By: ecchi.gaijin
13/10/2009
4:40 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
Honestly Ang, Menta might be able to understand the articles he reads but I am yet o see hi demonstrate any ability to critially analyse the validity of those articles. Every time an isue is raisaed he attempts to deflect the question by referring to another article quoting someone elses opinion.
All of these articles have underlying assumptions and basic principles. If someone doesn't understand those then they are merely learning how to cast a fishing line with no hook. |
|
By: ang101000
13/10/2009
4:32 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Ecchi,
When you argue with Menta, you have to speak his investment language ie bear language. Also, you need to be familiar with Prechters work and elliotwave.
Let me tell you, I have spent the weekend reading (and drawing charts) The Major Works of R N Elliott. Menta is in class by himself, I am trying to understand him and his views.
Mate, Elliotts principles of investing are really testing for my animal brain, I don't think I will ever be a true contrarian bear.
You are on the track with pointing out the economic fallacies such as market equilibrium, rationality etc. |
|
By: ecchi.gaijin
13/10/2009
4:27 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
| If I am missing the crux of the arguement please point me in the right area. |
|
By: ecchi.gaijin
13/10/2009
4:26 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Ang, from what I read they are ignoring te principal of elasticity in supply and demand. Elasticity of supply and demand allows for supply, demand, or both to be the primary drivers of price but at the end of the day price is determined where both meet. Think aboutit conceptually, price (a sale) cannot exist without a buyer (demand) AND a seller (supply), just because one party determined the value of the transaction does not mean both were not present. |
|
By: ecchi.gaijin
13/10/2009
4:15 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Ang, first thing I note is the reference to irrationality. This is not new to economic theory if I can refer you to the concept of value adding, an often irrational arbitrary figure. |
|
By: ang101000
13/10/2009
4:06 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Ecchi,
"This is based on the flawed assumption that supply and demand (economic theory) sets all prices."
I have uploaded a short file for you, which explains/underlines Mentas view regarding his assumption. Please read it, than argue if you still want to.
link
http://ifile.it/krq0cyx |
|
By: ang101000
13/10/2009
3:56 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Menta,
I am with you, the difference in our views are merely cosmetic. I follow all your writing, and read 2x times as much as I comment. Trust me, I do understand every one of your arguments.
Ang |
|
By: ang101000
13/10/2009
3:52 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Jay,
I am a stupid, old woman who does invest indeed in shares, housing etc. Pleading guilty, Your Honour!
But I don't have debts, following the mantra; 'you can't go bankrupt if you don't have debts'.
Sorry to shutter all illusions. |
|
By: ecchi.gaijin
13/10/2009
3:50 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta, irrelevant. You used an article about 1 in 6 australians struggling with debt in general to justify your speil about housing prices. The only way you can link the 2 is by making assumptions which could very easily be wrong. |
|
By: mentawaisurf
13/10/2009
3:47 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Pete, Ang & I already posted links to the figures & charts showing Australia's record household debt levels. Credit card debt is merely the hidden problem (due to Australia being one of the few countries in the world that does not employ credit reporting) and is a leading indicator of default behaviour.
And I suppose oil surged to almost US$150/barrel last year on supply and demand concerns only - not speculation? |
|
By: jaymarcel
13/10/2009
3:47 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Fair comment ang, are you blaming gov or private investment for the situation that has arised |
|
By: jaymarcel
13/10/2009
3:44 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Hi ang are you a member of the herd you talk of? |
|
By: ang101000
13/10/2009
3:44 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
'The top of the list - countries that actually produce more than they consume, either through manufacturing, via sovereign ownership of resources or just plain good business acumen.'
Check again the top countries; you will find that some like Germany are manufacturing countries and they have the same/similar wage conditions as Aus. Others, like the oil states rely on their resources but are not as indebted as Aus. And finally, there is Singapore who has just plain good business acumen.
My point being; I don't want the private debt invested in stupid Ponzi schemes ie housing and shares (mainly). |
|
By: jaymarcel
13/10/2009
3:44 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
| It appears to me everyone is now searching for a reason for house prices to fall, in 10 years time we could look back & think that property prices of 2009 were undervalued, a bit like when everyone told me in 2005 that house prices where at their peak yet they have continued to rise. |
|
By: ecchi.gaijin
13/10/2009
3:42 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
"allowing me to claim my top bracket tax back through negative gearing,"
Look for this to become a bigger influence on housing prices as the government is toying with the idea of increasing the marginal tax rates again. |
|
By: jaymarcel
13/10/2009
3:41 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hi Menta, Rather than looking at it as me trying to use the demand/supply arguement to support house price rises I would rather the arguement of what will cause the house prices to fall as I have yet to be given a reason for a fall that can be justified.
For me personally house prices rising with inflation alone is enough if someone renting it & paying the mortgage also allowing me to claim my top bracket tax back through negative gearing, as if the money was left in the bank I'd spend it all on unnecessary items & wasted |
|
By: ecchi.gaijin
13/10/2009
3:20 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
"This is based on the flawed assumption that supply and demand (economic theory) sets all prices."
I have heard this a couple times and am curious to hear what does determine price if not supply and demand. |
|
By: ang101000
13/10/2009
3:18 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
'The herd have been stampeding back into stocks, commodities, precious metals, oil AND real estate because everyone now believes the recovery is underway and that inflation is imminent. This 'certainty' has already been priced into ALL markets (including the AUD with the RBA now supposedly on the path of raising interest rates moving forward). It will take very little, of the plethora of risks still in financial markets, to trigger a surprise collapse to the downside.'
That is real Menta, at his brilliant best. Agree (: |
|
By: ecchi.gaijin
13/10/2009
3:16 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
That article doesn't refer to martgage debt Menta. Thre is nothing in there to suggest any effect on housing at all. For all we know a vast majority of the 1 in 6 struglling could be renters with large credit card debts.
Assuming is dangerous Menta, just ask Keen. ;) |
|
By: jaymarcel
13/10/2009
3:13 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hi Ang, ok so what is your point in relation to Australias CAB, the asian countries are happy to work for a lower wage, so anything labour hours intensive is bought in as we refuse to work for less than the minimum wage
It's just the way the world works, eventually one day china may have a minimum wage controlled by union too & then we will see a change, UK & USA are down there with us too & interestingly enough they too have a minimum wage/union control |
|
By: mentawaisurf
13/10/2009
3:10 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
The relentless cheerleading about real estates never-ending rise we watched on TV, heard on radio, read in newspapers and magazines helped expand the housing bubble while few ever questioned whether the past decade of 'prosperity' created by this debt explosion was in fact a false prosperity.
'One in six Aussies struggle with debt'
http://news.smh.com.au/breaking-news-national/one- in-six-aussies-struggle-with-debt-20091013-guq5.ht ml
As forced sales and mortgage defaults rise moving forward, more and more homes will be coming up for sale with fewer and fewer people willing or able to buy them. The debt deleveraging and asset deflation has barely begun. |
|
By: mentawaisurf
13/10/2009
3:08 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Jay & Stuart raise a vital point. All asset classes are currently rallying strongly around the world (all except the USD) according to liquidity flows (an inverse relationship to the demand for, and consequently the value of, the USD). The herd have been stampeding back into stocks, commodities, precious metals, oil AND real estate because everyone now believes the recovery is underway and that inflation is imminent. This 'certainty' has already been priced into ALL markets (including the AUD with the RBA now supposedly on the path of raising interest rates moving forward). It will take very little, of the plethora of risks still in financial markets, to trigger a surprise collapse to the downside.
Australia's housing bulls still focus on buoyant demand for real estate, with supposed supply shortages, as reasons for house prices to maintain their value. This is based on the flawed assumption that supply and demand (economic theory) sets all prices. This is true for basic goods & services (ie. demand falls as prices rise and vice versa) but not for financial assets.
Australia's housing sector has become a financial asset, especially over the last decade, resulting in an historic bubble.
Financial theory, relating to investments like shares and property, shows demand (notably appetite for risk/debt) being the primary driving force in setting price during investment manias, like the Australian share market since 2003 and our property market over the past decade. In these financial asset classes demand actually rises as prices rise (the opposite of economic theory). Conversely, in a decline demand recedes as prices fall (as we experienced around the world during the initial phase of the bear market).
This is a key concept in understanding the reason why we have experienced such a massive run-up in house prices. Australia's demand driven financial mania, fuelled by easy credit, was the leading force in creating our housing market bubble.... |
|
By: ecchi.gaijin
13/10/2009
2:53 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
| mortgage protection insurance is paid by the mortgagor and protects the bank if there is a shortfall. |
|
By: ang101000
13/10/2009
2:49 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Where IS MENTA? Where IS LASTY?
I am holing my breath _ share market to reach 4800(?)
David,
it has a name ,moral hazard' _ expect the taxpayer to foot the bill, again... |
|
By: davidjtroy
13/10/2009
2:38 pm Yahoo! Profile:
davidjtroy Did this message offend you?
Sign in to report abuse |
Reply to this message |
"Banks can default in two ways:
1) they don't have access to credit
2) their assets base get devalued. "
1) has already happened and can happen again.
2) Assuming you mean on liquidating assets, is unlikely given the banks insurance policies on mortgages. |
|
