Steve Keen is at it again

[tcocaro]

Vested interest? Ofcourse I do its a property forum.. thats hilarious... if this was a public debate in a town hall I would have to make my status of developer known...

hahahh vested interest in a property forum what a hoot.... investors in property have a vested interest... the only people that dont have a vested interest here are those with 12 posts in total with nothing better to say... not mentioning any names.

hmm, yep that's some good ignoring right there, all 11 pages of it...
Timmy, you really need to get a better hobby than just bagging out Steven Keen.

I love it when people with a vested interest in property get so dirty overy anyone saying prices may drop....

How dare they!!

 

[evand]

Say no more:

http://smh.domain.com.au/real-estat..._rid=smh:rainbowstrip:content1:10-08:mortgage

 

[devo76]

With our rates so high it leaves us with plenty of room to move back down if needed. And lets be honest. Things like the grants will come back quick as a flash if the correction looks like being too big. People would be falling into the same thinking trap to expect anything else.Stable house prices are much more politically friendly than falling ones.

 

[oracle]

Say no more:

http://smh.domain.com.au/real-estat..._rid=smh:rainbowstrip:content1:10-08:mortgage

Last time I checked (which was today) recent comparables to my IPs were still more than what I paid. Last time I checked I was gearing up to buy more properties and not even remotely considering selling any (No mortgage stress whatsoever).

Say no more...

Cheers,
Oracle.

 

[tcocaro]

evand, ill be as diplomatic as possible...

If by posting this link your saying that prices may fall we can discuss that however that link has nothing to do with this particular thread.

Simply open a new thread stating your views on the future in regards to house prices and we can all have a sane discussion. However if you frame that discussion around Keens views I for one will continue to ignore them.

Fair enough? Can we move away from Keen and get back to talking about things that matter?

Say no more:

http://smh.domain.com.au/real-estat..._rid=smh:rainbowstrip:content1:10-08:mortgage

 

[Sunfish]

Fair enough? Can we move away from Keen and get back to talking about things that matter?

Hang on, you started the thread and have kept it going. If it "doesn't matter" why have we been wasting our time? And I agree that it has been a bloody big time waster.

Do you go much further than API and Somersoft for your economic news? I have seen no indication that you do. I will pick up opinions from a dozen or so wealthy men every week.

One I enjoy is Pierre Lassonde. He is a debonair, grey headed gentleman with a soft French accent. He has everything it takes to be a playboy including the money, but still makes some time available to give some tips. Just one of many wealthy, well informed people giving honest opinion.

 

[steveadl]

I look forward to the day that I bump up this thread to point out that yourself and Shadow were wrong (I'm not expecting 40% falls, but Shadows construction boom in Sydney is not coming and likely your "mainstream" sources will be wrong also).

Just to clarify: so you're looking forward to bumping this thread one day when there are some (??%) falls, but not 40%?

I don't think Shadow or Tcocaro and suggesting property will never fall, they're saying Keen's 40% claims are wrong. You can't exactly claim vindication in 2012 if prices have dropped by 8% - perhaps Shadow and tcoc want to clarify but I'm pretty sure they have never said that can't happen?

 

[tcocaro]

HAHAHAHAHAHAH oh Sunfish your a clown or maybe just naturally funny and dont know it.

First, I didnt start this thread. Second, I didnt say it doesnt matter I asked to move on from the issue given the link evand posted had nothing to do with Keen.

Third, I have posted numerous times were I get my information from or do you think for a moment I go to the "where to buy" section to decide where I develop next?

And you get your information from Fench rich guys? The circle of friends I keep include, the largest two private developers in Canberra, too many builders in Sydney to list (none of the large ones), trades, bank managers, senior staff at CBRE, a real estate agent list long enough to make your head spin, several developers in Brisbane, architects... So whats your point?

Whats next we both pull down our trousers to see whose is bigger?

My name is Timothy Cocaro, you know my company, my phone number, my previous projects my upcoming projects and who are you? An anonymous poster who takes tips from french guys.

Grow up.

Hang on, you started the thread and have kept it going. If it "doesn't matter" why have we been wasting our time? And I agree that it has been a bloody big time waster.

Do you go much further than API and Somersoft for your economic news? I have seen no indication that you do. I will pick up opinions from a dozen or so wealthy men every week.

One I enjoy is Pierre Lassonde. He is a debonair, grey headed gentleman with a soft French accent. He has everything it takes to be a playboy including the money, but still makes some time available to give some tips. Just one of many wealthy, well informed people giving honest opinion.

 

[tcocaro]

The thread related to Keen to which i said hes wrong. When the sunfish, evand and friends hit a dead end defending Keen they turn to random stats showing weakness in the market so I therefore suggested to start a thread discussing the market rather than Keen. What do i get in return? Shot down by Sunfish..

If you ask Sunfish, Evand & co what my view is they will say I think prices are to rise.. but if you ask them to get a single quote of me saying that.. ummm you will be waiting for a while.

They are blind and deaf when it comes to this topic it doesnt matter what I or Shadow say at this stage

Just to clarify: so you're looking forward to bumping this thread one day when there are some (??%) falls, but not 40%?

I don't think Shadow or Tcocaro and suggesting property will never fall, they're saying Keen's 40% claims are wrong. You can't exactly claim vindication in 2012 if prices have dropped by 8% - perhaps Shadow and tcoc want to clarify but I'm pretty sure they have never said that can't happen?

 

[Sunfish]

When the sunfish, evand and friends hit a dead end defending Keen

I don't remember defending Keen. I may have said he is being unfairly attacked. I may not have.

I have constantly made the point that it doesn't matter what he said "exactly". He is but one voice and there are many (most?) who believe the march higher of property prices must end. When things correct, they overshoot "fair value" in the opposite direction. It is possible that the over-correction could show a 40% drop.

What happened to supply and demand during the depression? There was plenty of supply ---- underemployed workers and idle factories ---- and I'm sure the average Joe would have liked some nice things and a roof over his/her head but, instead, they "hit the wallaby" in their multitudes. That's what happens during deflation. Why would you totally ignore the odds of a reversal? I'm not.

 

[hobo-jo]

Just to clarify: so you're looking forward to bumping this thread one day when there are some (??%) falls, but not 40%?
I don't think Shadow or Tcocaro and suggesting property will never fall, they're saying Keen's 40% claims are wrong. You can't exactly claim vindication in 2012 if prices have dropped by 8% - perhaps Shadow and tcoc want to clarify but I'm pretty sure they have never said that can't happen?

steveadl, it perhaps won't be this thread I'm bumping when shadow is wrong, but one of his multiple threads relating to a boom in Sydney which he has predicted to start in 2010/2011 and has claimed will take the median house price in Sydney to around $1m.

I believe the Sydney median house price will approach $1M by 2014-2015.

As for tcocaro, well I probably won't be able to point to a specific prediction he made for price growth as he has stated he just follows "mainstream" views (Says it all really, doesn't it? Don't look at the data yourself, let someone else do it for you). He's already been called out on this claim:

More people wanting to buy property for purposes other than renting it out will lead to rental yields falling. What is so hard to understand about this?

Which he refuses to backup with data. I suspect he would not be prepared to make any bold predictions because he is the type to twist wording and avoid a direct/sensible discussion.

I personally think that all this time with specific predictions is a waste of time...I can just imagine if house prices fall nationall by 20% and stagnate enough years to make the fall in real terms 40% then we'll have the bulls still arguing that Keen was wrong and the bears arguing he was right.

What really matters is whether residential property is a worthwhile purchase at today's prices....

 

[WinstonWolfe]

Nah.....let's not end the thread yet.

What's everyone's views on this

The bank profit masquerade

Steve Keen
Published 9:53 AM, 11 Aug 2010 Last update 10:05 AM, 11 Aug 2010

The record $6 billion in cash earnings that the Commonwealth Bank has announced todayis a sign of an economy that has been taken over by Ponzi finance. Fundamentally, banks make money by creating debt, and the amount of debt we’ve been enticed into taking on is the sign of a sick economy rather than a healthy one. The level of private debt that is actually needed to support business and maintain home ownership at historic levels (ownership levels have fallen over recent years!) is possibly as little as one sixth the current level............more
Free registration required to access article.

 

[tcocaro]

he just follows "mainstream" views - huh? - mainstream economic theory you donkey not mainstream water cooler discussion.

I can just imagine if house prices fall nationall by 20% and stagnate enough years to make the fall in real terms 40%

Are you prepared to stand by 20% falls and stagnate for years? Or is that an off-the-cuff remark or just some rubbish comment meaning nothing?

You attack me for apparently not having a specific prediction but then you go on to say I personally think that all this time with specific predictions is a waste of time...

And I have provided predictions only difference is I dont change them daily so there isnt a need to repeat or clarify myself as time goes on like you or your mate Keen. Unlike Keen I dont make off-the-cuff predictions needing an ever growing list of excuses as to why they didnt eventuate.

Here is my post with my prediction, see for yourself; (notice the points raised in the rest of the post havent changed till today and unfortunately the same deaf and blind people are promoting the same wrong chant whereas my position hasnt changed and I can still proudly stand by them).

http://www.somersoft.com/forums/showpost.php?p=474611&postcount=1

How did i fair? This post dated at the end of 2008 shows I predicted worst case negative 0-10% and best case positive 0-10% with my view being somewhere in between. From memory national prices went up 6.7%?

So how did I fair compare to Keens predictions or yours?

Nothing you say ever sticks! your are starting to annoy similar to a buzzing fly.

steveadl, it perhaps won't be this thread I'm bumping when shadow is wrong, but one of his multiple threads relating to a boom in Sydney which he has predicted to start in 2010/2011 and has claimed will take the median house price in Sydney to around $1m.



As for tcocaro, well I probably won't be able to point to a specific prediction he made for price growth as he has stated he just follows "mainstream" views (Says it all really, doesn't it? Don't look at the data yourself, let someone else do it for you). He's already been called out on this claim:

Which he refuses to backup with data. I suspect he would not be prepared to make any bold predictions because he is the type to twist wording and avoid a direct/sensible discussion.

I personally think that all this time with specific predictions is a waste of time...I can just imagine if house prices fall nationall by 20% and stagnate enough years to make the fall in real terms 40% then we'll have the bulls still arguing that Keen was wrong and the bears arguing he was right.

What really matters is whether residential property is a worthwhile purchase at today's prices....

 

[tcocaro]

Ill take this opportunity to jump off the merry go round which is this argument... leave you with a pic showing Sunfish, evand, hobo-jo, Keen and co at their computer 15-20-30 maybe 40 years from now.

 

[.toe]

Nah.....let's not end the thread yet.

What's everyone's views on this

The bank profit masquerade

Steve Keen
Published 9:53 AM, 11 Aug 2010 Last update 10:05 AM, 11 Aug 2010

The record $6 billion in cash earnings that the Commonwealth Bank has announced todayis a sign of an economy that has been taken over by Ponzi finance. Fundamentally, banks make money by creating debt, and the amount of debt we’ve been enticed into taking on is the sign of a sick economy rather than a healthy one. The level of private debt that is actually needed to support business and maintain home ownership at historic levels (ownership levels have fallen over recent years!) is possibly as little as one sixth the current level............more
Free registration required to access article.

I would've said it's right. It does leave out productivity as a factor which I think would've helped Keen's arguement given that productivity has gone backward. Though I'd guess that the reason productivity was left out is that it could be used to muddy Keen's message. Any productivity gains could go to offset the debt problem rather than add to house price deflation. But further productivity loss would be cause for concern.

According to the productivity commission, half of the decline in productivity per capita over a decade has been due to the effect of the drought on agriculture, and the leadin time required for new mining projects to come online. Not exactly sure where that leaves us for the future though.

 

[WinstonWolfe]

I would've said it's right. It does leave out productivity as a factor which I think would've helped Keen's arguement given that productivity has gone backward. Though I'd guess that the reason productivity was left out is that it could be used to muddy Keen's message. Any productivity gains could go to offset the debt problem rather than add to house price deflation. But further productivity loss would be cause for concern.

According to the productivity commission, half of the decline in productivity per capita over a decade has been due to the effect of the drought on agriculture, and the leadin time required for new mining projects to come online. Not exactly sure where that leaves us for the future though.

Toe, productivity is represented as GDP. What keen is arguing is healthy debt, as in debt that is used productively, expands GDP at a similar rate o the expansion in debt. When debt grows quicker than GDP, credit is being misallocated into poor investments, such as asset speculation. I think that is very sound observation....

As for the Productivity Commission blaming reduced productivity on drought and new mining projects, I don't buy that though I haven't read their reports. I am suspicious because 70% of Australia's GDP is service industry and that 70% has been consistent for the last 10-15 years.

If agricultural productivity had declined, it would have been represented in trade figures...but rural exports have been consistently between 8 and 10 billion pa for the last 10 years.

Further, resource income has seen a stellar rise, and the sector only grew from 5 to 8% of GDP in the last 20 years.

By far the greatest rise in debt has been resi mortgage debt, expanding 500% in the last 20 years. Increasing debt to bid up houses does not increase productivity like an export business does.

Anyway, am happy to hear your views. I am still exploring this myself.

 

[.toe]

Toe, productivity is represented as GDP. What keen is arguing is healthy debt, as in debt that is used productively, expands GDP at a similar rate o the expansion in debt. When debt grows quicker than GDP, credit is being misallocated into poor investments, such as asset speculation. I think that is very sound observation....

Yes I'm sure that is exactly what he's arguing.

As for the Productivity Commission blaming reduced productivity on drought and new mining projects, I don't buy that though I haven't read their reports. I am suspicious because 70% of Australia's GDP is service industry and that 70% has been consistent for the last 10-15 years.

I think the confusion might be explained because the Productivity Commission's prefered indicator is MultiFactor Productivity which specifically ignores productivity increases due to labour and capital increases. So their figures are saying that productivity has decreased compared to the input costs of that productivity, especially in mining and agriculture.

Multifactor productivity in the market sector excluding EGW, mining and agriculture, 1996-97 to 2007-08

From Here

 

[WinstonWolfe]

Multifactor productivity in the market sector excluding EGW, mining and agriculture, 1996-97 to 2007-08

I query whether decreased ag and mining MFP contributes to elevated debt/gdp significantly.

Debt/gdp has been rising steadily for decades.
I did not think public company debt equity ratios had grown higher in the last 20 years (bar Macquarie and B&B).
Rather I thought foreign equity partners were more the go (foreign ownership).
Risk on start up mines is usually only taken when profits are up from other operations.
Droughts don't last 10+ years.

 

[.toe]

I query whether decreased ag and mining MFP contributes to elevated debt/gdp significantly.

Sure, I'm not sudgesting it does. It was only really an off the cuff remark that the PC says its partly due to mining & ag. My main point is largely parallel with yours, that MFP has been lagging and productivity increases have been expensive.

The PC prefers MFP as a measure because it is about 'free' productivity increases which is our aim. Injecting capital or labour is not free, both have costs and both want to skim from the profits, especially if the capital is borrowed, and both could also be productive if deployed anywhere in the economy.

Over the 2000s and probably still now, contribution to growth from MFP has been small while contribution from costly forms of productivity has been high. Meanwhile debt to GDP has grown as you point out. So my point would be that a way out for us would be to increase the contribution of MFP. Though free productivity gains don't seem to be much of a factor into this election.

From: Enhancing Australia's productivity growth

 

[Aaron Sice]

someone make a youtube clip out of this thread, please.