often begins with defaults on small, non-bank credit obligations before escalating to more significant defaults.
The research finds that individuals who have defaulted on a phone, electricity or gas bill are nearly four times as likely to follow this up with a default on a financial services obligation. Consumers with outstanding defaults are nearly six times as likely to default again, with those who have repaid outstanding debt three times as likely to re-offend.
If consumers default on payments, this can have an adverse impact on small- and medium-sized businesses, which employ half the country's workers. If this sector starts to shake, it will have huge implications for consumer confidence and economic growth.
Adele Ferguson | September 07, 2009
Article from: The Australian
ONE-THIRD of the country -- including battlers' suburbs and some of the wealthiest urban areas -- has entered the danger zone for financial distress, despite signs that economic conditions are improving.
Dunn & Bradstreet found that 33 per cent of postcodes had fallen into the "high-risk" category of financial distress, with Victorian suburbs facing the highest risk of defaulting on debts. This is up 30per cent on the same time last year.
The research, released exclusively to The Australian, lists the Melbourne outer suburb of Frankston North as the postcode with the highest risk of default, followed by two of Sydney's most exclusive eastern suburbs, Bellevue Hill, the home of Ros Packer, and Woollahra, the address of former premier Neville Wran.
Of the 50 most financially stressed suburbs, 29 are in the first-home owners belt, which includes the outer Melbourne suburbs of Chirnside Park, Cranbourne and Carrum Downs and Sydney's western suburbs Mount Druitt and Auburn. These areas have seen a sharp rise in credit obligations since the increase in the first-home owners grant.
Last week's GDP figures showed the economy had gained pace, driven by increased spending on equipment and by households, which helped to make up for falls in private investment.
There are concerns about the next phase in the economic downturn as interest rates start to rise towards the end of the year and the Rudd government's stimulus package starts to wear off.
Dunn & Bradstreet chief executive Christine Christian said the rising risk of loan defaults underlined the potential for the global financial crisis to become a personal credit crisis in many Australian homes. "If you scratch the surface, there are still problems in the economy," Ms Christian said. "As a country, we have amassed a lot of debt. Each person has $160 of credit for every $100 earned. If unemployment rises or interest rates increase, we will see a significant fallout."
Aussie Home Loans chairman John Symond was not surprised some of the nation's top suburbs ranked as the highest risk.
"People overstretch themselves in these suburbs. The wannabes pay the double rent and pay much higher prices going shopping at Woolworths in Double Bay than Blacktown. Many are living on credit," hesaid.
"Between the last recession and now, we have over-borrowed as a nation. Consumer debt has increased 400 per cent and 500per cent for NSW. That is where the risk is."
The Geographic Risk Indicator assesses the likelihood of default on a credit obligation based on demographic data. Those suburbs categorised as a high risk are 340per cent more likely than average to include households that have experienced previous negative credit defaults. The GRI reveals that 33 per cent of suburbs are rated a high risk, with Victoria having the most significant percentage of such postcodes, 46 per cent. This is followed by Western Australia with 35 per cent and NSW with 30per cent.
D&B defaults analysis reveals the path to financial difficulty often begins with defaults on small, non-bank credit obligations before escalating to more significant defaults.
The research finds that individuals who have defaulted on a phone, electricity or gas bill are nearly four times as likely to follow this up with a default on a financial services obligation. Consumers with outstanding defaults are nearly six times as likely to default again, with those who have repaid outstanding debt three times as likely to re-offend.
If consumers default on payments, this can have an adverse impact on small- and medium-sized businesses, which employ half the country's workers. If this sector starts to shake, it will have huge implications for consumer confidence and economic growth.
Grandpa Aerotart
Hmmm don't remember saying the housing collapse would happen on a certain date merely that the situation as it has been to date was unsustainable - sooner or later prices must revert to the long term trend and the longer that is delayed by Pollies propping things up with stimulus the greater will be the thud as prices re set.
I find it fascinating that not only did 1000s of 'experts', from Pollies to analysts to Wall St "Kings of the Universe' to CNBC Talking heads to US Fed Chairman Greenspan and Bernanke (and our RBA) to 10's of thousands of Academic Economists and on and on, say the GFC was impossible but they actively sought to denigrate the 10 or 20 Economists who predicted it with great accuracy.
What blows me away is all the people who were WRONG are still running the ****fight - including those who actively CAUSED it - Bernanke, Paulson et al.
Its all very reminiscent of the AGW carryon and for all the same reasons - unreasonable faith in computer models that don't/can't model all the variables in a complex, non linear system - The Atmosphere or Human Behaviour.
The wheels fell of the Japanese economy in 1990 due excessive debt and it has yet to recover from an 80-90% DROP IN PROPERTY PRICES
Its pretty clear the US has not learned any lessons from Japan.
Doesn't matter 'which' Chinese Gnads they will all be effected to a greater or lesser extent by the bursting of the US bubble economy and collapse of US consumer spending which is already happening. I can't think of a single good reason why Australia consumers, who carry a greater debt burden than their US peers, won't follow along in due course.
Lowered interest rates and govt stimulus will be overwhelmed IF consumers start saving instead of borrowing and spending. Consumers can't borrow and spend forever - when they stop unemployment goes up. Calculated the old way its already around 16% not the 5.5% the Pollies claim.
In the last decade median house prices have increased 250% against the century scale average of maybe 15% while Private debt has increased 500+% and median wages might have increased 20% but have actually decreased in purchasing power - please someone explain how that is sustainable?
I find it fascinating that not only did 1000s of 'experts', from Pollies to analysts to Wall St "Kings of the Universe' to CNBC Talking heads to US Fed Chairman Greenspan and Bernanke (and our RBA) to 10's of thousands of Academic Economists and on and on, say the GFC was impossible but they actively sought to denigrate the 10 or 20 Economists who predicted it with great accuracy.
What blows me away is all the people who were WRONG are still running the ****fight - including those who actively CAUSED it - Bernanke, Paulson et al.
Its all very reminiscent of the AGW carryon and for all the same reasons - unreasonable faith in computer models that don't/can't model all the variables in a complex, non linear system - The Atmosphere or Human Behaviour.
The wheels fell of the Japanese economy in 1990 due excessive debt and it has yet to recover from an 80-90% DROP IN PROPERTY PRICES
Real estate
As the general wealth of Japan continued to increase so we saw a significant move in the stock market which hit an all-time high on 29 December 1989 of 38,957.44 and real estate values moved higher and higher. At the peak of the property market in 1989 the Ginza district of Tokyo saw prime properties going for $1 million per square metre!
The explosion in property prices was a disaster waiting to happen and by 2004 many of the prime properties in the Tokyo region were valued at less than 1% of their peak. Residential homes fared a little better but even those were only valued at around 10% of their all-time peak. The bubble had burst but much worse was to come as the Japanese economy collapsed.
The Japanese economy
As the Japanese stock market and real estate market crashed in the 1990s this took away much needed investment funds for Japanese businesses which affected their competitive edge over overseas competitors. As this differential between Japanese companies and overseas competitors continued to narrow there was a significant reduction in export business which then exposed the relatively low consumption of Japanese goods and services in the country.
This collapse in business levels lead to the Japanese central bank reducing interest rates to 0% although they could not stop the onslaught of deflation which would affect the Japanese economy for well over 10 years. Even towards the end of the 1990s the Japanese banking system was still in disarray with many loans written off and a number of banks still chasing business at ridiculous margins. As the Japanese authorities stepped in to avoid the total collapse of the financial sector we saw the creation of companies known as "zombie businesses" which are effectively dead but being kept alive by the government.
The Japanese stock market bottomed out in October 2008 at just under the 7,000 level although there has been a partial recovery to 7,500 at which the index now stands. This fall in the stock market and real estate sector reflects the explosion rather than bursting of the real estate, economic and stock market bubble of Japan.
As the general wealth of Japan continued to increase so we saw a significant move in the stock market which hit an all-time high on 29 December 1989 of 38,957.44 and real estate values moved higher and higher. At the peak of the property market in 1989 the Ginza district of Tokyo saw prime properties going for $1 million per square metre!
The explosion in property prices was a disaster waiting to happen and by 2004 many of the prime properties in the Tokyo region were valued at less than 1% of their peak. Residential homes fared a little better but even those were only valued at around 10% of their all-time peak. The bubble had burst but much worse was to come as the Japanese economy collapsed.
The Japanese economy
As the Japanese stock market and real estate market crashed in the 1990s this took away much needed investment funds for Japanese businesses which affected their competitive edge over overseas competitors. As this differential between Japanese companies and overseas competitors continued to narrow there was a significant reduction in export business which then exposed the relatively low consumption of Japanese goods and services in the country.
This collapse in business levels lead to the Japanese central bank reducing interest rates to 0% although they could not stop the onslaught of deflation which would affect the Japanese economy for well over 10 years. Even towards the end of the 1990s the Japanese banking system was still in disarray with many loans written off and a number of banks still chasing business at ridiculous margins. As the Japanese authorities stepped in to avoid the total collapse of the financial sector we saw the creation of companies known as "zombie businesses" which are effectively dead but being kept alive by the government.
The Japanese stock market bottomed out in October 2008 at just under the 7,000 level although there has been a partial recovery to 7,500 at which the index now stands. This fall in the stock market and real estate sector reflects the explosion rather than bursting of the real estate, economic and stock market bubble of Japan.
Doesn't matter 'which' Chinese Gnads they will all be effected to a greater or lesser extent by the bursting of the US bubble economy and collapse of US consumer spending which is already happening. I can't think of a single good reason why Australia consumers, who carry a greater debt burden than their US peers, won't follow along in due course.
Lowered interest rates and govt stimulus will be overwhelmed IF consumers start saving instead of borrowing and spending. Consumers can't borrow and spend forever - when they stop unemployment goes up. Calculated the old way its already around 16% not the 5.5% the Pollies claim.
In the last decade median house prices have increased 250% against the century scale average of maybe 15% while Private debt has increased 500+% and median wages might have increased 20% but have actually decreased in purchasing power - please someone explain how that is sustainable?
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We seem to have grown accustomed to good times and forgotten what the houses we grew up in were like, haven't we?
I say we are only finding out as a society what we all really knew all along...we could never afford it in the first place. Our expectations are a little unrealistic. No wonder people are going broke!
I say we are only finding out as a society what we all really knew all along...we could never afford it in the first place. Our expectations are a little unrealistic. No wonder people are going broke!
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The Lumpen Bureaucratariat
By DANIEL HENNINGER
When the political world arrives at the point where even the Japanese rise up to toss a party from office after almost 54 straight years in power, it's time to see something's happening here, Mr. Jones.
The ever-entertaining Karl Marx described a society's least politically engaged people as the lumpen proletariat. Well, it's beginning to look as if the globe's lumpen proletariat has decided they've had about enough of the lumpen bureaucratariat. It could be a revolution is beginning, though not the one predicted by the boys always at the barricades.
To Mr. Marx, the lumpen proletariat (often slurred into a single word, lumpenproletariat) was the most marginalized, hopeless, faceless swath of the underclass. Were he alive at this moment, it is not beyond imagining that Karl would have joined the charge against what has become a lumpen bureaucratariat—the permanent, often faceless overclass of gerrymandered politicians, bureaucrats for life and the public unions and special interests that swim alongside like pilot fish. In Marx's view, the lumpen proletariat included pickpockets, pimps and prostitutes. Sounds about right.
The weekend vote out of somnolent Japan suggests that electorates are casting a global no-confidence vote in their leaderships. The same weekend the Japanese unloaded the Liberal Democratic Party, German voters withdrew Chancellor Angela Merkel's ruling majorities in the state legislatures of Thuringia and Saarland.
In the U.S. political handicappers are predicting heavy Democratic losses in the House next November. This just four years after ending GOP control of Congress in the 2006 off-year elections and two years after sweeping into office Barack Obama and his Democratic partners.
Some search for an ideological trend toward the left or right in these votes, but the only evident trend is to strike out at whichever faceless mass is currently in power. Even as Americans turned over their country to liberal Democrats, opinion polls showed that the British people were turning toward the Conservatives for relief from listless Labour.
What accounts for the global electorate's growing disgust with the political overclass? Try this: No matter what the ideological cast of these governments, they all hold in common one policy: the inexorable upward march of national indebtedness. It is a bad habit that has arrived at the cliff's edge.
Japan's gross debt is currently estimated at some 180% of its gross domestic product, the highest among the world's theoretically serious economies. Look elsewhere and one sees the same fiscal obesity.
As measured by the OECD, the growth in gross debt as a percentage of GDP since the dawn of the new century is stunning. The data isn't exactly comparable across individual countries, but the trend line is unmistakable.
In the U.S., debt as a percentage of GDP rose to 87% in 2009 from 55% in 2000. In the U.K., to 75% from 45%; Germany, to 78% from 60%; France, 86% from 66%.
There are exceptions to this trend, such as Canada, New Zealand and notably Australia, whose debt has fallen to 16% of GDP from 25%. But for all the countries in the OECD's basket, the claim of indebtedness on GDP grew to 92% from 69% between 2000 and 2009.
In short, the lumpen electorate works, and the lumpen bureaucratariat spends. They get away with it because they have perfected the illusion that no identifiable human hand causes these commitments. The payroll tax just happens. Entitlements are "off-budget," presumably in the hands of God. This is government without the responsibility of governance.
Unable to identify exactly who or what has put them in hock to the horizon, national electorates are attempting accountability by voting parties out of power. The pollster Rasmussen recently found that 57% of American voters would throw out Congress en masse if they could. Self-gerrymandered districts ensure that they can't.
Problem is, the lumpen bureaucratariat won't or can't stop. Amid the phenomenal spending on the financial mess here, they tried to pass a cap-and-trade bill whose centerpiece was an auction of carbon credits to flow trillions of dollars toward the bureaucracies. Obama's people seem weirdly oblivious to the scale of their outlays, programs and dreams.
The decision by the voters of Japan to turn out the LDP after 54 years in power argues that in real democracies, political self-entrenchment and enrichment can arrive at limits. In 2000, more astonishingly, Mexicans defeated the PRI after 71 years in office, then re-elected the new party's candidate in 2006. Now it looks like similar forces are bubbling out of town halls across the United States. If American elections since 2006 (or 1994) tell us anything it is that their target is the party of the Beltway.
This is hardly a fair fight. The political overclass everywhere holds the power to print money and grab it back with taxes. Still, the election returns suggest something's stirring. Maybe we should call it the revolt of the masses.
By DANIEL HENNINGER
When the political world arrives at the point where even the Japanese rise up to toss a party from office after almost 54 straight years in power, it's time to see something's happening here, Mr. Jones.
The ever-entertaining Karl Marx described a society's least politically engaged people as the lumpen proletariat. Well, it's beginning to look as if the globe's lumpen proletariat has decided they've had about enough of the lumpen bureaucratariat. It could be a revolution is beginning, though not the one predicted by the boys always at the barricades.
To Mr. Marx, the lumpen proletariat (often slurred into a single word, lumpenproletariat) was the most marginalized, hopeless, faceless swath of the underclass. Were he alive at this moment, it is not beyond imagining that Karl would have joined the charge against what has become a lumpen bureaucratariat—the permanent, often faceless overclass of gerrymandered politicians, bureaucrats for life and the public unions and special interests that swim alongside like pilot fish. In Marx's view, the lumpen proletariat included pickpockets, pimps and prostitutes. Sounds about right.
The weekend vote out of somnolent Japan suggests that electorates are casting a global no-confidence vote in their leaderships. The same weekend the Japanese unloaded the Liberal Democratic Party, German voters withdrew Chancellor Angela Merkel's ruling majorities in the state legislatures of Thuringia and Saarland.
In the U.S. political handicappers are predicting heavy Democratic losses in the House next November. This just four years after ending GOP control of Congress in the 2006 off-year elections and two years after sweeping into office Barack Obama and his Democratic partners.
Some search for an ideological trend toward the left or right in these votes, but the only evident trend is to strike out at whichever faceless mass is currently in power. Even as Americans turned over their country to liberal Democrats, opinion polls showed that the British people were turning toward the Conservatives for relief from listless Labour.
What accounts for the global electorate's growing disgust with the political overclass? Try this: No matter what the ideological cast of these governments, they all hold in common one policy: the inexorable upward march of national indebtedness. It is a bad habit that has arrived at the cliff's edge.
Japan's gross debt is currently estimated at some 180% of its gross domestic product, the highest among the world's theoretically serious economies. Look elsewhere and one sees the same fiscal obesity.
As measured by the OECD, the growth in gross debt as a percentage of GDP since the dawn of the new century is stunning. The data isn't exactly comparable across individual countries, but the trend line is unmistakable.
In the U.S., debt as a percentage of GDP rose to 87% in 2009 from 55% in 2000. In the U.K., to 75% from 45%; Germany, to 78% from 60%; France, 86% from 66%.
There are exceptions to this trend, such as Canada, New Zealand and notably Australia, whose debt has fallen to 16% of GDP from 25%. But for all the countries in the OECD's basket, the claim of indebtedness on GDP grew to 92% from 69% between 2000 and 2009.
In short, the lumpen electorate works, and the lumpen bureaucratariat spends. They get away with it because they have perfected the illusion that no identifiable human hand causes these commitments. The payroll tax just happens. Entitlements are "off-budget," presumably in the hands of God. This is government without the responsibility of governance.
Unable to identify exactly who or what has put them in hock to the horizon, national electorates are attempting accountability by voting parties out of power. The pollster Rasmussen recently found that 57% of American voters would throw out Congress en masse if they could. Self-gerrymandered districts ensure that they can't.
Problem is, the lumpen bureaucratariat won't or can't stop. Amid the phenomenal spending on the financial mess here, they tried to pass a cap-and-trade bill whose centerpiece was an auction of carbon credits to flow trillions of dollars toward the bureaucracies. Obama's people seem weirdly oblivious to the scale of their outlays, programs and dreams.
The decision by the voters of Japan to turn out the LDP after 54 years in power argues that in real democracies, political self-entrenchment and enrichment can arrive at limits. In 2000, more astonishingly, Mexicans defeated the PRI after 71 years in office, then re-elected the new party's candidate in 2006. Now it looks like similar forces are bubbling out of town halls across the United States. If American elections since 2006 (or 1994) tell us anything it is that their target is the party of the Beltway.
This is hardly a fair fight. The political overclass everywhere holds the power to print money and grab it back with taxes. Still, the election returns suggest something's stirring. Maybe we should call it the revolt of the masses.
This articles argument seems to support the "Chimbu hypothesis".
Last edited by breakfastburrito; 8th Sep 2009 at 22:29. Reason: source URL fixed
It is hard to debate the cut n' pasting Cassandras...
Chimbu has, again hysterically, used Japan as an example of a property bubble to draw comparisons to Australia. And a bubble it was. Remember the Imperial Palace in Tokyo was supposed to be worth the same as the entire State of California!
Yes the Melbourne property market is hotting up again but is the MCG worth the same as the Sate of California?
Foie gras. The cash rate is half of what it was 2 years ago. I'd suggest ( and there was press at the time ) that mortgage stress was far more serious an issue back then.
That's just typical, sensationalist journalism.
In three months time you will be reading about further modest housing price rises. Good property in Sydney at the moment is hotting up.
Chimbu has, again hysterically, used Japan as an example of a property bubble to draw comparisons to Australia. And a bubble it was. Remember the Imperial Palace in Tokyo was supposed to be worth the same as the entire State of California!
Yes the Melbourne property market is hotting up again but is the MCG worth the same as the Sate of California?
Foie gras. The cash rate is half of what it was 2 years ago. I'd suggest ( and there was press at the time ) that mortgage stress was far more serious an issue back then.
That's just typical, sensationalist journalism.
In three months time you will be reading about further modest housing price rises. Good property in Sydney at the moment is hotting up.
Last edited by Gnadenburg; 10th Sep 2009 at 04:49.
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G-Burg, Heard of "Cockpit Resource Management"?
We've got a potential problem.
GATHER info
SHARE ideas
(Inputs such as yours are valuable, but give them some credibility.)
ANALYSE.....etc...
Next step DEVELOPMENT.
We're all professionals, a PLAN in case this all goes pear shaped, should be everyone's goal.
We've got a potential problem.
GATHER info
SHARE ideas
(Inputs such as yours are valuable, but give them some credibility.)
ANALYSE.....etc...
Next step DEVELOPMENT.
We're all professionals, a PLAN in case this all goes pear shaped, should be everyone's goal.
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For many, that's the desired approach, FG. Yet for a few marginalised individuals, contrary opinions, feelings or analysis that attempt to discuss, add to or even detract from the accepted argument or state of affairs is often met with incandescent rage.
Heated responses then follow, as has happened here and elsewhere on PPRuNE. It's the way of the world, unfortunately.
But, fortunately, more and more people are able to access information in this 'information age' which enables more creative thought, less polarisation and, hopefully, better results.
Stay away from stocks, buy Treasuries, sell all commodities and get rid of any and all debt. It's all about protection right now, not your percentage gain.
Just an opinion, and probably sure to raise G'boy's temperature
Heated responses then follow, as has happened here and elsewhere on PPRuNE. It's the way of the world, unfortunately.
But, fortunately, more and more people are able to access information in this 'information age' which enables more creative thought, less polarisation and, hopefully, better results.
Stay away from stocks, buy Treasuries, sell all commodities and get rid of any and all debt. It's all about protection right now, not your percentage gain.
Just an opinion, and probably sure to raise G'boy's temperature
G-Burg, Heard of "Cockpit Resource Management"?
If you are getting your financial advice from the cockpit you are probably going to be in trouble.
GATHER info
Inputs such as yours are valuable, but give them some credibility
A misunderstood cycle in our multi-faceted property market.
We're all professionals, a PLAN in case this all goes pear shaped, should be everyone's goal.
Just an opinion, and probably sure to raise G'boy's temperature
Doesn't worry me. I'm just holding people to account for what was said last year.
Self-Quote 1 year ago -
Good Australian real estate should hold out OK. Propped up by a supply shortage and foreign bargain hunters.
Australia should do OK. Helped by a lowered currency.
Australia should do OK. Helped by a lowered currency.
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If Australia's fortunes are tied to the currency, shouldn't you be getting nervous?
If the persistant property bubble (IMF) will only be pricked by rising unemployment (my belief, as stated here), I'd recommend less optimism. Look at todays numbers. "Overly defensive" is the way I'm going. I'd rather miss a modest increase in asset price than suffer a large correction- and that's the situation I'm looking at right now. There's simply more downside than upside (right now).
If the persistant property bubble (IMF) will only be pricked by rising unemployment (my belief, as stated here), I'd recommend less optimism. Look at todays numbers. "Overly defensive" is the way I'm going. I'd rather miss a modest increase in asset price than suffer a large correction- and that's the situation I'm looking at right now. There's simply more downside than upside (right now).
Gnadenburg
Lets see, AUS$ up 41% since late last year, that means expats like me and foreigners are much less likely to invest in Aus property, first home owners grant about to end, AUS$ interest rates likely to start rising by the end of the year, and true unemployment (not the BS one that is always quoted that ignores those that have given up) and underemployment getting worse and you think property is a good investment. Mmmm. Me thinks you have a vested interest because you're probably leveraged up to your eye balls.
Lets see, AUS$ up 41% since late last year, that means expats like me and foreigners are much less likely to invest in Aus property, first home owners grant about to end, AUS$ interest rates likely to start rising by the end of the year, and true unemployment (not the BS one that is always quoted that ignores those that have given up) and underemployment getting worse and you think property is a good investment. Mmmm. Me thinks you have a vested interest because you're probably leveraged up to your eye balls.
Grandpa Aerotart
Not the least bit hysterical Gnads. Nor do I think we have reached the extremes of the Japanese market in the 1980s yet. But if Australia shrugs off the GFC and leverages up again we might.
I see the bureau of statistics suggests that another 27500 people lost their jobs in August (economists thought it would be 15000) plus another 30800 moved from full time to part time - and yet the unemployment rate remained at 5.8%
As the rate of unemployment calculated the old way (before Govts started massaging the numbers) is closer to 17% that would indicate if we get to 8+%, as Govt projections suggest we will next year, that will be more like 25% real unemployment.
In % terms those numbers are not so different to the US which has been losing 250-300000 jobs per month - down from 650000+ per month early this year.
US consumer credit debt (not including Mortgages) fell 21.4 Billion in July alone - an annualised rate over 10% - down 100 Billion since March 09 and accelerating. And that during the silly 'Cash for Clunkers' lifeline thrown to US car manufacturers where people got paid $4500 for the older cars they owned outright and exchanged them for new cars and 15k in debt.
You gotta wonder how many cars they will sell next year and how many auto workers will join the unemployment line
This is the first time consumer debt levels have fallen since 1990 and the fastest rate of fall since 1975 during that recession.
Given that the US consumers have been the financial drivers of Asian manufacturing for decades....
I wonder how much Australian consumers are paying down debt rather than spending? I don't know but maybe not so different to the US or maybe a lot less. I suspect the former - people are smarter than the pollies think.
Japan is still sliding down hill.
China is stockpiling resources - presumably they will eventually figure they have enough of our resources and slow down purchasing. Maybe they are getting set up to cross the straights and take Taiwan back?
Apart from 'strongly' worded condemnation I doubt Obama/The west would do terribly much about it if they do.
The AUD is getting stronger which means everything we sell, resources and tourism, is getting more expensive at the same time our major trading partners are least able to afford what we have to sell.
Just offshore where I live in Asia are 100s of container ships anchored - 1000+nm from the nearest major trading ports of Singapore and Hong Kong - apparently its the cheapest place in Asia to park these assets while no one wants to put 'stuff' in them and transport it from A -> B.
Yeah, buy more real estate
I see the bureau of statistics suggests that another 27500 people lost their jobs in August (economists thought it would be 15000) plus another 30800 moved from full time to part time - and yet the unemployment rate remained at 5.8%
As the rate of unemployment calculated the old way (before Govts started massaging the numbers) is closer to 17% that would indicate if we get to 8+%, as Govt projections suggest we will next year, that will be more like 25% real unemployment.
In % terms those numbers are not so different to the US which has been losing 250-300000 jobs per month - down from 650000+ per month early this year.
US consumer credit debt (not including Mortgages) fell 21.4 Billion in July alone - an annualised rate over 10% - down 100 Billion since March 09 and accelerating. And that during the silly 'Cash for Clunkers' lifeline thrown to US car manufacturers where people got paid $4500 for the older cars they owned outright and exchanged them for new cars and 15k in debt.
You gotta wonder how many cars they will sell next year and how many auto workers will join the unemployment line
This is the first time consumer debt levels have fallen since 1990 and the fastest rate of fall since 1975 during that recession.
Given that the US consumers have been the financial drivers of Asian manufacturing for decades....
I wonder how much Australian consumers are paying down debt rather than spending? I don't know but maybe not so different to the US or maybe a lot less. I suspect the former - people are smarter than the pollies think.
Japan is still sliding down hill.
China is stockpiling resources - presumably they will eventually figure they have enough of our resources and slow down purchasing. Maybe they are getting set up to cross the straights and take Taiwan back?
Apart from 'strongly'
worded condemnation I doubt Obama/The west would do terribly much about it if they do. The AUD is getting stronger which means everything we sell, resources and tourism, is getting more expensive at the same time our major trading partners are least able to afford what we have to sell.
Just offshore where I live in Asia are 100s of container ships anchored - 1000+nm from the nearest major trading ports of Singapore and Hong Kong - apparently its the cheapest place in Asia to park these assets while no one wants to put 'stuff' in them and transport it from A -> B.
Yeah, buy more real estate
Last edited by Chimbu chuckles; 10th Sep 2009 at 10:44.
If Australia's fortunes are tied to the currency, shouldn't you be getting nervous?
If the persistant property bubble (IMF) will only be pricked by rising unemployment (my belief, as stated here), I'd recommend less optimism. Look at todays numbers. "Overly defensive" is the way I'm going. I'd rather miss a modest increase in asset price than suffer a large correction- and that's the situation I'm looking at right now. There's simply more downside than upside (right now).
If the persistant property bubble (IMF) will only be pricked by rising unemployment (my belief, as stated here), I'd recommend less optimism. Look at todays numbers. "Overly defensive" is the way I'm going. I'd rather miss a modest increase in asset price than suffer a large correction- and that's the situation I'm looking at right now. There's simply more downside than upside (right now).
You mention the IMF. Whose advice to Australia was not to provide government stimulus but to drop % rates further. I tend to agree. But they won't be addressing a property bubble in Oz with lower interest rates.
Once again. The IMF is contradicting itself.
Gnadenburg
Lets see, AUS$ up 41% since late last year, that means expats like me and foreigners are much less likely to invest in Aus property, first home owners grant about to end, AUS$ interest rates likely to start rising by the end of the year, and true unemployment (not the BS one that is always quoted that ignores those that have given up) and underemployment getting worse and you think property is a good investment. Mmmm. Me thinks you have a vested interest because you're probably leveraged up to your eye balls.
Lets see, AUS$ up 41% since late last year, that means expats like me and foreigners are much less likely to invest in Aus property, first home owners grant about to end, AUS$ interest rates likely to start rising by the end of the year, and true unemployment (not the BS one that is always quoted that ignores those that have given up) and underemployment getting worse and you think property is a good investment. Mmmm. Me thinks you have a vested interest because you're probably leveraged up to your eye balls.
For an ex-currency trader, living in Hong Kong, it should have been plain to see. But required street smarts and balls.
I'm sorry to disappoint and not willy waving, but my D/E ratio too healthy. But more importantly, cash flow has skyrocketed due halving of interest rates and rental hikes. Which is why I couldn't understand the prophecies of doom here.
Chimbu
You crack me up. OK. You have backed down from the Japanese come Australian 90% real estate collapse.
And here comes the geo-political stuff. China, stockpiles now-cheap Oz commodities, to facilitate a cross strait invasion of Taiwan. The Yanks do nothing-even though they are militarily structured too.
But anyways. Think the Chinese could pull it off at the moment? Not sure. I reckon their command and control is still lacking and both nations are a bunch of greedy pricks who know their wealth synergies could drive Asia this century.
You crack me up. OK. You have backed down from the Japanese come Australian 90% real estate collapse.
And here comes the geo-political stuff. China, stockpiles now-cheap Oz commodities, to facilitate a cross strait invasion of Taiwan. The Yanks do nothing-even though they are militarily structured too.
But anyways. Think the Chinese could pull it off at the moment? Not sure. I reckon their command and control is still lacking and both nations are a bunch of greedy pricks who know their wealth synergies could drive Asia this century.