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The high cost of snake oil
Topic Started: 7 Jan 2017, 10:18 AM (10,295 Views)
Chris
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Rufus
9 Jan 2017, 12:19 PM
What concerns me about Keen is his shallow approach to his craft. He really uses the single metric of private debt, which is certainly an indicator that should be watched, but by itself is only that
I see it more as a bellwether because it gives us an understanding as to how dangerous lending has become to the economy if other facets begin to deteriorate. In itself it is not a primary cause and I dare say for most FHB the lvr's would be naturally higher and based on the mechanics of NG so would investor loans.

As you say as long as everyone can keep buying and paying everything will be fine.

Edited by Chris, 9 Jan 2017, 04:32 PM.
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Simon_S
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Rufus
9 Jan 2017, 01:56 PM

His books on the economy are negative. Naturally I wasn't including his book or papers on the environment in that statement.

Is your IQ larger than your shoe size yet? Maybe your feet are too big. Are they 145 cm long?
Perhaps not.
Here was your original response:

Quote:
 
Garnaut is a serial doomster, he's written a huge number of books themed around impending doom.


Rufus' Bullshit exposed

Which were his Impending Doom books again?

You should already know my shoe size I've kicked your arse so hard it should have left an imprint.

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Rufus
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Simon_S
9 Jan 2017, 05:00 PM
Here was your original response:




Rufus' Bullshit exposed

Which were his Impending Doom books again?

You should already know my shoe size I've kicked your arse so hard it should have left an imprint.
It comes as a great shock to me that there could be someone as stupid as you in this country.
We used to have quite good education standards.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Simon_S
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Rufus
9 Jan 2017, 05:11 PM
It comes as a great shock to me that there could be someone as stupid as you in this country.
We used to have quite good education standards.
i'm not shocked at all when it comes to the Bullshit you spout.
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Trollie
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Simon_S
9 Jan 2017, 05:15 PM
i'm not shocked at all when it comes to the Bullshit you spout.
The biggest bullshitter on here is you timo
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skamy
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Chris
8 Jan 2017, 01:51 PM
Blame the spelling on predictive text, what do you blame your deception on?

You avoided the question, you know that's not what I asked you but I guess that's the point. I have hit at the heart of all the property BS and that states you are wealthier because you own a home or have a PPPOR you OO.

This is the greatest fallacy of all. You cannot deny that without using the equity to buy other assets/investments the value of your PPOR as an OO is completely meaningless. House price rises are billed as a good thing for OO but it doesn't make a licking difference and you know it and so does everyone reading this forum. Are you saying a pensioner living in Potts Point in a house she has owned for 50+ yrs is worth millions? She has no mortgage but lives solely on a pension, is she a multi millionaire because her house is worth multi millions?



This ignores the fact that equity is theoretical and based on an opinion. Losses are compounded by gains, how much more devastating is a 20% drop at $882k. You wipe nearly $200k from the price, take into account Stamps, legal, rates, cost of the remaining mortgage and maintenance and the renter could actually be in front after 7 yrs.

And as I've said the $299k gain in value is not net wealth unless it is realised through a sale and putting it in the bank. The only way to turn it into potential net wealth is to use it to invest in property or shares. If they do this then they become wealthier when the value of those investments rise, short to medium term they are heavily dependent on capital gains to realise any escalation in wealth.

The greatest suburbanite lie is the belief that people are richer because their homes rise in value, if they have a PPOR as an OO and no other assets or investments then house price rises are not making them richer at all as long as they are living in the home.
Chris - we built a house in the UK for 70K sterling in about1987 we sold it for 250K sterling in 2000. The money was dead set real - we changed it to dollars and bought a great house in Coogee Sydney. My renting peers had no such money - they could not afford a nice house in Coogee no way- they are still pretty broke today as they throw all their money away paying ever increasing rents to pretend they are as wealthy as their home buying neighbours by staying in suburbs that have become ridiculously expensive since the 1980's.

Renting as an alternative to buying is a mugs game and anyone who tells you any different is an out and out charlatan.

At this stage in your life you got two choices.

1. Stay with the doomster nonsense of "money in property prices is not real" so I will spend the rest of my life paying down other peoples property for them all the while moaning and whinging about how unfair life is. I know plenty people like this who thought they would get bargain homes if they only waited and threw all their deposit money into doomster harebrained schemes and 100s of thousands down the drain in rent.

2. Walk away from the doomsters - look squarely at the world and how it works and make good financial decisions for you and yours, it is better to buy later than never.

Wake up to the nonsense you have been fed by all of the media for the past decade of negativity since 2007.

Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Chris
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Rufus
9 Jan 2017, 05:11 PM
It comes as a great shock to me that there could be someone as stupid as you in this country.
We used to have quite good education standards.
No one will ever know who you are Pete but it's clear you have significant greater vested interests in property far beyond a humble investor/mortgage broker.

Maybe someone from the millionaires factory or from REIA or an economist? You have a very slanted view against anyone who doesn't have a bias towards property, you are very quick to denounce and label descending views, Garnaut as a 'doomster' is an example of this. You also happy to credit his views on climate but state his views on property are doomster and unfounded/non-credible.

It's hard to see how a man if his calibre could be written off in such a manner without an individuals own bias weighing heavily on the stance rather than fact.
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Terry
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Rufus
9 Jan 2017, 03:03 PM
Debt quality is governed by underwriting standards. If you don't know anything about lending, you may not fully appreciate that.
Even if you did appreciate underwriting standards, you wouldn't know how those standards are being applied unless you're inside the black box.

Keen could however have some discussions with APRA and some bank hierarchy to get a feel for the standards, and he could talk to a lot of people out in the field.
He hasn't of course, but he has listened to people who know nothing at all apart from their inner beliefs.

As for some quantifying model, which you appear to be wanting, that ain't gunna happen. It more complex than that, and at this point anecdotal evidence is probably the best way given the requirements of the privacy act and the expectations of the clients.

I did give you some metrics in an earlier post which you can plug in if you like, but they have their limitations.

If Keen is frustrated, it should be with himself, not me.
OK, so you think quantifiable variables in econometrics can be replaced by feelings or discussions with puffed-up regulators.

That's why you're a sales rep, not an economist.
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Chris
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skamy
9 Jan 2017, 05:38 PM
Chris - we built a house in the UK for 70K sterling in about1987 we sold it for 250K sterling in 2000. The money was dead set real - we changed it to dollars and bought a great house in Coogee Sydney. My renting peers had no such money - they could not afford a nice house in Coogee no way- they are still pretty broke today as they throw all their money away paying ever increasing rents to pretend they are as wealthy as their home buying neighbours by staying in suburbs that have become ridiculously expensive since the 1980's.

Renting as an alternative to buying is a mugs game and anyone who tells you any different is an out and out charlatan.

I've never claimed that renting is better than owning, ever!

As for the rest of your dribble you completely missed the point but I can only expect that from you. It is astounding that you read all my posts and still missed the point completely, this is why it is so difficult to take any advice from someone like you.
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skamy
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Chris
8 Jan 2017, 05:08 PM
My arguement is not that renting for life is a better option. No one wants to be paying private rent in retirement that is by far the worst case scenario.

My arguement is based on the falsities surrounding the idea you are richer because your PPOR you OO goes up in value, this is simply not true while you are living in it.

In no way am I advocating that people rent for life.
This is clearly not the case - take two families both deciding to live in a block of units in Bondi Beach in 1990. One bought a unit for $250K and one rented the same sized unit in the same block for $250 a week.

Roll on the years until 2017, the renter now has to pay $1000 a week for the rent, while the OO lives virtually rent free in what is now one of the worlds most desirable suburbs. In property terms the OO shares his suburb with some of Australian wealthiest people.

The OO is $1000 a week better off than the renter - week in / week out the OO is increasing their wealth whereas the renter is becoming more and more impoverished.

Chris you have been sold a lie - drop the doomster charlatans who sell this nonsense to impressionable young people and greedy older people.
Simon_S
8 Jan 2017, 08:11 PM
Perceived or Real?

10 million dollars in the Bank is Real.

10 million dollars perceived value in an asset is hypothetical.
Is it real? have you not studied your history books? Germany post WW1 is one example I recall when money in the bank became virtually worthless.
Edited by skamy, 10 Jan 2017, 12:22 AM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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