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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 (18,388 Views)
Ex BP Golly
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None of this proves I have made anything up.

Has not the last 15 years run at about 6% average?

How is that made up?

And, (not that I introduced it) the last 50 years has run at about 8.5%.

Hmmm, I wonder what it was for the last century?

Could it be 8.5%? Its got to be close right :re:

Come on String Handbag, don't come in here with your strawman tactics saying I'm making things up.

Show me your evidence.


Ps, Id still like to hear what Peter thinks the interest rate should be if it "is unduly high"!



Or are we experiencing 'tag team trolling' to stop him sharing that information with the world?
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earthsta
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Shadow
13 Sep 2012, 01:47 PM
Last time I checked, 53 years didn't make a century.

Can't refute the argument, so throw in a strawman!

Hilarious! :lol
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Shadow
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earthsta
13 Sep 2012, 02:01 PM
Can't refute the argument, so throw in a strawman!
It seems you can't even follow the discussion, as usual.

Golly said... 'Average interest rates in Australia have run at about 8.5% over a century'.

Strindberg pointed out that this was incorrect.

You then posted an irrelevant 53 year average.

I then provided a chart covering a full century (and a bit).

You can go back to sleep now.

Posted Image
Edited by Shadow, 13 Sep 2012, 02:10 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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peter fraser
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Ex BP Golly
13 Sep 2012, 10:35 AM
stinkbug
13 Sep 2012, 10:19 AM
Interest rates are now lower because concerted efforts were made to reduce inflation. Until inflation rises significantly, rates are unlikely to be significantly higher.
I agree, I'm just trying to work out why Peter thinks present rates, which most pundits what to drop to a third of the 100 year average, which would then be almost half of the last decades average, are both a "punishment" and "unduly high".

What do you think a fair interest rate should be at the moment Peter?
I think that interest rates have to offer several things. They must give a reward for savers, they must give a margin for lenders so that they can continue to organise our pooled savings and lending (that's what they do really) and they should not be so punitive that our borrowers are forever indebted and business's can't survive.

Plucking figures out of the air, that means from 5.5% to 7.5% in my view. Clearly the RBA need some margin of adjustment to tailor the economy. It's probably fair to say that there have been times when rates were too high, artificially so.

I'm still of the view that when the RBA hike rates to subdue the economy, they are just setting up the right scenario for the next boom, especially if those rates remain high for an extended period. It's probably quite unrealistic to bind the RBA to a fixed range, but a preferred range should be possible at least for the forseeable future.

If we want a steady supply of new housing to meet a steady demand for it, then the prices have to be stable, and the construction industry needs prices that they can budget for. Wild interest rate fluctuations both repress demand and stimulate demand creating a see saw effect in the market. It's either a feast or a famine in housing, and prices adjust accordingly - I don't see the long term benefits to society in this set up. I might be way off the mark, but equally there must be a better way.

Any ideas?
Any expressed market opinion is my own and is not to be taken as financial advice
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Shadow
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http://www.theaustralian.com.au/business/opinion/best-bull-market-in-bonds-in-our-lifetimes/story-e6frg9r6-1226383902307

Posted Image
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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Ex BP Golly
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So Shaddow, what do you think the long term interest rate over the century would be for the average mortgage mug?

I really do like to hear people express their own opinions!

Bond rate returns are not there same thing as mortgage interest rates, but the graph you have kindly provided looks to support my original contention.

Maybe Peter, who knows the market well might like to opine on this question, given the INTEREST it seems to have generated :lol

Shaddow, I wont even ask that the costs, charges and fees for a mortgage be included in these latter years! Not even the ' comparison rates' :lol

Do you still think I am wrong?
timmy
13 Sep 2012, 01:44 PM
bears aren't trying to revive the notion that rates are going up are they?
last week china was going to implode, now that iron ore prices have stablised it's interest rates. you bunch of dickheads couldn't predict a fuck in a brothel.
No, we are clearly talking about the past, and the present.

Ps I agree with Peter that interst rates should be from 5.5% - 7%.

But generally they run at 8.5% actual cost to home purchasers.

Would you like to make some judgements on the topic?
Edited by Ex BP Golly, 13 Sep 2012, 02:47 PM.
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Shadow
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Ex BP Golly
13 Sep 2012, 02:42 PM
the graph you have kindly provided looks to support my original contention
No, the graph shows interest rates averaging around 2% from 1900 to 1960.

There was only a relatively brief period where rates rose above 8%

Clearly the average over 100 years shown on the chart is going to be much lower than 8.5%

Posted Image
Edited by Shadow, 13 Sep 2012, 03:00 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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Ex BP Golly
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Shadow
13 Sep 2012, 02:57 PM
No, the graph shows interest rates averaging around 2% from 1900 to 1960.

There was only a relatively brief period where rates rose above 8%

Clearly the average over 100 years shown on the chart is going to be much lower than 8.5%

Posted Image
Apples and lemons!

We are talking about mortgages are we not?



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Shadow
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Ex BP Golly
13 Sep 2012, 03:11 PM
We are talking about mortgages are we not?
Peter said... 'the RBA the government continually punish home buyers with unduly high interest rates'

You said... 'Average interest rates in Australia have run at about 8.5% over a century'

I assumed Peter was talking about the RBA rate.
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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Ex BP Golly
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Shadow
13 Sep 2012, 03:15 PM
Peter said... 'the RBA the government continually punish home buyers with unduly high interest rates'

You said... 'Average interest rates in Australia have run at about 8.5% over a century'

I assumed Peter was talking about the RBA rate.
I'm sorry, I assumed we were talking about actual costs to the punter.

So many different measures !

Your graphs talk about financial returns on assets, and I'm talking about costs on debt!

Not sure though why people don't just stick to actuals :?:
:wak:
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