Australia Faces Its Demons

[JonoP]

As I said the journos are a a fickle bunch. I don’t hold them in high esteem, since you asked the question I don’t see any marked difference in the quality of yours either but you obvioulsly do.

I do respect Terry Ryder as a property journalist though.

Why? Because he makes you feel secure?

The fin review is not a bad rag. I skimmed the headline on Friday while getting a glass of water, something about the biggest investment ever in commodities and construction of the top of my head a 40% increase from last year and potential wage breakouts and skills shortage. So I wonder what will that do to the housing market ?

Hah hah, yeah commodities. Whatever. Aus does have some commodities. But they are needed given the pathetic lack of any other industry. No manufacturing, no financial services, no business services, nothing. Commodities just about compensate for the terrible lack of any other industry within Aus. However, it ain't just commodities that are fueling your economy. It is what your favored journalists refer to as property 'investment'. However, in reality, this 'investment' is just the same people selling the same thing (houses) backwards and forwards between each other for ever increasing amounts of debt.

You should read the weekend edition of the AFR. The headline is 'Safe as Houses?'. It is not entirely upbeat if you catch my drift....

And, always remember, for all your banging on about commodities, Aus needs to import HUGE amounts of capital each year to support its housing market. If the commodities were driving a current account surplus, then I would be all over Aus property like a rash. But there is no surplus. There is a huge deficit. And sooner or later, foreign banks will judge the Aus hosuing market too much of a risk and then……BANG!

I was only making the point that the press swing either way. As a bull I understand that you would be ashamed about the inaccuracies of previous posts. Personally speaking I couldn't live with the shame of it.

How can I be ashamed about someting I have not read?

What I hold really important in all of this is the price of houses and the level or rent, and what direction they are moving in. These are the brutal facts.

Translated: ‘ have been lucky so far. I do not understand why. But I am sure it will continue’

Why is that ?

Is it because I won’t slag my workmates of or I enjoy my job or is it because my salary expectation are too high

I do not salg all my workl mates off.

I do not slag all my workmates off. The European and American ones get it. The Aussie ones are all very nice. But they tend to be a little, ummm, naive.

Nothing wrong with renting, it takes all kinds to make a market.

It does. And a nice kind property 'investor' is subsiding my rent to the tune of 50% whilst also lining owning all of the downside capital risk. Nice!

Edited February 28, 2010 by Pond321

[aussieboy]

"Is it because I won’t slag my workmates of or I enjoy my job or is it because my salary expectation are too high

I do not salg all my workl mates off.

I do not slag all my workmates off. The European and American ones get it. The Aussie ones are all very nice. But they tend to be a little, ummm, naive. "

Since when was being patronising not count as slagging off?

Edited February 28, 2010 by aussieboy

[aussieboy]

"But they [commodities] are needed given the pathetic lack of any other industry. No manufacturing, no financial services, no business services, nothing. Commodities just about compensate for the terrible lack of any other industry within Aus"

Jesus: never forget, if you're thinking about making that big, bold statement, before you go with your gut Google is your friend.

[JonoP]

"But they [commodities] are needed given the pathetic lack of any other industry. No manufacturing, no financial services, no business services, nothing. Commodities just about compensate for the terrible lack of any other industry within Aus"

Jesus: never forget, if you're thinking about making that big, bold statement, before you go with your gut Google is your friend.

As is wikipedia. I quote:

Current areas of concern to some economists include Australia's large current account deficit, Australia’s current account deficit for the 2007- 2008 financial year was up 4% to $19.49 billion (according to the Australian Bureau of Statistics), the absence of a successful export-oriented manufacturing industry, an Australian property bubble, and high levels of net foreign debt owed by the private sector.

[aussieboy]

As is wikipedia. I quote:

Current areas of concern to some economists include Australia's large current account deficit, Australia’s current account deficit for the 2007- 2008 financial year was up 4% to $19.49 billion (according to the Australian Bureau of Statistics), the absence of a successful export-oriented manufacturing industry, an Australian property bubble, and high levels of net foreign debt owed by the private sector.

= "But they [commodities] are needed given the pathetic lack of any other industry. No manufacturing, no financial services, no business services, nothing. Commodities just about compensate for the terrible lack of any other industry within Aus"

Loving your long bow, Pond321.

[aussieboy]

What a weekend many records broken in Melbourne.

Property market continues its red-hot run

<Snip>

Craig Stevens of Jas H Stephens Real Estate reported a 13 per cent rise in property prices in the inner west, selling 6 Agnes Street, Yarraville, which was on the market at $700,000, for $807,000.

''The property market is just roaring along - what started as a grassfire is now a bushfire,'' he said.

<snip>

That's some good taste right there, Craig... and from a Victorian too.

Couple of weeks earlier would have hit the Black Saturday anniversary smack on the nose.

[Guest Noodle]

"Hmm. You would never, ever, be able to get a job with the company I work for, which, incidentally, is one of the most successful companies known to mankind. Keep digging those holes of fixing pipes or whatever it is you do. It will hopefully provide you with plenty of cash to subsidize your rental tenants……"

How exciting! Is it Microsoft?

And WTF's wrong with diggin' holes? I've been diggin' and refillin' holes all my life. Never did me any harm.

(Seriously. That's what I did.)

[JonoP]

So if it is not because of the reasons I mentioned before why would I never ever be able to get a job with your company ?

Lack of skills.

[JonoP]

= "But they [commodities] are needed given the pathetic lack of any other industry. No manufacturing, no financial services, no business services, nothing. Commodities just about compensate for the terrible lack of any other industry within Aus"

Loving your long bow, Pond321.

Ummm, are you trying to make point here? As I said, Commodities are needed given the pathetic lack of any other industry within Australia.

Australia is only able to earn foreign income from things it digs up or grows.

Figures are:

• Agricultural exports accounted for 4.1 per cent of total exports in 200809, down from 8.8 per cent in 199899.

• Mining exports accounted for 41.5 per cent of total exports in 200809, well above the 17.7 per cent in 199899.

• Manufacturing exports accounted for 29.7 per cent of total exports in 200809, down from 45.6 per cent in 199899.

• Services exports accounted for 18.9 per cent of total exports in 200809, down from 24.8 per cent in 199899.

• Exports not specifically classified to an industry (due to not readily being classified and/or confidential) account for the remainder.

This is pathetic. Give me the names of some companies (outside of commodities) that are globally famous for innovation? Name five famous inventions that have come out of Aus? The only well known brands you have are Fosters and Quantus and they are both failing.

Your economy is a two trick pony. Deal with it

Edited February 28, 2010 by Pond321

[JonoP]

And WTF's wrong with diggin' holes? I've been diggin' and refillin' holes all my life. Never did me any harm.

(Seriously. That's what I did.)

Nothing wrong with digging holes at all.

[Guest Noodle]

Nothing wrong with digging holes at all.

My biggest stockpile was 120,000 cubic metres.

Yes.

It was very big and there were lot's of yellow dump trucks.

[Guest DissipatedYouthIsValuable]

My biggest stockpile was 120,000 cubic metres.

Yes.

It was very big and there were lot's of yellow dump trucks.

I've done my best to fill in a few large holes in my time.

Giggity.

[aussieboy]

Ummm, are you trying to make point here? As I said, Commodities are needed given the pathetic lack of any other industry within Australia.

Australia is only able to earn foreign income from things it digs up or grows.

Figures are:

• Agricultural exports accounted for 4.1 per cent of total exports in 2008–09, down from 8.8 per cent in 1998–99.

• Mining exports accounted for 41.5 per cent of total exports in 2008–09, well above the 17.7 per cent in 1998–99.

• Manufacturing exports accounted for 29.7 per cent of total exports in 2008–09, down from 45.6 per cent in 1998–99.

• Services exports accounted for 18.9 per cent of total exports in 2008–09, down from 24.8 per cent in 1998–99.

• Exports not specifically classified to an industry (due to not readily being classified and/or confidential) account for the remainder.

This is pathetic. Give me the names of some companies (outside of commodities) that are globally famous for innovation? Name five famous inventions that have come out of Aus? The only well known brands you have are Fosters and Quantus and they are both failing.

Your economy is a two trick pony. Deal with it

First off, you may treat your country's economy as the basis of your nationalistic feeling but I have trouble working up much of a froth about these things.

Also, I don't really get a stiffy running off a list of my country's achievements like some sort of antipodean Jeremy Clarkson, so I'll skip your playground challenge for the moment if you don't mind.

BTW, the bit you missed on your link was this:

"Total industry exports (current prices) totalled $285.5 billion over 2008–09—this is 150.0 per cent higher than the total for 1998–99."

Which means that all the exports increased by a chunk, but, like other natural resource exporting economies in the last 10 years, that particular industry has overperformed.

If you're concerned about these things, it's on Wikipeia: the US is a two trick export pony too.

[JonoP]

First off, you may treat your country's economy as the basis of your nationalistic feeling but I have trouble working up much of a froth about these things.

Also, I don't really get a stiffy running off a list of my country's achievements like some sort of antipodean Jeremy Clarkson, so I'll skip your playground challenge for the moment if you don't mind.

BTW, the bit you missed on your link was this:

"Total industry exports (current prices) totalled $285.5 billion over 2008–09—this is 150.0 per cent higher than the total for 1998–99."

Which means that all the exports increased by a chunk, but, like other natural resource exporting economies in the last 10 years, that particular industry has overperformed.

If you're concerned about these things, it's on Wikipeia: the US is a two trick export pony too.

Hah hah. That was a bit of rant! Touch a raw nerve did I?

[JonoP]

Do we have a fully assimilated whinging pom here ?

Nah, we have a two bit economy and a mocking pom

[blue skies]

The only cash flow that a home brings to a home owner is as an expense. Unless you've managed to rent a room out to a lodger that is, then we'll agree there's a positive cash flow from the lodger.

But it does highlight something else worth mentioning. And that is rental yields. Right now, according to our chums at RP Data the gross rental yield for houses in Melbourne is just 3.8%.

Try getting a new mortgage on a home where your annual repayment is just 3.8%. That wouldn't even cover the interest costs.

In other words, based on imputed rents, it's more cost effective for someone to rent than it is for them to buy a house. Furthermore, the chances are that if you're renting rather than buying you'll rent a house that is smaller than a house you would have bought.

So, your cost savings as a renter are likely to be even greater still.

But that's not all, in recent days the property spruikers are starting to ratchet up the untruths and propaganda. It seems the latest claim doing the rounds is that those who didn't buy a house last year have not only missed out, but it's cost them a potential profit of $100,000.

Not surprisingly, none of these claims are backed up with any figures. The reason it isn't is because it isn't true. Because the real story is that despite the figures claiming that house prices have risen by 11.8%, those that bought this time last year are still in the red.

Take off all the fees and charges and interest costs of buying a house and having a mortgage, home buyers from a year ago wouldn't even be at breakeven point. So quite how people have missed out on $100,000 of profits we're yet to figure out.

But, it's as we've always said, the argument about buyers having missed out on the property boom flies in the face of the claims spruikers make about prices always going up.

If house prices always rise then you'll never miss out. If house prices always double every 7 years as the spruikers claim then does it really matter if you buy this year or next? If you buy next year then you'll double your money in 8 years from now.

What's the rush?

The answer is, there's no rush. All the spruikers are interested in is keeping the property ponzi scheme going. So far they're succeeding. What they're also succeeding at is ensuring the long-term impoverishment of the Australian economy.

We'll be back tomorrow with more. Until then, Murray...

Cheers.

Kris.

[blue skies]

This is pathetic. Give me the names of some companies (outside of commodities) that are globally famous for innovation? Name five famous inventions that have come out of Aus? The only well known brands you have are Fosters and Quantus and they are both failing.

Your economy is a two trick pony. Deal with it

1 Victor, lawn mowers. 2 Hills, clothes hoist. 3 Arbor Tec, wood carver. 4 Tridant, wood working center. 5 Coclea , ear transport.

Just off the top of my head.

You are correct how ever take away the minerals and we will be in poverty.

[aussieboy]

Hah hah. That was a bit of rant! Touch a raw nerve did I?

Not really - just responding in idiom to an angry man.

Or woman.

[aussieboy]

Much as I hate to leave the fascinating discussions on atomic absorbance spectroscopy, commercialisation of penicillin et al., VPAPs, TNFalpha and the rest, my neighbour in Woollahra has just put his place up for auction.

Bought in 2007 ("peak") for x, spent 0.25x renovating, renters in for a year or so. Let's see how he goes.

Edited for typo.

Edited March 1, 2010 by aussieboy

[Guest Noodle]

Was that lose or bank volume ?

I like big machines with flashing lights and reversing beepers that are painted yellow as well.

I have been in some very big holes, Freeport Copper Mine in Irian Jaya is a big hole at 4500m above sea level and what is more interesting is that there is a glacier called Grasberg below you believe it or not that close to the equator.

In my training years I had an old fella show me how to dig a hole properly with a shovel, there is a right way, it is still hard yaka though.

We are making a big hole on the job I am on now it will be 1.25million m3 cut at the end. Also got two separate 4.5m dia tunnels going out about 1.4km to sea.

The big one is coming and that will be the extension to the Roxby Downs Gold/Copper/uranium open cut BHP mine in South Australia that will be the biggest hole in the world when finished.

Loose. Even though there was a lot of compactive effect from plant running about on it, PSD showed high sand fraction. Done landfills where the cut is 500,000m3.

[quine]

1 Victor, lawn mowers. 2 Hills, clothes hoist. 3 Arbor Tec, wood carver. 4 Tridant, wood working center. 5 Coclea , ear transport.

Just off the top of my head.

You are correct how ever take away the minerals and we will be in poverty.

Give Australia its due, the clothes hoist (aka whirly bird) has been a fantastic Australian invention. You forgot that other great one that I'm always told about - the dual toilet flush - another great Australian invention.

[Guest Noodle]

Much as I hate to leave the fascinating discussions on atomic absorbance spectroscopy, commercialisation of penicillin et al., VPAPs, TNFalpha and the rest, my neighbour in Woollahra has just put his place up for auction.

Bought in 2007 ("peak") for x, spent 0.25x renovating, renters in for a year or so. Let's see how he goes.

Edited for typo.

Nobody uses FAAS any more, it's now Inductively coupled plasma with optical emissions spectroscopy (ICP-OES). I get full metals suites done for less than a fiver.

[aussieboy]

Like chuckin a fag doubt up a close.........

In my mind, he was talking about his own apertures.

[aussieboy]

Nobody uses FAAS any more, it's now Inductively coupled plasma with optical emissions spectroscopy (ICP-OES). I get full metals suites done for less than a fiver.

Had it's moment, though, eh? Handy for measuring Pt-DNA adducts back in the day. Used to get them done for pence.

[aussieboy]

Give Australia its due, the clothes hoist (aka whirly bird) has been a fantastic Australian invention. You forgot that other great one that I'm always told about - the dual toilet flush - another great Australian invention.

Go us!