Links 1 June 2020

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Leith van Onselen
Latest posts by Leith van Onselen (see all)

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  1. RYANAIR … LATEST NEWS …

    Ryanair to cut fares by HALF in war on rivals: Michael O’Leary determined to fill planes even if it means losing money … This Is Money / Mail On Sunday

    https://www.thisismoney.co.uk/money/news/article-8372237/Ryanair-cut-fares-HALF-war-rivals.html

    Ryanair is to slash flight prices by more than half and operate at a loss over the next year in a major attack on struggling rivals, boss Michael O’Leary has revealed.

    In a pivotal interview with The Mail on Sunday, O’Leary declared he is launching a ‘pile them high, sell them cheap’ sales blitz to lure passengers as he gobbles up flight routes vacated by other airlines.

    The Ryanair chief executive hopes his bold recovery plan will convince nervous British families to flock to European holiday hotspots this summer. … read more via hyperlink above …
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    COME FLY WITH ME Ryanair to cut fares by HALF this year … The Sun

    https://www.thesun.co.uk/money/11749632/ryanair-cut-fares-half-this-year/?utm_medium=browser_notifications&utm_source=pushly

  2. HOUSING BUBBLES: IF (UNITED STATES) ARIZONIANS ARE WORRIED … NEW ZEALANDERS AND AUSTRALIANS SHOULD BE TERRIFIED …

    Fear of another real estate price crash and memories of the extreme hardship it caused in 2008 haunt housing markets in Arizona, writes Henry Thomson. In conjunction with the pandemic, it’s a deep-seated fear … * Henry Thomson … Interest Co NZ

    https://www.interest.co.nz/opinion/105296/fear-another-real-estate-price-crash-and-memories-extreme-hardship-it-caused-2008

    The Covid-19 pandemic has pushed pause on the red-hot real estate market in the greater Phoenix area, causing many to wonder whether we are going to see a replay of the Great Recession when housing markets in some southwestern states crashed in spectacular fashion. … read more via hyperlink above …

    • Henry Thomson is originally from Amberley, North Canterbury (New Zealand) and is now an Assistant Professor of Political Economy at Arizona State University. His research focuses on the political economy of authoritarian rule and transitions to democracy. You can read more about his research here and follow him on Twitter @HenryRThomson. His earlier letters are here.
    .
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    … Check out the Median Multiples histories here …

    All Editions – Annual Demographia International Housing Affordability Surveys

    http://www.demographia.com/db-dhi-index.htm

  3. migtronixMEMBER

    Trump has completely lost the plot – wish there was a dashboard somewhere so I can see what percentage great again America is now….

    • he is doing this on purpose to polarize voters and secure election victory … by saying these things he will not lose any votes but he’ll win over many white middle class votes that were undecided … (many that voted for him last time but maybe had a second thought this time)

      • migtronixMEMBER

        I don’t think so. Jobs are ultimately far more important – after all Trump told them he’d bring manufacturing back etc.

        The strategy is the same but the execution this time is a failure. He had one thing going for him, the economy, but now everyone is unemployed and the stock market is at all time highs – that’s a problem with that white working class base.

        • so what politicians always do when economy is struggling?
          remember stop the boats … that’s the same trick

          that strategy almost always succeeds

        • migtronixMEMBER

          It’s the same trick but not from the same players – the whole point of Trump 1.0 was “im not a politician, so I can make America great again unlike all those failed politicians”.

          Trump 2. 0 is just Trump – a fat arrogant ahole enriching his family.

          I’m beginning to think The Apprentice was actually a day job for Donald – he had big debts to pay DB

      • He tried a dogwhistle Tweet about it being MAGA night at the White House. Nothing happened.
        I think people are starting to realise Trump is more of the same tax cuts and bailouts for the already extraordinarily wealthy.
        Biden provides little in the way of inspiration but Trump’s goose is looking cooked.

        • The left should have gone for Yang and Gabbard, although we know Yang would need a skin and name transplant to have a chance. Like someone said, Trump v Biden is like Mike Tyson vs a 3 year old. And in this case, Donny Trump isn’t the 3 year old, unlike most cases where he is.

      • Interested PartyMEMBER

        Funny as hell reading the tears around here. Most amusing.
        TDS bigly……epic.

          • Interested PartyMEMBER

            Ginger, as I suspect you know, Trump Derangement Syndrome is the reality behind the acronym tds. For several good examples, all you need do is scroll up and see the anti-trump rhetoric that sprouts like weeds everywhere. It exists best in strong echo-chambers.
            The weird part of all this is so many complained about the state of the world ( pre-trump ), and then he gets elected, inherits a dogs breakfast, does what so many want a political leader to do; that being to keep promises made , and has to work within a broken system to keep those promises, all while exposing and removing the corrupt actors also within that system ( who are working around the clock to remove him ). Not to mention the corrupt main legacy media who are all part of the effort to remove him. It is difficult for many to reconcile the past with trump against the president trump. Give it time.

          • drsmithyMEMBER

            What exactly is TDS? Can you give examples?

            Trump Derangement Syndrome is any suggestion Trump is not an honourable individual executing a complex, brilliant and selfless strategy to bring down both the economic elites and the satanic cult behind them to Make America Great Again.

            All will be revealed in the end, and though some innocent people might have to suffer, that is a sacrifice Trump and his Qanon cult are eagerprepared to make.

            TL;DR: Any criticism of Trump == “Orange man bad” TDS.

  4. Looks like we get to see Scummo’s housing kitchen sink today.
    Newspapers are saying government is going to pay for renovations to existing homes as well.
    Let this put to rest any question of how far they will go to protect housing (and by extension bank balance sheets… hello Westpac)

    The question in my mind is how all this cash from government could ever end without causing an almighty shock. Have they set a trap for themselves?

    • clearly they are trying to protect construction industry not house prices … and by what media is speculating about, these measures can even hurt house prices by shifting little of the existing demand into a new supply, leaving the existing sully in even dearer situation …

      these measures are designed to shift demand onto new homes and are unlikely to increase overall demand while it will increase supply …
      next to none will decide to buy a new property while prices and rents are falling just because government gives $30k or $50k.
      those new dogboxes lose more than 50k as signature goes onto the paper – hardly an investment opportunity to lure hoards of BBs who just put everything they have into shares … LOL

      • Hope you’re right Doc, but there’s a superb PHD topic ready and waiting for an enterprising candidate – ‘Historic capitalisation multiplier effect of Government home owner grants’.

        Has there been one in any scheme that didn’t result in a price impact of 5x the value of the grant?

        • every state already has similar schemes for new homes in place, some as high as 25k plus stamp duty exemptions with combined worth of over $50k

    • Renos as well. Bugger me, that’ll inflate the hell out of materials and labour. A chippy I know is the busiest he’s ever been during this lockdown and its purely down to Government bailing everyone out with JK and their inability to spend it elsewhere. It’s been hard enough getting them to quote at the best of times, imagine the rush this will cause.

      • if government does support renos it is going to be a clear sign that government just want to save construction industry not house prices …

        • Might be splitting hairs here, in our market they target one, they probably get the other. Which has the bigger impact on the economy, tradies in jobs or households refinancing every two years and blowing the capital gains on consumption? Genuine question, dunno the answer. One thing we do know is politicians really couldn’t give a toss about anything other than their own portfolios and the wellbeing of their benefactors.

      • Jim's Central Banking

        Grants for renos would be a gift to the wealthy. If they’re going to do this it should be grants to remove old asbestos which would mostly help less wealthy housholds and potentially prevent healthy problems down the track, if removed carefully. I’ve noticed a lot of those old asbestos roof sheets are flaking quite badly now.

        • Agree with Swampy, potentially good idea. Experience from the Rudd-era insulation program provides guidance on what to do and avoid. A major problem was the unregulated nature of the insulation installation that allowed cowboys to get away with murder. Asbestos removal is regulated by federal and state authorities but needs tightening.

        • drsmithyMEMBER

          Works for me, I’ve got an asbestos lined sleepout I want to turn into an en-suite. =)

      • Blottridesagain

        In this moronic world we might end up at M- while most of the rest finish up at Y ???
        Just chose the nominal letters to be further down than G

      • Hill Billy 55MEMBER

        Yes, that will be the story, then interest rates up and the crash. Amazing that no-one is talking of the AAA in these times of unlimited money printing. I guess the narrative is already written, its Labor’s fault!

    • bolstroodMEMBER

      That’s a good question Gramus… have they set a trap for themselves ? Or a trap for the next government.
      I find your insights very acute.
      I like how your mind works.

  5. Arthur Schopenhauer

    One third of the initial Corona tests in Australia returned false negatives, especially at the start and end of the disease’s course. Apparently due to being rushed into service.

    • False negative means that the subject was positive, or just that the test didn’t work – failed some sort of internal standard?

      • It means the person was actually infected with CV19.

        False negatives from tests are a major risk to bringing the infection under control as Tracing cannot be effective.

    • Blottridesagain

      I was tested twice because of this. Health people were aware and on the lookout.

  6. Darkly, Arrow, Dom – here’s the run down

    Decided to list in March last year, probably 6M late.
    Spent 6M painting exterior etc
    3Bed, 1bath, 10 acres, pretty immaculate, solid old house hardwood frame, AC in wet areas/kitchen and FC cladding ($$$$$ anytime you want to renno), kitchen needs renno still, 60sqm deck, solar HW/PV, new paint, carpet etc, 3 x 4 bay sheds. Spent about 150k on improvements, fencing, fruit trees, pasture improvement etc.

    Appraisal 1, 650k (agent had no idea)
    Appraisal 2, 780-820 (this in hindsight was about 50k too high at bottom and 40k too high at top). That’s not the reason we went with them – they’re a well respected rural/regional agency, their roots alongside a jam company.

    Listed around 1 Oct
    Weirdly, an auction with no date, which I questioned, but was told that’s what they do to get a sense of price (on reflection, they should know this stuff)
    Bushires, endless smoke, drought – place looked dry, smelt smokey, active fireground 6km away for 3 months for every inspection. Madly pumping water from the spring fed dam to keep the lawns somewhat alive.
    Christmas
    Floods Feb 2020
    Covid

    Trying to buy in a small very tightly held village

    Offer early on 765 (week 2), also another party interested at 750. Met the market and accepted 765 right away. Agent took too long to qualify the 750 party (2 days) as they ducked his calls — apparently he didn’t know about sms and email. They went and bought something else. He took 5 days to let the 765 know we’d accepted (even though we pushed him, we assumed he knew what he was doing), we subsequently made an offer on another place, accepted. Our buyer pulled out Tuesday night, we had to pull ours – that then sold. They pulled out as a place they’d liked more had come back to market. Can’t begrudge them that, would have been good to know earlier.

    We told the agency we’d pull the listing Early Dec. Jack of their sub optimal comms and qualification of buyers.

    Our agent left for another agency. instead of the principle putting himself on the sale, he put their youngest person on. I should have pulled the listing then. Lesson learnt.

    Another offer early Dec. We were told buyer had to resolve a family law matter (ex had to buy him out of their house before he could get finance). Took his offer of 760 and were told exchange would be 2-4 weeks, settle early March. Every 2 weeks it became another 2 weeks. We got increasingly frustrated as about another 4 places in this village came up and we couldn’t move on any. Including one we got an accepted offer on Xmas Eve, contemplated financing / bridging taking a calculated risk ours would exchange soon, and buying with a long settlement. The BoQ stuffed around with the finance after the local manager suggested this route (never deal with them again, they’re a circus). Missed that one, wife devo’d. We pulled out as our buyer was looking iffy, something felt suss. Didn’t want a 1M / 2 mortgages for unknown period of time.

    Pulled ours from the agent early Feb – the 760 buyer and I subsequently had a chat on the phone and it turns out he told our agent there’s no way he could *exchange* until March. Agent never characterised the offer like that – had he done so we’d have pulled the listing on the spot. Hard to escape the conclusion that advice we’d pull the listing and mischaracterisation of offer weren’t linked. This buyer told me he’d considered knocking on the door for a chat a few times as he suspected the agent was communicating his position accurately.

    Relisted with McGrath (very, very happy with them/our agent by the way), 720-780. We excluded the buyer above from commission, ie he came along, no commission. First open March 22, place looking immaculate (had been mowing 4 acres every 4 days), blue skies, warm weather. Then of course lockdowns commence. 2 interested parties indicated they really liked the place but weren’t buying as they waited to see how things panned out.

    Heaps of interested, 2-3 looks, one lady in particular from Byron. Had to sell hers first (story of our sale actually!), 6 acres. Had an off market offer of 1.7M, turned it down – divorce sale so she wanted to maximise the sticker price, fair enough. Agents telling her good price in the market.

    Meanwhile, our first buyer from Dec pops back up. Offer is lower though, has to borrow money from family. In net terms (taking into account commission), we’re 1.2% lower (not including marketing, so about 2%, we’re ok with that, just want out, and 10k less overall is not a huge issue over time). Offer has no conditions, apparently his family law stuff settled and just waiting on his finance final approval.

    Couple weeks later, turns out buyer above didn’t disclose to us his family law issue NOT settled. We found out from his conveyancer as their exchange is delayed.

    Then horse lady pops up, hers on market, offer 2M for hers, she is at 760 for us, we say yes, race to exchange. Her buyer an overseas celeb. We go to issue contract, her solicitor says don’t rush – we get suss, her sale is sounding shakey.

    Still a race to exchange. Get the call couple of weeks ago our 740 ready to exchange. Job done.

    Meanwhile we’ve missed about 7 properties in this little village that has I think 250 properties, turns over about 10/year.

    Whole process a pain, wife devo’d at the places we’ve missed.

    Anyway, got a rental in that village so will settle in and see if something pops up. Our agent from sale might have something they manage as a rental. Only 1100sqm though, enough room for couple each of mangos, avos, a pecan, mulberry, citrus and veggie boxes plus kick footy and chip golf balls. Neighbour over back on 3700sqm so good aspect.

    Not whinging, just laying it out.

    PS: ended up paying McGrath some commission (1/2 the full rate) because he did a good job. Had some pretty funny discussions though about how much -the principal was grateful for some though as contractually we could have paid none.

    • bolstroodMEMBER

      I have a mate who is doing up his house( Old Qlder ) on 3and a half acres in Clunes, getting ready to sell
      Let me know if interested.

      • Jeez, I typed a response and the spambot caught it again (that’s not whinging, that’s a statement of fact).

        Thanks for thinking of me, I mean that. I wanted to get down to about an acre, and importantly, walking distance to the cafe/gen store (yep, Clunes) for wifey and kids. Anything over say 1/2 acre is above our budget I think.

        That’s where we’re headed though – your mate might know someone else though (or not). We’d do an off market to save on agent comms, inspections etc.

        I think you have my email, though, shoot me the road, interested in where it is. Be interesting to see how they price it…or if they know anyone else thinking…

        (Also, too, we had a farm sale on the weekend and I sold a lot of stuff eeeek! Except the zero turn)

        • bolstroodMEMBER

          I’ve poken with my friend , he is Ikm from the Clunes Store down Booyong rd.
          He would be interested in talking with you, and has not yet gone to market ( Next week)
          Unfortunately I do not have your emal and am reluctant to post my or his contact details on MB.
          I am 10km east of Lismore, near Bexhill. Could we arrange a meet say at Bexhill cricket ground (Sam Trimble Oval ) or the store ?
          Hope this is useful.

          • Ah yep, know it – couple of other places there recently

            I thought you were in BB! I’m through Bexhill on Thurs Fri after school drop off en route to Lismorethe. Drop me a line at [email protected]. It’s just a spam catcher anyway. Happy to grab a coffee at Flock.

            I checked out the Bexhill subdivision – what do you reckon?

    • Swampy thanks for the full story wow. What a trip. Glad you made it at the end and for a price you were happy with. Agents eh…

  7. Locus of ControlMEMBER

    What’s the super withdrawal money been spent on? Well, according to the AFR: grog, gambling & pizza.

    “ Earlier this morning, we reported that almost two-thirds of superannuation money withdrawn early during the coronavirus crisis has been frittered the money away on alcohol, take away food and clothes, according to research by AlphaBeta, which is part of Accenture, and credit bureau illion.” Source: https://www.afr.com/politics/federal/virus-cases-rise-by-10-20200601-p54y7p?utm_term=Autofeed&utm_campaign=nc&utm_medium=social&utm_source=Twitter#Echobox=1590963837

    Ah, Straya

    • drsmithyMEMBER

      It’s a simple keyword filter. Though some keywords trigger a moderation – you’ll be the only one able to see your post until a human reviews it – and others trigger a black hole – post just disappears.

      If it’s just a moderation then typically it will be approved and passed through within a few hours. If it gets blackholed then in my experience it’s gone forever.

      • Yep, I get that – I have a couple of WP sites with Akismet and some other spam management.
        It just seems to pull non-spammy stuff…
        Anyway, not whinging, it’s frustrating for legitimate comments, especially paying subs.

        • drsmithyMEMBER

          Several of the keywords are not obviously in need of moderation but are an artefact of MB-specific history. Certain words pertaining to race and religion, members/posters names, etc.

          • Cheers – I try and keep well clear of religion and race

            Thanks though – hard though when you don’t know what it is