WinstonWolfe

Just i an expression of appreciation for all the contributions you make to this board.

These are and will be difficult times.

I really appreciate the alternative, yet INTELLIGENT views you present.
I might not always agree but generally i respect your viewpoints, and they often give me something to ponder.

Both you and Token Funder are very valuable members of Somersoft for your presentation and highlighting of risks that may not be apparent to many members of board.

Note: i am not talking about D&G, i am wishing to draw attention to intelligent risk identification.
 
I agree IV. I find WW's contributions very interesting and informative, even if at times some of his graphs are over my head.

Often reminds me of this quote: "Facts are meaningless. You could use facts to prove anything that's even remotely true!" :D
 
Thx IV and Kissfan.

I know I come across as a bermabear to some, but I just believe in covering the downside and letting the up take care of itself.

Further, via my parents I have been involved in property since 1971, when dad first built a block of flats. Us kids were up there helping Dad's builder friend mix cement for the first cavity brick 4 pack. we wanted to do at least a 6 pack on the 870m2 Res B lot, but the Pine Rivers Council insisted we save half of the lot for septic catchment, which was serious overkill. In the pic below, the catchment area can be seen behind the carport and laundry.





Since then, I remember clearly the movement of Australian property well. In the mid 80s, Sydney prices saw strong growth, and lots of my 20 something friends were thinking if they didn't buy soon, they'd be unable to for years to come. Mind you, I am talking about urban professionals wanting to buy close to town, not at Campbelltown.

I saw Brisbane flat through the 90s. So when prices started pushing along in 2001-2, I thought ok, here's another boom to make up for the flat 90s, normal part of the cycle stuff. Now every old timer property investor I know (several greeks, italians, my mother, uncle, three high net worth mid sized developers) thought the end of 2003 was the end of the boom for another cycle. They started to progressively offload their self created 'superannuation'.

But then, in 2005, the market started to fire up again and continued until this year. I could not understand this and felt whatever was driving it was historically unprecedented and potentially very dangerous. That led me on a quest to find out what was permitting this growth.

My readings identified looser bank lending and banks borrowing higher portions of foreign capital to keep pushing our property prices up. There was sufficient foreign capital prepared to invest in our mortgages because we have amongst the highest interest rates in the OECD and our economy was being used as a proxy by foreigners who wanted to invest in the China boom, without the sovereign risk. This is the same money that Australia's non bank lenders were tapping into to compete against our banks.

However, global credit was expanding well beyond global gdp growth. And that's where the people I read saw a fragile house of cards building.

So, it is my historical perspective from the age of 8, and my readings, that make me realize this time it is different. It is not that I am a permabear. I have always seen property as a means for people to provide for their retirement. Many Greek and Italian friends of my Dad built 6 packs and had commercial sheds. My father and uncle did the same. Not many of my school mate's anglo parents did though. They all seemed stunned that I had to spend 3-4 hours on Saturdays mowing multiple lawns and cleaning up flats after dirty tenants vacated.

So that's why I have been manically reading macroeconomics for the last few years. The growth of the last decade has been historically unprecedented. And I think anyone with serious debt exposure should be taking a strong interest in what is happening globally. I appreciate the discussions I have here with those who do. Boz is a guy, who being Italian, I identify as having learnt a hell of a lot about macro economics, in English, over the last few years and I always read his posts. I have no doubt he is a smart boy. TopCropper and Sunfish also share similar perspectives to mine, just a different style of presenting it though. And I know many others read the world's designated bear media tarts. As for Steve Keen, I think he has identified there is a problem with too much debt, and I respect his analysis on that. However, I think he was unwise to go to the media and emphatically declare a 40% house price drop. Nevetheless, I can see his motives for doing it. Do I think there's going to be a 40% price fall? probably not. but it will all depend on how developed economies deleverage from the excess credit that built up over the last 10-15 years and global contagion of debt defaulters.
 
Are you saying you expect a fall in house prices in Oz generally, or just staying stagnant for many years

"it will all depend on how developed economies deleverage from the excess credit that built up over the last 10-15 years and global contagion of debt defaulters."
 
Where could I find the stats showing residential mortgage defaults in Aus?

imho

defaults are a lagging indicator. And rather than take note of total defaults, express today's default rate as a % of say, 2002's.

no. of owner occupier dwelling commitments is a coincident indicator.



what happens with global credit is a leading indicator.
 
My appreciation of WW stems not only from his intelligently written posts which btw, I don't read as being permabear, but from the perspective that I've also taken note of the way the housing market has evolved over the last few decades and see it much the same way.

Certain aspects that stand out as being different to the past is the easier credit combined with the double incomes we have now (or had), and the mindset that exists that we can comfortably negatively gear because housing and rents will continue to rise allowing us to buy even more properties, as they have done in the noughties.

I remember a decade where investors payed down IP's for equity and yields were much better, even though at times interest rates where high, to now were negative gearing, low yields an low interest rates (the other end of the spectrum) is normal.

It make me wonder if it leaves much room for more booms in the short and medium term. As Sunfish has often asked... where is the next cash injection coming from.
 
Totally agreed with IV, I value WW views and contribution in this forum. And I feel glad that WW came back to SS after his self imposed exile last year. Continue your good work, man!

Your views and Sunfish's have triggered me on a course of self learning. I now understand big stuff like peak oil, gold, currency etc.

However, I still feel lost in the sea of graphs and financial jargons you sometimes use (eg. Libor etc) but they also pointed out there is more for me to learn.

Appreciate if you could somehow express what you learn in primary school English (Khan Academy style?) :D It is quite depressing to listen to Puplava, Schiff, Faber and the like, already :)

Thanks man.

Also thank to many more like SF, Dazz, Topcropper, MW, IV, Keith, Peter 147...

Cheers
 
Nice thread Mr Value.

I am also grateful for the posts of Mr. Wolfe. Keeps one a little grounded and allows one to adopt the (wider) vision of say a chameleon (I love those guys....they gotta be the coolest lizards) always looking up/down and round and round.

To take the metaphor a little further his posts and information allow one to consider changing their colours to suit the investment environment and camouflage (protect) from risk/predator or adopt the predatory role of an opportunist. :D

Agree with Aaron above that WW's contributions and numerous other more (widely) experienced posters whose knowledge extends beyond property alone, have (in my time here) caused me to often "measure twice and cut once". That old carpenters adage is very apt at any time, but moreso in the current environment :cool:

Mr. Wolfe's charting skills are very impressive albeit sometimes over my head in terms of the information portrayed. His posts are articulate and reflect wide reading not only on the economic/fiscal front, but on all manner of topics.

Those who have met him, know that he is a superb conversationalist, widely read, and most importantly, a good bloke to know. Very down to earth and humble. Oh and he doesn't mind a bit of imbibing.............Mr. Wolfe, I believe it is your shout next time ;)
 
Mr. Player, you are peeing on my shoe....aim a little higher :) .......

Keep a night between June20-Jul10 free, have your 21yo Swedish uni student child minder on call, and we'll reciprocate dins for 4, at the Calombaris Club. Maybe Mr and Mrs Value would like to join us, and anyone else interested in a chin wag.

Point taken about the complication of what I chart. I have often thought about putting a bottom up website together with pertinent macro economic info for property investors, with simple explanations of how each piece of data effects the property outlook.

I actually thought it would be a good idea for Sim to create a few pages (on the forum or SS site) with such charts of property pertinent fundamentals. We all have a vested interest in matching supply to demand as do most Mom and Pop investors. It could only facilitate the more informed, ethical, and efficient allocation of capital.


Those who have met him, know that he is a superb conversationalist, widely read, and most importantly, a good bloke to know. Very down to earth and humble. Oh and he doesn't mind a bit of imbibing.............Mr. Wolfe, I believe it is your shout next time ;)
 
Mr. Player, you are peeing on my shoe....aim a little higher :) .......

LOL ......... if I aim higher I'll be doing it up against the wall and I don't like to lose capital :D

Keep a night between June20-Jul10 free, have your 21yo Swedish uni student child minder on call, and we'll reciprocate dins for 4, at the Calombaris Club. Maybe Mr and Mrs Value would like to join us, and anyone else interested in a chin wag.

Sounds good keep us posted :)

Point taken about the complication of what I chart. I have often thought about putting a bottom up website together with pertinent macro economic info for property investors, with simple explanations of how each piece of data effects the property outlook.

I actually thought it would be a good idea for Sim to create a few pages (on the forum or SS site) with such charts of property pertinent fundamentals. We all have a vested interest in matching supply to demand as do most Mom and Pop investors. It could only facilitate the more informed, ethical, and efficient allocation of capital.

Great idea. Trying to make sense of all the ABS and adjunct data providers info in a graphical format is useful (for those inclined to) enhance decision making.
 
Where could I find the stats showing residential mortgage defaults in Aus?

ABS category 5609 table 12 has the total dollar value.
summary interpretation at the end
data in table 12 here

RBA includes no. of loans and total dollars in charts such as the one below from APRA data. What direction is the medium to long term trend?




You want to keep in mind that default rates will be lower when house price growth is higher.....why? because mortgagors who have trouble with repayments can always sell the house and pay the loan down without losing significant capital.

It is a different story as house price growth flattens.
 
Just i an expression of appreciation for all the contributions you make to this board.

These are and will be difficult times.

I really appreciate the alternative, yet INTELLIGENT views you present.
I might not always agree but generally i respect your viewpoints, and they often give me something to ponder.

Both you and Token Funder are very valuable members of Somersoft for your presentation and highlighting of risks that may not be apparent to many members of board.

Note: i am not talking about D&G, i am wishing to draw attention to intelligent risk identification.

Here here, I meant to chime in much earlier however I became temporarily lost. I do very much value the insights of WW and also Sunfish and many others here.
 
+1

If i fully understood the info WW contributed, im sure there would be a higher number on the end of that +.

When im a little smarter and can fully appreciate the share over the years mr WW, i shall return to this thread and continue my praise. Thanks
 
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