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Robert Shiller's Devastating Takedown Of Housing As An Investment; Will Have You Renting For The Rest Of Your Life
Topic Started: 15 Oct 2013, 08:54 AM (3,316 Views)
Billy Jack
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The Duke of Brisbane Town

stinkbug
15 Oct 2013, 10:21 AM
...and:
8) They recognise everyone needs somewhere to live, and realise they can buy a property, rent it out, and eventually own it outright, paid for with other peoples' money.
Yes friend, but only if they have IQs sufficiently low as to not be able to make money in a normal way. Homes are easy to understand for them folks. Are you one of them?

EDIT: They have IQs sufficiently low as to not be able to do anything else and need to live there because if they left their village/town/"city" they would be big ass nobodies who couldn't clean a restroom to make a buck. Smart folks just get on a plane and make money doing their jobs in other places. And they don't buy at all. They rent.

By the way friend, them so called assets aint worth nothing in a normal market. Young folks aint buying. The jig is up and people will opt out of the market. But then again, there are people 1-8 coming in by the boatload.
Edited by Billy Jack, 15 Oct 2013, 10:39 AM.
Tell Billy Jack the Truth
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CSI
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Its not so much the buildings as the land underneath you are "investing" in. In any case I believe analysis of properties in the Europe shows that, adjusted for inflation, land prices are stable over the long term.

From my layman's perspective there is a big problem with investing in property. You only want to invest in something if is appreciating faster than inflation. Inflation is correlated with the median wage isn't it? So if property is a good investment its going to be rising faster than wages. You can make credit cheaper and cheaper, but there is a limit. First home buyers are almost wholly dependent on credit, and when they are no longer eligible for enough credit they are priced out of the market. Without first home buyers, the whole thing devolves into a bubble.
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stinkbug
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Billy Jack
15 Oct 2013, 10:37 AM
Yes friend, but only if they have IQs sufficiently low as to not be able to make money in a normal way. Homes are easy to understand for them folks. Are you one of them?

EDIT: They have IQs sufficiently low as to not be able to do anything else and need to live there because if they left their village/town/"city" they would be big ass nobodies who couldn't clean a restroom to make a buck. Smart folks just get on a plane and make money doing their jobs in other places. And they don't buy at all. They rent.

By the way friend, them so called assets aint worth nothing in a normal market. Young folks aint buying. The jig is up and people will opt out of the market. But then again, there are people 1-8 coming in by the boatload.
Leaving aside your insults for the moment, let's tackle the issue of property being an asset.

The definition of an asset is something that provides future benefit. Does property provide future benefit? Yes, I think so.

Let's also think about Robert Kiyosaki's definition of an asset. Does it put money in my pocket? Interesting one... Maybe not at first, but over time yes, yes it does.

Property provides yield consistently, and generally grows in value over time. So if I can buy a property that covers its costs, what is to stop me simply waiting for enough time to pass to get the result I want?

You also suggest property investors have low IQs. Has it occurred to to you that most property investors have full time jobs? Many investors (including myself) have professional jobs that pay significantly more than average. Property is a very effective, low risk way to store and grow wealth.

Young people aint buying? They want to rent in the popular locations? No problem at all, they can rent from me. I'm happy to use their money to buy assets, and happy to live off their money when I retire. Sounds like a good deal from where I'm sitting.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Catweasel
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stinkbug
15 Oct 2013, 11:55 AM
Leaving aside your insults for the moment, let's tackle the issue of property being an asset.

The definition of an asset is something that provides future benefit. Does property provide future benefit? Yes, I think so.

Let's also think about Robert Kiyosaki's definition of an asset. Does it put money in my pocket? Interesting one... Maybe not at first, but over time yes, yes it does.

Property provides yield consistently, and generally grows in value over time. So if I can buy a property that covers its costs, what is to stop me simply waiting for enough time to pass to get the result I want?

You also suggest property investors have low IQs. Has it occurred to to you that most property investors have full time jobs? Many investors (including myself) have professional jobs that pay significantly more than average. Property is a very effective, low risk way to store and grow wealth.

Young people aint buying? They want to rent in the popular locations? No problem at all, they can rent from me. I'm happy to use their money to buy assets, and happy to live off their money when I retire. Sounds like a good deal from where I'm sitting.
Cat weasel say it good.

Always the important to a rationalize mouse's own behavior.

Universe take care of a rest.

And that the why,

A Schiller win a Nobel.

But media not a focus,

Yet.

And maybe its Herald Sun,

Never address.
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Veritas
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Where are Shadow and Strindberg when the bulls need a good professional smear job done?

Stringy, still doing up the hate file on Mr.Schiller?

Perhaps the boys are a little worried what with those pesky Norwegians handing housing bears Nobel prizes.

Quote:
 
This financial crisis that we’ve been going through in the last five years has been one that seems to reveal the failure to understand price movements,” Shiller said.

…China, Brazil, India, Australia, Norway and Belgium, among other countries, were witnessing similar price rises. “There are so many countries that are looking bubbly,” he said.


Reminds me of conversations with Shadow.

Me: Our prices are bubbly.
Shadow: Please look at this list of countries who have had similar booms.
Me: They are bubbles too.

Now, I've got a Nobel laureate in my camp.

Cool.
Edited by Veritas, 15 Oct 2013, 01:07 PM.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Shadow
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Evil Mouzealot Specufestor

peter fraser
15 Oct 2013, 08:54 AM
If you think investing in housing is such a great idea, why not invest in cars? Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people won’t want our cars. It’s the same with our houses.
Why not? Why not indeed!

Shiller makes a great point. There really is no difference at all between property and cars.

I'm going to sell all my IPs now and buy a fleet of Holdens. I know I'm onto a sure thing here... what could possibly go wrong?

:huh:
Edited by Shadow, 15 Oct 2013, 01:21 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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stinkbug
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Shadow
15 Oct 2013, 01:20 PM
Why not? Why not indeed!

Shiller makes a great point. There really is no difference at all between property and cars.

I'm going to sell all my IPs now and buy a fleet of Holdens. I know I'm onto a sure thing here... what could possibly go wrong?

:huh:
I agree. Holdens, like gold, have a kickass yield.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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gen y
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Shadow
15 Oct 2013, 01:20 PM
Why not? Why not indeed!

Shiller makes a great point. There really is no difference at all between property and cars.

I'm going to sell all my IPs now and buy a fleet of Holdens. I know I'm onto a sure thing here... what could possibly go wrong?

:huh:
Because renting cars for life is way cheaper
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Admin
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Administrator

Quote:
 
Nobel Prize winner Robert Shiller warns of 'bubbly' global home prices

October 15, 2013 - 12:14PM

One of three American economists who won the 2013 economics Nobel prize today for research into market prices and asset bubbles expressed alarm at the rapid rise in global housing prices.

Robert Shiller, who shared the 8 million Swedish crown ($1.31 million) prize with fellow laureates Eugene Fama and Lars Peter Hansen, said the US Federal Reserve's economic stimulus and growing market speculation were creating a "bubbly" property boom.

The Royal Swedish Academy of Sciences lauded the economists' research on the prices of stocks, bonds and other assets, saying "mispricing of assets may contribute to financial crises and, as the recent global recession illustrates, such crises can damage the overall economy".
Housing guru: Robert Shiller speaks at a press conference in Connecticut.

Housing guru: Robert Shiller speaks at a press conference in Connecticut. Photo: Reuters

This was the case in the collapse of the US housing market, which helped trigger the 2008-09 global financial crisis. Markets are at risk of committing the same error now, Shiller told Reuters after learning he had won the Nobel prize.

"This financial crisis that we've been going through in the last five years has been one that seems to reveal the failure to understand price movements," Shiller said.

Bubbles are created when investors fail to recognise when rising asset prices become detached from underlying fundamentals.

Shiller and other economists warn that prices in some markets have risen too far, too fast due to the Fed's ultra-easy monetary policy. The benchmark US Standard & Poor's 500 index hit a record in September, though it is generally not considered overvalued based on expectations for corporate earnings results or economic growth.

Shiller's work led him to suggest in 2005 that the US housing market might be overheating. He helped create a closely watched gauge of housing prices, the S&P Case/Shiller Index.

In June this year, he pointed to a potential new housing bubble in some of America's largest cities.

"It is up 12 per cent in the last year. This is a very rapid price increase right now, and I believe that it is accelerated somewhat by the Fed's policy," he said.

China, Brazil, India, Australia, Norway and Belgium, among other countries, were witnessing similar price rises. "There are so many countries that are looking bubbly," he said.

Read more: http://www.smh.com.au/business/world-business/nobel-prize-winner-robert-shiller-warns-of-bubbly-global-home-prices-20131015-2vjh1.html
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skamy
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Catweasel
15 Oct 2013, 10:32 AM
Catweasel say if a Robert the Schiller can the be a guilty,

how it apply to mouse?

How does mouse position its bench the mark to ascertain a guilty?

Base upon a hopes & expectation of mouse in English-speak the world?

Or a collective of white shoe article it consume?

And any the way,

why does mouse attach emotional adjective to word "analysis"?

If collective mouse really feel this way, not much the change from a 2003.
Mouse and white shoe and master all can lose lot the money that is why they like the trend spotter. Analysis is the fun, always guessing but guessing improving so on and on we go.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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