Steve Keen-where are you now?

Indifference said:
Why oh why, does conversation so regularly degenerate into secular investment options.... FWIW, I own both property and precious metals....:eek: OMG!

Can I actually do that..... or admit it here? The simple fact is, that both have a role in a balanced portfolio, as do shares (yep own them too!), bonds, superannuation & cash (oh crap, got some of them too!), amongst other things.

Constantly bickering and hacking on people for having a go, is not only childish, it is small minded. We all get it wrong sometimes. Maybe our timings is off, perhaps we didn't compensate for government stupidity enough, perhaps a major political or economic event derails our well intentioned plans... crap happens.

What I used to like about SS, was the ability to be open about an idea, an alternate investment, whatever, and have constructive adult discussion, without fear of constant reprisal and hounding.

FWIW, directly correlating one asset class against another is idiotic. Each has their place, their purpose and their time.... *sigh*.....
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Spot on Indifference. A few childish posters around here like to bring up Gold in every discussion thread that I take part in, regardless of it's relevance to topic at hand.
 
hobo-jo said:
Spot on Indifference. A few childish posters around here like to bring up Gold in every discussion thread that I take part in, regardless of it's relevance to topic at hand.
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That's a co-incidence . Exactly what I wrote when I gave Indifference Kudos for their post :D

Cliff
 
Ajax said:
I wonder what University of Western Sydney associate professor of economics Steve Keen would be saying now.

If I recall correctly he sold his unit in Surry Hills in inner Sydney on the basis of his belief (in 2008) that property prices would fall by 40%. I hope he is not still teaching economics to (somewhat) impressionable minds.
Click to expand...

This chart shows what has happened to Sydney house prices since Steve Keen sold up in fear of the imminent 40% crash...

ResidexSydneyTrendAug2013.png~original
 
hobo-jo said:
Spot on Indifference. A few childish posters around here like to bring up Gold in every discussion thread that I take part in, regardless of it's relevance to topic at hand.
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You didn't seem to have a problem with people discussing gold before the gold bubble popped two years ago...

gold_2_year_o_aud.png
 
hobo-jo said:
Keen has expressed an opinion, don't see where he told anyone what to do...?
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In 2008, on the ABC News, he warned everyone to get out of debt and sell their house because house prices were going to crash 40% within a few years, and we would have a severe recession, double digit unemployment (up to 20% he said) and ZIRP by 2010.

Steve Keen's bad calls and predictions

01 - In 2006, Keen said we may already be in a recession (we weren't)
02 - In 2006, Keen said the Australian Debt/GDP ratio would exceed 160% by 2007 (it still hasn't)
03 - In 2006, Keen said Australia will be in recession long before our Debt/GDP ratio falls (ratio has fallen, no recession yet)
04 - In 2008, Keen said interest rates would be at 2% by 2009, and ZIRP by 2010 (neither happened)
05 - In 2008, Keen said we would have double digit unemployment (up to 20%) (didn't happen)
06 - In 2008, Keen said we would have a severe recession, possibly a depression (didn't happen)
07 - In 2008, Keen said house prices would be down 40% within 'a few years' (wrong)
08 - in 2008, Keen sold his Sydney home at a cyclical low point, just before prices rose 20% (very bad call)
09 - In 2009, Keen admitted he was hopelessly wrong on house prices after losing the bet with Rory Robertson (he walked)
10 - In 2010, Keen predicted an accelerating rate of decline in Australian house prices (declines eased shortly after, then prices started rising)
11 - Between 2008 and 2011, Keen claimed the Australian property bubble began in 1964, 1983, and 1988 (when did it begin?)
12 - In 2008, Keen said his biggest regret was not buying property at the start of the property bubble in the 1970s (so it began in 1970s now?)
13 - In 2011, Keen identified 1997 as the start of the 'bubble' (he makes it up as he goes along)
14 - In 2011, Keen said Australian house prices would fall 20% by the end of 2013 (not looking good, prices rising)
15 - In 2012, Keen said Australian house prices would rally in 2013 (conflicts with #14)
16 - In 2012, with Australian house prices well above 2008 levels, Keen said his 40% crash call was 'looking healthy' (fail)
 
hobo-jo said:
Spot on Indifference. A few childish posters around here like to bring up Gold in every discussion thread that I take part in, regardless of it's relevance to topic at hand.
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Nothing childish about it.

You're the in-house gold investor and we all know that; you have a link to precious metals in your signature; and you used to bring it up all the time (when clearance rates were a bit lower and gold was a bit higher).
 
Deltaberry said:
Nothing childish about it.

You're the in-house gold investor and we all know that; you have a link to precious metals in your signature; and you used to bring it up all the time (when clearance rates were a bit lower and gold was a bit higher).
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Only in the gold threads and hardly "all the time".
 
hobo-jo said:
What's the net yield on a negatively geared property?
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If you have a negative cashflow property, the nett yield is positive.

"Negative cashflow" is where the property is initially neg geared, but all the cash and non-cash (on paper) deductions return a positive cashflow to your bank account after the tax return.

Plus cap growth.

It's shown to be a pretty good indicator for the cities which hold a lot of auctions ie Melbourne, Sydney. But I would be surprised if Adelaide with a couple of dozen auctions would have the same reliability
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Most auctions are held in areas where most auctions are conducted, and most of these areas are pretty much the only areas the real estate crowd and the CBD and inner leafy suburb - centric media are focused.

This may in fact not be that wide an area over the entire market - I reckon the majority of houses in Melb at least, are private sale.

And, even the auctions end up being sold afterwards by private sale on many occasions with no bidders, or very little interest, so the auctions themselves are a dud, really.

But the real estate crowd aren't going to let that stand in the way of good publicity.

They always chalk up a failed auction with one Vendor bid - which sells two weeks later by private negotiation - as a clearance.

And, a house that fails to sell at auction, and stays on the market afterwards as "For Sale" by private sale, are not deducted from their clearance results as a fail. It sits there as a no result yet.
 
bubbly?

I'm glass half empty on this. when the reserve says there's not a bubble, yet. when r shiller says "bubbly", when interest rates are unlikely to fall cause inflation is becoming evident (therefore more likely to rise), when there has been a good runup (in asset value), i think its a good time to take stock.

cheers
adrianjt
 
adrianjt said:
I'm glass half empty on this. when the reserve says there's not a bubble, yet. when r shiller says "bubbly", when interest rates are unlikely to fall cause inflation is becoming evident (therefore more likely to rise), when there has been a good runup (in asset value), i think its a good time to take stock.

cheers
adrianjt
Click to expand...

Im not an econo mist , my view is that housing affordability and inflation are but 2 things of a much larger picture.

Toss into the mix a strong AUD, "official" unemployment of 6 %, effective underemployment making that figure probably closer to 8 ??, lowish business confidence ( as evidenced by the lack of growth in business investment), and a very likely major contraction of spending by both federal and state govs.........

Id hazard that inflation and high housing prices will be "collateral damage" to keep the ship afloat.

I cant see how variable rates cant NOT come down further in the short term, but if I was any good at this Id be on My big boat in the whitsundays, not my Ikea desk on the Gold Coast

ta
rolf
 
Rolf Latham said:
I cant see how variable rates cant NOT come down further in the short term, but if I was any good at this Id be on My big boat in the whitsundays, not my Ikea desk on the Gold Coast

ta
rolf
Click to expand...

Ikea? I dream of having an Ikea desk!

I picked my desks up for $10 each at a commercial furniture auction when I set up my office a few years ago. Ex bank or public service desks I think.
My waste paper bin cost more than the desk!
 
In defence of Steve Keen,

He does raise some real and valid issues.
His problem was to be so self confident in his beliefs that he put absolute time frames to his thought process.

This was incredibly na?ve in my opinion.

Markets are not two dimensional.

Its why the truly inspirational investors such as Warren Buffett keep harping on that they cannot predict how markets will evolve in the short term.

There WILL be a time when Steve Keen is correct, when that will be I don't know (and its not just because markets will 'fall' at some point, some of his logic has good underlying logic to it).

For myself I think with the Australian property market there are 4 over riding forces that have delayed any substantial contraction in residential property prices:
(a) interest rates on a longer basis are still trending down (this is a long term down trend starting from the early 1990's)
(b) Population is still experiencing sound growth
(c) Australia is rather unique in that its actually hard to 'toss' properties, because of high transactional costs (essentially stamp duties)
(d) Another Australian uniqueness: its actually quite hard to rapidly increase supply
 
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