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Will the Sydney median house price reach $1 million by the end of 2015?
Topic Started: 4 Sep 2014, 03:48 PM (22,835 Views)
Shadow
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Evil Mouzealot Specufestor

Terry
3 Jun 2015, 08:12 PM
That is true. The risk from being hit by a car has potentially more impact. However, crossing the road is something than you have relative control over. You have no control over the impacts of leveraging, just like people who got swamped by the GFC. Regardless of how smart they thought they thought their actions were prior to the GFC, they were unable to control the impact. Greater the leverage, the greater the impact to the system. Globally and nationally, nothing has changed and risk remains high. No idea what the next shock will be and what will trigger it.
You have control over the impacts of leveraging by choosing when to leverage, how much to leverage, and which assets to leverage against. Worst case scenario, you lose some money.

You have zero control if a speeding vehicle comes round the bend while you're crossing the road, or a truck breaks the lights at a pedestrian crossing, or a bus mounts the kerb while you're waiting to cross. Worst case scenario, you die.
Edited by Shadow, 3 Jun 2015, 08:25 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Mallard
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Shadow
3 Jun 2015, 08:21 PM
You have control over the impacts of leveraging by choosing when to leverage, how much to leverage, and which assets to leverage against. Worst case scenario, you lose some money.

You have zero control if a speeding vehicle comes round the bend while you're crossing the road, or a truck breaks the lights at a pedestrian crossing, or a bus mounts the kerb while you're waiting to cross. Worst case scenario, you die.
Apples and oranges here gents.
Collecting desperation.
Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
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Shadow
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Mallard
3 Jun 2015, 08:27 PM
Apples and oranges here gents.
That's the whole point. There is risk in everything. Terry/Catweasel has been stuck in analysis paralysis for the past seven years, scared to take a risk by buying property, but displaying a lot of sour grapes towards those who took the risk and profited.
Edited by Shadow, 3 Jun 2015, 08:32 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Mallard
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Shadow
3 Jun 2015, 08:29 PM
That's the whole point. There is risk in everything. Terry/Catweasel has been stuck in analysis paralysis for the past seven years, scared to take a risk by buying property, but displaying a lot of sour grapes towards those who took the risk and profited.
Is terry really catweasel? I hated catweasel. I always scrolled past his posts. How many hours did he waste writing that shit?
Collecting desperation.
Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
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Shadow
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Mallard
3 Jun 2015, 08:34 PM
Is terry really catweasel? I hated catweasel. I always scrolled past his posts. How many hours did he waste writing that shit?
Yes, it's him. I ignored him as Catweasel, but now that he has dropped the silly language I'm willing to humour him.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Mallard
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Shadow
3 Jun 2015, 08:36 PM
Yes, it's him. I ignored him as Catweasel, but now that he has dropped the silly language I'm willing to humour him.
Csn you tell me the genealogy of Timmy and Ted too please?
Collecting desperation.
Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
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Shadow
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Evil Mouzealot Specufestor

Mallard
3 Jun 2015, 08:37 PM
Csn you tell me the genealogy of Timmy and Ted too please?
Hmmm, Ted started as Dave289, then TED BULLPIT, DANNO178, Fullvalda, MMM, guest.

Not sure where Timmy went.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
Profile "REPLY WITH QUOTE" Go to top
 
Terry
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Shadow
3 Jun 2015, 08:21 PM
You have control over the impacts of leveraging by choosing when to leverage, how much to leverage, and which assets to leverage against. Worst case scenario, you lose some money.

You have zero control if a speeding vehicle comes round the bend while you're crossing the road, or a truck breaks the lights at a pedestrian crossing, or a bus mounts the kerb while you're waiting to cross. Worst case scenario, you die.
If you don't understand leveraging as an aggregate, then you don't understand fundamental risk and how you are simply a microbe. The risks with leveraging are related to system instability, which you cannot control. It doesn't matter how smart you think you are. Also, one of the risks with leveraging into housing for suburbanites is that you rarely have limited capacity for counter-party risk should the unexpected happen. What you don't understand is that as that leverage increases, so does the risk.....across the whole economy.

Compare that to crossing a road. You can take extreme precautions, such as blocking access to cars. However, ridiculous that seems, it is possible to control. Leveraging is a completely different animal and is also linked to popping of bubbles. No control. When it pops, you have no control over it and the impacts it has on the wider economy.
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peter fraser
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Terry
3 Jun 2015, 10:15 PM
If you don't understand leveraging as an aggregate, then you don't understand fundamental risk and how you are simply a microbe. The risks with leveraging are related to system instability, which you cannot control. It doesn't matter how smart you think you are. Also, one of the risks with leveraging into housing for suburbanites is that you rarely have limited capacity for counter-party risk should the unexpected happen. What you don't understand is that as that leverage increases, so does the risk.....across the whole economy.

So nice to see that you have finally worked that out.

The rest of us were on top of this decades ago.
Any expressed market opinion is my own and is not to be taken as financial advice
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Terry
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peter fraser
3 Jun 2015, 10:31 PM
So nice to see that you have finally worked that out.

The rest of us were on top of this decades ago.
Here's a useful primer for you in plain, simple English.

Why is systemic risk a problem for investors today?

Over the past several years we have witnessed an explosion in sovereign debt, credit creation, monetary policy, bubbles, derivatives and complexity of the system. This has been offset, in part, by productivity growth and modest inflation. Nevertheless, the growth in the negative factors is greater than the growth in the positive factors. So, on


Conventional approaches to risk management use some form of regression analysis in their models. Is this a problem?

Models are simply measurement tools to help us understand the world. At the core, many of these investment risk models use regression analysis. Regression analysis defines the statistical relationship between a dependent variable and one or more independent variables. So we simply need to keep in mind that regressions describe co-movement of one variable relative to one or more other variables. Because it is relative, it cannot describe something absolute, such as the risk of the whole system.
We need to have clarity about what these simplifying tools can and cannot do.



Which other sources of systemic risk have increased in recent years?

Hidden sources of leverage not only increase the leverage in the system, but also decrease trust in the system during periods of stress. One example of these hidden sources of leverage is the disappearance of the commercial paper market, hitherto an important source of funding, after the financial crisis of 2008. In its wake, investors have increased their appetite for liquidity, and accounting rules have made accounting for off-balance-sheet entities more difficult. Since the crisis, many smaller corporations have increased their reliance on bank loans and non-bank loans, and have not used commercial paper for their funding.

The next time the banking system turns sour on extending new credit, these corporations will be unable to roll over their debt, placing greater primacy on cash and liquidity at a time when the economy is probably heading into recession.

Of course, measuring systemic risk is a whole other problem. Some have suggested a simple scoring system that weighs the magnitude and direction of each of the systemic risk factors as one way for investors to overcome this challenge.

http://goo.gl/uVBH5H
Edited by Terry, 3 Jun 2015, 11:07 PM.
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