Weekend reading: 4-5 November 2017

Global Macro / Markets / Investing:

Americas:

Europe:

Asia:

Trans-Tasman:

Other:

 

Leith van Onselen

Comments

  1. The duplicity of the right wing:

    “5G will kill the FTTH market” and “solar panels will not kill coal power stations”.

    lol.

  2. Member the trace
    Black light in place
    Under a trance of
    Cryptic reflection.

    Too often these pages
    Soften in rigour
    And intellectual spirit
    But as I always say
    #iblameboomers
    … So ban me..

  3. IS THE BUREAUCRATICALLY BLOATED AND UNRESPONSIVE AUCKLAND COUNCIL GOING TO DESTROY THE NEW LABOUR GOVERNMENTS HOUSING ASPIRATIONS ?

    KiwiBuild doubts raised: building boss blames (Auckland Council) consent delays – NZ Herald

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11939992

    … extract …

    … Richards addressed industry leaders, funders, builders and colleagues at McConnell Property’s 20th anniversary celebrations at The Cloud in Auckland last night.

    “I’m not knocking the aspirations of the KiwiBuild scheme, or out to criticise the approach. But I’m suggesting the new Government needs to be made aware of the challenges of dealing with the Auckland Council’s consenting regime, especially when we compare it to some of the other local authorities around New Zealand,” he said.

    Twyford has said that KiwiBuild can be achieved, is a $2b scheme, he has had extensive discussions with industry leaders and is confident of its success.

    Richards called for a “radical change” in consenting processes.

    “As an industry, we face constant and expensive delays because the council is not resourced adequately,” Richards said, adding that he is not alone in his views, with fellow developers in Auckland regularly voicing the same frustrations. … read more via hyperlink above

    … The British style bureaucratically bloated local government culture (an unfortunate Rodney Hide creation for Auckland) … as explained by the UK Daily Mail …

    The Great Inertia Sector: A whistleblower’s account of council work where staff pull six-month sickies … UK Daily Mail

    http://www.dailymail.co.uk/news/article-1289702/Public-sector-inertia-council-office-employees-month-sickies.html

    Inquiry. The Great British Housing Disaster (Adam Curtis, 1984) – YouTube

    https://www.youtube.com/watch?v=Ch5VorymiL4

  4. Relevant StakeholderMEMBER

    So this Powell bloke, he comes from Carlyle Group? founded by a CIA director and owner of Snowden’s old employer? hmmm

    Economic warfare against China?

  5. boomengineeringMEMBER

    YOU’RE FIRED, sack the non citizen head of state, sack the dual flag join ARM, Australian Republic Movement.
    You an Aussie or not.

    • I would not trust my government to change my tyre, let alone my constitution.

      This has never been about a republic/royals. It’s about changing the constitution to their favour. If it weren’t why does it need to go beyond changing head of state?

      i.e. retain the political system we have, with houses, senate, ministers and prime minister.

      There’s a reason Turnbull was behind the republican movement. Power and money.

    • The Traveling Wilbur

      All these politicians entering through the doors of Parliament illegally is just too much for this country to bear. It will ruin the quality of life in this country and the government must do something about it. The law is the law and it must be respected – people can’t just jump from one country to another just to reach a safer electability queue.

      If the LNP won’t act to take control of this country’s political borders… that’s unthinkable. They must.

      They must Stop The Votes.

  6. Well turnball has shown us he is not afraid to walk the plank, most recently advising the high court on how to interpret the law. For a person supposedly learned of the law he sure makes mistakes.
    How about the latest, telling us that frydencoals mum had her citizenship stripped by some foreign nasties, when in all probability, many of those immigrants, at that time, identified as stateless to assist their emigration to places like Straya mate. Much more to come on this story.
    Turnball must be going very close to misleading parliament with these statements.
    More nails in his coffin.

    • boomengineeringMEMBER

      What a dud he turned out to be after being our great white hope for ARM which he was, we thought, a fierce proponent.

      • boomengineeringMEMBER

        Ermo should come aboard, why do you think they called it the Labor Party instead of the Labour Party.

      • migtronixMEMBER

        I’m confident Ermo is a republican – i mean socialist international first, but after that republican, cause, you know, Queen.

        But definitely socialist international first, that’s why they called it Labor and not Think For Yourself…

      • @boomen
        He was never my great white hope. A banker and a lawyer – his loyalties hardly lay with the electorate.

    • I will only support a Republic if it entails a root and branch over haul of the entire political system.
      Includes a Bill of Rights, Federal ICAC, recall facilty for lazy, corrupt or incompetent MP’s,allows citizen referenda,requires majority of both houses to vote for going to War, and gives Australian citizens a share in the National Wealth.
      Otherwise why bother?

      • Mining Bogan stands out as the potential minister for justice.
        My guess is that it would still be a winners and losers game, but he’d just swap the current winners and losers around, and make more of an example of the newly anointed losers.

      • Mining BoganMEMBER

        No thanks. My views on justice and punishment…especially punishment…lay in common with medieval times. Not suited for a civilised society.

        Something that got me in quite a bit of strife when I was younger.

      • First decision would be to remove RBA independence and return it to being a “bond selling agent of the Treasury” as Keating once called it.

      • Mining Bogan
        If I’m dictator your knowledge of medieval ‘justice’ would be just what we’d require!!! So Justice Minister
        pfh for Minister for Finance I think although MB might have to use some of his skills to get the bit of MMT out of him before appointment.
        billygoat given his antipathy to lawyers and bankers must be qualified for a place somewhere. Maybe as head of the Federal Police to do the big roundup of lawyers and bankers on the first night . He would have to work closely with MB.
        Treasurer I guess Sweeper would have to get a run.
        Strewth I’m getting a cabinet of lefties!!!

    • Frydenberg states in today’s SMH that his parents came to Australia as stateless aliens who arrived by boat and without papers.
      God help them if they did that today. Dutton would have them incarcerated on Manus Is.
      What have we become?

      • Selfish children who are devoid of empathy. We need not imagine monsters, for we are already surrounded by them.

      • Mining BoganMEMBER

        There was a ‘journalist’ last night saying wtte that if you supported basic human rights for the Manus refugees then Frydenberg cannot be a dual citizen.

        Yeah, we’ve gotten that stupid.

    • Yeah I watched it, I see both sides but the fat bloke is an accurate representation of property investors. I know a few withultiple properties who are over weight poor health etc.. it seems greed can take many forms.

      While I respect that blokes tenacity for get off your arse and do something, I also understand why the foreign kid is angry.

      Having dealt with the liars and cheats that are real estate agents on multiple occassions now. I can say FHB don’t stand a chance.

      • @tonydd
        The best time to buy in Melton has passed.
        197-1979 would buy a block large enough for 3 x 3bedroom triple front brick veneer AV Jennings Special @$28000. House (basic) and large block of land (clay / dirt) unmade road & sewer in 4 years later. Now on the market at 800K and development approval for 13 units.
        Mention to anyone that you grew up in Melton in the ’80 s and you’ll be met with silence and quick change of subject. Snobbery and immense feelings of ‘less than’ for anyone not raised in Toorak & Brighton has sent Victorian property prices through the roof. Absurd and distressing financial lessons coming to an outer suburb near you – SOON

    • good link tonydd.
      The part where FHB says he would like to save for another year to afford something a little better gets to the heart of the problem in my view. The issue here is inflation. Inflation in the cost of buying a home at a rate that far outrstips what wage growth can keep up with and that is conveniently ignored because it doesn’t show up in the CPI so the RBA pretends none of us want to own a home when they set the cash rate.

      The other point is that they are in Melton (likely in VIC). Melton has a high crime rate and wouldn’t be somewhere I would feel safe raising a family.

      A high crime rate for areas that are more affordable is common for the suburbs I’ve seen in Vic and SA.

      The videos are a good way to see the thinking involved on both sides.

      • That is what should have been stopped the inflating out of reach has put the entire system at risk ! Totally correct, and let me add, that the Butanese Aussie is exactly the type of migrant we WANT coming here, we have enough home grown parasites without having to import more …. FFS

      • Yes exactly I love The Butanese kid, I relate to him and his anger over foreign buying. It has nothing to do with racism and everything to do with fairness but of course the world is not fair! Still a whole generation is being sold out here and it doesn’t matter the colour of your skin.

      • @David.
        I’m not having a go at you.
        However FEAR drives everything including prices. Melton is indeed west of Melbourne and has for years been been considered the home of ‘bogans’ Melton was synonymous with this term for years – now it’s crime, such bull – Meltons only crime in the 70 80 &90’s was to be located west of Melbourne in a relative dust bowl and even worse have ‘cheap’ (affordable) housing.
        Like I said in an earlier comment house and huge block of land $28000. Chilled lifestyle, roller skating on newly made roads when they finally arrived, playing adventure stories and ship wreck in and around the trenches dug for sewer, all weekend at the 3 pool swim centre (walk home in time for evening bbq on a reworked 40 gallon drum, street cricket til the sun went down….safe as houses. Don’t believe everything you read.

      • Also in Melton couples raised large families 3-8 children who went on to tertiary study and professional & non professional roles!

      • billygoatMEMBER

        One more thing in the supposed crime thing in Meltin. Check out Footscray sunshine st kildacway back when and now oh so desireable ex railway weatherboard homes. My granddaddy told me to never ever get off the train at Tottenham! Changed days although it still looks scary.

      • @billygoat

        From memory Melton had a similar crime rate to a suburb a bit north of Melbourne I was in for a year and because of my experiences there I looked into it from the VIC Police statistics and moved somewhere with a lower crime rate (break-ins etc).

        If I didn’t know any economics and didn’t see any risk with the housing market I’d probably be making quite different choices though. I’m from South Australia originally so I’m not acquainted with Melton’s history or reputation.

  7. If all that bank lending, deposits, Basel stuff is a blur this is a pretty good explanation. Not perfect but pretty good.

    https://www.forbes.com/sites/francescoppola/2017/10/31/bank-capital-and-liquidity-sorting-out-the-muddle/#40e1222e498e

    Now don’t go thinking that banks in our monetary system are ‘special’ or anything like that though. You will get the banking status quo apologists all hot and bothered.

    Unfortunately Frances undoes all her good work with this confused post in which she serves a pile of red herring and sets fire to a bunch of strawmen.

    https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/#1b5c73353073

    A few regulars around these parts will love it.

      • She is always interesting.

        Oh look there is Skipper’s ‘little buddy’ Ralph M in the comments.

        http://www.coppolacomment.com/2017/10/beyond-disappointment.html

        This is a fusion of the first two posts above.

        http://www.coppolacomment.com/2017/10/money-creation-in-post-crisis-world.html

        It includes that bizarre ‘banker apologist’ idea that giving a technocratic public authority a monopoly over public money creation is dreadful even though our current model involves a technocratic public authority (the RBA and APRA) doing something very similar, in respect of what Frances uses to buy her breakfast, by manipulating the target rate and the regulations relating to private bank credit creation.

        No doubt Sweep and Skipper will swing by soon to set us straight on how one is ‘totalitarian’ and one is ‘Social Democracy’

      • migtronixMEMBER

        “Steven Fazzari and Adair Turner made some interesting comments, but the rest of the panel was terminally unoriginal. I lost interest quite quickly, turned to Twitter for light relief and got involved in a far more interesting discussion about whether or not banks earn seigniorage from lending”

        LOL she is pretty good.

      • oo7….

        Ahem… I’ve noted that Musgrave is on your side of the fence many times, your attempt to fling him back aside.

        Compounded by putting words in others mouths like bipolar options – social democracy or totalitarianism shtick. I’ve always been clear about say an Eisenhower sorta centrist underpinning and social democracy [especially at a local or regional level] e.g. informed discussion w/ compromise achived thorough wet ink and open transparent voting processes.

        disheveled…. you forward market fundamentalism…

      • But Sweeper….

        Deductive reasoning needs no evidence… its self evident ™…. ideology precludes such contrivances… it was written thingy…

        disheveled…. tho miggie did say the burning bush was self sustaining…. chortle…

      • migtronixMEMBER

        What on earth are you babbling on about Sweeper? Where did all of that “non financial credit” come from? Where did the demand deposits come from?

    • Maaate! Sorry but that is bordering on worthless!!! Discussion of Money Supply and creation is pretty meaningless without including the role of the external account and how this feeds back (or at least SHOULD) into money supply.

      • migtronixMEMBER

        “Williams calls for a “public authority” to create money. But, given how difficult it is to estimate the present and future productive capacity of the economy, I find it hard to see how a public authority can be a better creator of purchasing power than banks. Flawed though it is, money creation through bank lending at least responds to demand.

        However, that demand may not come from the most productive sectors. U.K. banks lend mainly for real estate purchase, and are frequently criticised for failing to lend to small and medium-size enterprises. To remedy this, Williams calls for commercial banks to be stripped of their power to create money. How this would ensure that bank lending in future was more productively directed is hard to imagine, unless she is also thinking of nationalizing the banks so that the state can direct their lending. But this is more than slightly illogical. In the U.K., successive governments have for the last half-century openly promoted and supported residential mortgage lending to create a “property-owning democracy.” The current government has just proposed increasing government support for the residential property market. Why on earth would a U.K. government suddenly change course and direct newly nationalized banks to lend to businesses instead of households?

        But we don’t need to change the way money is created in order to have the things Williams mentions. We can have helicopter money instead of QE. We can have investment in green infrastructure and education. We can have universal basic income or a citizen’s dividend. These are public policy decisions. They are not cost-free, of course – but they have nothing whatsoever to do with banks.

        Stop blaming banks for the abject failure of governments to provide the fiscal stimulus that our damaged economies so badly need. Put the blame where it belongs – with politicians, and those who elected them.”

      • mig
        If you stop the capital flows then the A$ adjusts to a value our trading position designates. This would basically regulate quite satisfactorily how capital got distributed through the economy in terms of productive and non-productive. No need for no damned government to be trying to regulate anything.

    • Even StevenMEMBER

      What do you find objectionable in Frances’ second link, PFH?

      The processes she describes seem about right. The conclusions she comes to are pretty poor (particularly that bank lending remains the best method of allocating capital/growth in money supply). Anything else?

      • migtronixMEMBER

        “Williams calls for a “public authority” to create money. But, given how difficult it is to estimate the present and future productive capacity of the economy, I find it hard to see how a public authority can be a better creator of purchasing power than banks. ”

        😉

      • Mig beat me to it.

        How she can say that with a straight face having regard to the role and performance of regulators like the RBA and APRA is remarkable.

  8. Is anyone else hoping that a sitting member is outed as a dual citizen of Catalonia? Now that would be gold.

    • Much the same as last week’s. I’d expect a similar downward revision on the complete numbers. I’d also expect continued negative sideways price movement.

      0.1% doesn’t sound like much of a weekly fall, but it’s more than most capital city places rent for. #freerentforDBN

      • Are these reported falls (e.g. of 0.1%) taken from CoreLogic’s same weekend data?

        If so, given a lot of properties show as ‘Price withheld’, it would seem the falls could possibly be larger (yet another example of selection bias within the stats), and the stats are skewed upwards given the reporting bias.

        If prices are withheld until settlement, then finally show up in the land titles registry, things could be a lot worse on the ground with real / accurately recorded declines lagging?

    • VIC at 75% and NSW at 63%.

      Keep in mind Spring Racing Carnival in Victoria this week. Low volume of auctions ~350.

    • Isn’t she going to veto the NAIF loan to show that there isn’t a conflict of interest (as cover for the fact that ALP supporters don’t like Adani).

      • Given she’s called the election and is in caretaker mode, to veto it she needs bipartisan support from LNP, which they ain’t gonna get.

      • Let’s wait and see what she DOES after the election.
        It is by “their works you shall know them”, not their words

      • @J Bauer….

        Punt…. could be a great way to get the LNP to own it one way or the other with out getting burnt….

      • Yes, sure smells, I’d like to believe her but suspect it’s a ploy to pin it on LNP. Need to learn more in the coming days. But I will to you this whichever party sports the loan I will vote against here in NSW next election (even if it’s both of the major parties) and I hope every Aussie does meaning a party may win QLD but lose the country. Adani is a national issue, probably even a world issue re climate change. So come on Australia let the LNP & Labor know this will affect them nationally.

    • @Gavin.. and the Cockatoo name is Malcolm :))
      One thing I also wondered has anyone done a power consumption analysis of the NBN? The FTTN boxes for a start (SDU and MDU’s). I looked and couldn’t find that sort of data. I was just wondering is this the next thing we are shocked about.

  9. Taibbi on the College Loan problem America.
    http://www.rollingstone.com/politics/features/taibbi-the-great-college-loan-swindle-w510880

    “Nailor’s problems began at 19 years old, when he borrowed for tuition so that he could pursue a bachelor’s degree at the University of Southern Maine. He graduated summa cum laude four years later and immediately got a job in his field, as an English teacher.

    But he graduated with $35,000 in debt, a big hill to climb on a part-time teacher’s $18,000 salary. He struggled with payments, and he and his wife then consolidated their student debt, which soon totaled more than $50,000. They declared bankruptcy and defaulted on the loans. From there he found himself in a loan “rehabilitation” program that added to his overall balance. “That’s when the noose began to tighten,” he says.

    The collectors called day and night, at work and at home. “In the middle of class too, while I was teaching,” he says. He ended up in another rehabilitation program that put him on a road toward an essentially endless cycle of rising payments. Today, he pays $471 a month toward “rehabilitation,” and, like countless other borrowers, he pays nothing at all toward his real debt, which he now calculates would cost more than $100,000 to extinguish. “Not one dollar of it goes to principal,” says Nailor. “I will never be able to pay it off. My only hope to escape from this crushing debt is to die.”

    After repeated phone calls with lending agencies about his ever-rising interest payments, Nailor now believes things will only get worse with time. “At this rate, I may easily break $1 million in debt before I retire from teaching,” he says.”

    • also: “America as a country has evolved in recent decades into a confederacy of widescale industrial scams. The biggest slices of our economic pie – sectors like health care, military production, banking, even commercial and residential real estate – have become crude income-redistribution schemes, often untethered from the market by subsidies or bailouts, with the richest companies benefiting from gamed or denuded regulatory systems that make profits almost as assured as taxes. Guaranteed-profit scams – that’s the last thing America makes with any level of consistent competence. ”
      Thank God it’s different here.

  10. And something fresh from the oven

    The media in Sydney is currently full to the brim with stories about the fullness of Sydney.

    Some people like former NSW Premier Mr Bob Carr reckon Sydney was full 20 years ago.

    Others argue it started to overflow the lip of the teacup a couple of years ago when the rate of immigration into Australia – which means mostly Sydney and Melbourne – was given a massive boost by John Howard and Peter Costello and the tap left on maximum by successive governments.

    Click below to read on.

    https://theglass-pyramid.com/2017/11/04/just-say-when-what-does-sydney-is-full-mean/

    • TailorTrashMEMBER

      Great stuff 007 …….you need to get that to every talking head in Sydney …….though suspect many of them live in Balmain and like places and would want it buried
      …….sooner or later one of the parties will have to face up to this …….even the immigrants are getting angry with the destruction of the place they came to for its better life ……..and I think we definitely need to develop Jenny Leongs street …….and the bulldozer drivers can give her the finger as they rip into her trendy terrace.

    • Well said 007. Although, I think you are missing the point a little on Dutton and Leong. Both are ideologues on opposite ends of the spectrum. Dutton wants high immigration because he actually believes the right-wing propaganda “what is good for business is good for Australia”. Leong is the useful idiot. A highly strung virtue-signaller who is being played as a fool by right-wing politicians who want the immigration rate discussion shutdown.

      • Freddy,

        Good point.

        I hoped that point was made when I referred to the motley crew and bizarre bed mates.

        But I welcome extra emphasis on that point in a comment below the post.

    • Rather than debating whether Sydney is full, I think that the elephant in the room is what is the function of a city in the 21st century. Cities were probably one of the greatest inventions since the wheel. Cities got us out of the grass huts and eventually onto the moon (yes, some people dispute this). The burning question is – what do cities do for us now? If we grow Sydney and Melbourne out to 10m apiece and fill them up with little hirise apartments, what do we get for this? What do the inhabitants get for this? Has anyone ever seen a serious public discussion on this topic? Where are our urban planners?

      It seems to be very poor management to degrade our environment with wasteful, resource sucking megacities – all so we can easily find a yum cha on the weekend.

      • Read a bit of history…. its all in there….

        disheveled… suburbia was premised on mgf w/ ancillaries, mgf went poof, hence the trend to FIRE sector and the city renewal capital out lay… all this has long lead lines and heaps of demand pull….

      • Suburbia was premised on mgf w/ ancillaries, mgf went poof, hence the trend to FIRE sector and the city renewal capital out lay… all this has long lead lines and heaps of demand pull….

      • You have to wonder about how the urban planners have been so effectively silenced. Of all the social sciences, the study of cities and their role in human affairs would seem like a massive opportunity for academic research. But, hardly a squeak out of them. It just seems like another essential function of our universities that has gone MIA.

        The situation we find presently ourselves in should be a golden opportunity for academics to shine. Everything is changing and nothing makes sense. If our institutes of higher learning can’t make something of that, what good are they?

      • What we get is a loss of sovereignty!!! Sydney and Melbourne produce nothing so we incur foreign debt just to have them there. We are not masters of our own destiny.

      • Interesting SMH’s Elizabeth Farrelly wrote something similar questioning what we want Sydney to be/become.
        http://www.smh.com.au/comment/turnbulls-plan-for-sydney-is-yet-more-blandification-20171102-gzdtn6.html
        must admit most of the time I find what she pens to be completely unintelligible, her writing is always highly emotional but logic normally leaves the room real early on, I guess this little piece of wishful thinking is no different logic wise but at some level she is at least asking the right question. What do we want our home to be? What home do we hope to leave for our children? Is Sydney just another Tokyo wannabe?
        I’m forever the rationalist so all that I see is Sydneysiders gleefully f#cking other Sidneysiders, so that all can make some sort of claim to being a millionaire. To be honest it’d be much simpler for the government to just give everyone 1 million dollars. I’d be all for this but I’ve got a strange feeling that this million would just become the default deposit value for a Sydney house. This all suggests that collective rational behavior wrt city planning / housing (what do we want our city to be?) can’t possibly happen until prices either stabilize or reverse. Isn’t that an interesting thought, we can only ever plan our future if the market (when left to itself) destroys paper wealth. Under all other operating conditions the paper wealth creation process is so individually and systemically corrupting that it renders laughable the plan to plan our city.
        Personally my only plan is to play no role in the furtherance of this stupidity, however even that plan is impossible to execute because everything else that’s made in Australia seems to be priced relative to Sydney housing, housing is unaffordable in places like Bathurst and Dubbo, like how’s that even possible? why aren’t farms on the outskirts of Dubbo becoming housing estates? makes no sense except to refer to the above conclusion
        the paper wealth creation process is so individually and systemically corrupting that it renders laughable the plan to plan our cities.

      • michael hudson
        November 4, 2017 at 6:19 am

        This is very good. I attended a lecture by the NYU real estate department where a georgist (they are now lobbyists for real estate developers, reversing what Henry George actually advocated) where the NYU department head argued to replace a real estate tax with a land tax — claiming that skyscrapers had a NEGATIVE land value. Hence, they would receive an annual SUBSIDY out of rent levied on lower-rise buildings. (On website I think I have a summary of this meeting.) There actually is a play claiming that fiscal reality is the REVERSE of the chart. But in fact, if you look at the Federal Reserve’s Table Z, it often has a NEGATIVE land value for corporately owned real estate. (-$4 billion in 1994). This statistical anomaly is a result of the Fed’s “land residual” approach, after fictitiously increasing the value of buildings by the construction index rise. (I discuss this in The Bubble and Beyond.)

        https://www.nakedcapitalism.com/2017/11/skyscrapers-land-values-evidence-chicago-costs-building-tall-cities.html#comment-2882580

        disheveled… the meta it burns….

      • Fisho, DarkMatter, Flawse,

        The rapid acceleration of centralisation and declining interest in decentralisation is not surprising when the banking and monetary system became even more focused around unproductive private bank credit creation in the mid 1990s.

        https://theglass-pyramid.com/2017/08/17/population-pressures-why-isnt-decentralisation-working-in-australia/

        Under that model the safest security for the most profitable asset prices speculations will be always land in the biggest cities. Nothing beats driving up the value of the security pledged for the loans you and other members of the cartel just made.

        All with the taxpayer full faith and credit!

        But be warned this kind of thinking is “money cranberry” to the Bank apologists.

      • oo7….

        Neoliberalism became dominate in the mid 70s, everything you bemoan is a result of that, of which banks are just a subset. Its as bad as the monetarists proclaiming the Roman empire collapsed due to money in a first order of acts. Banks used to hold long term risk, then some wing nuts went the full retard with “financial innovation” under the premises of rational agent models and free market slogans. To make matters worse, as Yves Smith, Stroller, Levine, Black et al pointed out in gruesome detail was the inherent structural corruption and incentives in the process.

        disheveled… you have a power dynamic problem acerbated by ignorance and made manifold by complexity, and coupling / inter-connectivity. C/IBs are just a reflection of that, not the source imo,

        P.S. that Hudson comment must be a bitter pill for some to swallow…. chortle… but see the devil is always in the details and not the random musings of [I]deologues w/ huge bias conformation distortion – myopia.

      • No…he mindlessly shouts ‘neoliberalism’ to everything. No further need for any rational discussion.. It makes his life nice and simple.

      • Great point.
        I think big cities will start to decline. As drone delivery becomes cheaper and cheaper and high speed internet becomes readily available in remote areas the relevance of the big cities will start to fade. My view is lot of them will become slumps or ghost cities as more and more people start migrating to rural areas. I think technology will allow us to start deherding and become more self sustaining – only reason for need of larger cities now is for capitalism to stay relevant as it is easier to manipulate a herd into buying a new shine iPhone even though your older mobile is still capable of performing all tasks at acceptable speed.
        Edit – forgot to add – and population growth will need to stop. Why so many of us when the planet can’t support us.

      • @Nikola
        Re:Drone delivery
        I have to admit every time I see or hear AI and drones offered as a solution for cities overcrowded by rampant immigration to support the housing industry I shake my head in wonder? Australia in particular Sydney & Melbourne no longer manufacture anothing. We bring everything in on ships then distribute by trucks all over the country. I can’t wait to see to trailer load of BMW SUV delivered by drone to the southeastern suburbs.send me a picture then I’ll believe it. Also Williamstown road any weekday morning heading North and turning right into Seddon is a Semi car park. Yes drones will fix it and make hellbourne & Shitnry liveable. Too much sci fi and a narrow vision assuming the only deliveries that take place in a city are sunglasses & trainer via amazon traditionally delivered by India – sorry Australia post!

      • oo7 – flawse…

        Look guys if the scope is too much for you just say so, flippant retorts don’t cut it.

        This is the thing Sweeper and myself have to put up with, every time evidence is put under your nose or your taken to task over the narrative your trying to spin, it’s this kinda non response rhetorical buffoonery. Then you crack a fat when I point out the low ethical and intellectual rigor on display, shezzz, its about trust. Funny thing is tho then you both have the balls to call out politicians for the same sort of stuff, you are what you decry.

        disheveled…. oo7 do take the time to offer your opinion on the Hudson comment… yours [and others] lack of engagement does speak louder that what you do say, you get that don’t you.

      • “banks used to hold long term risk” when did they? There’s very long time line between the Roman Empire’s collapse and the rise of neoliberalism – banks have behaved in all sorts of permutations, you point to a tiny timeslice that was best characterised as Global Cold War, and say evidence. BS.

      • Skippy,

        Hudson has no time for your rent seeking FIRE sector. When i pointed that out to you a few years back you dumped a bucket on him.

        Hudson has no time for your precious private banks.

        Ask your buddy Sweeper what he thinks of Hudson.

      • @007 I’m not a big fan of the meme that the big bad banks did this to us, or the alternate meme it’s all foreign banks flooding our country with newly minted fiat. Bottom line is that Aussies are out bidding other Aussies to own the biggest slice of paradise possible (as we’ve collectively defined paradise). The actual monetary value of the assets we’re swapping is only necessary for accounting reasons, clearly we’re all blinded by big numbers but that’s a separate social engineering issue.

        @Nikola I think big cities will start to decline
        I don’t agree at all. Look at what’s happening in Sydney at the moment wrt West Connect’s $16B or was it $20B price tag. thing is we all agree it’s necessary so we’ll do everything we can to make this happen. But ask yourself, How much of the Money needed to make this tollroad flows outwards from Sydney vs how much money flows into Sydney to achieve this objective? So from a cash flow perspective: will money flow into Sydney to achieve this or out of Sydney as a result of this activity?
        Will this asset make Sydney Productive? Productive at WHAT? making over priced toll roads? you see the answer is yes, yes we need it and yes it makes us more productive, furthermore the answer will continue to be yes for the foreseeable future, so we’ll continue to do exactly that which is making us collectively poorer.
        If you really want to understand why decentralization is not possible you need look no further than the operational rules which Centralized NSW impose on other sections of the state / country. Sewerage and water systems have become huge expenses for many regional councils often costing upwards of $100M, servicing the debt incurred through this investment in water and waste infrastructure often requires council rates of the order of $3K per property per year. It’s much easier to get the $3K per year for a property that’s worth $300K then to convince the owner of a $50K valued house to pay $3K per year for water and sewer hook-up. We even have State government restrictions on Local rates which would make it impossible to charge $3K rates per year on a property valued at $50k. Here again (even in regional areas) everyone wants higher house prices, so they modify their planning behavior to achieve this objective. Try buying a small farm and you’ll find that there’s lot’s of rural land available that does not allow a house to be build on the property, those tracts of land that come with planning permission or a house, all cost an additional $200K.

      • miggie….

        Understand your concerns, yet that does not refute that post WWII banks aka credit issuers had to hold a significant portion of the risk they issued, as well, as be responsible for the underwriting of it. You and others seem completely uninformed or refuse to acknowledge events in America like North Dakota wrt CC IR or how industry lobbyists pushed the agenda which enabled most of what oo7, flawse and yourself lament. Yet to a fault focus on wonky ideological perspectives, money crankery, and never attend to the actual human agency behind it aka whom payed whom to write the rubbish which enable it all…. and why won’t they own it.

        disheveled…. again… Hudson’s comment… any takers or is pettifoggery the order of the day….

      • oo7….

        So your answer is a non answer per usual. I specifically requested you respond to the comment and how that reflects on the narrative you like to forward. Not only that but, your refusal to engage in ethical behavior or intellectual rigor.

        Banks are only – one – pipe line wrt to credit, not to mention the dominate social imperative that neoliberalism has wrought. So banging on about banks in the singular instance wrt false dichotomies about public and private credit is driven by your ideological condition, not actual events.

        The difference is I respect Hudson, even when I don’t always agree with him on specific issues, which I can argue with evidence, its not an ideological battle and given sufficient evidence Hudson will consider it, hes not a rank ideologue that has put irretrievable stakes in the ground.

        Disheveled… the biggest gap between you and me is I also have first hand knowlage about certain things, where as you don’t.

      • Skippy,

        Give it a rest.

        I have engaged with your guff and gibberish more than anyone on this site and you never address my criticisms beyond claiming that anyone who disagrees with you is working for MPS or the Austrians.

        You clearly accept that the rise of the FIRE sector is part and parcel of the rise of neoliberalism yet when it comes to the private banks you just give them a huge free pass with the nonsense that banks have been around for a long time so could not be part of the problem.

        Not once have you explained how you think credit creation by private banks should be regulated.

        Not once have you engaged with the discussion of the 1937 Royal Commission where even the majority acknowledged that the role of private banks in the monetary system was critical and required at the very least close regulation.

        Instead you just keep spouting your dissembling rubbish that bank credit is no different to credit extended by others.

        Even Sweeper does not try, most of the time, to run that rubbish. Which is why he regularly recommends nationalisation of private banking.

        You are a private banking shill and wrapping yourself in progressive acronyms and hanging around NC does not change that.

        At least 3D had a sense of humour.

      • Fisho,

        [email protected] I’m not a big fan of the meme that the big bad banks did this to us, or the alternate meme it’s all foreign banks flooding our country with newly minted fiat…”

        I don’t believe that is a fair characterisation of what I argue but always happy to respond to questions or requests for clarification.

      • Yeh it gets a bit frustrating.
        For example, the anti fake warehouse receipts money crankery chart:
        https://fred.stlouisfed.org/graph/?g=faBx

        I know 007 has seen it, because he commented on one of the papers linked to the chart.
        So how can you still run the line that the deposit creation powers of commercial banks are the most pressing issue facing humanity, when you’ve seen the chart… which shows that commercial banks actually shrunk their money-like deposits during the biggest most irresponsbile credit bubble in history and then expanded them during the deleveraging?
        At least try and engage with reality.
        It’s not reasonable to say something like, ‘yeh but they are banks’. ‘You are just pretending they’re not banks’. ‘You’re just a bank apologist etc. etc. etc’.
        That reeks of journalism imo. It’s just journalism.
        Are you trying to get to the truth of the matter, however much it contradicts your ideology/prejudice and threatens your dug in position, however hard it is to write about with high rhetorical flourish? Or is it just journalism.

      • Sweeper you jest….

        Journalism – ????? – I don’t confuse rank propaganda as journalism, unless your suggesting oo7’s offerings are Pravda like, that I can understand.

      • @007 I’m not attacking you, the insane growth in asset supported debt along with the necessary asset price inflation is a well understood much studied characteristic of any failing society. it’s sort of human nature to claim that you’re still doing OK when you’re clearly failing as measured by every external metric, so we simply revert to Internal metrics. Asset price inflation, wealth effect, insane growth in dependency ratios, all require the illusion of real growth which we create through financial growth.
        Of course it’s only possible because we all collectively underwrite this Financialization of everything while claiming that we’ve transitioned into a Service economy that only needs to keep ourselves happy. In the end it must fail but there’s absolutely no point getting ahead of ourselves. As a very wise man once said, Over the long term we’re all dead anyway….so in the mean time this is the game we play.

      • Sweeper

        “…I know 007 has seen it, because he commented on one of the papers linked to the chart…”

        Even better than that Sweeps, once I realised that it was your school project I explained why your excitement was misplaced.

        The answer was in the paper that your project software included as a reference without you realising it.

        https://www.bis.org/publ/qtrpdf/r_qt1303h.pdf

        I told you several times to read but you refused. Just like you refuse to read the 1937 Royal Commission report or anything else that complicates your Bank apologia.

        That paper explained why in the USA the relationship between loans and deposits changed after the GFC.

        Guess why?

        If you bothered to read things put in front of you – like the Coppola articles above – you would understand that banks fund their operations in a number of ways of which deposits are just one.

        Prior to the GFC some banks in some jurisdictions relied on other methods in preference to deposits…..bonds, other types of paper etc. The proceeds of those transaction are not recorded as deposits.

        That is why your graph for the US is very different to the same graph for a bunch of other jurisdictions for the same period.

        All of this is was in the paper that your school project references but you refused to read.

      • Fisho

        “…@007 I’m not attacking you,..”

        Didn’t say you did. I said I thought your characterisation of my arguments was not fair.

      • @footsore

        interesting doco on the synth music. Nowadays you could put a fairlight on a $2 chip and put one in every key of a keyboard. It would be possible to build some fantastic instruments. Nobody thinks like that anymore. These big waves of technology, they are part social change and part technology. Once they have passed through, then that is it pretty much.

        The next big thing in musical instruments might be neural nets where the players sort of control what is happening, but there are procedural elements interacting with that. Probably sounds horrible to a musician, but you never know what the future might look like.

      • oo7…

        What part about using commodity money theory to discern fiat outcomes escapes you and then use it to forward AET free banking, again its a bad case of trying to perfect an inaccurate argument. Its just more old wine in new bottle thingy, the economics behind it is the drama, not the money. Go look at Congress and discern why they act the way they do or our parliamentarians, all you’ll get is theoclassical dogma, its what they were indoctrinated with or the dominate environmental meme.

        I have attempted to broaden your perspective in the past by referencing path dependence in economics, not to mention Philips book, which your only response was interesting something.

        disheveled…. my point of introspection is several orders before banking, right down to the fundamental axioms you use to discern everything. FYI I’m fond of Robinson’s statement, paraphrasing here – we learn economics not to understand it, but so as not to be lied too by it.

      • Skippy,

        There you go again spouting gibberish as a response.

        You are not fooling anyone.

        Here is an even more detailed debunking of Sweepers school project / gotcha.

        You know the one that you and Sweeper were crowing about above.

        Why not respond to that. I have repeated it several times yet all we get is more Skippy gibberish word soup ad hominem

        Sweeper

        You keep claiming that I have ignored your “show and tell” contribution.

        Let me explain your ‘school project’ graph once more.

        It shows total credit extended – by banks and non-banks – in the USA.

        It also shows total demand deposits.

        You think it is remarkable that demand deposits are much lower than total credit extended.

        If you bothered to read the references that your graphing tool included …without you realising …you would know the following.

        The USA prior to the GFC was unusual in that only 30% of total credit was extended by banks whereas in Australia it was above 70% and about that for Canada and France with South Africa close to 90%.

        The paper explained what was going on in the USA. Much of the credit was being extended in the form of various securitisation structures tied to the banks which under accounting rules at the time meant it was not counted as bank credit but was in practice was. In other words a bunch of USA bank extended credit was hidden by accounting treatment.

        As the GFC demonstrated when that so called non-Bank credit wen sour it was a problem for the banks.

        That is the problem with your bright idea that the relationship between demand deposits in the US and total credit extended in the US before the GFC suggests that we do not need to worry about the role of private banks in the monetary system.

        1. The USA was unusual
        2. The USA was not really unusual because all that non-Bank credit was closely tied to the banks and that is why it threatened to destroy the US banks during the GFC.
        3. In any event, even the completely non-bank credit depends heavily on the bank extended credit for its credibility just as the banking credit depends heavily on the credit of the public.

        Your OWN school project proves the central role of private banks and their credit creation role to the inherent instability of the monetary system

        The most effective way of resolving the inherent instability of this monetary model is to heavily regulate private bank credit creation to restrict unproductive forms of it (you say you agree with this) and fill the gap with more credit / money directly created by the public sector.

        Completely removing the privilege of private banks with regard to credit creation is the logical end point to this process.

        One which you clearly understand and endorse when you call for the ‘nationalisation’ of private banks. By definition that means extinguishing a role for privately owned bank credit creation as public money.

      • I don’t think it’s remarkable. On the contrary; it’s exactly as I expected. When I combined those 2 graphs I have never been so unsurprised in my life when seeing the outcome.
        And if you ever took in what I’ve been trying to explain re. Tobin and the Old Keynesian view of commercial banking you would understand why.
        Ie. there is no relationship, if anything reverse correlation, between the demand and supply of demand deposits and the demand and supply of new bank loans.
        They are unrelated products in every sense, which only by fairly recent historical accident some commercial banks provide under the same umbrella but for very different reasons and also under segregated department management.
        New credit is in high demand and is provided by the banks when liquidity preference is weak and borrowers and lenders are seeking risk, new deposits are in high demand when liquidity preference is strong and investors are seeking safety and will be provided if banks are able to access liquidity.
        This is why your theory is completely wrong, as demonstrated by the least surprising graph I have ever combined in my life.
        Just to remphasise the graph:
        During the biggest credit bubble/buildup, demand deposits actually *fell* in absolute terms.
        So the loans weren’t financed by deposit creation were they? No they were not. And this ties back to everything I’ve said. It also ties back to the CB’s balance sheet during this period which is more or less static.
        So you can continue to promote a heavily stylised and appealing myth that deposit creation powers are some huge privilege and problem knowing what that graph represents. In which case I will regard that as extremely insincere and unserious.
        And the story is the same across the world. The credit buildup was not financed through deposit creation.

      • Sweeper,

        It is actually worse if you did not think it ‘remarkable’ as that means you are intentionally trying to mislead by asserting that I have been claiming that there is some relationship between ‘demand deposits’ and private bank lending.

        No doubt you know exactly what ‘demand deposits’ and accordingly you should know exactly why they are of limited relevance to my central point about the role of private bank credit creation in our monetary system.

        You said

        “So the loans weren’t financed by deposit creation were they? No they were not. ”

        I never said they were. That is simply your dissembling projection.

        “..So you can continue to promote a heavily stylised and appealing myth that deposit creation powers are some huge privilege and problem..”

        What? – you are the one calling for those powers to be nationalised!

        See Sweeper that is the problem with your cute obfuscations.

        You have already conceded the importance of the private bank credit creation and your attacks on Keating confirm your understand of the implications of the unproductive private bank credit creation that resulted from deregulation.

      • Shifting the goal posts (again).
        Have you not claimed that the private fiat powers of banks (ability to create liabilities which also serve as means of exchange) is some exorbitant privilege?
        So how is it such an exorbitant privilege, when by your own concession, they collectively decided not to exercise this privilege during the biggest credit buildup in history? Put simply. They chose to borrow in the same way the man on the street borrows to buy /finance their assets.
        Sorry but that’s a huge refutation of your argument.

        And as usual you are trying to pretend a narrow aspect of commercial banking – money like deposit taking – is the sum whole of commercial banking.
        I support nationalisation not because of the deposit thing, but for a whole heap of more important reasons, in order:
        1. Clash of profit motive with credit provision excacerbating boom and bust
        2. Clash of risk taking with safeguarding ordinary people’s savings
        3. Tendency to too big to fail post deregulation
        4. Problem of limited liability in a large highly leveraged institution.
        5. Corporate governance or absence of: where Directors seem to be able to break the law and get away with it. Regulators get upset when directors don’t return their calls. Pathetic seriously. Management not held accountable due to size and opacity of ownership structure.

      • Sweeper,

        If you and Skipster spent less time inventing what I say and then believing your own inventions we would probably have much less to argue about.

        You keep insisting I say stuff which I plainly do not.

        I know it makes it easier for the two of you to wrap your heads around something that you have pigeonholed but it is very unhelpful.

        The “shifting of goal posts” is nothing more than my pointing out that your twisted invention of what I say is far from the mark.

        You then have the nerve to say that I have shifted my position!!!!.

        ” So how is it such an exorbitant privilege, when by your own concession, they collectively decided not to exercise this privilege during the biggest credit buildup in history? Put simply. They chose to borrow in the same way the man on the street borrows to buy /finance their assets. Sorry but that’s a huge refutation of your argument…”

        Refutation of what argument?

        You keep claiming to have refuted an argument without stating what it is.

        The exorbitant privilege relates to credit creation and how that credit is treated at law. How they ‘honour’ the obligations that arise from the credit creation is less of an issue. Banks fund their operations in a large number of ways.

        The point about demand deposits is not that they fund 100% of the banks operational needs or any other %.

        As for the significance of the authority to accept deposits I will leave that for you to google or better still ring a bank and ask why they bother when according to you they could just go out and borrow whatever they need to meet their day to day operational requirements.

        You constantly claim that banks do not need nor want the ability to accept deposits but when it comes to explaining why they do not hand in their licences and free themselves from APRA oversight you have nothing to say beyond implying they do it grudgingly as a favour to the general public.

        Duh.

      • Sweeper,

        I am never sure whether you are joking or not when you claim that bankers enjoy no privilege with regard to their credit creation as you clearly understand there is a difference… which is why you want to nationalise them.

        You appear to be making the mistake of assuming that because a bank can now borrow in a wide range of ways domestically and externally to honour obligations created when it extends credit that its authority at law to accept deposits is of no or little significance.

        It is actually the core of what makes a bank a bank and why they are technically Authorised Deposit taking Institutions.

        If it really was such trivial detail then the banks would be rushing to give back their licenses to take deposits as they could then be free of APRA supervision.

        On the bright side as you seem to dismiss the significance of deposits you must have no objections to the removal of a banks authority to accept demand deposits and thereby force them to meet ALL of their obligations with borrowings at term.

  11. Addng some diversity here
    Modern but old ? may as well inject a sugar mix…
    https://www.bloomberg.com/news/articles/2017-11-02/patient-deaths-show-darker-side-of-modernized-chinese-medicine

    Meanwhile in Aus, and like the ABS, funding is being reduce to measure and monitor things. Let’s keep ourselves in the dark…. no data = no progress, no improvement
    http://theconversation.com/australia-among-the-worlds-worst-on-biodiversity-conservation-86685?utm_source=twitter&utm_medium=twitterbutton

    • The international unions says Chapter 18 of the Australia-US Free Trade Agreement requires Australia to uphold international labour standards including freedom of association. It says the European Union is negotiating a trade agreement with Australia and that the UK government has expressed interest in negotiating a trade agreement following Brexit.

      Hang on – how do they know what’s in the FTA? Or is this one pre-secrecy?

  12. The Staggering Value of (US) Urban Land
    New York, NY $2.5 trillion total $5.2 million per acre average $123 million per acre in Central city
    San Francisco, CA $622 billion total $3.2 million per acre average $25 million per acre in Central city

    These prices are joke compared to Australian land prices. $5.2m for NYC average land is cheaper than average land price in the most remote parts of Sydney Metro like Perith and Blacktown.
    In sydney CBD $132m buys 1000sqm block at the best

    • Yeah, but NYC and San Fran aren’t world class cities like the CBDs of Penrith and Blacktown.

      Also, I’d put our bathtub ice cooks and hydro growers up against the world’s best any day.

      • Was thinking along same lines. Even though I know this will end in tears for us and I tried to play few scenarios on how the music will stop, I still wonder how and when.

  13. https://www.realestate.com.au/property-house-qld-indooroopilly-126613402, attended auction for this today, in Indooroopilly Brisbane. 9 registered bidders, most Chinese, two Indian families, two australian (though my wife is Taiwanese) Bidding started $800,000; bidding came quick and fast. My original limit was $850,000. I was rapidly pushed to $900,000. Other Australian family went to $930,000. Came down to a fight between an attractive and well dressed couple of African appearance, and a Chinese couple. I kid you not, it went from $935,000 to $950,000 in $500 increments over 5 minutes. Really harrowing stuff. It eventually went to the African couple. The owner was a 90 year old, who built and lived in the place for 30 years, going to a small flat. Is it just me, or is the market in Brisbane, especially Chapel Hill, Indooroopilly insane at the moment, with a ver strong push from foreign buyers. Would be interested in your views and feedback. I won’t take offence at any criticisms of the house location. I’m a bear who has capitulated.

    • Can’t speak for Brisbane, but it’s the same here in Newcastle.. Which doesn’t have a lot going for it as far as industry, median income etc..

      Could be wrong, but just seems as though an exodus of people from Sydney are inflating prices elsewhere.

      Parents in Bathurst are seeing houses go for $500k+.. In Bathurst!

      I’m not familiar with how bubble contagion plays out, but it seems like that’s what it is. Virtually everything is seen as ‘cheap’ compared to Sydney. So throw a few marginal buyers into the market and away we go.

    • Yep thats what i have heard abt all those nice places in thw western burbs
      ..thghts abt why?? Ironside catchment? Dont forget that it is illegal for foreigners to buy unless rhey notify the firb…we need a new zealand approach to this ban all foreigners on a basic necessity.

    • boomengineeringMEMBER

      Charlie, long way from the beach, don’t capitulate yet,
      I could be wrong but the hotter a location, the more imperative proximity to beach ?
      Gavin, good on you, that’s it keep the faith.

    • Charlie that place is absolutely nothing special…. We can compare our capitulation sob stories. Here is the 1 I missed out on in Parkdale Victoria. I had signed contract but agent delayed supplying deposit details as he was using it to solicit another offer.
      https://www.realestate.com.au/property-house-vic-parkdale-126448506

      Turns out it came down to contract conditions, I had stipulated subject to finance in my contract (since it was a 100k deposit at risk) and the other party did not. For some reason vendor was nervous, perhaps the bank may value the place very differently given it’s *unique*? I don’t know, but I had over 50% deposit. So it was unlikely to be a problem… Still at the end of the day it’s just a big brick garage with an average unit in the rear. Could build similar again easily (Uncle is a Bricklayer).

      Never deal with the agent Marcus Traumanis – dishonest and deceitful from start to finish!

      http://raywhitebeaumaris.com.au/agents/marcus-traumanis/96488

      Ironically he used to be a police officer, according to his bio, I wonder why he’s no longer a police officer though? You can probably figure out why a Real Estate Agent is more to his liking.

      • Mining BoganMEMBER

        You read my tales of the last rental search. Ray White and Barry Plant are to be avoided at all costs. There’s one office of each where the doors should be chained and the place burnt to the ground with everyone inside.

        Pure filth.

      • boomengineeringMEMBER

        Thanks Gavin I didn’t mean to denigrate his choice of suburb but as in your case I was going to outline the fact that you and Charlie missing out is the best case scenario. You may well find in the recession there may be a choice of ex factory sites for sale at your price.

      • haha, I vaguely recall, but I did get a good chuckle out of it. My aunt who inspected the property on my behalf (since I’m in NSW) had to deal with him also (he didn’t know she was looking on my behalf) and she calling him a frucking CNUT! Which was a good laugh, that’s how much he got under her skin…

        She said we should complain to his boss, but I said if he’s behaving that way, it’s because there is a cultural problem in that office, he’s not a maverick acting on his own accord. I am seriously thinking of putting in a complaint to the ombudsman, since 1 of the things he did was underquote, misrepresent the property on multiple occasions. For example the listing says it has air-con but the compressor is missing and only the wall unit remains. There was a spa bath in the yard and that was not part of the deal, even though he mentioned it on his video (1:08 mins in).
        https://www.facebook.com/mtraumanisraywhite/videos/1763801670349611/

        Lies, Lies, Lies, Lies and more Lies…by the end of yesterday I had a sick feeling in my stomach from talking to him. I was no way prepared to do a deal with this man. It just felt wrong wrong wrong and I am almost sure I would have lost my 100k deposit. I suspect there may be some hidden issue with the property now because why else would the vendor be so nervous about bank finance (when we already had pre-approval)?

      • boomengineeringMEMBER

        I confess, I confess
        after telling you not to capitulate here I am ready to give up on my stinking truck trolley jack, put new seals in and new oil, tried all adjustments, checked valves and bleeding to no avail. You get what you pay for, nothing (a freebie)
        But here I am telling you to take Buffett.s advice wealth goes from the impatient to the patient.
        I won’t give up on the jack, I’ll fix the other one and do this one ( with notes of probable cause) when I haven’t run out of time

      • boomengineeringMEMBER

        Skip, I had to make the seals myself as the cylinder bores main and pump are neither metric nor imperial, arseholes don’t want DIY. My seals hold pump and main cyl pressure as do the valves. It’s the raise lower valve that seem good on external inspection but run out of time to fully investigate when I have another which I know used to work.

      • billygoatMEMBER

        @Gabin
        Ha Ha whether you’re buying or renting it is not the agents fault if something (heater, air con, etc) doesn’t work nor is it their responsibility to find anything out that may assist you in making a purchase or sign a lease. All they’re there for is to look sharp, open the doors and hold the keys while you look around. Never ask them anything – they’ll assume you are ignorant for asking. In any case I feel for them cos it’s hard to show up anywhere in a bad fitting suit on a Saturday morning with a head full of coke. Sweaty jittery people – Sydney eastern suburbs anyway!

      • Yeah boomin that’s a wear part of second order at least you know the guts are good, just a hassle getting the final tweek…

        disheveled… in other news my festool gear is paying for its self quite quickly… I would marry it but, the wife is top self of another order…

      • Thanks guys. I must say, part of me would like to find a nice beach or rural location. Gavin, you may have dodged a bullet mate. There is something very icky about constantly dealing with slime real-estate agents.

        Do you guys know a fellow called Phil Soos? He was a bit of a perm bear, writes a lot of articles on a similar grounding to the stuff found here. He now seems to believe some fellow called Anderson who bases his predictions on a 21 year US property cycle. He seems to think things won’t peak in property until 2028? I kind of respect Phil Soos’s stuff, but that prediction just fills me with despair. Any thoughts.

      • boomengineeringMEMBER

        Phil Soos used to be in the spotlight quite often but haven’t heard him much lately

      • @Mining Bogan – I’ve always found property managers from franchise agencies to be the least dodgy – they have enough places on their books that they tend to leave tenants alone and not meddle too much. It’s the small “boutique” agencies I’ve had to deal with as a tenant that I hated the most, in particular Infinity Property in Sydney. If I ever see properties being managed by them again I’ll be giving them a wide berth.

      • I put my house for sale in July 2015 just before I descovered this site – so decision was our own and I had few periods when I thought to capitulate and buy again. However, when I look at the prices and the areas – lol – I get my sanity back in an instant.
        I will be happy to rent for rest of my life rather than become a slave for rest of my.. so yeah I can wait to find out if Anderson is right – unless 2020/21 causes 40% drop then I am in.

      • boomengineeringMEMBER

        SKIPPY, Success, thought about it last night, the lower/raise valve if it did have a point had been ground off in any case I changed it to a ball check valve and bingo she pumps up.
        People used to ask me why I didn’t lay out gearbox or pump parts out in the sequence I found them and I would answer how do I know the guy before me wasn’t pissed or it didn’t have a design fault so I would put the parts in a heap and proceed to make my own with these parts.

      • Charlie Chaplin
        I used read a bit of Soos. He understands the dynamics. However, like for others here, he has disappeared off my radar. Re 2028? Who knows the future? However I reiterate my take on things. The one-way street of MB thsat it is all going DOWN ignores CB’s and the route they cannot leave which is to print money. Timing will be of the essence. If they are all printing in concert again nominal prices of today will look like a bargain. If, somehow, the Fed and ECB stop printing (Bwahahahaaa!) and we run into the iceberg that is our external account there will be much weeping and gnashing of teeth.
        This is not prediction – just a warning there is no certainty.

      • Charlie, I’m favouring history above a 21 year cycle. Love reading any theory on this though. The last two decent mining booms (1971 and 1983) with their subsequent peaks had well defined lags in property indices (between 3 and 5 years). Mining’s share of GDP again peaked in 2013, so I’ve been expecting the peak in property values somewhere between 2016 and 2018. Current conditions in our biggest market suggest that 2017 is that peak. Based on the charts I’m now expecting a bottom in housing around 2023-25 and then another peak late 20s – early 30s. There’s a definite 10 year period of falls in property values once the peak is in.

        Here’s a summary.

        1971 Mining peak…..1974 housing peak, prices bottom out in 1984
        1983 Mining peak……1988 housing peak, prices bottom out in 1997
        2013 Mining peak………? (this mining peak was close to double the last two combined)

      • boomin…

        Congrats, nothing like fixing stuff to get that cuffed feeling. Yeah I agree with the pissed comment and the only thing I lay out is p-rings, pistons, and valves when working on used motors. Once was doing a job down in Houston for Ashland chemical, 20” blast head DC drive motor went inop. On site 3rd level sparky said it was the actual motor that went, huge cost and time down to get new one. I sent 10+ hours with a multi-meter going through the whole thing including the control panel. Found the fault in a circuit board behind the control panel that had its own housing. It used to get a bit hot in the little box and trip the thermal sensor, so my partner had drilled a 1/4” hole in the top, unbeknownst to me. Thing is the goose neck horse float we used to transport gear to site was getting a wee bit old and a few rust holes on top in the skin next to welds had developed. I think you can figure out the rest.

        Disheveled… oh[sigh] the amount of times I had to fix the Eaton shift kit on the F250 4×4 [460 w/ elderbrock butterfly intake and holly 4 banger and towing cam] used to hall all the gear [matched to a borg-warner 4 speed] before I got the partner to buck up for a 3 main bearing diesel F350. Tho the exhaust flame when down shifting with hot motor at stop lights was always comic. Single exhaust exiting before right rear wheel, almost two foot flame of short duration, ahhh compact cars…. lol…

      • boomengineeringMEMBER

        Skippy. If you use the old rings I agree to lay out also to have ring gap opposition identical .Ship’s rings we cut ourselves.45degree gap. Standing on the pistons nearly 2M bore.

    • Is it just me, or is the market in Brisbane, especially Chapel Hill, Indooroopilly insane at the moment, with a very strong push from foreign buyers. Would be interested in your views and feedback.

      With the caveat that we’re more in the $1-1.25m bracket rather than $850-1m and looking more out around Fig Tree Pocket, Kenmore Hills, Brookfield, Pullenvale, rather than Indooroopilly/Chapel Hill (which are becoming WAY too subdivided)…

      We’ve been looking in 4068/4069 on and off for a couple of years now (we currently live in Oxley but the place is too small now we have kids), it actually seems to me that houses are staying longer on the market and not shifting as quick. That said, it also seems that they’re starting at higher prices than I would have expected a year ago, so the end result is probably much the same.

      Eg: here’s some on my list that have been on the market for weeks/months and/or come down non-trivial amounts ($50-100k) from their original prices:
      https://www.realestate.com.au/property-acreage+semi-rural-qld-pinjarra+hills-126584762 (on its third agent/listing from memory)
      https://www.realestate.com.au/property-house-qld-indooroopilly-126369014 (this went to auction a couple of weeks back, the open house I went to before that had heaps of asian couples looking)
      https://www.realestate.com.au/property-house-qld-oxley-125935538 (now back down to the same price it sold for several years ago – 950 – originally listed at 990 I think, owners are separating and need to sell it, actually a relatively good deal I think)
      https://www.realestate.com.au/property-house-qld-mount+ommaney-126306018 (down from 1.2something)
      https://www.realestate.com.au/property-house-qld-pullenvale-126272390 (also down from 1.2something)
      https://www.realestate.com.au/property-house-qld-fig+tree+pocket-126201582 (if you can’t sell a nice place in Fig Tree Pocket in a week or two, you’re asking way too much)
      https://www.realestate.com.au/property-house-qld-fig+tree+pocket-126255134 (ditto – can’t figure out why this hasn’t sold TBH, seems another relatively good deal)
      https://www.realestate.com.au/property-acreage+semi-rural-qld-pullenvale-125990082 (down from about 1.6 originally, and second listing/agent)

      We generally don’t do auctions, but the few we’ve been to have been sombre affairs to say the least, with bugger all bidding, mostly from the vendor. Indeed, almost every property I’ve ever saved to my list that was an auction, has passed in and then popped back up a week later “for sale”, sometimes even with an actual price attached.

      Ironside and Indooroopilly State have excellent reputations, which is probably why those areas are going bonkers. Though word from our nanny who lives in Indro specifically so they can send their children to Ironside is that it’s becoming VERY crowded, so it may not have such a good reputation in 5-10 years.

      • No idea, sorry, not really my thing.

        You’re right about Newfarm though, that was done and dusted 10-odd years ago.

        Only places I can think of in the suburbs I’m familiar with is maybe Sumner Park and a few places up the road in Seventeen Mile Rocks, but those are still used as commercial/light industrial I believe (or are in areas that flood).

      • drsmithy – you never told us you were a silvertail! Once you move into the 1m bracket you are actually required by law to put the boot into the poor people. So, no more lefty stuff from you now. Go forth and buy a BMW.

    • Before it was just plain old libertarian free market, then the democrats went third way e.g. liberaltarianism is just another term for third way…. yet its still free market i.e. everything is for sale, especially when people are reduced to commodity’s or production units…

      disheveled…. in addition – everything – must have a price…. value is not necessary….

    • TailorTrashMEMBER

      I love the smell of negativity in the evening ……we need Reusa to balance things out ……

    • TailorTrashMEMBER

      I love the smell of negativity in the eveniing . One has to wonder if the punters are still getting applause and a bottle of cheap Strayan “champagne ” at the Saturday morning debt auctions ……….we need Reusa to give us a true perspective on this silly negative stuff …….

      • boomengineeringMEMBER

        Reusa, is in hiding overwhelmed by people agreeing with him, his masochistic needs are not being forfilled.

      • I was thinking he looked nervous.. Sweating, licking lips.. But that’s how the poor guy is in every video

    • I have been thinking about the ‘Genworth’ story earlier in the week, and came up with the idea that, it won’t have to pay out very much at all because the insured are 80+% LTV borrowers and I guess there would be 80% of them who have fraudulent loan applications / data. No insurance payout for you Mr banker !

      • pyjamasbeforechristMEMBER

        Now that would be a very interesting twist.

        The Genworth underwriting Guidelines tend to agree they would be off the hook;

        Lenders responsibility
        Genworth relies on the Lender to conduct a complete and thorough credit assessment for all loan proposals in accordance
        with the principles of responsible lending and the Lender’s own lending guidelines.
        Lenders must also comply with their duty of disclosure and these Guidelines in connection with Genworth providing LMI
        under the Master Policy between Genworth and the Lender.

        https://www.genworth.com.au/media/1344/lmi-underwriting-guidelines-australia-19-may-2017-v10.pdf

  14. Clearance rate disaster. Trend going one way. Rental vacancies rising with peak completions as we speak for the next 6 months. Tradies who are sadly about to lose their jobs are huge mortgage holders from the “guarantee” of doing your own place up plus a rental property or 8. One thing I disagree with MB though, no-one will sell because they think prices will fall. They will sell because they can’t afford to keep only which is happening in a big way. Take prices down 10% and no-one will be able to get a loan. Popcorn is ready.

    • where was the clearance rates disaster?

      what do you have to support this fantasy scenario you’ve constructed?

      I sometimes wonder if the posters here are astroturfers or just deluded wishful thinkers

      • My bad. I thought the actual 118 that reported withdrawn was on top of the 888 results available but it isn’t. So it’s actually 524 of 1412 auctions they couldn’t get a result yet (to not stuff up the figures in the news). Doesn’t happen when the clearance rate is above 75%. Even with realistic expectations WA had a whopping 7 properties sold of 57 auctions.

      • I’m a wishful thinker. Rational thought out the window as everything thrown at housing to keep the emperor fabulously naked.

    • “”Everyone is assuming that Amazon is going to be a screaming success and they will put everyone else out of business. That may not happen,” Mr Sims said.

      What an gobsmackingly stupid comment. Seeing how stretched the Australian consumer is, one can assume that the entry of Amazon will not increase the consumer spend substantially. So the unenlarged pie will have to be split amongst existing retailers plus Amazon. Even if Amazon does a Masters and fails in Australia within the first couple of years (chances?) surely it is obvious that in the meantime existing retailers will get smaller slices of the pie, which will be enough to trigger job cuts, store closures and business failures. And then of course there are the suppliers who will be pressured to sell much the same products at much the same volumes but at reduced prices, if not to Amazon then to existing retailers. All that may be good overall but for Rod Sims to play down the impact of Amazon to existing retailers and wholesalers is just silly.

      • Regarding consumer spending, as things are right now and even though I have no mortgage I’m saving as much as I can for a rainy day. I know after 26 years of sun we are about to see a lot of rain and I need to buy a big umbrella.😁

      • Mining BoganMEMBER

        Is Straya split into those who shop online and those who don’t yet, or is online still grabbing more customers from the fat and bored Westfield shopping experience type shoppers?

        I’m just wondering if online has a ceiling where the likes of amazon, ebay, etc start eating each other only.

      • MB – I think I read somewhere that even with Amazon in full bloom, online sales in the US account for only about 10% of retail sales – see link below. So I would imagine that online sales has heaps of room to cut into the Australian bricks and mortar retailers. My kids shop online and I’d buy more online but for the fact that with every second delivery I have to drive into town, find a park and line up for 20-30 minutes. So much for free delivery, but I guess they’ll eventually train the delivery dudes to knock on the front door rather than just leave a pick-up card.

        https://marketingland.com/report-e-commerce-accounted-11-7-total-retail-sales-2016-15-6-2015-207088

    • We are truly on the verge of ww3.
      Btw – Iraqi forces are cooperating with Syrian forces to block advancements of US backed forces in Syria.

    • Yeah, nah. In the meantime my company is preparing another round of culling (in which I hope to get picked and get paid) while I expect to hear other banks announcing similar measures to NAB in order to keep up with the Joneses

      • Not just your company, I work for a large multinational which keeps posting record profits and has a new CFO determined to cut costs and 1 of those ways to destroy the support side of the business. You know all that support stuff can be outsourced to cheap third world places where you get what you pay for.

        A friend of mine in same company has been there 10+ years and works his arse off literally 24/7 and recently got tapped on shoulder, hey we’re moving your role to India you can go and take a pay cut or you have a couple of months to find another role.

        Basically they have people in a spreadsheet and just look at numbers and start cutting.. never been like this until recently. Very hunger games feeling… I’ve nearly been there 10 years myself. Just want to make it to 10 to get long service leave. But I reckon they might try let me go before that. (Nothing has been said) but I have a gut feeling..

        If any of that happens, not sure if I’ll stay in Sydney or move to Melbourne or somewhere else?

      • If it’s anything like manufacturing you’d better get used to a ~25 year attrition where each job gets more desperate & shittier than the last! Culture gets tense as management gets pressured & there’s less work doing the rounds. Items are redesigned to take operations out (time) while trying to retain quality – something that’s now lost in this world. You work harder for less, you work on older & more worn machines & are still expected to get better results & be able to compete against faster/newer….. They get to the stage where they quote production items guestimating with specs from machines they don’t own (chicken & egg, they need the contract first), refugees turn up from other factories & if they’re a hotshot, it’s guaranteed that an old hand will be packed up & disappeared….. race to the bottom & then – Poof, to dust anyway! Lot of pilots in Taxi’s in the 80’s, lot of machinists/factory hands in Taxi’s from the 90’s…… More about to hit the Uber market in Vic/SA I guess…… & that’s just a snapshot of 1 sector that was globalized – while automation is here, it never got the foothold it could’ve due to the cheap labour stampede OS……. & then the cheap labour brought in. Unless you have a niche, or a quality that can’t be easily copied/cloned – you’re gone! If you’re a drone, you’re done! Leave the sinking ship adapt & retrain earlier rather than go down with the sector is my 2c – you’ll likely be better off emotionally & financially.

      • Basically they have people in a spreadsheet and just look at numbers and start cutting.. never been like this until recently. Very hunger games feeling… I’ve nearly been there 10 years myself. Just want to make it to 10 to get long service leave. But I reckon they might try let me go before that. (Nothing has been said) but I have a gut feeling..

        Many employers will at least pay you out accrued LSL pro-rata if you’ve made it to seven years and leave. Something to check if you haven’t already.

    • On the questionable nature of childcare, someone was telling me you can get a live in Au Pair for as little as $200 a week.

      • adelaide_economistMEMBER

        Maybe ask Richard Di Natale for some advice on cheap au pairs. He seems to have some experience with them!

      • “Maybe ask Richard Di Natale for some advice on cheap au pairs. He seems to have some experience with them!”

        Probably recycled from Dubai or its ilk, hence conditioned, sorta like all the people that acutely do stuff over there vs. those that just throw money at it….

      • On the questionable nature of childcare, someone was telling me you can get a live in Au Pair for as little as $200 a week.

        That’s their “pocket money”. You’re also expected/required to provide food and board, and not have them “work” for more than about 30hrs/week [for that $ amount]. Their visas are also limited to six months I think.

        Most are just kids after a working holiday/overseas adventure, not really any different from backpackers doing fruit picking or bar work. Some are properly trained in childcare and make something of a career of it travelling between different countries, but those will obviously attract much higher costs than $200/wk.

        I’ve had a few friends try them, with good (on their third or fourth) and bad (“never again”) stories split fairly evenly.

    • I think most tenants will find nothing to be scared of in the exit if dilettante landlords with no understanding of their responsibilities and not enough ready cash to fix a broken door handle let alone a serious problem .

      • Who knows, we may even see a class of professional landlords who meet their responsibilities and seek to run their business at a profit. If it flushes out those who are only in the game for the tax perks and capital gains, and have no interest in being a landlord, that is they begrudge the very notion of having tenants in their property, then the changes will be for the better.

    • Mining BoganMEMBER

      Excellent news! These mums and dads won’t be able to afford the properties because of losing their gubmint welfare so on the market they’ll go, adding to the surge in listings.

      Don’t know if they’ve really thought this through…

      • You lot better be careful or us investors will be forced to sell our properties into the open market where FHB may have a chance to purchase them! Can you imagine the negative implications of that?

  15. http://www.zerohedge.com/news/2017-11-04/shocking-purge-saudi-king-arrests-billionaire-prince-bin-talal-others-anti-money-lau

    Looks like more purges are needed in Saudi Arabia for the young prince to get a grip on the iron thron. I think he will purely rely on CIA in order to survive – moving forward. These purges broke long term agreements between various families and tribes and ensures volatility ahead. He wasn’t in line to rule to start with hence why all the purges ever since his farther changed the rules.

  16. This was also a front page link on the Herald Sun and DT websites.

    http://www.dailytelegraph.com.au/news/nsw/loophole-allows-foreign-students-to-buy-property-in-australia-despite-crackdown/news-story/a16f874bfa2425a7272160bf7c8d5148

    FOREIGN students should be banned from buying properties because Asian investors are using them to illegally enter our market. In Australia, foreigners are not ­allowed to buy existing homes but temporary residents — such as foreign students — can, provided they live there permanently and sell the property within three months of leaving Australia.

    A major report into housing affordability by Industry Super Australia (ISA) has found that, despite a recent crackdown, overseas buyers are pushing up prices in hotspot property markets. ISA chief economist Stephen ­Anthony said foreign buyers are using the loophole to buy existing property through younger family members who are studying in Australia.

    The only solution is the government must stop all foreigners from buying ­existing stock, forcing them to only ­invest in new developments, regardless of whether or not they are studying in Australia, according to ISA.

    • Worth a read just for the comments………overwhelming rage out there. Will it translate into votes though?

      • it will in my burb. it’s the hot topic and everyone i speak to are furious with state and federal pollies. that’s people who are under financial stress and there are lots.

      • My voting preferences are very selfish and mostly aimed at candidates who have affordable housing policies. I think affordable housing is a vote winner. Refer to NZ.

    • Foreigners are allowed to buy existing homes. They just need FIRB approval and 35,000 or somesuch get it a year. at least let’s get the facts right.

  17. … Following New Zealand … housing affordability becoming the dominant political issue in Australia …

    From boom to gloom: how rising house prices have become a worry … Sydney Morning Herald

    http://www.smh.com.au/comment/from-boom-to-gloom-how-rising-house-prices-have-become-a-worry-20171103-gzeh8r.html

    … extract …

    … The latest Ipsos Issues Monitor, which asks respondents to select the three most important issues facing the community, shows housing has jumped from sixth place in Victoria to second place since 2014.

    In NSW, housing has topped the list of concerns for the past three quarters. Half of NSW respondents now rate housing as one of the nation’s most important challenges compared with less than a third in 2014.

    Other polls have drawn attention to the growing public unease about housing costs. An Essential Vision survey that asks respondents nationally to nominate the “three most important issues for government” shows housing affordability climbed from sixth ranking to second between 2014 and 2017. … read more via hyperlink above …

    … Late January report …

    Five Aussie cities named ‘worst in the world’ for affordable housing | The New Daily

    http://thenewdaily.com.au/money/property/2017/01/24/housing-affordability-demographia/

    Australian politicians have sleepwalked into a housing affordability “crisis” because they were hooked on property taxes and votes, a think tank has warned.

    Demographia, a global company based in the US, released an annual report this week that ranked Sydney as the second-most expensive city for housing in the world. …

    … Wayne Matthew, the Australian spokesman for Demographia, told The New Daily that our politicians are “only just starting to realise” the extent of the problem. … read more via hyperlink above …

    • … New Zealand’s new Labour – led government … watch Prime Minister Jacinda Ardern …

      Ardern: “We believe that housing is a right” … MacroBusiness Australia

      https://www.macrobusiness.com.au/2017/11/ardern-believe-housing-right/

      … watch too … New Zealand’s new Housing & Transport Minister Phil Twyford …

      Phil Twyford suggests rates hike for property owners near rail, infrastructure projects | Newshub

      http://www.newshub.co.nz/home/politics/2017/11/phil-twyford-suggests-rates-hike-for-property-owners-near-rail-infrastructure-projects.html

      • Why does no one complain about Hugh responding to himself in the third party or epic copy and pastas….

      • Skippy … These latest Australian poll results reported by Matt Wade of the SMH are enormously important.

        The additional links provided are important too … to provide some context / texture.

        The housing issue has been the dominant political one in New Zealand for a long time now (refer my archival website http://www.PerformanceUrbanPlanning.org ) which led to te change of government recently.

        Note the important videos above featuring new New Zealand Labour Prime Minister Jacinda Ardern and Housing q& Transport Minister Phil Twyford.

      • Hugh you’ll have to excuse me….

        During the whole time of my witnessing your comments I’ve always noted your pro developer advocacy, not to mention the whole Keys man love that blew up in your face, so, with that kinda track record how do you expect me to respond.

      • Come on Hugh how many times have I had to point out the whole NZ RE thingy was a result of ME war fear and capital looking for a remote safe haven, which then resulted in the corruption free for all as describe by those like Richard Smith and TJN.

        Disheveled… good grief your whole mob is just a developer lobby looking to head fk people into focuasing on RE prices you help to inflate and then bang on about affordability with out even taking note of the wages people get vs. the upper crust….

      • Skippy … As the Demograpgia Surveys show year after year (13 to date) the major drives of artificial housing inflation are strangled land supply and inappropriate infrastructure financing.

        Reputable international research reinforces this.

        There is access to just screeds of material on my archival website http://www.PerformanceUrbanPlanning.org.

        I am hugely heartened with this IPSOS polling reported by Matt Wade of the SMH … because it is very important the political authorities in New Zealand are aware of the looming competition building in Australia.

        As the Wade / SMH article thankfully makes clear, politicians … at least those interested in survival … are poll parrots.

        The New Zealand Labour Party only started giving a toss about housing 18 November 2014, when its preevious leader was put in place … and internal polling told them clearly about the depth of public concern.

        Check out the tail end of my article ‘Restoring affordable housing: An advocates tale’ for a copy of the Andrew Little email to Party members on that date … again accessible and highlighted on my archival website http://www.PerformanceUrbanPlanning.org .

        Public opinion is THE BIG political driver.

        We need to see public opinion start driving it in places such as California, Canada, Ireland and the United Kingdom.

        Where is the effective structural advocacy in those places ?

      • Hugh…

        What part of previously outing your camp as rank ideologues that manipulate data to conform to the agenda your pushing escapes you.

        disheveled….I understand strange cults and the belief aspect, but you and yours are right up their with the extreme sort of propaganda.

      • Skippy … With all due respects your last comment is mischevious … and quite wrong.

        Its just a matter of following the numbers … let the numbers do the talking.

        What part of ‘3.0’ don’t you understand ?

        Please note what I said in the SMH and The Age back early 2011 …

        Report: housing affordability out of sync with incomes

        https://www.domain.com.au/news/report-housing-affordability-out-of-sync-with-incomes-20110202-1ad3m/

        I have had massive battles with vested interests since the early 1990.

        The industry protectionists detest me … and justifiably so. The feeling is mutual though !

        Pragmatically yours,
        Hugh

      • Why do Demographia continue to value housing (the asset) against an unrelated income stream.
        Houses don’t generate household income, they generate rental income.
        Calculating a multiple of household income tells me nothing about whether housing (the asset) is under or over-valued. Which is the only question that matters when we are talking about an asset.
        The answer I’m guessing is because it suits certain people to confuse an asset with a consumer good which is artificially rationed – like beef in Cuba.

      • Hugh…

        I have shown the proprietor of Demographia has a massive bias drama, cars and suburban RE, not to mention Sweepers observation. I take issue as well with how the numbers are arrived at and the methodology used to quantify them, just for starters Warrens ‘Two Income Trap’ and the works of Math Babe [blog].

        I’ve also taken you to task on the examples you have provided wrt build quality and customer complaints, let alone the Mud bond or end user taxation per Texas.

        disheveled…. My family was part of the of original satellite city planing around Phoenix AZ during the late 60s early 70s, I don’t need you or Demographia to explain anything. If your memory serves I took you to task over that old Sunshine Coast article years ago.

  18. This is a pivotal moment for U.S. workers. For nearly 40 years, wages have been stagnant while at the same time our freedom to form unions and collectively negotiate for a fair return on our work is under attack.

    And while corporations and their lobbyists advance policies that force wages down, top CEO’s get paid 271 times more than the typical working person.

    http://www.epi.org/

    • “Putting in place sensible measures to assist first home buyers makes sense – but that’s a very different proposition to deliberately driving down the value of existing homes.”

      Is it? I’d genuinely like to know how we address housing affordability for FHBs while ensuring continued ‘equity mate’ so we can all drive luxury SUVs, especially given wages growth now appears to have gone backward.

      All I’m detecting is cognitive dissonance and “high prices are required to allow people to tap into ‘equity mate’ and spend beyond their means to support our poor, struggling retailers”.

    • That mp owns an investment property in Cronulla…hnh ls do a story on this blatant pig in the trough attitude of this dickhead

  19. You may be right with the school catchments. ALLLOOOOT of foreign buyers where we are, Toowong, Indooroopilly and St Lucia. Chapel Hill really seems to be going through the roof, but then again it maybe that I’m self selecting the places that are popular (logical I guess). Unfortunately, dealing in Chapel Hill means dealing with the real estate agent Michelle McCleod http://www.michellemcleod.com. One of the more narcissistic and manipulative agents I’ve come across.

    One of the things that strikes me is that people seem very keen, and completely unafraid of debt.

    Two years searching Dr Smithy…you seem to be taking the long patient approach?

    • $500K gets spoken about like it’s an old fashioned loan on a ten grand car. Absolutely no fear whatsoever. It gets worse when wages aren’t rising to cover steep cost of living increases and you refinance every few years to release equity. The banks are slowly boiling people by allowing it and they have no hope of ever repaying it.

      • Yep.. Frightening hearing people around me so casually discuss loans and house prices of $500-700k as though it’s no big deal.

      • TailorTrashMEMBER

        $500k is conservative ….spoke recently to some RE agents who are quietly pleased but a bit cynical at the casual attitude of bright young things taking out $1 mil mortgages to buy crumbling piles ……the agents dont mind …..as their competition increases and the % commissions fall the bigger the selling price to protect their dollar commissions the better for them …………..Garn ! Straya!! ………

    • Agree with ‘ALLLOOOOT of foreign buyers’ in and around the areas you are talking about. Really noticeable in the past say six years, but particularly in the last year.

    • We are fortunate enough to already own the house we currently live in, plus the missus agrees it’s an enormous bubble, which helps considerably (most of the pressure to buy comes from my parents). We’ve also saved more in the last 1-2 years (I believe) than prices have gone up.

      Unfortunately the kids won’t stop growing, so our hand is being forced. However, since we still hold the quaint belief that a million dollars is a LOT of money, we’re being fussy about what we spend it on. Consequently few places have been “just right” and worth putting in an offer on (three so far, missed out on all of them). It’s not like we’re out every weekend look at a few places, either. 😉

      TBH we’ve just about reached the decision to build. There’s a nice quart-acre block that’s off-market but still for sale that backs onto Mt Coot-tha in Chapel Hill.

  20. TailorTrashMEMBER

    Domain reporting a clearance rate of 66% for Sydney Saturday morning debt auctions ……..that will no doubt be revised down midweek ……but it must take some gritting of teeth to “oficially ” report less than the magic 70% ……and they have dropped Perth from their reporting numbers ……..just too hard to have to acknowledge those 10% clearence numbers …………the shiny suit RE agent brigade in Perth must have told them to ……… drop it !! …….gotta love the bullshit in Strayan real estate ……most land in the world per capita …….and the most expensive …….cos the people ….BELIEVE !…….FFS !!

  21. One for Reus, ‘How to eat your way onto the housing ladder and lose weight’ – Jessica Irvine. Let them eat air. She surely taking the pith now.

  22. Hope someone can run the numbers. A house in horningsea park was bought in apr 2016 for $920k and was sold in sep 2017 for $1.05m. not knowing how much stamp duties are these days I am wondering if these people made any money. Especially after paying real estate fees.

  23. 37K stamp duty. and transfer costs on the initial purchase = 957K
    1.7pc sales commission on disposal =16K
    1 050 – 957-16 = 77K
    In that area, it may look like a reasonable annual income. Was it rented the past year?

    Edit: reply to Nikola.

    • Not sure if it was rented but thank you both for your replies. It just gives me an idea on what they made. I can see number of houses being flipped just 12 -18 months after they were originally bought. If prices keep going down it can cause lot of problems for these people but before we see any panic on the streets prices will have keep falling for about 6 months..

  24. Dr Smithy. More power to you mate! Was looking at getting in in 2010 due to the pleading of my wife. Ended up leaving the market in disgust. It felt like a swarm of debt drunk paranas at viewings. I thought I was smarter than everyone else because I saw those steep debt overtime curves. I would’ve been much better off to buy then. Two kids later and one (understandably) angry wife I feel slightly less clever. I realise now that the market is not rational. It is a manifestation of humanity with all its quirks. It is hard to motivate yourself in a market that is soooooo expensive with sooooo little value.

    It’s good to see someone whose been sensible, and set themselves up in such away that they don’t have to feel rushed and controlled by this insane market. It’s such an emotional thing it’s a struggle to exercise sound judgement. I suspect I have been overly cautious.