on the one hand you are claiming prices will fall because falling capex will result in job losses, when asked directly your response is "no shit i do". but now you've wriggled around to saying this might not happen.
To be clear - I expect much weaker GDP growth relative to today and rising unemployment and higher house prices....
I think many people confuse the link between GDP growth with assets prices.
If I said in 2009 that over the next four years - US GDP growth would average less than 2%, - that unemployment was going to stay above 7.5%, and - US equity prices would increase by 100%,
on the one hand you are claiming prices will fall because falling capex will result in job losses, when asked directly your response is "no shit i do". but now you've wriggled around to saying this might not happen.
nice try my slippery little eel.
It can always go either way.
However I firmly believe job losses from the end of the mining investment boom will directly impact population growth and residential construction.
i'm book marking this for future reference when lower capex fails to produce the housing crash you all expect.
Yes, that's along the lines of what I said.
The cohort who are driving the price rises at present are generally less vulnerable to unemployment than those in the first time buyer cohort.
What we seem likely to have if nothing changes is a poorly performing economy, dragged down by unemployment and underemployment. Meanwhile sitting on top of the pile, a rentier class who are busily squashing the opportunities of the next generation, while using generous tax breaks to endlessly enrich themselves to the detriment of others - pretty much the epitome of Black Panther's glorious vision.
It's not the kind of country I aspire to live in but with concepts like the common good now pretty much consigned to history, it seems easily possible.
The cohort who are driving the price rises at present are generally less vulnerable to unemployment than those in the first time buyer cohort.
What we seem likely to have if nothing changes is a poorly performing economy, dragged down by unemployment and underemployment. Meanwhile sitting on top of the pile, a rentier class who are busily squashing the opportunities of the next generation, while using generous tax breaks to endlessly enrich themselves to the detriment of others - pretty much the epitome of Black Panther's glorious vision.
It's not the kind of country I aspire to live in but with concepts like the common good now pretty much consigned to history, it seems easily possible.
Lef tee governments used to pursue policies and taxes that redistributed wealth, trying to stop massive wealth accumulating in the hands of just a few. I believe we are seeing the end result of decades of policy change that has actively encouraged a new class system. In the USA it's quite clear just who has the wealth and who doesn't. Those policies have travelled throughout the western nations including our own.
I'm not being a raging commie here, I'm simply acknowledging what I see. I'm not surprised that we now have a wealthy class who will emulate the older upper class in Europe and assume ownership of the majority of assets, whilst the workers will just have to squabble over the crumbs.
I expect to see a diminishing proportion of home ownership as the wealthier families simply buy up the assets that the rest don't want to buy. This is what Coles and Woolies has been doing to the retail grocery market for years. The price paid for assets almost doesn't matter if there is a limited supply, further supply is controlled, and the owners of the supply are wealthy and don't need to sell - and best of all the asset is needed by everybody.
I'm not seeing any conspiracies, just the gradual shift over decades via policy change and tax change. I don't look at these issues emotionally because I need to work out what is best for me and my family, and I can't change the world around me, I can only change the way I fit in with it.
But it beats the hell out of me why people don't understand this. Buffet sure does and he has commented many times about it. It's not a secret, yet no-one seems to understand.
From my perspective I think that house prices will go up globally as less and less people own an ever increasing share of them, and those who do own them will be wealthy enough to cover any downturn - they won't have to sell as in the past.
Any expressed market opinion is my own and is not to be taken as financial advice
The price paid for assets almost doesn't matter if there is a limited supply, further supply is controlled, and the owners of the supply are wealthy and don't need to sell - and best of all the asset is needed by everybody.
I'm not seeing any conspiracies, just the gradual shift over decades via policy change and tax change. I don't look at these issues emotionally because I need to work out what is best for me and my family, and I can't change the world around me, I can only change the way I fit in with it.
But what are proposing is dependent on massive ongoing debt, and especially on low interest rates. Woolworths and Coles buy out of cashflow, it's basically a way of avoiding tax as much as a plan to enlarge their business. Property investors buy on leverage and you only have the last 10 or so years of low interest rates and lax banking policy to base your theory on. If there is a banking crisis, or rates rise precipitously your whole thesis is shot out of the water.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
Lef tee governments used to pursue policies and taxes that redistributed wealth, trying to stop massive wealth accumulating in the hands of just a few. I believe we are seeing the end result of decades of policy change that has actively encouraged a new class system. In the USA it's quite clear just who has the wealth and who doesn't. Those policies have travelled throughout the western nations including our own.
I'm not being a raging commie here, I'm simply acknowledging what I see. I'm not surprised that we now have a wealthy class who will emulate the older upper class in Europe and assume ownership of the majority of assets, whilst the workers will just have to squabble over the crumbs.
I expect to see a diminishing proportion of home ownership as the wealthier families simply buy up the assets that the rest don't want to buy. This is what Coles and Woolies has been doing to the retail grocery market for years. The price paid for assets almost doesn't matter if there is a limited supply, further supply is controlled, and the owners of the supply are wealthy and don't need to sell - and best of all the asset is needed by everybody.
I'm not seeing any conspiracies, just the gradual shift over decades via policy change and tax change. I don't look at these issues emotionally because I need to work out what is best for me and my family, and I can't change the world around me, I can only change the way I fit in with it.
But it beats the hell out of me why people don't understand this. Buffet sure does and he has commented many times about it. It's not a secret, yet no-one seems to understand.
From my perspective I think that house prices will go up globally as less and less people own an ever increasing share of them, and those who do own them will be wealthy enough to cover any downturn - they won't have to sell as in the past.
This seems a pretty fair analysis of the current situation. it's a recurrent pattern, from what I've read about Western history at least, that gradually wealth is transferred to a smaller elite class. I don't think this is part of some grand conspiracy either, it's just an individual's self-interested behaviour (which is how you described your personal situation Peter) writ large.
However there have always been stages where the underclass are oppressed so cruelly that they band together and threaten insurrection - from English history I'm thinking of the Peasants’ Revolt, or movements like the Levellers and Chartists - and the property owning classes will be forced to capitulate and offer some concessions: voting rights, better health care, abolishing slavery etc., so in this way some wealth is redistributed back and people's lives slowly improve. Most are smart enough to know that even if they're priced out of the housing market they have a far superior quality of life than the generations before, and it's largely thanks to these events that this is the case.
I guess the question now is how far away is the next flash point in the West. HSBC UK's chief economist (way more interesting than the brain-dead muppet they've got over here) seems to think it's pretty close:
Me personally I reckon we would have to see a much bigger reduction in people's quality of life to trigger a revolt. Perhaps food shortages or a failing health system. And this could take years to play out. (note to Mr Pig Shit - that was not a prediction on house price falls)
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
This seems a pretty fair analysis of the current situation. it's a recurrent pattern, from what I've read about Western history at least, that gradually wealth is transferred to a smaller elite class. I don't think this is part of some grand conspiracy either, it's just an individual's self-interested behaviour (which is how you described your personal situation Peter) writ large.
However there have always been stages where the underclass are oppressed so cruelly that they band together and threaten insurrection - from English history I'm thinking of the Peasants’ Revolt, or movements like the Levellers and Chartists - and the property owning classes will be forced to capitulate and offer some concessions: voting rights, better health care, abolishing slavery etc., so in this way some wealth is redistributed back and people's lives slowly improve. Most are smart enough to know that even if they're priced out of the housing market they have a far superior quality of life than the generations before, and it's largely thanks to these events that this is the case.
I guess the question now is how far away is the next flash point in the West. HSBC UK's chief economist (way more interesting than the brain-dead muppet they've got over here) seems to think it's pretty close:
Me personally I reckon we would have to see a much bigger reduction in people's quality of life to trigger a revolt. Perhaps food shortages or a failing health system. And this could take years to play out. (note to Mr Pig Shit - that was not a prediction on house price falls)
You pretty much have it. Clearly the flash point is pretty damn close for Egypt (unemployment over 13%) but a long way off here, if ever.
In decades gone by there were marginal tax rates for the wealthy of over 70% and death duties paid when someone with assets died. I'm totally against that level of taxation, but perhaps the pendulum has swung too far.
Any expressed market opinion is my own and is not to be taken as financial advice
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