Full article by Chris Joye: http://www.businessspectator.com.au/bs.nsf/Article/Rory-Robertson-Hawkish-pd20090901-VFV9Q
Key paragraphs reproduced below...
Chris Joye is right. And Steve Keen is doing exactly what lots of bears are now doing. He is saying 'I would have been right, if it weren't for X, Y and Z'.
Well, sorry Steve (and bears), but you were wrong. Many sensible investors and economists rightly predicted that interest rates would be slashed and that the government would not stand by and simply watch the economy crash.
Don't bet against the house! As expected, the 'powers that be' stepped in to rescue the economy, avoiding a recession, and ensuring that a healthy housing market was maintained. Their intervention worked. House prices are surging across the board now, not just in the FHB market but also mid and upper end property values are rising. Auction clearance rates are very high, finance commitments (a leading indicator) are soaring, and housing credit growth is accelerating for the first time in several years.
Cheers,
Shadow.
Key paragraphs reproduced below...
Steve Keen of the University of Western Sydney, who shot to fame last year with his predictions – relentlessly reiterated on 60 Minutes, the 730 Report, Lateline and so on – that Australian house prices would fall by 40 per cent while unemployment would shoot through the roof to “depressionary” levels...
But he is the first to admit that he was perhaps a bit out of his depth when it came to house prices...
Stevie himself has been forced to acknowledge the rather adverse reality he now faces. In his latest blog posting, he comments that the resilience of Australian house prices “will also almost certainly guarantee that I'll be walking (and running) to Kosciuszko under the first half of the bet with Rory Robertson”....
But Stevie also appears confused. He seems to be labouring under the misapprehension that he made not one, but two bets. I noticed this when he referred to the “first half of the bet with Rory”. To the best of my knowledge there was only one bet and certainly no “second half”. And Steve lost that bet if Australian house prices recovered their previous 2008 peak and did not fall by more than 20 per cent.
Unsurprisingly, that is exactly what has happened...
Australian home values are now 1.8 per cent above their previous peak...
When Steve made his call in 2008, which he was happy to relentlessly repeat on-the-record for a breathless media, the public rightly took him to mean that Australian house prices were heading south within the frame of reference of the GFC.
And one should not complain about the influence of the government’s fiscal stimulus—my blind poodle could have forecast that the government was going to undertake countercyclical measures to minimise the impact of the global downdrafts on the domestic economy.
It’s like saying, If the RBA had not cut rates by 40 per cent and the government had not decided to shift the budget into deficit, I might have been right!
Chris Joye is right. And Steve Keen is doing exactly what lots of bears are now doing. He is saying 'I would have been right, if it weren't for X, Y and Z'.
Well, sorry Steve (and bears), but you were wrong. Many sensible investors and economists rightly predicted that interest rates would be slashed and that the government would not stand by and simply watch the economy crash.
Don't bet against the house! As expected, the 'powers that be' stepped in to rescue the economy, avoiding a recession, and ensuring that a healthy housing market was maintained. Their intervention worked. House prices are surging across the board now, not just in the FHB market but also mid and upper end property values are rising. Auction clearance rates are very high, finance commitments (a leading indicator) are soaring, and housing credit growth is accelerating for the first time in several years.
Cheers,
Shadow.
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