Bad news for Interest Rate Hawks - RBA Cash rates unchanged

[bluestorm]

No Bluestorm you have not always said "thru" 2012.

I did check the older posts as per the link I attached, it is to a thread started by you on 1/5/2010

http://www.somersoft.com/forums/showthread.php?t=61852

"I expect we'll see the start of GFC2 in May/June, and this will see the property prices fall through to 2012."

Look at the property bulls predictions in May 2010. I believe people like Propertunity were predictions a healthy rise in property prices.

And property prices are falling through to 2012 as well. Shares are falling (I converted the super to conservative back in Nov last year) with the view the ASX will hit 3200 come Nov 2012 (30% of the way there now)

Europe will have more bailout, US will get downgraded, China is slowing. You can believe that this won't affect property, but I differ.

 

[turk]

Look at the property bulls predictions in May 2010. I believe people like Propertunity were predictions a healthy rise in property prices.

And property prices are falling through to 2012 as well. Shares are falling (I converted the super to conservative back in Nov last year) with the view the ASX will hit 3200 come Nov 2012 (30% of the way there now)

Europe will have more bailout, US will get downgraded, China is slowing. You can believe that this won't affect property, but I differ.

We are talking about your predictions which have now moved from

corrections through to 2012

to

corrections through 2012

and the fact that you claim you never made the "correction thru to 2012"
claim.


If you want to move the goalposts at least be upfront about it, you shred your credibility otherwise.

 

[bluestorm]

Please refer to the bullish predictions of the property bulls on here. Their predictions have been completely off. Even I'm more accurate than that.

So I underestimated the amount of money that governments would put in to kick the can along for a while yet. QE2, and maybe soon QE3 in the US, a SECOND bailout for Greece. But in the end, it will come to make no difference, and we head into another financial crisis.

Still more accurate predictions than the bulls on here. And hey, the "expert" economists can tweak the timeline a little, so why not us. I'm still saying 2012.
The message is still the same as it was at the start. Australia is heading for a recession, and we'll see a 30% property correction.

 

[turk]

Please refer to the bullish predictions of the property bulls on here. Their predictions have been completely off. Even I'm more accurate than that.

So I underestimated the amount of money that governments would put in to kick the can along for a while yet. QE2, and maybe soon QE3 in the US, a SECOND bailout for Greece. But in the end, it will come to make no difference, and we head into another financial crisis.

Still more accurate predictions than the bulls on here. And hey, the "expert" economists can tweak the timeline a little, so why not us. I'm still saying 2012.
The message is still the same as it was at the start. Australia is heading for a recession, and we'll see a 30% property correction.

Bluestorm

You have completely missed the point, it's not about the accuracy or the timing of your predictions .

It's about the honesty or lack of in making a prediction and when it doesn't occur changing it and claiming you never made the original prediction.

 

[bluestorm]

It's about the honesty or lack of in making a prediction and when it doesn't occur changing it and claiming you never made the original prediction.

Mate, so I said through to 2012. Are we at 2012 yet?? So I still have 5mths even on the old predictions. I've shifted by 10mths on top of that given the excessive government propping up. But in the end this is all delaying the inevitable.
Come back to me in 2012 if you have problems with the predictions. Spain will have a bailout in Dec or Jan, and the US will be downgraded from AAA by years end. If you think property will rise from here then your deluded.

 

[Aaron Sice]

Mate, so I said through to 2012. Are we at 2012 yet?? So I still have 5mths even on the old predictions. I've shifted by 10mths on top of that given the excessive government propping up. But in the end this is all delaying the inevitable.
Come back to me in 2012 if you have problems with the predictions. Spain will have a bailout in Dec or Jan, and the US will be downgraded from AAA by years end. If you think property will rise from here then your deluded.

maybe you should look at our local factors and have a gander at what China have been doing with US bonds lately. economists harp on about their 1.2t exposure to the US market, but China could easily offer the US an extension on payment or partial payment arrangements, absorb the cashflow drain and still churn away in their 9% pa growth cycle. would this happen? i don't know, don't care to be honest, the point is - considering China's investment in the long term, 1.2t is like you lending $5k to your sister and not getting it back on time.

1.2t is a drop in the ocean compared to the US's now 17t debt issue and China are still the world's manufacturing hub - what has the US got? China is sheilded from the Weinmar lessons because it still has something to sell - labour; and the fact that it's stimulus package is always measured in yuan - being 4 trillion ......which is actually just shy of 600bil USD. very managable against current GDP figures.

i see nothing but blue sky for Perth, Geraldton and PH in the medium term. most people don't even know the full extent of investment already committed, let alone coming up.

this was also an interesting article > http://online.wsj.com/article/SB10001424053111903341404576484192518584426.html

 

[bluestorm]

maybe you should look at our local factors and have a gander at what China have been doing with US bonds lately.

i see nothing but blue sky for Perth, Geraldton and PH in the medium term. most people don't even know the full extent of investment already committed, let alone coming up.

Yes, I know China is reducing US government bonds, and will continue to do so as it invests elsewhere.

I doubt that the big mining boom, will save Australia from the global problems. When the world slows, demand for Chinese goods falls, and so China will slow.

 

[turk]

Mate, so I said through to 2012. Are we at 2012 yet?? So I still have 5mths even on the old predictions. I've shifted by 10mths on top of that given the excessive government propping up. But in the end this is all delaying the inevitable.
Come back to me in 2012 if you have problems with the predictions. Spain will have a bailout in Dec or Jan, and the US will be downgraded from AAA by years end. If you think property will rise from here then your deluded.

Mate, your "through to 2012 prediction" was made in May 2010.

The propping up of the market by the government was already a historic fact, house prices had already spiked and were flattening out.

How did you not allow for this well documented market effect when making your 2012 prediction?

 

[Aaron Sice]

Yes, I know China is reducing US government bonds, and will continue to do so as it invests elsewhere.

I doubt that the big mining boom, will save Australia from the global problems. When the world slows, demand for Chinese goods falls, and so China will slow.

i don't think it will save the East Coast one iota, or retail here in the West either.

but considering what the US is about to go through, we're going to get off pretty light.

if China slows from 9% to 5 or 6%, that's a 30% correction and it still lands in VERY healthy territory; still very capable of funding a new middle class to keep itself churning over.

 

[Deltaberry]

Hmmm I think rates will rise soon. Anyway that's the vast majority of predictions, last I checked on my Bloomberg machine (you know, the one that costs $5k a month to rent) er....... this morning?

 

[bluestorm]

Mate, your "through to 2012 prediction" was made in May 2010.

The propping up of the market by the government was already a historic fact, house prices had already spiked and were flattening out.

How did you not allow for this well documented market effect when making your 2012 prediction?

I'm sorry, QE2 was this year 2011. The second Greece bailout was last month 2011. I'm not talking about the 2008/2009 stimulus. I'm talking about all the propping up since to prevent the world going under.- So yes, this additional government interventions have just pushed the timeline out a bit, but not by much.

 

[dan c]

I've called an August or September rate rise. I suspect the recent debt limit arguments in the US (which have as yet not fully been resolved) have led the RBA to hold rates for this month.

I now call a 100% chance of a 0.25% rate rise in September. I also suspect that with higher than expected CPI figures in the Sept quarter, that rates will head up a second time in Dec or Feb.

Inflation is becoming a problem, and the RBA won't hold indefinately. And certainly won't lower interest rates as some on here suggest.

http://www.theage.com.au/business/m...d-global-economic-jitters-20110803-1iabt.html

 

[bluestorm]

http://www.theage.com.au/business/m...d-global-economic-jitters-20110803-1iabt.html

I still think rates will go up in Sept.
But a drop either way is good, as it means the economy is in a mess, and hence property prices will continue their downward trend. Win-win.

 

[turk]

I'm sorry, QE2 was this year 2011. The second Greece bailout was last month 2011. I'm not talking about the 2008/2009 stimulus. I'm talking about all the propping up since to prevent the world going under.- So yes, this additional government interventions have just pushed the timeline out a bit, but not by much.

There had already been huge stimulus and propping up by governments world wide prior to May 2010.

QE2 and the second Greek bailout were minor compared to earlier actions by governments.

I'm at a loss as to why anyone would think governments would suddenly turn the tap off.

Do you consider that there will be no more bailouts?

 

[Aaron Sice]

I still think rates will go up in Sept.
But a drop either way is good, as it means the economy is in a mess, and hence property prices will continue their downward trend. Win-win.

you mean lose/lose.

maybe you're forgetting/too young to remember the early noughties - lacklustre sentiment from the tech crash (a REAL bubble) and low interest rates spurred on a boom like never before seen in Australia.

that was the crash that was meant to end the world as we knew it.

 

[bluestorm]

you mean lose/lose.

maybe you're forgetting/too young to remember the early noughties - lacklustre sentiment from the tech crash (a REAL bubble) and low interest rates spurred on a boom like never before seen in Australia.

Maybe your forgetting that the world has had a massive debt binge, and it will take a few years to get over the hangover. The credit is not there like it was last decade.

If your predicting that a drop in interest rates will lead to another property boom then your an even bigger property bull then Propertunity.

 

[Aaron Sice]

Maybe your forgetting that the world has had a massive debt binge, and it will take a few years to get over the hangover. The credit is not there like it was last decade.

If your predicting that a drop in interest rates will lead to another property boom then your an even bigger property bull then Propertunity.

what? credit? in 2001?

i was on good money for the time and my age ($25kpa....) and even then the banks were baulking at me paying $60k for a unit. in fact, i had only one option - a keystart loan.

my income is 5x that now and it appears lending hasn't changed much overall between then and now - only what happened in the middle.

a drop in credit costs will put a floor under prices - i'm not talking about a boom this time - just reciting history.

 

[bluestorm]

a drop in credit costs will put a floor under prices - i'm not talking about a boom this time - just reciting history.

The problem is everyone is focusing on interest rates alone. Cost of living has gone up, which reduces peoples disposable income.

The only floor you'll get under prices is if the government has a whole lot of new stimulus spending to put the floor there (like they did during the GFC). Otherwise if market forces are allowed to run their course, then Australia property will correct 30% over the next 1.5yrs.

 

[Aaron Sice]

The problem is everyone is focusing on interest rates alone. Cost of living has gone up, which reduces peoples disposable income.

The only floor you'll get under prices is if the government has a whole lot of new stimulus spending to put the floor there (like they did during the GFC). Otherwise if market forces are allowed to run their course, then Australia property will correct 30% over the next 1.5yrs.

i don't think you're looking back far enough.

the cost of fuel from 1997 to 2001 went from about 75c a litre to 1.10 - you remember these things when you drive a rotary.
bread went through the roof.
electricity costs were on the up and up.
water went from being "excess charges only" to "pay per drop".
GST being introduced in 2000
11 Sept 2001

etc etc

the holes in your argument about it not being like last time when it's playing out exactly the same is doublethink. the comparisons are almost identical.

*EDIT* there were HUGE issues about affordability and the rising costs of living. prices were rising almost exponentially under a media blanket of doom and gloom. i remember it - we struggled through it on one income paying a mortgage and putting my wife through uni.

 

[bluestorm]

the holes in your argument about it not being like last time when it's playing out exactly the same is doublethink. the comparisons are almost identical.

So last time we had countries being bailed out, the US facing a rating downgrade, trillions in stimulus spending globally to keep economies afloat?? There is no comparison to last-time because last time was completely different.
"the comparisons are almost identical."

If you want to compare to "last-time" then you'll have to do better. Maybe the 1930's.