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JC Political Thread - For all things political Part 2

Discussion in 'The Pub' started by minux, Apr 4, 2011.

  1. Reaper

    Reaper Tells it like it is.

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    I follow the housing market (Melbourne Metro) very closely along with the broader construction industry. Auction clearance rates are a good yardstick for the broader market. Since the market peaked in late 2017, clearance rates have been between roughly 55 - 65% (more so the mid/lower 1/2 of that) although on very low volumes. Listings have been way off.

    Since the election there has been a very marked improvement with clearance rates immediately jumping to around 75% and stabilising there. Listing volumes have been low however it does indicate that the buyers are far more optimistic and willing to pay realistic reserves set by vendors.

    Now APRA (Banking regulator) have loosened some of the lending constraints imposed on banks overall the property market is looking much more positive than it did pre-election
     
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  2. Skydrol

    Skydrol Well-Known Member

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    In the way I see it. If the bank ease the constrains is a crappy market. Which constrains, lower deposits, lower credit scores?
     
  3. Skydrol

    Skydrol Well-Known Member

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    Just short clip on the Pedo saga. Well said Dr P, well said.



    Ok, back to Oz stuff ;)
     
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  4. Reaper

    Reaper Tells it like it is.

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    Previously consumers had to prove serviceability at a retail interest rate of 7.5%. Now the rate is allowed to be at 2% over whatever rate the bank is ultimately offering to the customer. This policy makes sense. Retail rates are into the mid 3% these days although some products are 4 & 5%. Whilst there is a chance of them going north of 7.5%, opinion is pretty much universal that it'll be not in the near or even medium term. Serviceability is more stringently evaluated than I can remember in 20+ years. In the not so distant past and further back, it only slightly more than a matter of asking if the consumer could pay the loan back - 'Yup' - ok - you have a loan.

    Further, Banks were directed in 2014 to drastically cut back interest only (favoured by investors including myself) loans which more or less cut investors out of the market. A while ago the ratios of such loans were relaxed although the expected ALP election victory kept investors at the sidelines until now.

    Australian property is still expensive compared to many parts of the world however currently affordability is the lowest it has been since 1998.
     
  5. Skydrol

    Skydrol Well-Known Member

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    Lowering Rates is to boost a slow Economy by making the "Currency" cheaper. A cheater way to keep the Money Velocity at steady pace. That does not fix the problem, just make the numbers look good.

    Another way... Let us say that you are carring a 25 Kilos backpack, people sees you carring it, you are geting tired and slow. I take 10 Kilos off but you still carring the same backpack. The same person sees you and see the same backpack but have no idea that is 10 Kilos lighter, praises you for the stamina.

    Loweing Rates is just making the Currency cheaper. Just runing on inertia by sheding weight. Is not only Oz, is all over the world. Just name diffrently like QE, Lowering Rates, is all the same.

    On my case, I destroyed Currency by paying off my house, last week, paying off my Colorado and debt free. Not taking on another loan.
     
  6. Reaper

    Reaper Tells it like it is.

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    RBA only have 1 tool at their disposal and that is their interest rate. Call it whatever you like but that is only part of the story. Govco have more options at their disposal such as tax rates etc. A range of tax cuts just passed into law which will also help get things moving again.

    I don't think your analogy is valid in this case. As a significant proportion of our society lives on credit, particularly real estate and business, interest rates are a reasonably effective way of regulating overall spending. In the case of Australia and the property market there is no doubt that by 2017 price growth in Melb/Syd were in the stupid category and the longer things ran, the greater the chance of a catastrophic bust. The end of the boom happened by regulation of APRA and the banking royal commission probably pushed things a bit further than was needed.

    Now we it appears property prices are at the very least bottoming out with a slight creep forward. Overall that is good. Slow growth (say 2 - 3% pa) is sustainable. The 8 - 10% (and higher) we had in 2015 - 2017 was a recipe for disaster and fingers crossed, we have averted it.

    Congratulations. I personally don't have a problem with using credit for leveraging investment. Unless you are stupid loaded it's hard to do property without it. Equities are possible but obviously you can ratchet things up much higher with other peoples money. The trick is making sure you have the cashflow to manage the interest payments and don't become a forced seller.
     
  7. Skydrol

    Skydrol Well-Known Member

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    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".

    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.

    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.

    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.

    I am a beliver that lowering interest is not help, is an indicator of an economical slowdown. 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?
     
    Last edited: Jul 15, 2019
  8. Reaper

    Reaper Tells it like it is.

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    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.

    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)

    Yup. Pretty much :)

    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.

    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.

    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 :))
     
  9. Skydrol

    Skydrol Well-Known Member

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

    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 :D


    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.
     
    Last edited: Jul 16, 2019
  10. Reaper

    Reaper Tells it like it is.

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

    Skydrol Well-Known Member

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    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 :)
     
  12. Reaper

    Reaper Tells it like it is.

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    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.
     
  13. 1985VK

    1985VK Well-Known Member

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  14. 1985VK

    1985VK Well-Known Member

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  15. Reaper

    Reaper Tells it like it is.

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    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)
     
  16. Skydrol

    Skydrol Well-Known Member

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    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.

     
  17. Nitro_X

    Nitro_X Numbskull

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    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):
     
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  18. Skydrol

    Skydrol Well-Known Member

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    You are just decribing the USA, USE... heck the rest of the world. When the people will grow a pair and start linching all these bastard politicians? At least the Puertorricans got some together, and kicked the Governor out of office, what about the Yellow Vest?

    Is going to be a global civil unrest, the people can take so much for so long...
     
  19. Reaper

    Reaper Tells it like it is.

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    [​IMG]
     
  20. Nitro_X

    Nitro_X Numbskull

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    email link:
    blackeconomy@treasury.gov.au

    You can also write to your local federal member for which ever electorate you live.
    If you value your personal freedoms and civil liberties to live your life without our government controlling every aspect of your life and further eroding our civil freedoms and civil rights then you need to stand up and make your voice heard.




    As a side note: Due to the corruption in our political system, our banking system and our government regulators, Australia now has a property debt bubble of epic proportion, just like our big banks that have become 'to big to fail' so too has our property market, which is built upon ever expanding and unsustainable debt.
    Australian mortgage debt now exceeds our national GDP at over $1.8 trillion and that's just mortgage debt, if you add credit card debt, personal loan debt and business debt, total private sector debt now exceeds $2.6 trillion.
    During the GFC, two of Australia's big banks (Westpac and NAB) were on the verge of insolvency but were bailed out with emergency funding from the US federal reserve, which was covertly channeled via the RBA. And we had less debt then than we do now, it won't take much to crash our corrupt banking system when the next inevitable financial crisis hits, and why they want to follow the IMF's directives for 'bank bail-ins' - bank profits are privatised, and losses are socialised - ie: corporate welfare.

    Our current LNP government and the RBA are desperate to keep expanding the household debt bubble to artificially prop up our housing market (land prices), if not, Australia falls into recession, or worse, a depression. The ruling elite are getting desperate.

    https://www.adamseconomics.com/copy-of-education

    .
     
    Last edited: Aug 7, 2019

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