Has anyone noticed how MB is no longer the local “doomsayer”? Via AFR:
Australian asset manager Altair Asset Management has made the extraordinary decision to liquidate its Australian shares funds and return “hundreds of millions” of dollars back to its clients, citing an impending property market “calamity” and the “overvalued and dangerous time in this cycle”.
…”We think that there is too much risk in this market at the moment, we think it’s crazy,” Mr Parker said more candidly.
“Valuations are stretched, property is massively overstretched and most of the companies that we follow are at our one-year rolling returns targets – and that’s after we’ve ticked them up over the past year.”
Mr Parker outlined a roll call of “the more obvious reasons to exit the riskier asset markets of shares and property”.
They included: the Australian east-coast property market “bubble” and its “impending correction”; worries that issues around China’s hot property sector and escalating debt levels will blow up “later this year”; “oversized” geopolitical risks and an “unpredictable” US political environment; and the “overvalued” Aussie equity market.
But it was the overheated local property market that was the clearest and most present danger, Mr Parker said.
“When you speak to people candidly in the banks, they’ll tell you very specifically that they are extraordinarily worried about the over-leverage of the Australian population in general,” he said.
…”Let me tell you I’ve never been more certain of anything in my life,” Mr Parker said. “I am absolutely certain we are in a bubble in this property market.”
“Mortgage fraud is endemic, it’s systemic, it’s just terrible what’s going on. When you’ve got 30-year-olds, who have never seen a property downturn before, borrowing up to 80 per cent to buy three and four apartments, it’s a bubble.”
“Australia hasn’t had its GFC event, we’ve been living in this fool’s paradise. But if China slows down the way the guys think it will towards the end of this year, then that’s 70 per cent of our exports [affected]. You can see already that the commodity market is turning down.”
Doesn’t he know that Australia is different? MB Telephunken U-47s are still available: