Global Liquidity Crunch Coming our Way?

[Tim]

http://www.theaustralian.news.com.au/story/0,25197,22220872-643,00.html

Just reading this article makes me a tad conerned....

 

[Tim]

How interesting - not a single comment on this article after 2 years, yet this was the first indication I saw of real trouble.

Too bad I didn't see this before August 07

 

[Aaron Sice]

In New York, the Dow Jones industrial average plummeted by 387.2 points, or 2.8 per cent, closing at 13,270.7, in its worst losses since a 416-point plunge in February, when investors were shaken by a drastic sell-off in China’s stock markets.

i think you understated the effect - a "tad concerned"...!

still - i probably wouldn't have believed you anyway.

 

[Tim]

Lol oh man it is funny looking back on the last 2 years , it was baaaaddd...

Tim

 

[HiEquity]

Lol oh man it is funny looking back on the last 2 years , it was baaaaddd...

Tim

Oh I dunno - our properties have held up pretty well actually. Some of them have even gone up in value over that time...

 

[Piston Broke]

It was all in place long before that...

18-08-2006, 12:58 AM
There will probably another run up for a few years until we see a real crash.

In the meantime business will get harder, profits will decrease, un-employement will rise, properties will be vacant, and you will sure see the dowside of the XPJ.

Nothing new really

03-08-2006, 03:25 AM
Not long ago oil was below $20 x barrel and the world was awash with it. Could we really have run out in just a few years? Not in my opinion.
There are forces at play (like OPEC) here that are out of our control (and of most countries including ours). We just have to hang on to our rafts and ride the waves.

I see ahead a situation similar to the late 60's to late 70's.
Lots of start & stop, higher interest rates & inflation, and of course a recession.
I won't be selling my real estate though, I've been reducing my LVR for the last 3 yrs and will continue for the next 2-3 till until LVR is around 20-30%.
What I will be selling is all business interests I have as I think it will be challenging to run any type of business in 2-3 yrs time. Even worse for commercial RE imho.

Sell or not to sell really depends on the individual situation.
If you followed a highly geared (leapfrog) strategy for acquiring RE it may be wise to build a safety buffer and even sell some dog IP's (as willair pointed out) to add some floaters to your raft.

03-08-2006, 02:26 AM
There's always an excuse why it "had to happen".
Human nature in us always looks for someone else to blame for our own creations when they go wrong.
When the market was racing up, everybody was a winner, real-estate was "cool", anyone who bought anything made quick gains and became an instant expert.
Whatever reasons they had to buy those properties (like the dog watered the tree in front of *that* house ) was the "trick" or "secret" to investing in real estate.
But for whom the bell tolls, it will be sad but true and the masters of puppets will be back to pull the strings.
Last time around the blame was on Homefund, this time it's lo-docs.
...
But times do change, and it's now time for a different tune and a different dance. Many will be leaving the dancefloor, some never to return (and pay your rent).
The main lesson from history is that most people never learn from it.
wish you all the best.

05-12-2004, 10:04 AM
Money supply is still easy and interest rates are still low, but just as it happened many times in the past, a credit squeeze may happen again. Times do seem to be changing.
happy xmas

 

[Aaron Sice]

How Very Very Interesting.

 

[Ausprop]

bull or bear - it's a 50/50 call

 

[VYBerlinaV8]

Oh I dunno - our properties have held up pretty well actually. Some of them have even gone up in value over that time...

I agree, I'm in the same boat. I must say, though, that I am finding it harder and harder to find bargains in my target market.

 

[sash]

I can second that.....bargains are scarce...in NSW, QLD, and VIC.........

I agree, I'm in the same boat. I must say, though, that I am finding it harder and harder to find bargains in my target market.

 

[JulieW]

Daily Reckoning

Below is from today's Daily Reckoning.

Does anyone see good reasons then to wait for the 'bubble to burst' and wait til prices unearth some bargains?

--You can take your pick of reasons for rising Aussie dollar strength...growing economy, yield difference versus the greenback...commodity currency benefitting from secular decline of the USD. But after you pick, you have to ask the next question: will the RBA raise rates because the economy here is healing? If it does, it will send the Aussie higher. But what will it do to house prices?

--If you're in the real estate industry, you'll say "Nothing! House prices go up in all markets at all times regardless." But if you have a brain and use it from time to time, you would have to at least entertain the possibility that climbing interest rates and the end of the first home buyers grant spell real trouble for the housing market and the marginal buyers who support it.

--The housing market requires a constant stream of new buyers and a fresh supply of credit to keep demand for mortgage finance up. That's the only way for new buyers to bridge the gap between stupidly high median house prices and real wages that are not keeping up with home price inflation. Yet as we pointed out yesterday, the government-backed mortgage finance operations are nearing the legislative limit on funding. Something is going to have to give.

--Our guess is that it will be house prices. But you know that already since we've written in before.

 

[Ausprop]

the simplicity of their argument is gobsmacking - especially as they are the ones saying to use your brain... there are WAY more factors at stake than just the economic recovery

 

[cu@thetop]

How interesting - not a single comment on this article after 2 years, yet this was the first indication I saw of real trouble.

Too bad I didn't see this before August 07

I'm afraid your drawing attention to a negative article makes you a "Doom and Gloomer" (aka "D & G er"). Many of the "secret"/type A/ PMA types will refuse to acknowledge your existence purely on that ground alone.

Me, I like to hear all views on things so keep em coming

 

[steveadl]

Lol oh man it is funny looking back on the last 2 years , it was baaaaddd...

Tim

True, but not for everyone.

I take articles like this with a grain of salt (same as boom articles) - if this scared me into inaction in 2007, I wouldn't be in as good a position as I'm in now. To each their own.

 

[Tim]

I'm afraid your drawing attention to a negative article makes you a "Doom and Gloomer" (aka "D & G er"). Many of the "secret"/type A/ PMA types will refuse to acknowledge your existence purely on that ground alone.

Me, I like to hear all views on things so keep em coming

That is so interesting to think I could be a D&G!! I have always been negative about D&G but I can almost see the pyschology now of the typical D&G.

The only issue I have is that to not be a D&G you need to be overly optimistic - we know that optimism is less realistic than being pessimistic but more likely to be successful, according to "learned optimism" theory.

As long as people are not stereotypical in their thinking, I wont be either a D&G or an over-optimist in their view.


Tim

 

[Tim]

How times have changed....

 

[Deltaberry]

Loved the comments that it was hard to find bargains. In hindsight (irrespective of whether you think the current prices are fair), there were bargains EVERYWHERE in August 2009.

Only problem is - do you see a bargain now? And what will you be saying in 2016?

 

[nhg]

Loved the comments that it was hard to find bargains. In hindsight (irrespective of whether you think the current prices are fair), there were bargains EVERYWHERE in August 2009.

Only problem is - do you see a bargain now? And what will you be saying in 2016?

I was speaking with an investor with over 50 years experience last week (he was 70). Said people would always complain it was hard to invest. He was a Coles manager and was buying beach front Manly real estate. Doesn't matter which decade, you either have an eye for a deal, or you don't.

If any of you know that guy I mentioned. Please thank him for me. It was the most refreshing 45 min chat I've had in a waiting room in a long time.

 

[MTR]

Loved the comments that it was hard to find bargains. In hindsight (irrespective of whether you think the current prices are fair), there were bargains EVERYWHERE in August 2009.

Only problem is - do you see a bargain now? And what will you be saying in 2016?

In 2016 we will be thinking..... those were the good old days 2013 when there were bargains to be had

 

[MTR]

I was speaking with an investor with over 50 years experience last week (he was 70). Said people would always complain it was hard to invest. He was a Coles manager and was buying beach front Manly real estate. Doesn't matter which decade, you either have an eye for a deal, or you don't.

If any of you know that guy I mentioned. Please thank him for me. It was the most refreshing 45 min chat I've had in a waiting room in a long time.

The silly thing is that I meet plenty of people who have an eye for a good deal, only problem is most will only talk, they rarely jump in, of course that's why most retire on the pension