By: ecchi.gaijin
30/10/2009
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| Menta, simple question time again. YOU have been spouting about "affordability" being Keen's biggest concern but now you say sentiment is? Which is it? Maybe you should read Keen's blog better since your contradicting views seem to demonstrate a lack of understanding. |
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By: mentawaisurf
30/10/2009
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You better read Keen's website for his views; http://www.debtdeflation.com/blogs/
Fundamentals lag social mood so that the best news appears near market tops while the worst news appears near market bottoms. This is the psychology of the herd and the paradox in markets. It also explains why so many buy at market tops and so few buy at market bottoms. |
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By: ecchi.gaijin
30/10/2009
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| So President Keen's view of "affordability" (notice the parenthasis for misuse of the word) being the driver is incorrect? It's all really about sentiment? |
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By: mentawaisurf
30/10/2009
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| Pete, that's exactly what drives investment manias that lead to asset bubbles. And it's also what causes the herd to panic sell and burst the bubble. |
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By: ecchi.gaijin
30/10/2009
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| Menta, you just contradicted your own arguement. Previously you were quoting fundamentals (debt to income ratio) as the reason housing prices would collapse. |
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By: mentawaisurf
30/10/2009
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| Jay, what happens from here will depend on people's animal spirits and speculative impulses - not fundamentals. |
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By: lasty49
30/10/2009
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Jenny,
Now thats interesting.
Last night we saw the US GDP number come out from their Madoff Statistics dept.
Pretty positive for the US economy.
Interestingly they sold US dollars on the good news.
So if the US economy keeps bubbling along will they continue to sell US dollars.
More than likely so it seems.
Then why should they repatriate their funds?
Afterall the US isnt looking very attractive from an investment view point with all their issues dont you think? |
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By: jennyxuanwu
30/10/2009
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Hello Lasty sorry I have been away
You asked
'But why wouldnt they have done that when the currency was at 98 cents and then watch it fall to 60 cents?
Perhaps they appear to be in it for the long haul.'
My answer is why would I have done it when property in the US was still going down like free fall when 1A$ reached 98 US cents? Their market has seen the bottom and this is why
now is better time to do it. Patience is virtue I have learned.
:) |
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By: jaymarcel
30/10/2009
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Menta, from your example this does not give good reason for prices to drop, I'm sure you can give us better reasons.
I can't afford a mansion overlooking sydney harbour but that does not automatically mean they are overpriced.
They managed to buy a house two years ago for $470,000 does that mean property was under priced in Australia when they bought? |
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By: ang101000
29/10/2009
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Lasty,
What comes down must go up! As you say, the trend is your friend:) |
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By: ang101000
29/10/2009
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Lasty, Menta, and all those with 'alternative views'
So sorry, don't have time a long story about climate change and ETS ( I am working every day for 3 weeks).
I agree with those who think that we need to make a difference in this world but: Rudd has chosen to go down the most expensive and least effective way to save the environment and missed the opportunity to do the most 'good' for the world.
Instead of me writing a long litany about this, please google Bjørn Lomborg (just the name)! He wrote 'The Skeptical Environmentalist: Measuring the Real State of the World' (Cambridge University Press, 2001) and has become a cult figure since.
Watch him (only 9 to 17 mins video)
links; (any problems type his name bjorn lomborg and our priorities for saving the world)
http://www.youtube.com/watch?v=Dtbn9zBfJSs
http://www.ted.com/talks/bjorn_lomborg_sets_global _priorities.html
He is the best, he is worth listening to, I promise!
BTW, don't worry, my assets are safe (:
Ang |
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By: ecchi.gaijin
29/10/2009
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Lasty, to me Rseems to be very much an idealist as oppsed to Howard who was more of a realist. Neither is better than the other as we need a compromise between the 2. But these economic conditions are not the time to be idealistic. Howard and others neglected to promote Australia as significant on the international scene and Rudd is trying to remedy that while he can take credit for it.
Rudd is stuck in a nasty catch 22 with the environment, it was seen as one of his major policies that got him elected. Then the GFC hit so he wasfaced with fulfilling his election promises of environmental issues or ignoring them and addressinig the more important (short term) issue of the economy. He found some good ideas to do both (ceiling insulation etc) but these are only a drop in the ocean. |
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By: mentawaisurf
29/10/2009
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The couple, in their late 20s, recently sold a property in Newtown for $531,000 which they had bought two years ago for $470,000. They are hoping to get something bigger but said it was hard to find something decent for under $600,000.
''The value for money in the inner west is not justified at all - It's ridiculous,'' Mr Askew said.
I agree. Ridiculous! But since you're so positive that this bubble can keep inflating without ever bursting, and as per your blogname you must already have 'enoughwealth', then you have nothing to worry about then. So get out there and buy some more property before the prices rise even higher. |
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By: enoughwealth
29/10/2009
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Menta: "We've seen the top-end of Australia's housing bubble partially deflate while the lower-end has actually reflated!" -- but the top-end has now started to reflate, which seems to disprove your current theory for why house prices will drop 40% [or 40% 'in real terms' as some are now defining a 'drop' ;) ]
http://www.smh.com.au/national/balmain-hotcakes-pu sh-house-prices-higher-20091028-hl1e.html |
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By: lasty49
28/10/2009
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You have to ask yourself why is Rudd such in a rush to get his climate change ETS through prior to the conference in Copenhagen.
Well my theory is Rudd's ambition is to head the UN.
The climate change treaty is all about power to the UN.
Read the treaty. It's frightening.
Rudd has made himself a celebrity on the world stage.
His stance on international affairs benefits no one in Australia.
Conspiracy theory? Perhaps but his actions are very strange and every thing supports the UN charter, from the National apology to the aborigines,the asylum seekers,climate change |
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By: firefly_au
28/10/2009
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Hi Al :) And Hi all:)
There are certainly some problems with going Green and leading the way .....
The last articles I read concerning that issue was the OPEC want us to compensate them for the oil we are not going to be buying when we all drive electric gas hybrid cars! Also the foreign owned coal fired power stations want us to just pay them to shut down because they can't get funding to pay the debt involved in them buying up all the previously State owned power stations. The Rudd Government will have to provide them with cheap funds or buy the power stations back or they could just turn off the switch and walk away!
The last article was also a beauty - foreign owned large scale renewable power companies now reckon since there has been a massive take up of individual households of solar grid power systems and solar hot water systems that it isn't worth their while any more due to the collapse in the price of RECs (Renewable Energy Certificates). For "REC" Read Government subsidy....
So many vested interests in the game so little getting done - Wonderful isn't it he he :)
BYE :) |
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By: almurrie1@y7mail.com
28/10/2009
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E
I was thinking more of the Tarong power station etc. and the oil refineries.
Al |
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By: ecchi.gaijin
28/10/2009
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"while the players lose all their billions of infrastructure which will now be useless."
Not necessarily, the government will have to kiss ass to Energex (?) for the right of new entrants to utelise the existing infrastructure that is still required. Similar to Telstra. |
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By: almurrie1@y7mail.com
28/10/2009
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Riding the tightrope. At least Kev is less likely to be bribed by the big oil and coal. Even so getting rid of oil and coal overnight would probably see him a target of hit men. A very fine balancing act, can you imaging the negative hit to stocks? Gently gently catchee monkey. The weening off of electricity supplies from coal and switching cars to electric will take a while while the players lose all their billions of infrastructure which will now be useless.
Al |
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By: ecchi.gaijin
28/10/2009
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| I don't think Malcolm is the real problem at the moment Lasty. If he had a good team behind him then you could forgive him for not being the best leader. Noone will win an election when the best you have behind you is Tony Abbot. |
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By: lasty49
28/10/2009
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firefly,
What problem?
Im yet to see the alarmist debate it against the skeptics on a level playing field.
If you are going to tax people on carbon then surely there has to be a valid reason.
Sure if they want to tax you to raise funds for alternative energies then so be it but they dont have to use the smoke and mirrors.
All Ive seen is someone is telling me Sydney will be like Venice and Polar bears will be in Harvey Normans buying fridges because the ice caps have melted.
As for Capt Rudd he is currently ruling the waves in his little ocean.For how long depends on the opposition to put up a good candidate.
I think Humphrey B Bear has more of a chance than poor old Malcolm. |
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By: firefly_au
28/10/2009
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Hi lasty :)
Mate we have to do something about the global warming problem and other pollution problems! If we can wean ourselves off our nearly total dependence on oil at the same time so much the better! This is the time if we are ever to do it without much pain.
IMHO the carbon credits scheme if managed well and in unison measures with other world energy users and polluters we may have converted energy supply enough to survive the comming oil shortages and price shocks!
So Capt. Rudd cant be doing that badly! Surely it is and will be watered down more if the rest of the world don't swing into action or the research showing the need for action turns out to be false?
BYE:) |
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By: mentawaisurf
28/10/2009
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Whenever marginal borrowers enter a market in record numbers and on record debt levels (as we've seen with subprime in the US, rent-to-buy in the UK and recently with the FHBs surge in Australia's housing market) that signals the final tipping point from boom to bust. We've seen the top-end of Australia's housing bubble partially deflate while the lower-end has actually re-inflated! This is largely due to the enhanced FHOG & property bulls (agents, mortgage brokers, developers, builders & other vested interests) who continue to spruik housing for their own benefit.
This sector divergence is creating a market distortion that will only lead to even more pain moving forward, especially for those first-home buyers who were enticed to purchase on little or even no deposit (as developers like Devine & others continue to push).
Below is an extract from the Devine Limited website. They are aggressively marketing their properties to first home buyers with seminars across the country. And they are still heavily pushing their hard-hitting advertising campaign of 'No Deposit - No Worries!'
So when banks refuse to take on the risk of unqualified FHB's, and those with no deposit at all, then developers are happy to approve instant vendor finance - No Worries! And Devine are not alone. Builders and developers are doing the same - all around Australia. They are helping create a new generation of highly over-leveraged and heavily indebted Australians whose resultant mortgage defaults will be the final tipping point for a dramatic fall in our housing market.
And still FHB's continue to fly into their web - in record numbers! |
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By: mentawaisurf
28/10/2009
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Whenever marginal borrowers enter a market at record numbers (as we've seen with subprime in the US, rent-to-buy in the UK and recently with the FHBs surge in Australia's housing market) that signals the final tipping point from boom to bust. We've seen the top-end of Australia's housing bubble partially deflate while the lower-end has actually reflated! This is largely due to the enhanced FHOG & property bulls (agents, mortgage brokers, developers, builders & other vested interests) who continue to spruik housing for their own benefit.
This sector divergence is creating a market distortion that will only lead to even more pain moving forward, especially for those first-home buyers who were enticed to purchase on little or even no deposit (as developers like Devine & others continue to push).
Below is an extract from the Devine Limited website. They are aggressively marketing their properties to first home buyers with seminars across the country. And they are still heavily pushing their hard-hitting advertising campaign of 'No Deposit - No Worries!'
So when banks refuse to take on the risk of unqualified FHB's, and those with no deposit at all, then developers are happy to approve instant vendor finance - No Worries! And Devine are not alone. Builders and developers are doing the same - all around Australia. They are helping create a new generation of highly over-leveraged and heavily indebted Australians whose resultant mortgage defaults will be the final tipping point for a dramatic fall in our housing market.
And still FHB's continue to fly into their web - in record numbers! |
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By: mentawaisurf
28/10/2009
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FIRST home buyers seeking advice on entering the property market can have all their questions answered at a series of new seminars being held by leading homebuilder Devine Limited.
Devine is holding First Home Buyer Seminars throughout Australia.
"The seminars are designed to take away some of the confusion involved in buying your first home," said Steve Weightman, Devine General Manager South Australia. "First home buyers can have all their questions answered in a friendly and welcoming atmosphere, and get all the specialist advice that they need."
The seminars will include expert knowledge from a leading finance company specializing in home loans, and an independent view of why property is a good investment.
Mr Weightman said it was a great time for first home buyers to get into the market, especially with the $21,000 Federal and $4,000 State First Home Owners Grants.
"There are some terrific government incentives available to first homebuyers, including a $21,000 grant for first home buyers building their own home," he said. "We are also enjoying the lowest interest rates for many years."
Devine Limited is a leading Australian homebuilder. |
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