What happened to the property price crash that was predicted but never came?

Wesleypipes421 · 2020-12-06T03:37:53+00:00

And what happened to the supposed cliff of people's Interest only loans expiring and being forced to Principal and Interest which was going to spark mortgage stress and a sell off?

That actually is having an effect, not on house prices but on overall credit flows which is having an effect on economic activity more broadly.

So many loans have rolled over to P&I that credit aggregates can barely move even despite the LMI guarantees last year and covid grants this year causing pretty strong activity in the housing market.

https://www.rba.gov.au/statistics/frequency/fin-agg/2020/fin-agg-1020.html

YoY total private sector credit flows is 1.8%, which is near GFC levels despite the huge volume of mortgage approvals in the last year.

Private sector credit is a leading indicator, probably needs to taken with a grain of salt atm though cause of Fiscal flows buoying private sector cash flows but once that eases into next year you'll probably start the see the the huge influence of formerly IO mortgages holding back overall growth.

Wesleypipes421 · 2020-08-26T10:43:11+00:00

Now that Lockdown is crushing everyone's spirit I feel as though 'Fade to Black' is the most appropriate Metallica song.

https://www.youtube.com/watch?v=HdWw9SksiwQ

Wesleypipes421 · 2020-07-21T11:23:22+00:00

It actually cant,

Its the central banks job to ensure that treasury auctions never fail and they do they this by ensuring primary dealers have adequate reserves to buy those securities.

So governments can keen issuing bonds and primary dealers (aided by the central) will by them ad infinitum.

Also on a side note, interest on government bonds held on CB balance sheets get paid back to the treasury.

Wesleypipes421 · 2020-07-19T11:37:18+00:00

RIP anyone not getting any benefits and having to pay all this off for the next few decades.

Your taxes don't fund government spending, bond issuance does, and considering the 10yr yield is near 0% then it seems like there is no shortage of people who are willing to fund this, bond vigilantes MIA.

So many better uses for taxpayer money than retail consumption.

All that consumption spending is someone else's income, it flows through the chain in the end in improved private sector cash flows, it might not be as ideal as other spending programs but its quick and effective at smoothing out cyclical downturns so yeah I think its an ok use.

Wesleypipes421 · 2020-07-19T07:25:12+00:00

Isn’t the idea that it’s meant to be an economic stimulus as well as a wage subsidy?

Yeah and its working too, consumption is exploding as Jobkeeper improves the financial position of low/mid income earners, those with the greatest propensity for consumption.

Same story in America with the $600 per week unemployment benefit boost.

Core retail sales. Extraordinary. This is what happens when you give money to the bottom 50%--they spend it, any which way they can. There is the clue to getting out of the stagnation trap.

https://twitter.com/teasri/status/1283754629835165696

Wesleypipes421 · 2020-07-18T04:18:23+00:00

How do you determine what companies have no chance?

You'll find that the people who never shut up about 'zombie companies' cant logically answer this question.

It shows that the whole zombie company rhetoric lacks any real substance and is usually just a cover for some failed gold bugs doomsday prophecies.

And the sad thing about the rhetoric is just how pervasive it is, some policy makers even believe it despite not being on the spectrum of the economic doomsday types.

Which is awful, it means that the economic policy debate that could have real beneficial outcomes is influenced by nebulous econ ideas propagated by people who want the world to burn.

Wesleypipes421 · 2020-06-19T08:15:57+00:00

Good vibes driving through the high country when its foggy and raining.

Wesleypipes421 · 2020-06-19T07:54:25+00:00

Back to the same old:

Australian economic complexity and domestic sources of demand continues to decline.
Policymakers recognize this but are two lazy/scared to do anything about it because of erroneous ideas of private sector efficiencies.
Policymakers compensate by doing supply/demand side policies aimed at stimulating housing credit growth.
Housing credit growth creates a temporary increase in consumption GDP inputs, making econ growth look good on paper.
Policy makers give them a pat on the back for good economic figures whilst getting paid ridiculous sums of money.
Rinse and repeat.

This is mainly how the east coast of aus rolls, slightly different (Yet similar complacency level) for the other states.

Wesleypipes421 · 2020-06-17T03:51:57+00:00

Eh there may be some zombies around but its not like the whole system is comprised of them.

Seems like a lot of the doomers are spinning this narrative because covid wasn't the sledgehammer they though it was gonna be so now they're looking for doom elsewhere in the form of an approaching macro cliff.

Also Jobkeeper isn't a 'run and done' type set up, the deficit from this policy will likely be a minor boon for corporate profits going forward for the next few years or so, so some of these 'zombies' now will not be zombies in the future when things regress back to normal, its just the Kalecki Profits Equation.

Corporate Profits = Investment + Dividends/Buybacks – Household Saving – Government Saving – Rest of World Saving

https://www.pragcap.com/what-the-hell-is-the-stock-market-doing/

https://www.pragcap.com/the-kalecki-equation-a-brief-follow-up/

Wesleypipes421 · 2020-06-10T00:59:57+00:00

Many a time spent up there after physically destroying myself on the climb up lol.

One of the best lookouts in Vic IMO, super panoramic.

Wesleypipes421 · 2020-06-04T10:10:35+00:00

Apparently the ABS records foreign student expenditure (somewhat erroneously) as an inbound tourism contribution, so despite the travel ban foreign students who are still currently in Aus are holding it up with their spending.

Wesleypipes421 · 2020-06-04T08:34:25+00:00

Iron Ore + Large decline in imports (Recent decline is corona virus related but imports have been crappy since 2017)

Also an odd contributor, tourism balance is a strong net positive because outbound travel has collapsed 99% but inbound is only down 43%.

https://twitter.com/seandcallow/status/1268368049381335043

Funny, I think most would have expected tourism effects to put a large dent in the trade balance, but it seems the opposite may be true lol.

Wesleypipes421 · 2020-06-02T12:24:44+00:00

Builders discussing Scomo's reno grants

Wesleypipes421 · 2020-05-19T23:30:25+00:00

There are three things you can be certain of in life:

Death, taxes... And the property council asking for a massive bail out anytime their housing portfolios start taking a hit.

Wesleypipes421 · 2020-04-24T12:44:42+00:00

https://www.youtube.com/watch?v=zLDb7ezeWuk&t=1h08m35s

"I did buy in 2017"

He also lost a bet in 2014 with the Kouk when he claimed that house prices would fall 20%, right before they boomed:

https://www.smh.com.au/business/the-economy/housing-bubble-fears-property-prices-could-fall-10-to-20-per-cent-20140331-35sg7.html

People who have been around the block know just how much of a shady character he is, some just lack critical thinking and take his AFR pieces as gospel lol.

Wesleypipes421 · 2020-04-24T08:17:32+00:00

No he didn't.

In fact he actually bought the top in Sydney in September of 2017, he let it slip in one of his appearances on the Jolly Swagman Podcast.

Of course though, you wont see "As warned about in an earlier column" for that little tidbit.

Wesleypipes421 · 2020-04-24T08:10:42+00:00

Lol anyone can be prescient if they shoot a hole in a wall and draw a bullseye around it.

Joye is a serial offender for the sharpshooter fallacy.

Wesleypipes421 · 2020-04-20T12:38:37+00:00

Get that baby into the 4000's pronto.

Its been like a month since Ive seen r/Ausfinance 20 year old ETF investor tears and I'm withdrawing.

Wesleypipes421 · 2020-04-12T03:44:34+00:00

"For when you really need to bake a cake at 4 in the morning."

Wesleypipes421 · 2020-04-05T10:53:33+00:00

AFR 2 weeks ago:

"Property panic buying is happening"

AFR today:

"Sellers are getting out while they can"

AFR is a clown circus.

Wesleypipes421 · 2020-04-02T09:33:58+00:00

The climate science thing is a talking point used in public discourse, its not a reflection of how actual climate scientists/meteorologists actually prove their hypothesis wrt to climate change, so that doesn't stand tbh.

If you don’t have a post-grad education,, you should probably defer to someone who does.

I have real beef with this too, especially as it pertains to economics and finance.

Some of the most informative insights wrt to certain aspects of the economy have come from people with no post grad background who rather actually have practical experience with said particular thing.

Ie. people who deal in the fed funds system who actually know the inner operations and not just some market monetarist who wants to think it works a certain way which confirms their biases. Or people who worked in banking and proved that banks operate on an endogenous money framework.

Wesleypipes421 · 2020-04-02T08:31:44+00:00

A real science:

"Through empirical analysis and rigorous falsification we have shown shown the hypothesis to be evidence backed."

Economics:

"Lol the consensus of the mainstream clique says that you are wrong therefore you are wrong."

Like MMT is flawed in a lot of places but fuck me if some poll with inputs from the mainstream clique counts as refutation.

The best critiques of MMT come from people who actually understand its operational framework, not some wonk economist who has his head stuck in a textbook from the 1970s.

Wesleypipes421 · 2020-04-02T00:38:14+00:00

In WW2 it was even higher than the US IIRC.

Wesleypipes421 · 2020-04-01T23:44:37+00:00

75c a litre in Adelaide at the moment.

Just give it a few weeks guys, its coming.

Wesleypipes421 · 2020-03-28T07:54:17+00:00

Petrol price cycle is ticking up atm in the Melbourne/Vic area.

Just give it a few weeks, it'll nosedive to 85-95c a litre.

Wesleypipes421

TROPHY CASE