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Major banks slash interest rates out of cycle, and ease LVRs to lure more property investors; Mortgage War: CBA reduces investor mortgage rates by 40 basis points
Topic Started: 24 May 2016, 12:01 PM (7,458 Views)
Terry
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Rufus
24 May 2016, 05:01 PM
And yet during the worst financial crisis since the great depression the Australian tax payer paid nothing to stabilise the banks.

Weird isn't it.

BTW the other OECD nations have much the same system although the EUZone has some differences.

So how is our risk lower?
Why did you say that?
The taxpayer is arguably paying as we speak as the nation's energy and efforts are overwhelmingly dedicated to maintaining the status quo. Case in point: A 10-15% fall in house prices now is likely to have greater impact on the economy than a 30% fall in prices in 2008. You don't have to be technically proficient in risk analysis to understand the general principals of risk analysis, which, to put in the BBQ vernacular for your comprehension, is similar to "putting all your eggs in one basket."
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Rufus
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Terry
24 May 2016, 05:38 PM
Case in point: A 10-15% fall in house prices now is likely to have greater impact on the economy than a 30% fall in prices in 2008.
What evidence do you have for that statement?
Take risks - if you win you will become wealthy, if you lose you will become wise
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Tiger Lily
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Terry
24 May 2016, 05:38 PM
A 10-15% fall in house prices now is likely to have greater impact on the economy than a 30% fall in prices in 2008
load of bollocks, is this your idea of risk analysis ? bwahahahahaha !
your guessing and speculating and you dont have any models to base that on tezza, its pure conjecture like something theyd write in fairfax media
you are the lowest common denominator chump :D
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Terry
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Rufus
24 May 2016, 05:50 PM
What evidence do you have for that statement?
No evidence. That's why I qualified my claim with the adverb "arguably" and referred to a key tenet of risk analysis, which I'm happy to argue and educate on until the cows come home.
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Rufus
24 May 2016, 05:50 PM
What evidence do you have for that statement?
Because we cannot drop rates 6% overnight like then. Because we have no mining boom to save us this time round.

Because debt levels are 150% of income unlike then, we have no buffers. Since 2011 alone debt levels have doubled in Sydney and Perth.

And the biggy, because it will wipe out the savings and superfunds that were recently encouraged into this joke which was not the case in 2008.

Because this time rents are falling, back in 2008 we did not have extreme oversupply and rents were stable or rising.

Because in 2008 ,our dollar started rising after dropping to around 55 cents. But now its een crashing from around a $1.15, meaning the real losses are far greater.



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Rufus
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Terry
24 May 2016, 06:18 PM
No evidence. That's why I qualified my claim with the adverb "arguably" and referred to a key tenet of risk analysis, which I'm happy to argue and educate on until the cows come home.
Terry you used the term "arguably" in relation to a different part of your answer that had nothing to do with equating a 10% to 15% fall now to a 30% fall in 2008.

You're perfectly entitled to take a guess, but admit that it was a guess and not an outcome of some precision work on your part.

You still haven't answered the question.

Quote:
 
Case in point: A 10-15% fall in house prices now is likely to have greater impact on the economy than a 30% fall in prices in 2008.


If you have no evidence, then what was the rationale behind that statement? Why would a fall of just 10% now be as big a risk to the economy as a 30% fall in 2008?

You must have some idea of why you said that.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Terry
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Rufus
24 May 2016, 06:49 PM
Terry you used the term "arguably" in relation to a different part of your answer that had nothing to do with equating a 10% to 15% fall now to a 30% fall in 2008.

You're perfectly entitled to take a guess, but admit that it was a guess and not an outcome of some precision work on your part.

You still haven't answered the question.




If you have no evidence, then what was the rationale behind that statement? Why would a fall of just 10% now be as big a risk to the economy as a 30% fall in 2008?

You must have some idea of why you said that.
Yes, I should have used "arguably" to qualify myself twice then, but it's pretty simple from a risk analysis principal. Mathematically, it's also very simple. Just because "10" is smaller in magnitude than "30", it doesn't hold that "30" has more impact than "10."
Edited by Terry, 24 May 2016, 07:51 PM.
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Rufus
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Terry
24 May 2016, 07:48 PM
Yes, I should have used "arguably" to qualify myself twice then, but it's pretty simple from a risk analysis principal. Mathematically, it's also very simple. Just because "10" is smaller in magnitude than "30", it doesn't hold that "30" has more impact than "10."
No there is a direct relationship between house price falls and the ability of small business to borrow. There is also a relationship with the wealth effect for householders which affects consumer spending.

You are certainly not taking the first issue into account, and probably not the second. There are more issues such as banks having the confidence to lend. Anyway it's enough for me to know that you don't know.

Thanks.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Terry
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Rufus
24 May 2016, 10:04 PM
No there is a direct relationship between house price falls and the ability of small business to borrow. There is also a relationship with the wealth effect for householders which affects consumer spending.

You are certainly not taking the first issue into account, and probably not the second. There are more issues such as banks having the confidence to lend. Anyway it's enough for me to know that you don't know.

Thanks.
There's a relationship between house prices and consumer spending. You just don't know what it is. What we do know is that when prices in asset markets get to the point where removal of shiny trinkets like NG causes hysteria by all and sundry, you're living in a distorted market. "Arguably" the more distorted markets become, the greater the impact on the inter-relationships within an economy.
Edited by Terry, 24 May 2016, 11:00 PM.
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hidflect
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Terry
24 May 2016, 11:00 PM
There's a relationship between house prices and consumer spending. You just don't know what it is. What we do know is that when prices in asset markets get to the point where removal of shiny trinkets like NG causes hysteria by all and sundry, you're living in a distorted market. "Arguably" the more distorted markets become, the greater the impact on the inter-relationships within an economy.
Precisely. He's arguing correlation is causation. A fatal mistake. Also Rufus is ignorant of the fact that the Oz banks are majority owned by US interests. The banks are no more "Ozzie" than McDonald's. And the vast majority of money loaned out by these "Ozzie" banks is from money borrowed overseas. That's another fact he's ignorant of.
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