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I think there is a genuine housing shortage at the moment, but remember the demand side CAN change, even if population continues to grow. If we have a recession, and grads can't get jobs, they'll stay with the parents for longer. People will share more, etc. Rental demand can stall or even fall...

Actually all those reasons can result in rising RENTS but falling PRICES. You can't confuse DESIRE for property and ABILITY to buy property. Why? Rental demand is made up of number of people, shortage of housing, low unemployment, incomes, etc. That determines rent. Buying, in addition to...

I’m not going to take the credit for that. Any idiot could have seen that a credit slowdown in the US would have an effect on us. What I couldn’t predict is how big an impact it would have on our rates. The independent rates increases by the banks have been a little faster than I would have...

Frank, where are you getting this from? I'm not sure you want to live in downtown LA, Frank. I suggest reading those cities' local newspapers. Gives you some interesting 'on the ground' views. Alex

Pretty much, yeah. In the US there were a lot more 'spec' homes (builders build before they have buyers). And they were building brand new suburbs everywhere. In oz, we didn't have that to the same extent. Probably because we lack the infrastructure (in the US you just need a freeway that...

You might want to wait until Stevens comes out with his comments after the May RBA meeting. He may well keep rates flat. I really doubt he's going to cut them. In any case, the banks are going to keep moving rates up anyway, which decreases the value of the RBA keeping rates steady. Alex

That doesn't make it not true, though. Besides, I believe there's a difference between my 'we're going to have a recession, then another boom' and the standard D&G line of 'the market is going to hell and investors are all going to burn'. Yeah, prepared investors get rich. Would it make you...

Honestly? No. I'm way too cynical to get involved in the political process. If I want to affect policy, I'll go buy some pollies. Alex

Maybe, but that's irrelevant, because you're not Glenn Stevens. Stevens has been pretty clear about why he moves interest rates. Whether you or I think that's the right way to go about it or whether there is a 'better' way is irrelevant. I'd rather plan according to what Stevens will actually...

I think it’s more likely we have booms and busts than perpetual booms. So what? So people make painful adjustments. That happens in every recession. Just because a recession is going to hurt people isn’t a reason to believe it won’t happen. I’m positive and optimistic about the long term...

It’s my belief (reinforced by observation) that the economy and housing markets move in cycles. Must it be so? No. But you’re basically saying ‘why must we have booms and busts? Why not booms then levelling, then more booms?’ For that to happen, you would need people to NOT get too euphoric when...

I honestly don't understand why people want so badly to believe that markets won't fall. What's the big deal? Falling markets bring markets back towards (or below) the long term growth rate and are GREAT opportunities to buy. Markets DO stagnate or fall. We know that from history. I'd rather be...

They thought the good times would last forever. It didn't. This is nothing new. The junk bond era, the dot-com era..... same idea. Every so often people decide that 'this time it's different'. Of course the system falls apart every so often, simply because it involves humans, and humans are...

Bank deposits, presumably, aren't sufficient to fund all the loans the banks want to make. And if the banks can lend at 8% and borrow at less from overseas, and pocket the spread as profit, isn't that exactly what they are supposed to do? As a bank shareholder, why should I complain? If they...

I wonder if they would be doing this if it wasn't an election year?

Fair enough, but why should we care? As a result of foreign sourced credit, we had lower rates than we've ever had before (not just the official RBA rate, but the DISCOUNT to the so called 'standard variable rate). After years of cheap credit, we're coming back to reality. We, as owners of...

No, but if BoA is buying Countrywide, are they going to default on any of their loans? I agree it depends on exactly what they've lent against. Yes, the big 4 banks certainly seem like they act in collution. Swan and Rudd don't have any influence over them, and why should the government have...

If the majority of Australian bank exposure is to Countrywide, the risks just got smaller, no? Bank of America is going to buy Countrywide. While questioning the wisdom of the buy, no one is predicting that BoA is going to go bankrupt. Having 'exposure' to the subprime thing in the form of...

On the contrary. I've been consistently pessimistic about the short term. I'm upbeat about the long term. The short term is looking uglier. I'm still planning to buy more IPs in the near future (as soon as I get a refinance through, in fact). But that will be a smaller % of my total...

It might just be a time lag, you realise. Any effect on Australia is likely to pass through China first. So by the time US (and European) demand falls enough to affect China, which will then affect Chinese demand for our resources... it may well take months. In my opinion, we're nowhere near the...