You have got to give it to labour governmentsthe are the fiscal trogo (d) lytes of the universe;
Want another try at the correct spelling
Fiscal trogolytes and property values
- Thread starter nonrecourse
- Start date
Want another try at the correct spelling
Whats this got to do with the topic.
You always just fly off on tangents inserting random pieces of bad news
Oh i forgot those 52,000 wealthy Americans are the ones who will determine the fate of Australia.
Mate you really need to focus, your inability to focus and your tendancy to fly off on tangents detracts from the thoughts you are trying to present.
OK. I was just curious
I saw pallBEARer back slapping and make reference to Token Founder and Non recourse and also post the QLD Debt link at about the same time as it was posted here, so figured there was a connection.
I must have been mistaken.
Oh, Enjoy the pension as well NR
Dave
People also forget that with uncertainty assets tend to be priced with less blue sky valuations. So which is better buying in the good times with high degrees of perceived future forecasting (only to find out that things are not that stable) or buying when you are much more aware of the risks, and the market is more reasonably priced because it is also concerned about the risk.
NR,have a read about what George Soros thinks when he makes a financial bet, im told he keeps looking for instances that prove him wrong,but he still makes the bet, which will be more important in 3 months time in China
the price of a kilo of rice or the price of a can of coke??..willair..
Currencies, no one can predict. One will emerge as stronger out of this. My guess is probably the USD strangely enough. Gold is having a good day as well.
In Deflation, well yes everything deflates, including living costs, probably rents and cabages. Assets tend to depreciate more than consumables. The debt deflation refers to debts remaining the same. So your 30% LVR will be 60% if asset price falls 50%.
With the **** board, I actually think it is one of the best for macroeconomic debate. And this is interesting for what property investors are doing. I think they both have a roll and will probably inch towards the same reality, somewhere in the middle probably. I have a devious anarchical streak to me and like their revolutionary zeal.
Depression ? There's no set definition. Broadly considered to be a long recession with 10% or more decline in GDP. Some countries are approaching this % fall GDP already (Germany, Japan, Ireland, UK, all the eastern european ones who have fallen off a cliff, some like hungary, poland, latvia -10% in the last 2 quarters !).
AFR- I stopped reading that, too much noise, no real content. Only Bassanese says anything analytical and he seems to be on holiday.
Hiya red hot chillie my call on the asx reaching 2200 in October 2009 is looking a tad conservative don't you think with all the bad news
Funny how you cannot draw a parallel between the gnomes in Switzerland demise in banking, the wholesale wealth destruction of our American cousins especially the well heeled Yanks and Australia's precarious financial situation when you consider the fiscal pygmies that control all but West Australia politically.
As for focus well "mate" I think it is time someone took those Chess certificates of yours that some faceless board controls rolls them up and whacks you on the bridge of your nose like a naughty sock puppy that you are for believing you have any say at all in the companies you speculate
inGood point I got rather nervous when I read that because of the chinese bias for boys in one child families there will be 250 million more males than females by 2025. As for George his concept of reflexivity is very left brain.
As has been stated on this thread by top cropper and others. Australia is 12-18 months behind the rest of the world with regards to the unfolding financial tragedy and really its just the last two months that some of my customers have woken up.
The fact that 18 months ago I started talking about the soft depression counts for nothing on this site because some will continue to argue because they don't want to have to face up to reality....yet.
There are lots of economists in Australia who can't chew gum and walk who continue to tell us we will avoid a recession
The federal government ad nasum keeps telling us our banks are sound
We read the financial times and the finacial review from front to back every day, We attend about 6- 10 auctions most weeks. We are on half a dozen property and investment sites and instead of watching TV we surf the net learning and developing our financial literacy day in day out. We have owned and operated successful businesses since 1991 and we are comfortable with our own judgement and we will give you an example.
When we joined this site16.04.2007 the first few months we contributed a bit on SMSF's and Trevisan trusts as we were keen to share our good story that lasted up to 11th of August 1999.The large retail funds lobbied the government and had that option closed off as is so often the case. When property warrants were offered we could again see an opportunity for individuals to take control of their own super through investing directly in property.
Super the way the retail and industry funds want to run it is a scam designed to skim the cream off of working people for life.
When we first borrowed the term soft depression, (I think it was from a book that talked about demographics and the coming financial dislocation of so many boomers retiring and accessing their (U.S.) 401 retirement accounts selling down shares). it was around July 2007.
It was also then that we discovered the gorilla in the closet called subprime through surfing the net. We can accept that probably right up to July 2008 what we were saying looked like an unlikely scenario. Anything that we did post was viewed anti-property and D&G.
We only have limited time and as time went on anything we posted that suggested (a) a soft depression was coming, (b) the asx would drop below 3500 by the end of Oct 2008, (c) the reserve rate would drop to 2%, (d) the dollar would evenually drop to 38 cents and the final straw as far as the optimists on this site was that (e) residential property would drop 40-50%
sending the blue sky brigade into paroxysms of horror.
All along more and more demands are made to prove it. Anything we post is met with derision and scorn and is cast off as having no merit. Because we have kept posting the message and warning novice investors to protect their seed capital, this has infurriated what we call the blue sky brigade that advocate being geared to the back teeth. This term was coined in response to the continued abuse.
The moderators have done a great job of removing our vitriole when the abuse got too much. In the last few months we note a lot of people starting to say we don't like the message but NR's runs on the board are starting to add up.
Turk we are not prepared to continuely post to support what is now bleedingly obvious. The world banking system is insolvent, we are in a depression and world trade is collapsing. If you don't believe that or are not sure we have a suggestion.
Get on the net and arrange a three month subscription of the financial times. Also purchase a hard copy subscription of the financial review and read both from front to back for three months.
If at the end of that time you disagree with us then you are invited to click on the ignore facility on this site, that will hide our posts and you can get on with investing.
The only reason we believe we are still allowed to post on this site is that the moderators have scrutinized us closely and they recognise that we are indeed bonified property investors all be it unpopular ones
The fact that one of the owners of this site saw it necessary to post his long term optimistic view on property because of his genuine concern that the site has been polarized says it all, this discussion is going nowhere.
We would like to suggest that perhaps we will focus more on the posters who are interested in what to do with regards to protecting and expanding your property portfolio in a depression.
For those who wish to continue to flame us; "you will get a post from us saying have a nice retirement on the government pension
Someone we met many years ago who became a very wealthy man during the depression in Canada told us the secret to making a lot of money in a depression was to have no debt in your business and internally fund all your growth from profit, trim your overheads, look after your employees and those less fortunate than you.
Having just reread a book about Warren Buffett that was published in the late 1980's. He started with about $10'000 after the war, he was worth around 25 million by the late 1960's and as of 18.02.2009 his net worth was 62 billion. Warren has always eschewed debt. That is more difficult to do when investing in property initially. But in unstable times you should be preserving your seed capital.
NR
Hi NR
Nice post, I'm also bearish but not to the same extent as you, we agree in a number of areas, I have no money in retail or industry funds, novices need to preserve seed capital, my contingency plan includes enough cash to pay 2 years interest should all rents stop tomorrow or should they remain the same
a 18 year buffer plus further alternatives.
Much of my time is also spent surfing the net learning more about world economics, amazing the different spin put on the same events, so my interest is not in the what but in the why "it" will occur and then make my own decisions and act on what I think will happen but also plan for the worst.
Congratulations on 18 years of business success, I started in 1981 and retired from business in 2004, went on a 20 month holiday in the U.K. with my wife and daughter, now work partime at something I enjoy, however longevity doesn't neccessarily make us any smarter than the next person.
Getting back to your predictions for the last 18 months,
(a) a soft depression was coming,
You have now called a depression happening in Australia, to date I have not seen any data showing that we are in a reccession much less a depression yet.
So the question still being ducked is what is your definition of a depression
and where is your data to support this claim of an Australian depression?
(b) the asx would drop below 3500 by the end of Oct 2008,
Correct call,I've been shorting the market since March '08.
(c) the reserve rate would drop to 2%,
Hasn't happened yet.
(d) the dollar would evenually drop to 38 cents
Hasn't happened yet.
(e) residential property would drop 40-50%
Hasn't happened yet.
To date a strike rate over 18 months of 1 in 5, your predictions may still happen and I believe you when you state that you hope they don't, but agree that a plan should be in place should this happen.
You tell us you borrowed the term "soft depression" from a book, how did the author define this expression?
Cheers
Pete
Hiya red hot chillie my call on the asx reaching 2200 in October 2009 is looking a tad conservative don't you think with all the bad news
Funny how you cannot draw a parallel between the gnomes in Switzerland demise in banking, the wholesale wealth destruction of our American cousins especially the well heeled Yanks and Australia's precarious financial situation when you consider the fiscal pygmies that control all but West Australia politically.
As for focus well "mate" I think it is time someone took those Chess certificates of yours that some faceless board controls rolls them up and whacks you on the bridge of your nose like a naughty sock puppy that you are for believing you have any say at all in the companies you speculate
Moderators i am not sure if you will review this whole topic because it doesnt relate to property directly. But these are the sought of posts by Non-Recourse that i think are creating so much ire from mainstream posters on this forum.
The fact that Non-Recourse is making certain predictions is not the problem. The fact that Non-Recourse just keeps comming up with left field comments that have no bearing on the topic i feel is very frustrating. When someone raises this issue he ignores it and comes up with another unrelated piece of information. There is no coherency.
What do my personal chess certificates have to do with this topic?
Why should i be smacked on the nose with the share certificates, where did i ever state that a retail investor has the power to influence a publicly listed company.
Why is your ASX Oct 2009 estimate looking conservative and what has this to do with the topic on hand.
What do potential changes in Swiss banking laws have to do with mainstream Australian economics? This has no bearing on the topic on hand.
What fiscal pigmies control all but Western Australia?
Again moderators, its not the predictions, but the wild non-topic related random insertion of news or opinions that i think is really detracting from the quality of this board.
I also find it highly offensive that Non-Recourse basicaly says its his way or the government pension, when there are numerous suitable investment strategies that depend on a persons personal financial circumstances and investment philosophy
Further more we have to be sensitive to the current times.
There are alot of nervous people out there, including myself.
Highlighting potential areas of investment risk is beneficial to the board so long as they are adequately explained. I think Token Funder is a prime canditate for this. Whilst many might not like to hear his views, they are informed, well presented and logical.
Comming out with irrelevant or highly circumstantial/low correlation pieces of data or opinions and then blasting other peoples investment views when Non-Recourse doesnt have access to their personal information, know their risk strategies etc just encourages this board to become a flaming site.
Again if Non-Recourse gets his kicks out of such activities there are plenty of other more extreme based boards where he can go.
There are alot of nervous people out there, including myself.
Highlighting potential areas of investment risk is beneficial to the board so long as they are adequately explained. I think Token Funder is a prime canditate for this. Whilst many might not like to hear his views, they are informed, well presented and logical.
Comming out with irrelevant or highly circumstantial/low correlation pieces of data or opinions and then blasting other peoples investment views when Non-Recourse doesnt have access to their personal information, know their risk strategies etc just encourages this board to become a flaming site.
Again if Non-Recourse gets his kicks out of such activities there are plenty of other more extreme based boards where he can go.
Hello Peter when this discussion about the soft depression was introduced I took a lot of flack in suggesting what was coming initially because of the subprime. Today the U.S, Japan, most of Western Europe, Eastern Europe and Korea are now in depression. South America and Africa remain basket cases thanks to so called free trade since the second world war. World trade has recently fallen off a cliff. The U.S had been in a deep recession for most of 2007/2008 and denied it. Late last year figures were released that admitted the figures had been cooked.
When I called 2% the reserve rate was up near 7% and the dollar was at 96 cents when I was talking about 38 cents. If you go back through my posts which unfortunately only go back to October you will get a better idea.
Some on this site will say that I predicted property to fall 40-50% immediately which was nonsense. The history of property slumps always take a few years and 2009/2010 was reasonable although when I first realised the trouble we were in I was shocked how quickly it developed.
We sold some property to get our gearing down to an overall 30% but the sales took over a year and investors by the middle of 2008 had their hands in their pockets.
As for the dollar that won't happen until after the property correction and that will probably mean devaluation between 2012 and 2015. At that stage only property and precious metals will be deflation proof.
I'm also on record as saying the asx will be at 2200 by October 2009, that rental yields will hold up even when property values collapse and unemployment will range between 6.5 and 7.5 hence the term soft depression, that 5% gold in your portfolio was a good hedge when it was around $700 Australian.
Way back in July 2008 I spoke about a liqudity crisis before Bearn Stearns and Lehmans. I said it would become very difficult to borrow, that is yet to happen with housing in a big way.
As for your two years of rental buffer another ex property spruker Ed Chan contends you need a 7 year buffer
so am I really that radicle ?As for what constitutes a depression in Australia ? Watch our trade figures with Japan in the previous 3 months when they become available. Japan not China not America is our largest trading partner and they have fallen off a cliff. I agree the effects seem minor at the moment but we have at least 10 years of tough times ahead. All the platitudes you hear from government says its already here its spin.
A fellow who posts as Blue card contends that the real depression won't happen untill 2025. Historically his contention has some merit. In 1907 there was a financial melt down. J.P. Morgan the robber barron capitalist knocked a few bankers heads together and the banks started lending again. Unfortunately Warren Buffett is not J.P. Morgan as far as his ability to get bankers to cooperate
I'll get a lot of abuse about the 6.5 to 7.5% unemployment. Two points Australia is a nation of mum and pop businesses, unlike America, Canada, Europe or Japan and mum and dad are the largest employers not Myers, BHP etc
Second point as fiscally inept our labour governments are they will keep throwing money around to keep people employed even if it means extending the depression and bankrupting the country. Problem is the Holden et al large companies are going to disappear anyway. The car industry in this country is stuffed.
The soft depression was defined as financial and unlike the Great depression in the developed countries at least we will not see soup kitchens.
We will see the four pillars fold into two we will see a new world financial order that will have gold as a base in some form.
Unlike most on this site I am willing to put my calls up for ridicule and I guess I now have a big bullseye on my back. I give as good as I get. On my score card its NR 4 blue sky 0
Further more we have to be sensitive to the current times.
There are alot of nervous people out there, including myself.
Highlighting potential areas of investment risk is beneficial to the board so long as they are adequately explained. I think Token Funder is a prime canditate for this. Whilst many might not like to hear his views, they are informed, well presented and logical.
Comming out with irrelevant or highly circumstantial/low correlation pieces of data or opinions and then blasting other peoples investment views when Non-Recourse doesnt have access to their personal information, know their risk strategies etc just encourages this board to become a flaming site.
Again if Non-Recourse gets his kicks out of such activities there are plenty of other more extreme based boards where he can go.
Ok Chilli I'll tone it down if you do too
. If you notice I didn't wish you a nice retirement on the pension so I am still reading your posts.After reading this post many times, I think it does make some senses and some nonsense.
1. ASX 300 to fall to 3500 (mid September 2008 call)
Good called
2. Reserve interest rates to drop to 2% (mid July 2008 call)
possible.
3. Financial tsunami call (Feb 2008 in an SMSF thread)
Good call.
4. Put 5% of your assets into gold (March 2008 call)
not qualify to comment.
5. Dollar to drop to 38 cents 2009/10 (July 2008 call)
Big call???
6. Unemployment not to go above 6.5% (September 2008 call)
Good call, but not really a threat to our economy in this level.
7. Rents will not appreciably fall when property prices collapse (called September 2008 call)
Good call.
8. Residential to drop 40-50%, Commercial up to 70% ( called March-April 2008?)
Huge debate here. If USA dollars is used, it is. If it is a real value comparing with 2003, it is. That means for the last 5 years, there is no price increase and real housing value is dropping each year because of the inflation.
If you claim that Sydney average house price will become $250K later, it is non sense and never happen because of item 2 (low interest rate), 5 (low exchange rate), 6 (not high jobless rate), and 7(stable rent) above. They are conflicting.
9. Deflation in Australia will largely be confined to property and share values initially ( call Oct 2008)
It is happenning.
10. ASX 300 to fall below 2200 (call early November 2008)
Can't comment.
Now that is totally off topic and highly offensive to many no doubt.....but damn, I'm rolling on the floor in stitches.
Like people with split personalities sparky
Touche!!!!
Good. Then you would also have seen the commentary by David Hunt (p.45) calling bottom and the comments by the debt collector that people have never had so much spare cash (cant find the page reference).
Thank you kindly, I've been semi retired for almost 15 years but I'm can't get a pension for a couple of decades yet. Even then the gov. would have to keeps the current retirement age and I'd have to gamble away most of my assets so I could be eligible for a pension.
And since you have this obsession with pensions, have you considered getting one yourself ? I've heard that these days you can receive a disability pension if you suffer from a case of major depression. Just tell them of your predictions and you'll be on the gravy train in no time.
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Hi Boomie I really wish it were true
I think we have a way to go yet. As poor red hot chilli alluded to in his post we all should be worried. Its fine for me to have a go at share investors but again though we don't invest in shares if everyone was like us the Australian Economy would be stuffed.I keep saying properties turn is coming and it is probably after Oct 2009 when the share market hits rock bottom at or below 2200. There I go again painting a bulls eye on my back for the blue sky crowd to give me a kick
NR,If the Aussie stock market does go that low in the 2200 range by Oct.
I keep saying properties turn is coming and it is probably after Oct 2009 when the share market hits rock bottom at or below 2200. There I go again painting a bulls eye on my back for the blue sky crowd to give me a kick
09, plus add currency fluctuations,and upward movements in unemployment numbers,higher interest rates,less government revenue
then you may well see the property slump you are talking about , but i still think the stock market will not drop into that range,if it does then we are all stuffed..willair..imho..
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