Enough doom and gloom

[theasxgorilla]

That's a shame. We need house price falls (amongst other things) to get out of this mess.

Hmmm...after looking at Japan for almost 2 decades I think the worlds central bankers fear deflation more than anything else and would rather inflate away the debt. I'd bet on this lesser of two evils being their objective, which I don't think will result in house price falls in the vicinity that many are thinking is necessary.

 

[chops_a_must]

Hmmm...after looking at Japan for almost 2 decades I think the worlds central bankers fear deflation more than anything else and would rather inflate away the debt. I'd bet on this lesser of two evils being their objective, which I don't think will result in house price falls in the vicinity that many are thinking is necessary.

The end results will be the same though as wages, costs of living and support payments have to rise.

 

[sinner]

So using the Marty Armstrong theory, from his graph he says that the high would be 27 Feb 2007, but it actually Oct 9 2007, which is 224 days out.

Hmm...how did you justify this again? I misunderstand.

Feb 27
http://money.cnn.com/2007/02/27/markets/markets_0630/index.htm
"Dow tumbles 416, biggest one-day point loss since 2001, as investors eye China, drop in durable orders."

(since 2001 means since 9/11)

I am pretty sure the numbers "work" (please note I suggest you run the numbers yourself and not take my word for it) if you only count business trading days.

The above chart, I am sure, is not meant to be taken so visually as much as an indicator for highs and lows on particular dates.

 

[cuttlefish]

The end results will be the same though as wages, costs of living and support payments have to rise.

But different strategies are needed depending on the form it takes - deflationary or inflationary.

And everybody is a participant in the property market (because whether an owner, a mortgagee or a tennant, everybody has to live somewhere).

 

[Smurf1976]

Hmmm...after looking at Japan for almost 2 decades I think the worlds central bankers fear deflation more than anything else and would rather inflate away the debt. I'd bet on this lesser of two evils being their objective, which I don't think will result in house price falls in the vicinity that many are thinking is necessary.

I tend to agree somewhat. But to work that needs to be wage inflation we're talking about and not something else being inflated.

 

[theasxgorilla]

The end results will be the same though as wages, costs of living and support payments have to rise.

Fine, but factor those things in as part of an alternate scenario. I think too many bears are looking for the inevitable what goes up must come down. That is a scenario, yes. But not exploring other possible scenarios, however illogical or unlikely based on todays "facts", means you might miss something vital when your map stops matching the terrain.

Take the bear camp for the last several years. The consensus was that it's all got to end now...no I mean, now...ummm, I mean, ready, now. It's been like kids sitting in the back seat trying guess when the lights will change to green. Whilst it's highly unlikely that we were ever going to buck the business cycle indefinitely, side lining yourself too early (or worse still, shorting) means you missed a real goldilocks of a bull market.

I know, because I went cash heavy with my super a little earlier than I could have and missed a really nice trend. That my low-risk income investments have compounded since then to ensure that I'm still well ahead of practically anybody in the "balanced" buy-and-hold camp is of course some salvation.

What are some of the alternative scenarios, and what might they look like?

The Peter Schiff scenario is for real doom and gloom. It's possible that we might get doom without gloom. If central banks manage to lower rates to reduce the worlds home owners monthly commitments, and their house prices remain steady yet inflation takes off, we could well have the doom...but people might be a lot less gloomy about it than a savagely deflating house price scenario.

What about boom and gloom? Is there a scenario where we have some booming sectors/economies yet the masses are still gloomy? Of course. Observe the distribution of Russian prosperity over the last decade or so.

Scenarios are fun. Far more valuable than pegging your hopes to just one outcome and defending it to the hilt.

 

[Ageo]

lol sammy if you think this market will continue to go on forever like this you have got to be kidding? if nothing changes to our monetary system then what happens when property prices are $1million on average? whats the medium wage going to be?>do we all go from our parents having 1 job of the husband to working 2 jobs each (for the average person)? If you look at statistics our growth isnt sustainable, the only way that our growth is possible is from credit (this has proven itself). I suggest you learn about credit creation/destruction a little more before trying to think our leaders have an idea.

Sit through this simple crash course and then tell me what you think (remember this is based purely on facts as i have cross checked these).

http://www.chrismartenson.com/crash-course/chapter-1-three-beliefs

 

[moXJO]

Things do not suddenly come crashing down its death by a thousand cuts. I would love for the OP to be right. But things have slowed down a lot in my town. And a lot of business has started to go bust. We were flat out just a few months ago and now everyone is quiet. I think a lot of it is influenced by people’s fears as well. The lag time on property coming down has taken a lot longer then I thought it would. While I am prepared for a downturn I hope that we might pull up ok and things wont be so bad. But rest assured there are a lot of people doing it very tough out there right now.

 

[shaunQ]

Hmm...how did you justify this again? I misunderstand.

Feb 27
http://money.cnn.com/2007/02/27/markets/markets_0630/index.htm
"Dow tumbles 416, biggest one-day point loss since 2001, as investors eye China, drop in durable orders."

(since 2001 means since 9/11)

I am pretty sure the numbers "work" (please note I suggest you run the numbers yourself and not take my word for it) if you only count business trading days.

The above chart, I am sure, is not meant to be taken so visually as much as an indicator for highs and lows on particular dates.

Hi - I am not arguing it at all, simply saying the graph points to all time high at 27/2/2007, and it was very high, however, the market continued to climb for another 224 days (incl. weekends).

However, obviously I am taking it visually, in reality I think he just says there will be a change of sentiment on that day, not necessarily a complete redirection.