utter malarkey

m.evt

m.evt

ONE of Australia's most senior bankers has taken aim at the negative gearing millions of property owners use, claiming the tax break is leading to an unhealthy focus on housing as a way to get rich, while pushing property prices to unaffordable levels.

ANZ Australian chief executive Phil Chronican also cast doubt on property as an investment class, saying housing looked ''weak'' compared with other forms of investment and that the substantial gains in property prices over the past two decades were unlikely to be repeated.

...........

http://www.theage.com.au/business/bank-boss-questions-gearing-20110602-1fit2.html
 
yes - i saw that and couldn't believe that someone in his position could be so naive and idiotic.

shows that he has absolutely no understanding of investors. the number of investors who investor due to negative gearing would be a tiny minority of the tiny minority of investors.

this was an irresponsible and nothing more than a blame shifting comment.
 
Someone should take a giant run up and slap his muppet head straight off his shoulders.

So investing in property as a means of gaining wealth is "unhealthy" while being the head of an insolvent bank that requires government guarantees to stay alive is healthy?

That's almost as bad as that idiot big 4 spokeswoman saying after the recent rate rise that "Aussies need to tighten their belts - but it'll be good for them" - May salmonella forever infest her expensive caviar and her custom leather seat give her incurable swimwear zone itches! :mad:

Now excuse me. I'm going to take off all my clothes and do the Ocean Magic Naked "may all of their investment properties develop roof leaks" Dance. If I look suitably ridiculous and my wobbly bits please and amuse the Gods of Justice, it'll happen. Please Baby Jesus hear my prayer, hear me O Lord :(
 
My god... the mere suggestion of property being a little bit spiked up has you guys quivering in fear!

Nooo! Say it isn't so! Someone hold me and reassure me that my property value isn't going to burst! :(
 
Incomes grow at ~4% a year, while property grows at 8-10% year... tell me why you think that isn't sustainable forever, Mark?! :(
 
His comments are not something that hasn't been repeated before.

Just as an aside, 5 years ago ANZ share price was around $27, its $21.37 today. That's a 20% difference. Compared to a
10% reduction in the S&P ASX 200
5% reduction for WBC.
12% increase for CBA

But better than the NAB at 30% reduction. Good work Phil.

Maybe he is forewarning the same for property?
 
Bon said:
My god... the mere suggestion of property being a little bit spiked up has you guys quivering in fear!

Nooo! Say it isn't so! Someone hold me and reassure me that my property value isn't going to burst! :(
Click to expand...

LOL not really :D If property goes down so too do construction costs, no biggie. What annoys me about these people is the double standards, and the fact that they were complicit in creating the property landscape - so giving people no doc loans that they clearly couldn't afford in order to pump up the property market is "healthy", but people buying property to make money is "unhealthy"?

Yeah. maybe I should have put my money into a term deposit all those years ago and collected my 4% return, while reported inflation is aroundabout that, with real inflation being double.

RBA: "Inflation in Australia is a very healthy 2.5%"
OA: "Uh, then why did the cost of housing go up by 200% in 15 years?"
RBA: "well, that was a very unusual circumstance, mr OA"
OA: "Oh. Well then, why was I buying fuel in 1998 for 62c/L and now I pay a dollar fifty?"
RBA: "Well, it's a complex issue Mr OA, China and India are increasing demand"
OA: "Oh. Well, I sort of noticed that I'm paying twice as much for my groceries lately as compared to 10 years ago, which is rather out of line with the rule of doubling at stated CPI figures"
RBA: "Mr OA, would you like a job as a lobbyist for $250 000 a year where all you have to do is shut up and not ask anymore questions?"
OA: "Do I get a corner office?"
RBA: "Of course not!"
OA: "Then Ya Dreamin mate! Ya Dreamin!"
 
Ocean Architect said:
RBA: "Inflation in Australia is a very healthy 2.5%"
OA: "Uh, then why did the cost of housing go up by 200% in 15 years?"
RBA: "well, that was a very unusual circumstance, mr OA"
OA: "Oh. Well then, why was I buying fuel in 1998 for 62c/L and now I pay a dollar fifty?"
RBA: "Well, it's a complex issue Mr OA, China and India are increasing demand"
OA: "Oh. Well, I sort of noticed that I'm paying twice as much for my groceries lately as compared to 10 years ago, which is rather out of line with the rule of doubling at stated CPI figures"
RBA: "Mr OA, would you like a job as a lobbyist for $250 000 a year where all you have to do is shut up and not ask anymore questions?"
OA: "Do I get a corner office?"
RBA: "Of course not!"
OA: "Then Ya Dreamin mate! Ya Dreamin!"
Click to expand...

Inflation is not affected by petrol prices and non-essential grocery items it is calculated on a basket of essential items. eg:
2 pounds of flour
8 oz butter
1 gallon of kerosene
4 horseshoes
1 dozen standard length candles
1 hank of yarn
 
Graingrower said:
Inflation is not affected by petrol prices and non-essential grocery items it is calculated on a basket of essential items. eg:
2 pounds of flour
8 oz butter
1 gallon of kerosene
4 horseshoes
1 dozen standard length candles
1 hank of yarn
Click to expand...

I know. However, they also do this neat little trick whereby they either remove items from the basket of goods and services that fluctuate too much for their liking, or simply change the schedule so that instead of going off the price of 2 pounds of butter, they go off the price of 1.5 pounds of butter.

Besides, who in their right mind doesn't include things like housing and petrol when working out inflation figures?

RBA: "Inflation is a very healthy 2.5%"
OA: "Sooooo....which items went up by 2.5% or less this year?"
RBA: "Fluffy dice."
OA: "Anything else?"
RBA: "Yes, of course. Chewing gum too."
OA: "Uh...but everything else went up more than 2.5%?"
RBA: "Yes, but they aren't counted in the basket of goods and services."
OA: "Uh...isn't that a bit misleading? What about fruit and veg?"
RBA: "They aren't counted, because they went up too much."
OA: "Uh, but, isn't the point of measuring inflation so that you actually know what inflation is?"
RBA: "No, Mr OA. The point of measuring inflation...is to say that it is 2.5%."
 
Ocean Architect said:
I know. However, they also do this neat little trick whereby they either remove items from the basket of goods and services that fluctuate too much for their liking, or simply change the schedule so that instead of going off the price of 2 pounds of butter, they go off the price of 1.5 pounds of butter.

Besides, who in their right mind doesn't include things like housing and petrol when working out inflation figures?

RBA: "Inflation is a very healthy 2.5%"
OA: "Sooooo....which items went up by 2.5% or less this year?"
RBA: "Fluffy dice."
OA: "Anything else?"
RBA: "Yes, of course. Chewing gum too."
OA: "Uh...but everything else went up more than 2.5%?"
RBA: "Yes, but they aren't counted in the basket of goods and services."
OA: "Uh...isn't that a bit misleading? What about fruit and veg?"
RBA: "They aren't counted, because they went up too much."
OA: "Uh, but, isn't the point of measuring inflation so that you actually know what inflation is?"
RBA: "No, Mr OA. The point of measuring inflation...is to say that it is 2.5%."
Click to expand...

Bingo !

As I said on another thread earlier, they do seem to be trying to make it hard to think otherwise
 
buzzlightyear said:
His comments are not something that hasn't been repeated before.

Just as an aside, 5 years ago ANZ share price was around $27, its $21.37 today. That's a 20% difference. Compared to a
10% reduction in the S&P ASX 200
5% reduction for WBC.
12% increase for CBA

But better than the NAB at 30% reduction. Good work Phil.

Maybe he is forewarning the same for property?
Click to expand...

ANZ have also paid $6.89 of fully franked dividends in the same 5-year period. Which works out to be $9.84 in a tax-effective environment. That's hardly setting the world on fire, but it's certainly better than you make it out to be.
 
Vesuprop said:
ANZ have also paid $6.89 of fully franked dividends in the same 5-year period. Which works out to be $9.84 in a tax-effective environment. That's hardly setting the world on fire, but it's certainly better than you make it out to be.
Click to expand...

Interesting to note that i just did a quick 'back test' of an estimate of intrinsic value for ANZ 5 years ago and i come out with a figure of around $20-$22 dollars, using information available at that time (ie before it was known that the GFC would arrive on our door step).

So although the share price might have been around $27 at the time, the VALUE of the share was much less.

And whats the current rough back of the envelope valuation for ANZ: somewhere around $21-$25
 
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