Terry you have just made the connection between interest rates and behaviour, but fail to make the connection between buyer behaviour and market prices.
Yes, because without understanding the relationship between interest rates and human behavior, you don't really understand market prices. Hence, the reemergence of behavioral economics whereas the suburbanites are discovering macroeconomics for the first time and think they are learning something "scientific".
Furthermore, all the excitement about low interest rates is misguided. What it really indicates is something more complex and interconnected on a global scale. Unfortunately, out in the burbs, people are still prone to be duped into the razzle dazzle of interest-rate driven bubble, like being gifted a fireworks display by its benevolent leaders.
Yes, because without understanding the relationship between interest rates and human behavior, you don't really understand market prices. Hence, the reemergence of behavioral economics whereas the suburbanites are discovering macroeconomics for the first time and think they are learning something "scientific".
Furthermore, all the excitement about low interest rates is misguided. What it really indicates is something more complex and interconnected on a global scale. Unfortunately, out in the burbs, people are still prone to be duped into the razzle dazzle of interest-rate driven bubble, like being gifted a fireworks display by its benevolent leaders.
Yawn - so glad that you explained that.
Any expressed market opinion is my own and is not to be taken as financial advice
It doesn't bore people who are genuinely interested in economics, particularly as it relates to here and now. However, the idea that interest rates are a primary and significant driver of asset prices is important as the externalities can potentially be as destructive in magnitude as the perceived benefits of economic activity and asset prices driven through cheap and plentiful credit.
Unfortunately, out in the burbs, people are still prone to be duped into the razzle dazzle of interest-rate driven bubble, like being gifted a fireworks display by its benevolent leaders.
Your posts are light years more interesting when you spice up the waffle with a few lively analogies.
I sense a fledgling transformation into a new persona a-la catweasel here. How about the anthropomorphic adventures of Terry the suburbanite dog? mocking the stupidity of his owners for shelling out a small fortune to live in a cramped encosure of poorer quality than his kennel.
"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.
Your posts are light years more interesting when you spice up the waffle with a few lively analogies.
I sense a fledgling transformation into a new persona a-la catweasel here. How about the anthropomorphic adventures of Terry the suburbanite dog? mocking the stupidity of his owners for shelling out a small fortune to live in a cramped encosure of poorer quality than his kennel.
Not really sure what you're talking about, but I guess you fall into media saturated speculation of what your future vision of where the world is anchored to our house prices. Not really sure why there is such an aversion to anything but "patterns" and what is relayed to you from the research departments of banks and institutions without any thought to what you're being told.
FIVE months. That’s how long before house prices start to fall, according to the latest major investment bank to call the peak in Australia’s housing cycle.
“Credit growth, auction clearance rates, house prices, settlement volumes and the dollar value of settlements are all showing signs of slowing, albeit from lofty levels,” analysts from investment bank Macquarie said in a note today, The Australian reports.
“Our economics team are forecasting quarter-on-quarter house prices to fall from the March 2016 quarter before beginning to recover from June 2017, with a 7.5 per cent fall from peak to trough.”
It said the issue was easing population growth just as housing supply surged well above trend, raising the risk of “rapid adjustment”.
Credit Suisse has also warned about the deterioration in buying conditions, particularly in NSW. “Macro-prudential tightening, out-of-cycle rate hikes on investor mortgages, and weakness in Chinese buying are having a clear impact on sentiment and demand,” it said.
It came after both the ANZ and Commonwealth Bank indicated a tightening of lending to property developers due to oversupply fears as the market cools.
The biggest story nationally that isn't actually a story.
Peter has already pointed out that the yoy gains will no doubt be greater than this on the coming 5-6 months. The assertion that such a nominal drop in prices would cause systemic failure in out banks and economy is laughable.
As I have said all along, any prelonged downward movement in price would be sharp and devastating any notion that there could be a small drop before a prelonged static period or tiny single digit drops is just naive.
The biggest story nationally that isn't actually a story.
Peter has already pointed out that the yoy gains will no doubt be greater than this on the coming 5-6 months. The assertion that such a nominal drop in prices would cause systemic failure in out banks and economy is laughable.
As I have said all along, any prelonged downward movement in price would be sharp and devastating any notion that there could be a small drop before a prelonged static period or tiny single digit drops is just naive.
A return to mean is coming, and it's the cascading fall in prices that will gather momentum. Just as confidence builds a market - the same drop can cause a rapid downward spiral.
A return to mean is coming, and it's the cascading fall in prices that will gather momentum. Just as confidence builds a market - the same drop can cause a rapid downward spiral.
Cash is king in a crisis
Yes, but crisis' are created by an event or series of events. There is nothing being nominated by anyone either professional or armchair that would or could attribute to future drops. The vast majority are saying its business as usual but just not at break neck speed.
I think the chances of significant rises is far greater than significant falls.
Yes, but crisis' are created by an event or series of events. There is nothing being nominated by anyone either professional or armchair that would or could attribute to future drops. The vast majority are saying its business as usual but just not at break neck speed.
I think the chances of significant rises is far greater than significant falls.
Seriously? Want to try looking out the window?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Yes, you are right about house prices but you will find that most people will think of that 10% as an increase in wealth, not inflation. However, I think house prices or rent are not included in Aussie CPI figures. Nor are taxes or any other government excesses. That's why inflation figures are nothing more than a smoke screen. I actually believe that inflation is probably much higher than is officially reported. The RBA will know this, but they are not working in the interests of you and the general public. They have many interest groups to appease
I forget to thank you for posting us these little pearls of wisdom.
Thank you Shadow.
Chris
14 Oct 2015, 07:45 AM
Yes, but crisis' are created by an event or series of events. There is nothing being nominated by anyone either professional or armchair that would or could attribute to future drops. The vast majority are saying its business as usual but just not at break neck speed.
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