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Steve Keen: Australian house prices to fall 20% "peak to trough" by end of 2013; House price hit yet to come
Topic Started: 20 Oct 2011, 12:43 PM (18,394 Views)
Shadow
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Wisebear
20 Oct 2011, 08:01 PM
It doesn't look like Keen has changed his view at all here.

He's still saying prices will fall 40% over 10-15 years plus he's adding a tighter timeframe forecast of a 20% fall in the next 2 years.
He describes 2013 as the trough. Trough means bottom. After prices hit a trough, they rise again.

Prices don't hit the trough and then fall another 20%. If they fall another 20% then it wasn't a trough.

"I’d expect something of the order of a 20 per cent fall from peak to trough, whatever the peak might be, whatever the trough’s going to be. I’d be quite happy now to say the last price peak was the overall peak and so I’d expect something of the order of a 20 per cent fall between now and say the end of 2013."

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http://www.investopedia.com/terms/t/trough.asp#axzz1bJjFC827
Edited by Shadow, 20 Oct 2011, 09:39 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
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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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Wisebear
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Shadow
20 Oct 2011, 09:37 PM
He describes 2013 as the trough. Trough means bottom. After prices hit a trough, they rise again.

Prices don't hit the trough and then fall another 20%. If they fall another 20% then it wasn't a trough.



I agree that the word "trough" is confusing in this context but I took him to mean the low point in the period to 2013.

It is quite possible of course to have troughs in a different time periods.

I'd be amazed if he was abandoning his call for a 40% fall in a 10-15 year time period as this still looks like a very reasonable forecast.


Edited by Wisebear, 20 Oct 2011, 10:05 PM.
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earthsta
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Shadow
20 Oct 2011, 09:37 PM

Prices don't hit the trough and then fall another 20%. If they fall another 20% then it wasn't a trough.

Oh dear....what a knob

As I have been saying to you and your braindead cohorts for years, NOTHING ever goes down in a straight line

Maybe Keen means they will drop 20%, go up 1% (to suck in the moron bulls) to form a TROUGH and then fall a further 21%.

I guess the whole concept of wave principles is way beyond your grasp.
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Shadow
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earthsta
20 Oct 2011, 10:05 PM
what a knob

you and your braindead cohorts

way beyond your grasp
Why all the abuse? You seem to get yourself very worked up over very little these days...

Quote:
 
Maybe Keen means they will drop 20%, go up 1% (to suck in the moron bulls) to form a TROUGH and then fall a further 21%.
Do you think that's what he meant? You believe Keen has such powers of prediction (must have gained them recently given his record) that he can predict a 20% fall to 2013, followed by a 1% rise, followed by another 21% fall to 2026? That's quite a detailed and specific prediction you believe Keen has made.

Surely you should realise by now that prices don't always drop in a straight line, and that a 1% rise in the middle of a 40% fall is just noise.

Would you really call that a trough?
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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schooner
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Shadow
20 Oct 2011, 10:51 PM
Why all the abuse? You seem to get yourself very worked up over very little these days...


You can tell some people until your blue in the face.
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Aussiehouseprices
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Shadow
20 Oct 2011, 01:35 PM
As pointed out in the other thread, this revision from 40% to 20% is much more than a 50% cut, because prices have risen substantially since Keen first said they would fall by 40%. This new prediction would only take prices down to about 8% below 2008 levels. His expected 'crash' is now about one fifth of the size it was previously going to be.
C'mon Shadow, you don't honestly believe Steve would defend his '40% over 10-15 years' call:

"I’ve always been strong in saying that will be over 10 to 15 years."

... and then abandon it in the very next sentence!

Just one other thought - you and Strindberg have been saying that if a bear predicts prices crashing to a certain level, but the crash is delayed and the bubble grows even bigger, that prices would still need to fall back to that same level for the bear to be right (i.e. a bigger crash than first thought).

But if the prediction is based on prices falling to achieve a certain rental yield, for example, then any increase in rents during the delay would do some of the leg work in bring prices back to predicted value.
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Strindberg
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Aussiehouseprices
21 Oct 2011, 08:47 AM
Just one other thought - you and Strindberg have been saying that if a bear predicts prices crashing to a certain level, but the crash is delayed and the bubble grows even bigger, that prices would still need to fall back to that same level for the bear to be right (i.e. a bigger crash than first thought).

But if the prediction is based on prices falling to achieve a certain rental yield, for example, then any increase in rents during the delay would do some of the leg work in bring prices back to predicted value.
..I see, you are saying that if prices don't fall at all but rents rise 40% then Steve Keen's prediction of a 40% price fall will be correct.

Give it up - you're making yourself look silly.
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2002-2012 10 year house price growth the SLOWEST since 1952-1962
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davel
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I dont see why people on both sides get so worked up about what SK did or didnt say. Hes not the messiah. Noone can predict these things with any certainty because econometric/mathematical models that cover all variables dont and cant exist.

Hes an academic and their job is to try to build theoretical models to increase understanding, but the sensible ones admit their frailties.

SK may not be that sensible in his pronouncements. However his theory on debt is quite compelling and seems to have some reflection in whats going on. I'd rather listen to him than many of the MSM drones, but that doesnt mean we should believe every word he says.
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Sydneyite
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davel
21 Oct 2011, 10:01 AM
I dont see why people on both sides get so worked up about what SK did or didnt say. Hes not the messiah. Noone can predict these things with any certainty because econometric/mathematical models that cover all variables dont and cant exist.

Hes an academic and their job is to try to build theoretical models to increase understanding, but the sensible ones admit their frailties.

SK may not be that sensible in his pronouncements. However his theory on debt is quite compelling and seems to have some reflection in whats going on. I'd rather listen to him than many of the MSM drones, but that doesnt mean we should believe every word he says.
The reason people get worked up about SK is because of all the media whoring he did in 2008 when he really caused a lot of concern for a lot of ordinary people, and it turned out that he was worrying them unnecessarily and could not have been more wrong with his outlook and predictions. If he layed off 60 minutes, the 7:30 report, ACA etc etc, then maybe the criticisms would not have flowed as harshly as they do.
Edited by Sydneyite, 21 Oct 2011, 10:10 AM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Catweasel
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Sydneyite
21 Oct 2011, 10:09 AM
The reason people get worked up about SK is because of all the media whoring he did in 2008 when he really caused a lot of concern for a lot of ordinary people, and it turned out that he was worrying them unnecessarily and could not have been more wrong with his outlook and predictions. If he layed off 60 minutes, the 7:30 report, ACA etc etc, then maybe the criticisms would not have flowed as harshly as they do.
Catweasel laugh. Yes, don't worry a mouse unnecessarily. Its master will do all its worrying for it. Mouse just get on a with a pay the bills and running on its wheel.
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