Bill Evans: “Substantial falls ahead for house prices”

From a perturbed Bill Evans at Westpac:

David Llewellyn-Smith
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  1. Bill is looking well. I think wfh is suiting him.
    The Oz economy is all extend and pretend right now.

    • As opposed to the earlier days when it “exported” the more-better-education? And built the world class flammable apartments? Ah, the good old days of the old norm…

    • happy valleyMEMBER

      And that looks like a very impressive tall brick wall he is standing in front of – Bill wfh in his walled “estate”?

      • Clever man – a high wall will be necessary to keep the rampaging hordes at bay when everything turns to custard.

      • billygoatMEMBER

        Half witted nutters on the poo tube says brick wall & handholding gesture is brother to brother communication. Seriously though why isn’t there a sign language expert gesticulating on his right. For sure there are deaf folk mortgages to the eyeballs:))(

  2. Bill looks like the CCP is holding a gun to his head and asking him to read a script. Very weird.

  3. Who is this guy?
    He does look like he is being paid by the CCP to advertise that Australian property is a good investment.
    Well it is not. Bring on the housing collapse. Let it burn.

    • happy valleyMEMBER

      And won’t it be a whopper for services rendered to his employer and to his RBA happy clappy mates in getting depositor rates down to basically nuthin’ from 6 % pa in 2010. Only one piece of unfinished business – getting us in to NIRP, which if Bill can last a bit longer will surely happen – both the RBA happy clappies and he need to be able to fill their day doing something. Mission almost accomplished.

        • happy valleyMEMBER

          Yep – at least the private banksters and/or the RBA happy clappies could do a very good bulk buy on KY jelly and give one “free” (another 5bps off the their latest r.pe rate) tube to each depositor as “a feel-good” gesture?

        • I thought Matt Comyn was eminently reasonable yesterday on RN Breakfast

          Poor old Kuddles Kelly asked if OCR should go negative to force people to spend
          He said that saving money right now was entirely rational and sensible for people to do as a buffer.

    • happy valleyMEMBER

      But some of the others like Gittins and economics/finance commentators like McCrann and the Pascometer are also having a bit of a late-in-life epiphany as they realise their days are probably numbered – they are actually talking sense and calling it as it is, for a change. Only The Kouk who isn’t quite old enough yet anyway, is way off ever having a redemption epiphany?

      • Poochie the Rockin DogMEMBER

        Gittens has been on a roll lately. For a long time his articles were just meh and I never could understand my old economics teacher’s love for him – but he’s completely changed recently

    • They’re all calling 10-15% falls.

      Because they’re all career frauds with no f.n idea.

      They’ve had around 30 plus years of consistently wrong “forecasts”. So hilarious how Bill rattles off percentages to one decimal point like he’s a toddler that’s so serious about what he’s saying. I wonder does he really believe himself in his own mind.

      But, they’re Aussie boomers so they’ve had a free ride their whole lives so so far. They’ll continue.

        • I missed it, thanks for repeating here. Quite bullish given the circumstances. Did you outline the underlying assumptions for the increase?

      • billygoatMEMBER

        No Bill is just another act whore playing the role of politician. His wooden acting skills and poor delivery of lines indicate he is either bad at his job or coached by director of the BS theatre that is Oz economy to stumble through his delivery. NOTHING on MSM by accident:))

  4. So far only some negative sideways movement

    You lot are a bunch of lifters who need more betterer jerbs that pay more

    • Dammit! The answer’s been staring me in the face all this time. Thanks Swampster – a better paying job coming up!

      • The only problem is that we dont have a world war 2 for national unity, nor the Japanese culture of forbearance. We’re already seeing social agitation everywhere.

          • They’re not working on it, they’re already doing it. Largest deficit spending since WW2 in conjunction with YCC.

            Look to how it impacts you.

          • The sabre rattling between US and China, our own government suddenly getting a backbone and acting like China is a threat.

            Our defence spending getting boosted every time the wind changes direction.

            It will only take a Bay of Tonkin style incident in the disputed waters and is on for young and old.

          • Once you’ve exhausted the credit creation machine (real rates through the floor) and new debt is no longer creating sufficient productive return to service that debt, you have a debt crisis. Make no mistake about it, we had one in March. A bank didn’t blow-up, because the government and RBA got in front of it.

            So here we are with a massive private sector over-indebtedness problem and no hope of a new surge in credit to temporarily plug the hole again. There are 2 ways to get yourself out of this situation:
            Austerity/debt restructuring
            or
            Inflating away the debt (only an option if the bulk of ones debt is denominated in your own currency)

            They are going to inflate away the debt, but with an inflation rate that is ‘manageable’ for the economy (they hope). They do this by pegging yields at artificial lows, as inflation (even historically mild inflation), runs higher than yields. The inflation is driven by government spending creating artificial demand with little to no productive return. This is tantamount to currency debasement, as the purchasing power of the average Australian is slowly eroded away by an insidious form of inflation, which is coupled to low growth.

            In Australia’s case, this would mean that the mortgages will be slowly paid down with existing incomes. There is no doubling of house prices to get out from under this like everyone had been conditioned to believe in the decades prior. In fact, house prices are set on the margin by a surge in new credit, which cannot be profitably done with negative real yields, and so the banks, like the household sector, languish in zombification. In other words, house prices collapse from credit fueled highs toward something that reflects incomes (productivity). We have a period of private sector retrenchment, with government spending ‘life support’ to prevent capitulation/social turmoil.

        • Thanks. The only thing I have my doubts is about the “national unity” thing.

          I suspect that is gone out the window, no?

          • I agree. I reckon we’re getting a taste test with all this social unrest that’s currently flaring up around the world. This thing isn’t unique to here, everyone is pretty much in the same boat, even the Chinese.

        • Mike Herman TroutMEMBER

          Hi Brenton, I really enjoy your posts. I am replying to the one about the government inflating away the debt. I have been reading about this recently and while I don’t pretend to understand the intricacies of it, I worry about what this will mean for me financially. How are you playing this and what time frame does this occur over? I have been a steady purchaser of bullion since 2014 and have recently begun dabbling in commodity etfs….

          • Don’t take anyone’s advice, but note the validity of their opinions. Read as diversely as possible and trust your own intellect.
            My belief is that diversification is king, as the goal is to retain the value of your capital, not chase returns.

            Any cash savings diversified in a basket of various currencies
            Gold as a play on real yields and currency debasement; crypto is used by some
            Some miners and ag – and/or commodities
            SEA and South Asia based EM that benefits from capital being diverted from China due to Cold War 2.0

            The timeframe is dependent on success and the social climate. Japan has been doing this for decades, at which point it is a painful multi year process of no growth and excess savings that generate no yield. IMO this is their goal and what they’re currently doing.

            Failure would be inflation running too hot on the back of excess money sloshing through the system; ie too much currency debasement, too quickly.

            Failure would also be a massive deflationary bust that gets out of hand; Great Depression. I think they’ve averted that in March/April.

            If they succeed in Japanifcation, you need to look at where genuine productivity growth is occurring. It won’t be here, or if it is, it will only be in select niches. If you don’t own a house, just buy a greatly discounted house in the near future and look to relieve yourself of a household’s largest living expense.

        • Mike Herman TroutMEMBER

          thanks for getting back to me Brenton. Appreciate your time. Not taking it as advice but good to hear another opinion….

      • billygoatMEMBER

        We don’t go anywhere from here. They have gifted themselves the Covid black swan event. All over red rover. Crash & burn. Reset game…begin again. Anyone left standing can play whatever round we’re up to.

        • @Brenton – How does the government get cash in the hands of punters to stimulate this inflation trigger?

          • They’re doing it.

            We’ve seen wages crash as a result of recessionary conditions, yet according to CBA total incomes are up 12% as a result of government fiscal injections; JobKeeper, JobSeeker etc. If that increase is sustained and is not diverted to savings or debt deleveraging, it will overflow into the economy and become inflationary.

    • You’ve gotta be joking. When has an economist ever produced great predictions, other than by chance?
      Bill and Westpac are just MB favorites (sponsors?)

  5. working class hamMEMBER

    The economy is basically surviving on Govt handouts and Bill is surprised that confidence is down?
    The cool-aid is not working mate, time to up the dosage.

  6. next month critical for economic outlook…
    next month critical for economic outlook…
    next month critical for economic outlook…

      • ErmingtonPlumbingMEMBER

        We ain’t seen nothin yet. Just wait until March/April next year. That’s when the shyte is really going to be hitting the fan.
        IMHPlumbersO

        • yep was meant to all go down next month as we all know.

          That poo is gunna be rock hard by March and its gunna ricochet right off that fan. Where it goes, no one knows.

          We get some rules to follow
          That and this
          These and those
          No one knows

          • Murdoch the Maker

            Around and around we go when we deleverage nobody knows so around and around we go (someone once said to keep repeating ones mistakes is sighn of insanity) so around and around we go til negative rates and then around and around we go infinity

  7. Gonzo Woyzeck47

    When Bill predicts the economic outlook in a bliss,
    The house price will change, or stay as it is.

    Yay, its lyric Friday

  8. Big 4 spruiker talking it down to ensure the government JobScammer continues so business can keep raping the tax payer = more profits for the C suite.

  9. was talking to a mate today who is at big 4 accounting firm and specialises in capital adequacy / apra stuff.

    big issue for the banks is that they will be killed by capital adequacy once the apra covid honeymoon expires. any deferred loan will need massive capital provisioning – banks don’t have it.
    worse is the RMBS securitisations – most don’t really have mechanisms for deferrals – that will be considered a default – although you guessed it the govt is working on providing a backstop!!! ffs.

    • Silly billies, they should have suspended their bankruptcy laws like we have. No bankruptcy = extend and pretend for ever.