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The Negative Gearing Thread: RBA Bulletin - Negative Gearing available in many countries
Topic Started: 10 Mar 2011, 12:10 PM (32,805 Views)
Shadow
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Alex Barton
17 Mar 2011, 09:36 AM
Good chart, Shadow. I added it to the Gallery.
Credit for the chart goes to Leith van Onselen from Unconventional Economist.
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
17 Mar 2011, 09:41 AM
Credit for the chart goes to Leith van Onselen from Unconventional Economist.
Thanks Shadow. I saw your "financial aggregate" chart in the gallery is out of date, have you a more recent one?
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Rastus2
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Shadow
17 Mar 2011, 09:09 AM
Why don't you apply some serious scrutiny to it then, and try to find out?

Another point... last time NG was removed, rents spiked in Sydney and Perth, cities with low vacancy rates at the time. But rents were flat in Melbourne and Adelaide, and fell in Brisbane. Some people use this to claim that NG does not place downward pressure on rents, because rents didn't rise everywhere when it was removed. The problem with that theory is it does not consider what would have happened if NG had not been removed. Perhaps rents would have fallen in Brisbane anyway, due to an oversupply, and removal of NG simply reduced the magnitude of that fall, rather than completely reversing it.

Posted Image

We can also see from the chart that a few years after NG was reintroduced, rents fell in every city, and kept falling (in real terms) for many years. A few years is probably how long it would take for investors to start getting back into the market again, and adding to rental supply in a substantial way. However, again there is no way to prove that NG was responsible for that fall in rents, because we don't know what would have happened without NG. Maybe rents would have fallen anyway.

And this is a key problem with the document (which Kenny has also mentioned... "the author has no way of controlling other extraneous or confounding variables in the economy"). Basically, we can't confirm that NG does or does not have a particular effect on the property market because we have no way of knowing what would have happened to the property market if NG wasn't there. There are far too many different variables acting on the property market at any one time to be able to isolate one variable and prove it is having a particular effect. All theories about the impact of NG are unprovable. So you can attempt to apply 'serious scrutiny' to my theory if you wish, but neither of us can prove anything either way.

The only things we can 'prove' are some of the statistics, which Strindberg has provided, and then we must draw our own conclusions and form our own theories based on this data.



I would be more keen to support/ disprove your theory when you have enough hard evidence to substantiate it.

as you point out yourself, it is all conjecture from you...


Correlations have already been (reasonably) discounted as being a valid form of evidence for scientific discussion by Ken... Putting this chart up and offering conjecture on top of it is just more of the same...



Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Shadow
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Rastus2
17 Mar 2011, 01:15 PM
I would be more keen to support/ disprove your theory when you have enough hard evidence to substantiate it.
As I explained, it is impossible to prove or disprove, so whether or not you are keen to do so is irrelevant.
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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Rastus2
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Shadow
17 Mar 2011, 01:36 PM
As I explained, it is impossible to prove or disprove, so whether or not you are keen to do so is irrelevant.


Why is it impossible to prove ?

If it has such a large effect, it should be measurable no ?

I would have thought you, more than many here, would insist on hard data to prove any theories before embracing them.... guess that is only for other people's theories.

Edited by Rastus2, 17 Mar 2011, 06:42 PM.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Shadow
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Rastus2
17 Mar 2011, 05:44 PM


Why is it impossible to prove ?

If it has such a large effect, it should be measurable no ?

I would have thought you, more than many here, would insist on hard data to prove any theories before embracing them.... guess that is only for other people's theories.
As I explained to you before, a theory about motivations can't be proven other than by asking the person/organisation what their motivation is.

Even then you might not get an honest answer.

Think about it. If you still don't understand, ask me again and I'll try to help you out with some examples.
Edited by Shadow, 17 Mar 2011, 10:02 PM.
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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Rastus2
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Shadow
17 Mar 2011, 10:01 PM
As I explained to you before, a theory about motivations can't be proven other than by asking the person/organisation what their motivation is.

Even then you might not get an honest answer.

Think about it. If you still don't understand, ask me again and I'll try to help you out with some examples.

Thankyou for the smart alec reply..

If you could put some of that energy into your theory instead of looking smug, you just might get it off the ground.

Just in case you do not know the basics..

Steps to advancing your theory

Get back to me when you can be bothered to pick up your act and stop hiding behind the 'I can't find any data' claim...

Until then, lets just keep it in the 'conjecture' basket along with other bull myths.

The best evidence to date supports the alternate theory.

Edited by Rastus2, 17 Mar 2011, 10:26 PM.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Shadow
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Rastus2
17 Mar 2011, 10:26 PM
Yes, that's all fine if the theory is measurable and testable - for example, a theory that a dropped ball will fall to the ground can easily be tested and proved. However a theory that someone is motivated to do something for a particular reason can never be tested without the co-operation of that person. For example, I might see you drinking water and theorise that you did this because you were thirsty, but I can never prove this because I can't read your mind, and if I asked you why you were drinking the water I have no way of knowing whether you will tell me the truth.

Similarly it is impossible to prove why a particular government supports negative gearing. Motivation can't be proved.

Surely even you can understand this?
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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Rastus2
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Shadow
17 Mar 2011, 10:37 PM
Yes, that's all fine if the theory is measurable and testable - for example, a theory that a dropped ball will fall to the ground can easily be tested and proved. However a theory that someone is motivated to do something for a particular reason can never be tested without the co-operation of that person. For example, I might see you drinking water and theorise that you did this because you were thirsty, but I can never prove this because I can't read your mind, and if I asked you why you were drinking the water I have no way of knowing whether you will tell me the truth.

Similarly it is impossible to prove why a particular government supports negative gearing. Motivation can't be proved.

Surely even you can understand this?


I understand this fully thanks again for the attempted smug remark. Still a waste of energy IMHO, but I agree, it's a better investment to look smug than to follow through with real effort.


Do you understand that real motivation that results in investment can be measured ?

There are numerous examples, you can google them if you like... or would you like me to do that for you too ?

Seriously, either peruse this theory, or let it go, it's up to you... Regardless, smugness and smart arse comments do not further your theory at all.





Don't worry, I think I know the real reason you don't wish to spend the effort doing the research... it's unlikely that any data found would support it... It can be our little secret :D

<tag> shadow demands data but can not deliver <tag>
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Shadow
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Rastus2
17 Mar 2011, 10:53 PM
Do you understand that real motivation that results in investment can be measured ?

There are numerous examples, you can google them if you like... or would you like me to do that for you too ?
Yes, please. Personally I don't believe anyone can ever prove what someone else's motive is, but if you've got some examples to show how we can prove government motive in this case then please do post your examples (or explain how to do it yourself, if you can).
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.
Profile "REPLY WITH QUOTE" Go to top
 
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