Irresponsible scaremongering

lizzie

lizzie

http://bigpondnews.com/articles/Fin...homes_set_for_50_crash_forecaster_668021.html

Getting major coverage as if what he says is gospel. Perhaps he's hoping that if enough people believe it, it will be a self fullfilling prophecy.

Irresponsible scaremongering in my book. Sure things are tight due to cautious consumer confidence and, in some areas, tough due to belt tightening ... but to compare it to California, in that we live in Australia because "it's an attractive place to live"?

Get over yourself MATE!
 
I know it was discussed elsewhere - to death - but now he is being spouted in mainstream media (today's paper and online) as if what he says is the gospel truth.
 
lizzie said:
I know it was discussed elsewhere - to death - but now he is being spouted in mainstream media (today's paper and online) as if what he says is the gospel truth.
Click to expand...

I wouldn't worry lizzie - if people want to believe him and wait for property in Australia to drop - then they can go right ahead and wait. Every generation has the people who wait on the sidelines until property is at a 'fair price' - it's just that nowadays they are more vocal because of social media and online websites.
 
I am just concerned that consumer confidence is low at the moment, which causes the effect of all sectors slowing (not just property) ... if sentiment plunges further, caused by articles such as these, then the onflow effect could be devestating.
 
lizzie, if you remember back in 1976 in Adelaide, a Melbourne housepainter John Nash (turned psychic) predicted a catastrophe after he had a dream that much of Adelaide would be wiped out by an earthquake and tidal wave at noon on January 19, 1976. (we didn't call them tsunamis in those days)

His prediction became rumour. The rumour became an inevitable fact. People sold beachfront properties for bargain prices. Occupancy at foreshore hotels and motels dropped to 25 per cent. Hundreds of people, particularly of Greek and Italian backgrounds, fled inland as far as the Riverland, their cars loaded with personal possessions, to avoid the ocean-generated holocaust.

The then premier, Don Dunstan (not sure if I remember him wearing pink shorts that day), went down to the beach along with a few thousand others to prove there would be no disaster.

The appointed time came and went and the crowds wandered away. The following morning ,The Advertiser editorial said: "Hopefully, the lesson we should all have learnt from yesterday's pathetic anticlimax is to rely more on our common sense and less on the silly and unscientific speculation of self-appointed soothsayers.''

I can't help but draw parallels to the situation with American economic forecaster Harry Dent and the recent headlines of "AUSTRALIA'S love affair with property is about to turn sour as an "economic tsunami'' looks set to hit world markets".

Maybe I've seen too many of these dire predictions all before......yawn.:cool:
 
Unfortunately, the media are focused more and more on irresponsible scaremongering, across a wide variety of topics, and from both sides of every debate.... global warming, carbon/mining/pokie tax, boat people, health issues, crime, hung parliament etc.

It seems like its becoming rarer and rarer to hear a balanced, rational viewpoint.
But in the end, it seems like fear and shock-jock tactics are what sells... and quiet, sensible voices are difficult to hear amongst the chaotic shouting....... and the positive, inspirational voices seem, unfortunately, to have been silenced altogether.

I think everyone needs to take a deep breath, do some relaxation exercises and calm down.

The sky is not falling.........
 
Propertunity said:
The then premier, Don Dunstan (not sure if I remember him wearing pink shorts that day), went down to the beach along with a few thousand others to prove there would be no disaster.
Click to expand...

When I was growing up, my brothers used to cut out cartoons and stick them in the kitchen cupboard...
there was one of Don Dunstan "doing a Canute", holding back the waves. I never understood what it was about until now....
 
pennyk said:
...there was one of Don Dunstan "doing a Canute", holding back the waves.
Click to expand...

Actually Canute never held back the waves or purported that he had the ability to do so.

His purpose that day was to highlight how "empty and worthless" was the power of kings, and that he couldn't control the tides - only God could (bearing in mind this was the early 11th century).
 
hobo-jo said:
So never mind the effects that could stem from a second/worsening GFC... but watch out for the damage that could be done by some negative articles??

LOL
Click to expand...

Not downplaying the potential GFC #2 ... but articles/scaremongering such as this is not helping and, in fact, are doing the opposite by choking off any glimmer of optimism and have the potential to become self-fullfilling prophecies purely by their fear factor.

Hey - I'm an optimist!
 
As I've said before, I reckon Harry Dent has a reasonable track record of predicting market direction, but a poor track record of predicting magnitude.

With the amount of money in Australia, it would be pretty hard to see Australian house prices at 2000 levels.

It could happen, I just don't think it will. I still think we are going to see a long period of stagnation, at least we will where I invest.
 
Harry Dent is doing the wealth making speaker circuit at the moment. I got an email invite to it. You know "Hurry book now....learn the secret ways....worth a squillion bucks....blah blah"
 
Lets hope he's right! I highly doubt it, but it would be great to get a bunch of positive cash flow properties.
Rents can't really fall too much as it's still a supply and demand game and as long as the demand stays up and the supply down, I can't see them falling.
 
lizzie said:
Not downplaying the potential GFC #2 ... but articles/scaremongering such as this is not helping and, in fact, are doing the opposite by choking off any glimmer of optimism and have the potential to become self-fullfilling prophecies purely by their fear factor.

Hey - I'm an optimist!
Click to expand...

Then why isn't anyone also criticizing Michael Blythe, the CBA economist also quoted in the article???? After all, he says:

'Our housing market went through, in some ways, the ultimate stress-test a few years ago, when the financial crisis was in full swing and it came through with flying colours.'


This is also a load of crap..... the worst of the financial crisis has only been realized for the head in the sand brigade. I mean, take a look at the EU and US. Debt issues have worsened since 2008 and now entire countries are on the brink of financial collapse, not just a few banks and wealthy traders. Some serious economic challenges are unfolding right now......and to say our property market came through with "flying colours" also ignores the realities of 2011, which had their genesis in 2008.

I think Dent has overstated the issue and that Blythe has done the exact opposite; underestimated the situation. IMO, we are somewhere in between the two and if people want to believe that the impending EU collapse (maybe partial or maybe a full melt down) and US economic crisis will not have MAJOR consequences for the Australian economy, then they are ostriches as well as sheep. Anyone who actually takes the time to understand global economic conditions realizes that the next few years are not bright. I am NOT advocated D&G, I am simply looking at the facts at hand:

- US debt 14.9 trillion
- Greek default imminent (re: Greek deputy PMs latest comments if in doubt)
- IMF warning of global crisis & needs more funds (re: Lagarde - IMF Chief)
- EU officials planning boost bail-out fund, EFSF (Euro Fin. Stability Fund) from 440bn euro to around 3 trillion.... <-- Yes that is a BIG number
- All this money ^^^ for all these problems will be CREATED from thin air.... that equals currency debasements and inflation.

This is NOT D&G, this is what is really happening in the real world, today. I hope that the grown ups can fix the mess, but I plan for the grown ups to continue wreaking economic havoc.
 
spludgey said:
Lets hope he's right! I highly doubt it, but it would be great to get a bunch of positive cash flow properties.
Rents can't really fall too much as it's still a supply and demand game and as long as the demand stays up and the supply down, I can't see them falling.
Click to expand...
House prices could fall 40-50%, rents stay the same and we would be back to yield levels that have been seen in the past. So rents wouldn't necessarily need to fall for a large correction in prices to take place (to return to historical norms). That said, if we went into recession and unemployment sky rocketed then we could easily see rents fall.

Have you seen this report on Melbourne vacancy rates:
http://www.earthsharing.org.au/2011/05/17/speculative-vacancies-in-melbourne-2010/

How do we know vacancies aren't being under reported in other cities as well?

As Indifference has pointed out, the situation is very dire. While I personally think that a 'muddle through' is still more likely, I can still respect the views of those that think such a collapse is the most likely outcome as I can see it is a very real possibility if credit markets and so forth were to collapse.

lizzie said:
Not downplaying the potential GFC #2 ... but articles/scaremongering such as this is not helping and, in fact, are doing the opposite by choking off any glimmer of optimism and have the potential to become self-fullfilling prophecies purely by their fear factor.
Click to expand...
Did you complain about the scaremongering that occurred on the way up as well??
e.g. http://www.smh.com.au/articles/2003/07/05/1057179204746.html

The media will print extreme views on both sides of the equation, in the case of property driving consumers to bid more than they should have in the good days and drive them to bid less on the way down. It all balances out as far as I'm concerned.
 
Indifference said:
Then why isn't anyone also criticizing Michael Blythe, the CBA economist also quoted in the article???? After all, he says:

'Our housing market went through, in some ways, the ultimate stress-test a few years ago, when the financial crisis was in full swing and it came through with flying colours.'


This is also a load of crap..... the worst of the financial crisis has only been realized for the head in the sand brigade. I mean, take a look at the EU and US. Debt issues have worsened since 2008 and now entire countries are on the brink of financial collapse, not just a few banks and wealthy traders. Some serious economic challenges are unfolding right now......and to say our property market came through with "flying colours" also ignores the realities of 2011, which had their genesis in 2008.

I think Dent has overstated the issue and that Blythe has done the exact opposite; underestimated the situation. IMO, we are somewhere in between the two and if people want to believe that the impending EU collapse (maybe partial or maybe a full melt down) and US economic crisis will not have MAJOR consequences for the Australian economy, then they are ostriches as well as sheep. Anyone who actually takes the time to understand global economic conditions realizes that the next few years are not bright. I am NOT advocated D&G, I am simply looking at the facts at hand:

- US debt 14.9 trillion
- Greek default imminent (re: Greek deputy PMs latest comments if in doubt)
- IMF warning of global crisis & needs more funds (re: Lagarde - IMF Chief)
- EU officials planning boost bail-out fund, EFSF (Euro Fin. Stability Fund) from 440bn euro to around 3 trillion.... <-- Yes that is a BIG number
- All this money ^^^ for all these problems will be CREATED from thin air.... that equals currency debasements and inflation.

This is NOT D&G, this is what is really happening in the real world, today. I hope that the grown ups can fix the mess, but I plan for the grown ups to continue wreaking economic havoc.
Click to expand...

Great post Indifference. Realism, not eternal pessimism or optimism, is what's needed to survive and prosper in these times.
 
hobo-jo said:
House prices could fall 40-50%, rents stay the same and we would be back to yield levels that have been seen in the past.
Click to expand...

but at that time interest rates were around 18%+, so properties weren't necessarily positively geared.

I am optimistic realist. Didn't see the "on the way up" stuff - but I also believe, outside of the physical country debt, optimistic sentiment will play a large role in turning this crisis around.
 
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