By: ang101000
Yesterday (7:00 pm) Yahoo! Profile:
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S_step,
Agree with you to a degree; everybody knows models work best on the catwalk...
On the other hand; If you can draw one lesson from GFC it must be :you can't go broke if you don't have debts.... |
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By: s_step000
Yesterday (6:41 pm) Yahoo! Profile:
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Tks for the links.
Keen assume houses are bought all for speculation. Up to individual to decide whether this assumption is valid or not. Like others (including me) when he wrote journal papers, he was making some assumptions.
As we all know, there is always 2 side of coin thus depending how u write and justify your view.
I dont buy any theory or model that is valid for everything. Model and theory are developed under certain assumptions. :) |
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By: ang101000
Yesterday (5:13 pm) Yahoo! Profile:
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Hi Enough,
I think Menta has been watching Mr Doom;
'Marc Faber: USD Will go to a Value of Exactly Zero'
http://mellgren.com/category/deflation/
Fascinating, even if you don't agree with it. |
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By: ang101000
Yesterday (4:27 pm) Yahoo! Profile:
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Hi S_step000,
I know you have asked Menta a few questions about household debt. Given that Menta has used Prof Steve Keens data in support of his posting, I thought, you should see the original document to argue your view. So here is a link for the original data as presented by Steve Keen (you need to download the file and read)
http://ifile.it/yonhws8
After reading it perhaps you be clearer about Menta's (and Keen's) view. |
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By: ecchi.gaijin
Yesterday (12:50 pm) Yahoo! Profile:
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| Please practice impersonating a foreigner more. |
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By: qitulong
Yesterday (12:39 pm) Yahoo! Profile:
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Mr. ecchi.gaijin. Mr. Menta is polite fella here. Why you can not be polite too? You always post bad things about other people on many these BLOG's but not seem to have sense of making up your own comment about anything discussed here. You just try to make fun of others. I not interested you or your bad comment about others. Please stay onthe subject and show us your knowledge. It welcome.
Also. Your ID is offenzive. I think you shoudl not use such ID here. Maybe someone from J A PA N get offended easy by it. |
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By: ecchi.gaijin
Yesterday (10:53 am) Yahoo! Profile:
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| Guys, you are wasting your time with Menta. I tried explaining this to him previously but he obviously can't understand anything that he reads and just wants to go around regurgitating what others are saying like a parrot. |
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By: enoughwealth
Yesterday (10:49 am) Yahoo! Profile:
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Menta - re your deflationary and bear-market viewpoint:
Generally speaking, when governments have previously gone through periods of high expenditure and deficit financing they have resorted to "printing money" to eventually pay for it. This tends to a) devalue the currency, and b) boost inflation.
To me this suggests we are more likely to experience a decade of HIGHER inflation in Oz and the US, not a period of deflation.
Deflation would require a massive melt-down of the real economy, which, with current signs of a modest global economic recovery and reasonable growth in Australia, seem highly unlikely.
Please explain why YOU think that "things will be different" this time around?
I believe the usual economic, stock market and real estate cycles will continue to be experienced. Your comments suggest that you think that anyone not expecting imminent stock market and real estate melt-down is a believer in never-ending booms/bubbles and that "this time it is different". Yet, to me, it seems that by constantly predicting imminent market collapse and deflation it is you that is proposing that "this time it will be different" and that normal economic cycles are about to come to a dramatic end... |
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By: s_step000
Yesterday (10:43 am) Yahoo! Profile:
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"The level of Australian household debt - the sum of mortgage debt and personal debt - is every bit as extreme as the USA's,"
This comment I believe is wrong. 1) You need to write exactly who is the borrower. 2) mortgage debt caused by overseas investor and emigrant bringing in skill and wealth are beneficial in the long term for OZ's economy.
As an economist Steve Keen should know that the origin of the debt does make a difference.
PASTING some part of Keen's comments without understanding the basic concept will result in different intepretation.:) |
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By: enoughwealth
Yesterday (10:37 am) Yahoo! Profile:
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Menta - Keen's own graph (http://www.debtdeflation .com/blogs/wp-content/upl oads/2007/03/US_v_Aus_HHD ebt2GDP.png) shows only that Australia's household debt:GDP ratio is now roughly the SAME as in the USA. The fact that it has been growing faster than in the USA since the 1980s simply means it was starting from a lower base.
You may not remember, but in the 1980s Australia was just starting to recover from a prolonged period of double digit inflation, so our interest rates were MUCH higher than in the US - hence a MUCH lower ratio of household debt:GDP could be sustained in Oz vs US due to the interest rate differential.
That differential has been dropping since the late 80s, as Australia got it's inflation back under control.
ALSO, Australia in the early 80s was just starting to loosen up regulations regarding personal borrowings (I remember margin loans, lines of credit etc. just starting to become available - up to the 1970s the only household debt in common use was the home loan!)
The graph also seems to be a couple of years out of date - it would be interesting to see what had happened since 2007...
Finally, if you look at the debt servicing cost (ie. interest being charged on the debt), the current household debt:GDP ratio means that the household debt servicing cost:GDP ratio would have stayed pretty constant from the 1980s to today.
Another example of selective data mining (polite speak for when an academic such as Keen resorts to "lies, damned lies, and statistics" to support a weak theory). |
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By: jaymarcel
Yesterday (8:40 am) Yahoo! Profile:
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You forget that Australia is still very much a growing country as opposed to the USA.
Growing debt is always linked with a growing country or business or even an individual. |
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By: mentawaisurf
2 days ago (Wednesday, 5:52 pm) Yahoo! Profile:
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"The level of Australian household debt - the sum of mortgage debt and personal debt - is every bit as extreme as the USA's," Professor Steve Keen commented. "And contrary to popular opinion, our debt binge dwarfs America's."
Australia's household debt to GDP ratio had been growing more than three times as rapidly as the USA's since 1990. The ratio had grown at an average of just over 2 per cent per annum in the USA. It has grown at over 6.8 per cent per annum here.
Keen hopes his outlook for a deflationary crash in Australia proves wrong, and so do I, but complacency could be our greatest enemy. |
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By: rstuarts2000
2 days ago (Wednesday, 3:28 pm) Yahoo! Profile:
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Menta, it has always been over the coming weeks and months, but those weeks and months haven't come and just don't seem to be coming. The syncronised effort of governments around the globe to restimulate the global economy may well have succeeded in keeping the debt machine alive and well for another run. How long this run will last is anyones guess, but I would caution anyone holding thier breath!
Low end rental prices are continuing to rise to the point where purchasing is not much more. Do you keep renting? Alternativley you take out a big fat mortgauge and have faith that history shows the trend of our economy is inflationary. I think the real question is, will Mars bars be more expensive in 20 years time? If you think so, you can bet housing will be also, along with your average weekly pay packet. |
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By: jaymarcel
2 days ago (Wednesday, 2:26 pm) Yahoo! Profile:
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| I did hear from a real estate friend today that they believe property prices will drop if not environmentally friendly under the new scheme which comes in 1st Jan 2010 |
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By: mentawaisurf
2 days ago (Wednesday, 2:21 pm) Yahoo! Profile:
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Menta, by 31/12/09 you expect "...the resumption of the underlying bear-market trend will be obvious to everyone by then"?
Ralph, there will be irrefutable signals and warning signs from around the world over coming weeks and months that the worst is not over and that recovery is not imminent - contrary to what we have been constantly told by our 'experts' (who also failed to warn us about the initial phase of the credit crisis).
As a hint, a 'correction' in China's stock market bubble will be an early warning sign of things to come (interesting that the Shanghai Index was down 3.5% yesterday and is currently down about 1% today). The other signs will become more apparent over the very near future. |
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By: jaymarcel
2 days ago (Wednesday, 2:18 pm) Yahoo! Profile:
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Ang you are in for a shock, when we first emmigrated here we moved to Bentley a suburb 9 km south of Perth (this by the way was after living in Maroochydore Sunshine Coast), we thought we would save money & the purchase price for a house up the street we rented started at $500,000 so thought it can't be that bad with rent $200 a week. WRONG
From bikie gang drug deals to Aboriginals giving us death threats whilst they try to break into our house at 3am we soon realised this saving money scam wasn't so great but looking back we now laugh & are also very pleased that we bought a house in a reasonable suburb of Brisbane, put a fence around it fitted an alarm & call it home.
Think of it as character building. |
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By: ecchi.gaijin
2 days ago (Wednesday, 2:01 pm) Yahoo! Profile:
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| I hope you are good at researching then because real estate agents can do a lot of the work for you. You just need to then decide what information to trust. If you do it yourself you first have to find it all then cull it. |
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By: ang101000
2 days ago (Wednesday, 1:48 pm) Yahoo! Profile:
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No Menta,
I am not a buyer at this time. I don't know where to move next and like to make my own decision without any help from a real estate agent. |
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By: ang101000
2 days ago (Wednesday, 1:35 pm) Yahoo! Profile:
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Jade,
I agree with you but I have grown emotionally detached from my place ( don't want to go in personal details). I know, it is time to move on.
Financially, it is fully paid so will get my money and think where I would like to move long term.
Moving to a 'bad' suburb may give me a doze of reality, which perhaps is needed at this time in my life.
The decision has nothing to do with this blog. |
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By: almurrie1@y7mail.com
2 days ago (Wednesday, 1:34 pm) Yahoo! Profile:
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Oops just saw your "Chinese computer", sorry.
Al |
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By: almurrie1@y7mail.com
2 days ago (Wednesday, 1:32 pm) Yahoo! Profile:
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Ang, you seem to have fallen into the trap of spelling then with an a. If you meant than, it seems that you would rather move than think about the market!
Al
(I know I am being super critical, but it is pet hate at the moment, because my students seem to be doing it a lot too and it would be hard to make a typing error of two keys across and one down). |
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By: mentawaisurf
2 days ago (Wednesday, 1:26 pm) Yahoo! Profile:
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| Ang, be more worried about the real estate agent trying to convince you to buy another property, after he has sold yours of course, because he has "a bargain that's just become available" and "now is the perfect time to buy". |
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By: jadeshangrila
2 days ago (Wednesday, 1:20 pm) Yahoo! Profile:
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| Personally I never think of houses as investment rather it is a home and also a work of art. I wouldn't care if my 120 year old Victorian villa came down 40% in value, but i would be jumping up and down if it's cedar floor boards had termites or it's sand stone walls are affected by salt dam. One can't always be thinking about the dollar but also about the passion and the life style. That is why it is a different class of asset to stocks and shares. Go ask someone why they paid 10 million dollars for a Ming vase. |
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By: jaymarcel
2 days ago (Wednesday, 1:12 pm) Yahoo! Profile:
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Menta, several years? Just renting for one year is painful you just have no control of making the property enjoyable, safe, liveable & to your satisfaction at all.
Ang it appears you now have to live in a cheap run down house in a crime ridden run down suburb for several years to benifit from your choice, well sold menta.
Ang how much do you think the real estate agents will charge you for selling your house? |
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By: ang101000
2 days ago (Wednesday, 1:11 pm) Yahoo! Profile:
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| sorry, today Chinese computer...should be 'to move to a perceived bad suburb' |
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