The Economy - why economists and MSM have no clue (yet again)

Bored at work today, I read the following article on the Courier Mail site - something about "News Limited's shadow board of respected economists" (too funny) predicting an end to rate drops, a steady hold and the next movement to be up.

http://www.couriermail.com.au/news/...e-only-way-is-up/story-e6freon6-1226570299700


Smelling instant B.S, I took 2 seconds to Google a couple of current articles (any article really - there's thousands out there) that paints the real economic picture:

1. Victoria coming to a HALT (go 3rd of the way down the page)

2. Australian Inflation Remains Tame Giving RBA Room To Cut

As we know, rates don't go up when the big daddy of economic indicators is so rotten. Unemployment up, inflation tame, the building industry in a spiral of death, yet rates will go up. Uhuh.

Btw, I really love this line --> "shadow board of respected economists".....Of course they are, News Limited says so.

Gg
 
Yeah; had to laugh yesterday when on Sunrise Kochy was talking to the rep from CBA in the "finance" segment about how consumer confidence has suddenly increased....

What's changed in the last 5 mins to facilitate it?

I know....the latest Miranda Kerr promotion for David Jones...or was it Myer?
 
I can only talk about my little area of the world, but the increase in confidence among clients is massive. Contract drafting is through the roof, but my conveyancing has slowed slightly in the last few weeks due to clients missing out on properties to other parties,

It is the same for people I deal with.

My surveyor has had his best January in 10 years and is now taking 6-8 weeks before he can get on site.

I hope that this is just a flurry and then steadies off. I do not think the economics are there for a boom and if we build to that it will be not nice on the way back down.
 
I noticed that Stephen Keen was one of these "respected" economists. Is he the same Keen who predicted that house prices would plummet by over 20%? He predicts that interest rates will drop by 1&
 
There are some pretty decent economists I've spoken to expecting we have at least two more rate cuts to go.

I'm fence sitting on this one.
 
Just wish experts would have to revel their personal assets etc.

Probably find that 95% of them have cash in the bank, have a huge mortgage on their PPOR, have super that will one day provide for their retirement and be on large salaries.

They can say what they like. They've never been in the real world.
 
I can only talk about my little area of the world, but the increase in confidence among clients is massive. Contract drafting is through the roof, but my conveyancing has slowed slightly in the last few weeks due to clients missing out on properties to other parties,

It is the same for people I deal with.

My surveyor has had his best January in 10 years and is now taking 6-8 weeks before he can get on site.

I hope that this is just a flurry and then steadies off. I do not think the economics are there for a boom and if we build to that it will be not nice on the way back down.
That makes sense for Brisbane, heard a few stories about January being the best month ever, most likely it's going to steady but will be only possible to be certain some months from now looking backwards!
 
had to laugh yesterday when on Sunrise Kochy was talking to the rep from CBA in the "finance" segment about how consumer confidence has suddenly increased....

What's changed in the last 5 mins to facilitate it?


I can think of at least one announcement very recently that affects the whole nation that would easily cause a sudden spike in all levels of confidence.
 
Yeah; had to laugh yesterday when on Sunrise Kochy was talking to the rep from CBA in the "finance" segment about how consumer confidence has suddenly increased....

What's changed in the last 5 mins to facilitate it?

I know....the latest Miranda Kerr promotion for David Jones...or was it Myer?

I think they would be reporting on the latest Roy Morgan poll where they ask consumers questions like:
Is this a good time to buy major household items?
Would you say you and your family are better-off financially or worse off than you were at this time last year?
Thinking of economic conditions in Australia as a whole. In the next 12 months, do you expect we'll have good times financially, bad times or some good and some bad?

The share market and peoples super accounts have bounced back lately. Also around here the property market looks to be moving. I guess those people relying on bank interest for their retirement would be the ones feeling the pinch.
 
I can think of at least one announcement very recently that affects the whole nation that would easily cause a sudden spike in all levels of confidence.

From one Dazz to another, I think that will be huge benefit to the economy, pity the date wasnt weeks instead of months.
 
I noticed that Stephen Keen was one of these "respected" economists. Is he the same Keen who predicted that house prices would plummet by over 20%? He predicts that interest rates will drop by 1&
Plenty of markets have dropped by at least 20%, so Keen has been correct in that respect so far in some areas.
 
Plenty of markets have dropped by at least 20%, so Keen has been correct in that respect so far in some areas.


He predicted a property crash in Australia this did not happen.

20% up/down is nothing new, that is just how property cycles work, one market down one market up, rising markets/falling markets, depending on the State etc. While he was predicting doom and gloom Melb property market infact rose 25%+.

MTR
 
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He predicted a property crash in Australia this did not happen.

20% up/down is nothing new, that is just how property cycles work, one market down one market up
This is not a normal property cycle, it´s the end of the biggest credit boom in history. The large price drops now being experienced in many areas has not happened to the same degree before.

Keens predictions were early, but have come true for many regions.
 
This is not a normal property cycle, it´s the end of the biggest credit boom in history. The large price drops now being experienced in many areas has not happened to the same degree before.

Keens predictions were early, but have come true for many regions.

Hi joeExpat

I have been a full-time property investor now for 12 years, I have now experienced at least 3 boom/bust cycles, what we are experiencing now today is just part of the property game.

Perth crashed in 2006, bottomed out late 2012, top ending dropping as much as 20-30% it crashed and many lost their shirts, but this happened prior to GFC, lower end did not suffer as much.

2013 Perth is now experiencing boom times because we are in a different stage of the cycle. One stategy that I know investors use me included is following property cycles, riding the boom times.

When cycles crash it is not uncommon to go into free fall and experience losses greater than 20%.

I have posted this a number of times, here it is again

http://danerwin.typepad.com/my_weblog/2011/02/ten-reasons-why-economists-get-it-wrong.html


MTR
 
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Plenty of markets have dropped by at least 20%, so Keen has been correct in that respect so far in some areas.
I'm pretty sure Keen originally predicted at least a 40% drop in property prices back at the start of the gfc. His prediction probably only came true on a few individual properties at the high end of the market where people just paid way too much in the first place.

Mystery
 
Didn't Keen sell at the bottom....?

Credibility plus +

:rolleyes:


Don't write off that Keen fella. He predicted the GFC, only he couldn't predict when. Here's my go: Australia will be in recession some time in the future. Too easy, I don't need to be a professor lol.
 
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