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We are anticipating a massive GFC by mid next year
Topic Started: 8 Sep 2015, 05:09 PM (3,706 Views)
The Whole Truth
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Andrew Judd
8 Sep 2015, 10:03 PM
What we are imagining here is a GFC next year where the slate will be wiped clean and you can start again.

While also imagining that is not going to happen next year and you will look totally daft.

If a person currently bearish on the stock and property markets here is wrong, what will they lose in a year,
what is the potential upside in those markets? I'll tell you, it's fuckall, and you know that.

What is the potential downside? You haven't even considered the downside have you. You should consider it. And then consider how far down it has to go before you are in the red. That's what a smart investor does. They don't just stick their fingers in their ears and chant La La La like you are doing.

Seven years ago people like yourself were probably here advising buying Brisbane property on IO loans. A friend in Brisbane told me I was mad not to. If I had followed that advice I would have lost money because.

1/ the yield would have all gone back to the bank in interest
2/ The maintenance, rates and agents fees would have come out of my own pocket
3/ There have been no capital gains on unimproved Brisbane property in all that time.


"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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newjez
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Elastic
8 Sep 2015, 11:51 PM
I'm not sure what the trigger for a global crash will be, which isn't to say it won't happen.
A severe downturn in Australia is much more likely over this time period.

The global economy's main problem is high debt, deflation and inequality.
With improving technology and plenty of labour resources there really should be no problem globally. It's just that every fucker wants to be rich that's the problem.
If we aim to live sustainably and sensibly there might be a future.
Essentially I just think it's a matter of shifting money. But as you know, when you start moving supports around on a house which is unstable, there's always a risk the house will fall down, with the damaged taking out the sound.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Jimbo
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The Whole Truth
9 Sep 2015, 12:38 AM
If a person currently bearish on the stock and property markets here is wrong, what will they lose in a year,
what is the potential upside in those markets? I'll tell you, it's fuckall, and you know that.
The number of people I have heard parroting the old "it doesn't matter if they go down a bit, they always go back up again".

The mindless majority have no idea how these things work. Their broker tells them that if they invest this much, they will get that much back.

Same with property. It always goes up in the long term. Cue a long term graph where the bumps are smoothed out (Skamys favourite).

It has become a question of not if it will go up, but how much by. It is taken for granted that it always will go up. Classic Tulips.

But what happens if it doesn't go up? What happens if it goes down?

Are there more reasons for it to go down than up?

Simple questions that the average IP or share owner doesn't even bother to consider.



Edited by Jimbo, 9 Sep 2015, 04:16 AM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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John Frum
8 Sep 2015, 10:26 PM

Whoa, I thought I was bearish - you need to take a cold shower dude!
Changing the quote won't help your cause.
There will be no GFC and 2% interest in cash is all you'll get.

Sydney real estate detached dwellings are massively under supplied.
With apartments - well it depends on the area.
There is a strong demand there as population is growing.

Prices will moderate in 2016 - No GFC.
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newjez
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http://www.telegraph.co.uk/finance/economics/11852633/Federal-Reserve-rate-rise-would-cause-panic-and-turmoil-warns-World-Bank.html


Like a couple of months will make any difference? Time to suck it up guys.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Andrew Judd
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newjez
9 Sep 2015, 04:06 PM
These kinds of articles all seem a whole bunch of noise over nothing. Rate changes always create winners and losers. A quarter point change is not going to break many people and will be welcomed by some, and either the US economy is doing better or it is not. On the other side of the alarmism coin are those saying that delays to raising rates are dangerous.

:z:
Edited by Andrew Judd, 9 Sep 2015, 06:15 PM.
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Chris
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Andrew Judd
9 Sep 2015, 06:15 PM
These kinds of articles all seem a whole bunch of noise over nothing. Rate changes always create winners and losers. A quarter point change is not going to break many people and will be welcomed by some, and either the US economy is doing better or it is not. On the other side of the alarmism coin are those saying that delays to raising rates are dangerous.

:z:
If a bubble like China's share market can drop 30%+++ in such a period and cause no ongoing issues to the global markets then a rate rise or two will do nothing. Short term there will be sporadic convulsing up and down but this will subside and get back to normal trade. I would think most of these movements up or down have been posted out long before they occur and tha markets have faster them in.

I think a huge part of any movement by reserve banks Feds etc is

to forewarn all players well before they occur.

Recent events have got me thinking seriously about my views on 'overvaluation' or percieved bubbles. It is evident that for all my conjecture stock and property markets have had no long or mid term adverse reaction since 2008. It is fair to say that I am close to conceding I have been wrong for a very long period of time, I'm not there yet but I must admit I am close.
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peter fraser
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Chris
9 Sep 2015, 06:30 PM
If a bubble like China's share market can drop 30%+++ in such a period and cause no ongoing issues to the global markets then a rate rise or two will do nothing. Short term there will be sporadic convulsing up and down but this will subside and get back to normal trade. I would think most of these movements up or down have been posted out long before they occur and tha markets have faster them in.

I think a huge part of any movement by reserve banks Feds etc is

to forewarn all players well before they occur.

Recent events have got me thinking seriously about my views on 'overvaluation' or percieved bubbles. It is evident that for all my conjecture stock and property markets have had no long or mid term adverse reaction since 2008. It is fair to say that I am close to conceding I have been wrong for a very long period of time, I'm not there yet but I must admit I am close.
At the height of the GFC 30% of home loans in the USA were underwater - that's massive. Now there are just 14% and it is never zero, so over the next couple of years it will return to the long term market average.

If you buy quality assets that will provide you with a return (and that return can be in the form of accommodation) then as long as you can hold on through the bad times, it really doesn't matter what happens in the market place in the interim period.

Any expressed market opinion is my own and is not to be taken as financial advice
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John Frum
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Visitor
9 Sep 2015, 02:05 PM
Changing the quote won't help your cause.
And neither will adopting a patronising tone or being too lazy to sign up for an account help yours.

Quote:
 
There will be no GFC

On that we agree.

Quote:
 
Sydney real estate detached dwellings are massively under supplied.
With apartments - well it depends on the area.
There is a strong demand there as population is growing


You can tout the supply side garbage as long as you like - but we all know that this bubble is about low interest rates.

You are living in a fairy land if you think rates will stay low for much longer.

Wake up and smell the coffee - shit is changing, fast:

http://www.bloomberg.com/news/articles/2015-09-08/no-end-in-sight-for-slide-in-singapore-home-prices-as-rates-rise
Edited by John Frum, 9 Sep 2015, 07:02 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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The Whole Truth
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Jimbo
9 Sep 2015, 04:15 AM
The number of people I have heard parroting the old "it doesn't matter if they go down a bit, they always go back up again".

The mindless majority have no idea how these things work. Their broker tells them that if they invest this much, they will get that much back.

Same with property. It always goes up in the long term.
They learnt it off TV, back in the GFC the Prime Minister was on television giving the same lame arse advice. Be diversified he said, blah blah blah. His wife was worth millions and he had a pension package coming most could only dream of but the drones lapped up his every word, They calmed down and more money was poured from super into worthless corporations. Rio Tinto has a market cap of 93 billion, a PE of 32, 32['b] and no doubt sliding every month. What's it own aside from mining leases and some rusty old bulldozers. 93 Billion, ridiculous. The banks are worse, they don't even own bulldozers, just debts.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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