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Latest RBA Financial Aggregates
Topic Started: 2 Nov 2010, 01:12 PM (6,925 Views)
PuntPal
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That Wulfger article is from 2007....so yeah you are right, Blind Freddy could see it (well not Chris Joye, Glenn Stevens and every other Australian economist in the media)

Keen called the GFC in 2005. And he didnt just say it would be a recession and leave it at that.

He predicted everything down to a tee and also provided a whole economic theory to explain it to people.

He built on the work of Minsky and Fischer and he is regarded as one of only 12 economist worldwide (out of 1000's) that correctly pointed out the timing, cause and effect of the GFC.

So right him off all you want. He is just like all other geniuses...too smart for their time and loathed by the ignorant masses!

His vindication is coming...its already arrived, in fact
Edited by PuntPal, 22 Jun 2011, 10:14 PM.
"Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." - Paul Krugman 2002

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Dexter
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PuntPal
22 Jun 2011, 10:11 PM
That Wulfger article is from 2007....so yeah you are right, Blind Freddy could see it (well not Chris Joye, Glenn Stevens and every other Australian economist in the media)

Keen called the GFC in 2005. And he didnt just say it would be a recession and leave it at that.

He predicted everything down to a tee and also provided a whole economic theory to explain it to people.

He built on the work of Minsky and Fischer and he is regarded as one of only 12 economist worldwide (out of 1000's) that correctly pointed out the timing, cause and effect of the GFC.

So right him off all you want. He is just like all other geniuses...too smart for their time and loathed by the ignorant masses!

His vindication is coming...its already arrived, in fact
Is that why Keen loaded up on debt buying his unit only to sell in a panic a couple of years later. Yeah he knew was was going to happen
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Strindberg
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Dexter
22 Jun 2011, 10:26 PM
Is that why Keen loaded up on debt buying his unit only to sell in a panic a couple of years later. Yeah he knew was was going to happen
http://australianpropertyforum.com/single/?p=8166186&t=8725183

Steve Keen:
Quote:
 
1. He put off buying a house in the 1970s and 1980s, expecting a crash.
2. He eventually bought in 1989 at the peak of a boom just before prices fell.
3. He bought again in 2006 at the age of 53 with a huge mortgage.
4. He stated on ABC in 2008 that he had a mortgage of 3.5 times his GROSS income at age 55. (ABC transcript still there)
5. He sold his unit in 2008 at the trough of prices in Sydney.
6. Prices in his area boomed after he sold and he had to wear an embarrassing T-shirt.
7. He now rents at the age of 58.


All from his own mouth. Says his biggest regret is not buying a house in the 1970s.
Edited by Strindberg, 22 Jun 2011, 10:43 PM.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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Shadow
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PuntPal
22 Jun 2011, 10:04 PM
Shadow...WHAT!!!

I used those (MADE UP!) numbers to illustrate a point that you guys seemed unable to grasp...THE RATE OF GROWTH IS FALLING RAPIDLY
The point I was making is that housing credit growth did in fact fall, from 15% several years ago, to the current level around 6%. During that period house prices generally rose. Sure, there was a small fall of a few percent in 2008, but that was insignificant compared to the gains over that period. House prices today are substantially higher than they were when credit growth started trending down.
Edited by Shadow, 23 Jun 2011, 10:45 AM.
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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Shadow
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PuntPal
22 Jun 2011, 10:11 PM
Keen called the GFC in 2005. And he didnt just say it would be a recession and leave it at that.

He predicted everything down to a tee and also provided a whole economic theory to explain it to people.
Yep, he predicted everything down to a tee. Incorrectly.

ZIRP? Didn't happen.
Severe recession? Didn't happen.
Double digit unemployment? Didn't happen.
40% house price crash? Didn't happen.

To make it worse, Keen sold his home just before the new boom, and he is on the record as saying his biggest regret in life is that he didn't participate in the previous boom. So now he's missed two property booms in a row. Dreadful timing. But I'm sure he saw it all coming and predicted it down to a tee.
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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Count du Monet
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Shadow
22 Jun 2011, 10:52 PM


To make it worse, Keen sold his home just before the new boom,
You mean just before the bull trap don't you? Saw that one in the late 80's, share market crash in 87' and 3 year bull trap in property.

The best possible outlook for property now is a decade of flat prices. The worst case is a 50% tumble in property.
Edited by Count du Monet, 22 Jun 2011, 11:07 PM.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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Shadow
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Count du Monet
22 Jun 2011, 11:06 PM
The best possible outlook for property now is a decade of flat prices. The worst case is a 50% tumble in property.
You've been saying that for years Wulfie. Just last year you promised prices would already be down 40% by now. What happened?
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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mugshot
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apex
22 Jun 2011, 08:18 PM
Eek! It's like seeing Kiss without their makeup. How disappointing..........
Haha, true! I wonder what happened to him, his first 3-4 posts were fine, then he sort of devolved ........................ what's your story CW???
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Count du Monet
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Shadow
22 Jun 2011, 11:20 PM
You've been saying that for years Wulfie. Just last year you promised prices would already be down 40% by now. What happened?
Well the Real Estate market is saying flat prices now as their best hope. It's all a question whether the PI's are dumb enough to sit around losing money for the next 10 years. Any reasoning person would bolt.

If St Glen stalls on rate rises or drops rates, then 400 billion worth of foreign hot money will wish to leave. This is what happened in the US in 2006 to 2007 according to Wulfgar. If our banks have re-patriot foreign funds they won't be able to lend to property in any capacity.

This is where the bulls are dead wrong, falling rates will sink the Aus property market. There is no longer any surplus the government can give to the banks as they did under Howard.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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Andrew Judd
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davel
1 Mar 2011, 06:36 PM
Strindberg
1 Mar 2011, 01:18 PM

"The banks are also taking a more cautious approach to lending, requiring larger deposits, longer savings history and a greater scepticism about the valuations of properties."

"larger deposits"? He doesn't know his arse from his tit.
Hot off the press:




They take rent paid now as evidence of savings too.
The question is (and we won't know the answer to it) - what loans are they actually making?

The reason this is important is that they may very well be happy to make a 95% loan to the right customer buying in what they believe to be the right area of sydney, for example. But a customer looking to buy an apartment in Broadbeach may find that 95% loan is not available,a nd neither is a 90%, or and 85%. How sophisticated are their risk models?

And how hawkish are their valuations?

How much of it is just a marketing push to increase applications and their customer databases?


Anyway, it doesnt surprise me that the banks are trying to increase credit and grow their mortgage books. Why wouldnt they, its made them a lot of money. They still reserve the right to refuse loans, and their approval processes must be pretty fixed-cost, so its a no-lose situation for them.

The issue will come when they realise that its not growing prices any further. At that time they will take a different view of their risk and exhibit a different behaviour, IMO.
I am fairly sure that RBA policy during the 2008/9 period has already set up the criteria whereby the banks do not have to worry about getting loans from the RBA with no risk to the private banks, providing the banks are doing what the RBA wants them to do.

So if house prices fall and the RBA does not want that to happen the banks have no reason to worry about loan losses - the RBA will take the losses and do all it can to support the banks with interest rates and so forth.

The whole situation is a bit circular. The banks have to carry on lending to ensure their assets do not have to be marked down in a crisis caused by lack of lending and the banks do not want to be the leader in lending for fear their reserves will drain to the other less enthusiastic lenders. The RBA comes in as lender of last resort and reassures the banks they can lend without fear - providing they are following the policies of the RBA, where the RBA is following the policies of the government where the treasury secretary and the RBA are required by Australian law to have a close working relationship, meet regularly, keep each other informed and so forth, and the government have the power to remove the governor if necessary.
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