JC Political Thread - For All Things Political Part 2

[Reaper]

Perhaps is not the best analogy, I give you that one.

So let me see if I understood what you are saying. The Housing Market is at all times stupid record high. Nobody will buy at that price because the loan will be too expensive to maintain/service. So, lower the interested rate to make it more affordable? Why not let the Price Discovery Mechanism / Free Market do its job? What about going the other route, what about Wage Increases to keep up with the prices and keep rates at "Normal Levels".

Housing is off around 15% (or more in some areas) compared to the highs of late 2017. Note that many regional areas and major metro areas in Tas, SA and WA plus much of QLD missed out on the boom completely.

If the housing hit its true value, all those Collateral Debt Obligations (CDOs) and Synthetic CDOs will be worthless. Banks now days see debt as an asset, I see it as a liability.

Exactly what is 'true value' of anything?? It's an opinion of worth at any given time which changes daily/monthly/yearly. One thing Australia has got going for it is strong population growth and a near 15 year long under-supply of new housing. If we manage the transition to equilibrium well then things will be fine. Mess it up and we may fall back into the boom/bust cycle again (not sure which of those we'd start with)

On businesses loans. I was told that if you owe a Bank $1,000 is your problem, if you owe $1,000,000,000 is the Bank's problem. As long the debt is serviced is all A-OK. So renegociate to keep the service going and off the hook, for the moment.

Yup. Pretty much

What will happen when it reaches to 0 to keep the market going? Is it going to hit the Negative region? For the people that does not know what Neg Rates are is Paying the Bank for holding your Currency in the account, a Checking Account with a Service Fee whether you use it or not.

As in interest rates?? No idea - look at your side of the pond and the likes of Japan for a case book on that I suppose.

I am a beliver that lowering interest is not help, is an indicator of an economical slowdown.

What happens with interest rates is a reactive lever - economic growth/inflation/wages growth/house prices/a myriad of other things get overheated - raising interest rates sucks money from the economy which slows things down. Any of the above gets too slow then lowering it puts more money into the economy to get spending going again. The biggest problem is when you have some factors (eg inflation) significantly high with others low (eg wage growth). Simply messing with the interest rate will help one but make the other worse.

Of course Interest rates aren't adjusted in isolation. APRA can (and do) dictate banking lending policy in a broad sense which can be far more targeted. Govco have a raft of tools at their disposal such as income tax cuts, their own infrastructure and other spending and so on. If they get things right then we will be fine. Mess it up and yeah.

If the economy is that strong, why the "help"? Is like a person drowning, instead of getting the person off the water, I extend my hand and say... "hold on to it" and keep the person in the water holding on. Is not drowning but is not out of the water either, until I get tired, now what?

Wage and economic growth has been sluggish for a while but hardly catastrophic. Relatively low inflation have helped here. Property prices needed a haircut, no doubt and we have had that. Construction has had one too. Now it's time to take the foot off the economic brakes, put it in 1st and start accelerating again (slowly - like you are driving granny down to the hospital to get her hip operation, not like we are at the drags in a top fueller running 6's )

 

[Skydrol]

As in interest rates?? No idea - look at your side of the pond and the likes of Japan for a case book on that I suppose.

Yes, was talking about Interest Rates. Also, forgot the ECB

Exactly what is 'true value' of anything?? It's an opinion of worth at any given time which changes daily/monthly/yearly. One thing Australia has got going for it is strong population growth and a near 15 year long under-supply of new housing. If we manage the transition to equilibrium well then things will be fine. Mess it up and we may fall back into the boom/bust cycle again (not sure which of those we'd start with

True Value... very hard to say. But I can say is driven by the local economy and currency purchasing power (curency value). If the people are "low" income, for an outsider might look like is super cheap (assuming they are using the same currency). In the USA, if you have a Rat's Nest for house in California, you might sell that pile of garbage for 1 million USDs (chump change over there). Then, go to South Dakota and with that currency, buy a mansion and have some leftover cash. The previuos house was based on a High Price area pushed by a higher cost of living and higher wages (to keep up with living standards). What I see is the outside capital is killing the market for the South Dakota locals. So what is True Value? The local's economy driven prices or the outsider's point of view?

What about, a group of Chinese "Investors" with a big fat wallet that are willing to pay bloated prices? Is outside capital shoving the prices through the roof. On my view, is not a fair market true value. Is like bringing a Gun to a Knife Fight


The other side of the spectrum... the chaps that paid the bloated prices will not be able to sell. Unless they find someone that is willing to pay to break even or above water.

Where I live, some of that outside capital skewed the market. Locals took advantage of "outside suckers", drove prices up. Those "suckers" cannot get rid of their properties, no local is willing to pay that much. Most likely, if they cannot service the debt because of Rate Increases, the Bank have to eat the debt. So a way to help the Bank is to lower rates, to keep them above water.

All debts are paid at the end, by the creditor or the lender.

 

[Reaper]

True Value... very hard to say. But I can say is driven by the local economy and currency purchasing power (curency value). If the people are "low" income, for an outsider might look like is super cheap (assuming they are using the same currency). In the USA, if you have a Rat's Nest for house in California, you might sell that pile of garbage for 1 million USDs (chump change over there). Then, go to South Dakota and with that currency, buy a mansion and have some leftover cash. The previuos house was based on a High Price area pushed by a higher cost of living and higher wages (to keep up with living standards). What I see is the outside capital is killing the market for the South Dakota locals. So what is True Value? The local's economy driven prices or the outsider's point of view?

What about, a group of Chinese "Investors" with a big fat wallet that are willing to pay bloated prices? Is outside capital shoving the prices through the roof. On my view, is not a fair market true value. Is like bringing a Gun to a Knife Fight

The other side of the spectrum... the chaps that paid the bloated prices will not be able to sell. Unless they find someone that is willing to pay to break even or above water.

Where I live, some of that outside capital skewed the market. Locals took advantage of "outside suckers", drove prices up. Those "suckers" cannot get rid of their properties, no local is willing to pay that much. Most likely, if they cannot service the debt because of Rate Increases, the Bank have to eat the debt. So a way to help the Bank is to lower rates, to keep them above water.

All debts are paid at the end, by the creditor or the lender.

I'm trying to find a point to all that.

 

[Skydrol]

Was trying to somewhat say what True Value is and gave some outside influences that can affect the value.

Typed that at work, got interrupted way too many times

 

[Reaper]

Was trying to somewhat say what True Value is and gave some outside influences that can affect the value.

Typed that at work, got interrupted way too many times

It's very easy - True Value is an opinion which often is very fluid. It's made up of an infinite amount of external factors and said true value is unique to each individual with anybody else forming the same opinion being both very rare and probably just co-incidental at best.

 

[1985VK]

https://www.reddit.com/r/melbourne/comments/399lm8/average_melbourne_house_prices_1965_2012_taken/

 

[1985VK]

https://www.news.com.au/finance/eco...r/news-story/8ef84bdc2aaa5bb589aa77da5522d45b

 

[Reaper]

https://www.reddit.com/r/melbourne/comments/399lm8/average_melbourne_house_prices_1965_2012_taken/

Interesting milestones, particularly the 1999 one regarding CGT discount. It fails to mention the previous system had the cost base indexed by the CPI for each full year of ownership of the asset. There is no doubt the 50% discount was much more generous than the old system unless the asset was owned for a very long time. The thing is - it effectively pulls tax on profit after the disposal of a major asset held by an individual slightly lower than the small business tax rate of 25%. Alternately, without the discount govco would often effectively pocket close to 50% of any capital gain which would be a major roadblock to investment (Or people would just shift assets to PTY LTD companies and minimise the tax that way)

 

[Skydrol]

Interesting... instead of bombs, bullets and destruction like in WW2, the Germans found a way for WW3. Through financial, banking, economics, the 21st Century Battlegound.

Few years ago I said to watch out for this gal when she was "Douche-Land" Defense Minister.

%%%%%

Von der Leyen is the past and Nigel Farage is the future of Europe.

 

[Nitro_X]

Australia got what it deserved at the last federal election.
The majority of our politicians, both ALP & LNP are corrupt, but PM Morrison and Co. are particularly corrupt.
Our current PM is as cunning as they come, he has no integrity and has zero care factor for the average Australian, don't believe his empty rhetoric, he is a liar and a greedy self serving fascist, his policies and actions contradict his empty words.
Before entering politics PM Morrison worked for six years as national policy and research manager for the Property Council of Australia.

The PCoA are the most powerful property LOBBY organisation in this country, backed and funded by their private members most of which are multi-billion dollar property/finance corporations, eg: Lendlease Corp, Stockland and AMP Capital, to name only three.
He is in bed bed with this lobby group and colluding with the RBA and our big private banks, to keep our fake corrupt economy inflated by increasing the household debt bubble, and flipping over priced houses and land price speculation, our government regulators are corrupt (APRA, ASIC, Austrac) APRA a supposedly independent government regulator of our financial sector receives most of its funding from the institutions it is supposed to regulate, if that's not a conflict of interest, I don't know what is.
The RBA is corrupt and propagate lies the the Australian people, and colluding with worldwide central banks and the IMF.

Their current agenda is to ban cash (ultimately completely) using lies, manipulation and propaganda, which will allow private bank "bail-ins" when the next financial crises happens, this means they can confiscate private citizens deposits to bail out the bankers, and to introduce negative interest rates, this stuff has been on the global agenda of the ruling elites for many years and is well documented and in progress, bail-ins have already occurred in Cyprus and Greece and I believe Spain, India tried to ban all cash money.

Our banking royal commission was a joke, a stage show, the government and regulators have already watered down the recommendations of the commission, and as yet, none of our banking executives or colluding bureaucrats have been taken to criminal court and charged with any crimes, despite the evidence available (which only scratched the surface)
Australia is a haven for money laundering, particularly in our property market, along with many other countries, a Canadian provincial government has released a report that around $5.3 billion was laundered in Canadian real estate in 2018 alone.
This has been happening in Australia also, for at least the last 20 years.

Our economy is a lie, it is rigged and rorted by the wealthy ruling elites in politics, banking and big corporations. Australia no longer a free democracy but morphing into a plutocracy and fascist police state.

The current Australian government want to sneak in new laws and regulations that will further erode our civil liberties, freedoms and privacy. It's called...."The Currency Bill 2019 - Restrictions on the Use of Cash".
If you don't care about this, how it will affect you, your children and grandchildren, sit back and do nothing. If you care, sign the petition in the linked videos and write to your local senators and ministers.
ps...most of you won't have the attention span or time, or desire to watch all the below videos, whatever, but I recommend making the time and effort and at least think about it because many Australians are sleep walking and have no idea what is going on behind the scenes of power (which is how the ruling elites want it)

John Edwards has an honorary degree in economics and has consulted / advised for both private business and the Australian government, he also has inside contacts within government and had private conversations with high ranking federal bureaucrats:

Full interview with Helen Edwards:

Denise Brailey exposing Australia's banking mortgage fraud (part 2):