http://www.news.com.au/story/0,23599,23947854-5007146,00.html
A good summary of what's to come ( and what I posted 2 months ago ).
Scamp wrote:http://www.news.com.au/story/0,23599,23947854-5007146,00.htmlA good summary of what's to come ( and what I posted 2 months ago ).
What Mark has said in that article is very good advice.
But it's also "commonsense 101".
If people are struggling to repay their loans, and/or are about to convert to a variable rate after a long fixed rate, and see that they are going to struggle, then they have over-committed from day 1.
Your predictions are correct Scamp – there will tears soon enough, but every single one of those people who will be affected only have themselves to blame.
No one put a gun to their head and said "BUY!"
So what's your point? What are we supposed to be doing based on that? There is nothing those people can do except sell for the best price they can get now. As always.
I'm ok, so I'm not going to be selling – I'm going to be buying the shipwrecks.
You are preaching to many of the converted here; we all know what's happening and we take steps to mitigate risks. That's all part of investing safely and successfully.
Rather than just keep stating the obvious, give the forumites a few strategies that will teach them how to invest successfully in the times ahead.
L.A Aussie wrote:Rather than just keep stating the obvious, give the forumites a few strategies that will teach them how to invest successfully in the times ahead.You're right. I think it's obvious now. Hm. Investing successfully in the times ahead :
– Buy alternative energy funds ( solar / wind / geothermal technologies )
– Buy bank shares at the bottom of the crisis
– Buy goldie : stay away from property. The market will stagnate for years and years.
After you stop hearing stories of real estate, and everyone knows someone who lost tens of thousands of dollars on properties, THEN you need to buy. Wait for the negative AND the positive news to stop. When you hear nothing, then you know it's time to buy property again.Banks always recover before the property market does. So if you invest in banks before you invest in property, you should be making enough money to have a head-start on the rest.
Oil is the key to doom guys, $143 record again. Watch it, and be afraid. War soon.
ormeau wrote:Oil is the key to doom guys, $143 record again. Watch it, and be afraid. War soon.Green energy is the key guys. Its happening. More oil discoveries soon anyway.Alternate fuel as well. Everything will be fine.
L.A Aussie wrote:Scamp wrote:http://www.news.com.au/story/0,23599,23947854-5007146,00.htmlA good summary of what's to come ( and what I posted 2 months ago ).
What Mark has said in that article is very good advice.
But it's also "commonsense 101".
If people are struggling to repay their loans, and/or are about to convert to a variable rate after a long fixed rate, and see that they are going to struggle, then they have over-committed from day 1.
Your predictions are correct Scamp – there will tears soon enough, but every single one of those people who will be affected only have themselves to blame.
No one put a gun to their head and said "BUY!"
So what's your point? What are we supposed to be doing based on that? There is nothing those people can do except sell for the best price they can get now. As always.
I'm ok, so I'm not going to be selling – I'm going to be buying the shipwrecks.
You are preaching to many of the converted here; we all know what's happening and we take steps to mitigate risks. That's all part of investing safely and successfully.
Rather than just keep stating the obvious, give the forumites a few strategies that will teach them how to invest successfully in the times ahead.
There will be simply a DOMINO effect.
If a house in your street sells for $100,000 LESS then ALL houses in that street will lose value and then the next street will lose some value too and so on.
Come on, how can you think that Australians will keep buying houses at 6X the average income while in the US and Canada they get it at 3X ?
devo76 wrote:ormeau wrote:Oil is the key to doom guys, $143 record again. Watch it, and be afraid. War soon.Green energy is the key guys. Its happening. More oil discoveries soon anyway.Alternate fuel as well. Everything will be fine.
I think you should study a bit before to say incorrect things. Oil is ENDING and alternatiove energies require LOTS of time and LOTS of money to be build otherwise we were using them already. And even if we were starting NOW, we are already late of about 20 years. So for 20 years there will be lots of pain. Forget cars, forget crazy shopping…..let alone buying overinflated houses.
This is one of the last desperate actions:
Stressed borrowers taking in lodgers
http://www.news.com.au/dailytelegraph/money/story/0,26860,23951235-5015795,00.html
Interesting story from Forbes,Sky-High Oil Will Make U.S. Go Broke
Charles Biderman, TrimTabs 06.23.08, 7:00 PM ETStratospheric crude oil prices precipitated by speculation are wreaking havoc on the U.S. economy.
Based on income tax withholdings data from the Daily Treasury Statement, the wages of all U.S. workers on payrolls were unchanged on a year-over-year basis in the past two weeks (Friday, June 6 through Thursday, June 19) and rose 1.1% year-over-year in the past four weeks (Friday, May 23 through Thursday, June 19). Both of those growth rates are well below the 2.8% year-over-year in May, and they are consistent with an economy that is contracting sharply.
As long as oil prices stay above $120 per barrel, the economy is more likely to slow than strengthen, and companies are not likely to announce much float shrink. With real wages falling, large numbers of jobs being shed, gas prices exceeding $4 per gallon almost everywhere and home prices falling about 1% per month nationally, this year is going to be tough for American consumers.
Believe it or not, there is plenty of oil in the world. What is in short supply are investors willing to go short oil futures. The open interest on oil futures worldwide is 2.6 million contracts. With oil prices at $135 per barrel, each contract is worth $135,000. To control $135,000 of oil, investors have to put up no more than $10,000.
A hefty $1.3 billion per month flowed into commodity trading advisers (CTAs) in the first four months of this year, and $700 million per month flowed into commodity exchange-traded funds (ETFs) in the first five months of this year. Those amounts do not even include investments through other vehicles by hedge funds and pension funds. The latest issue of Barron's reports that $55 billion flowed into commodity investments in the first quarter of 2008, and probably at least one-third of that amount was directed into long-only investments in oil.
In any case, if half of the $2 billion per month inflow into CTAs and commodity ETFs were used to go long oil futures, it would be enough to go long 100,000 contracts, which is equal to 4% of the open interest on oil futures. In other words, open interest would grow roughly 50% per year just from inflows into CTAs and commodity ETFs.
What is happening now is not demand destruction, it is a financial disaster. The U.S. consumes 21 million barrels of per day. At $135 per barrel, the U.S. spends $1.0 trillion per year on oil, which is equal to 15% of the $6.8 trillion in take-home pay of everyone who pays taxes. If oil prices rose to $200 per barrel, the U.S. would spend $1.5 trillion per year on oil, which would be equal to 22% of take-home pay. Moreover, those percentages of 15% and 22% do not even include the cost of coal or natural gas. In other words, the U.S. will be broke long before oil prices hit $200 per barrel, and the rest of the world would be sure to follow.
Another way to put the oil crisis into perspective is to compare increased spending on oil to inflows into savings and investment vehicles. For every $60 per barrel increase in the price of oil, the U.S. spends an additional $450 billion annually, or $38 billion per month, on oil. In the past twelve months, the inflow into savings and investment vehicles–bank savings, certificates of deposit, retail money market funds, and all long-term mutual funds–was $744 billion, which is $296 billion more than the additional money the U.S. would spend each year on oil if the price of oil rose by $60 per barrel from its current level.
From April through June, the inflow into savings and investment vehicles was $35 billion per month, down 43% from $61 billion per month in the same period last year. In other words, the U.S. will generate almost no savings if the price of oil stays at $135 per barrel. If the price of oil rises even modestly from its current level, the U.S. will be operating at a deficit.
If regulators raised the margin requirement for oil futures to 25% from no more than 7.5%, the oil market would crack. Unfortunately for oil users, regulators are unlikely to boost the margin requirement, unless outside pressure becomes unbearable, because the income of commodity exchanges and traders would plummet.
But there are two other solutions to the oil crisis.
The first is requiring major players in the oil futures market to disclose their total positions of all kinds in crude. Given the importance of oil to the U.S. economy, everyone should be able to know who is going long crude oil in a big way. Institutional owners must report what stocks they own at least semiannually. Why should they not be required to report the amount of crude oil they are long?
The second solution is for oil consumers to make a concerted effort to go short oil futures. The U.S. government has been spending $280 million per month, pumping 70,000 barrels of oil per day into salt caverns. Instead of buying oil, why not go short 35,000 contracts monthly at $8,000 per contract, in other words selling high the crude we bought relatively low? What if other major crude oil users also went short oil futures each month? What if the Japanese government, airlines, trucking companies and utilities spent several billion dollars to go short oil futures each month until the oil market came to its senses?
It is insane for the world to go broke while oil traders and a handful of gangsters who control their national oil production make huge fortunes.
ItalianDragon wrote:There will be simply a DOMINO effect.
1. If a house in your street sells for $100,000 LESS then ALL houses in that street will lose value and then the next street will lose some value too and so on.
2. Come on, how can you think that Australians will keep buying houses at 6X the average income while in the US and Canada they get it at 3X ?
1. This is all only relevent to anyone having to sell under duress. Not much anyone can do for them, and unfortunately it's not a good time to HAVE to sell. Life is tough. If you don't sell, and aren't looking to access any equity in the near future, then no probs.
2. There are literally millions of houses still cheaper than that stat. Media figures are usually centred around the median price, which can easily be skewed by a spike in sales on one side of the ledger or the other. If the average wage is $60k right now, then, it is quite easy to find a $300k property somewhere in every cap city. The people buying their 2nd or 3rd PPoR will be able to afford more because they have had time in the market, some cap growth, some debt reduction and some pay rises, so OF COURSE they can afford 6 times the average wage. The FHB's on the other hand; can't. But, they were never able to afford the same standard of house historically that the 2nd and 3rd home buyers could afford anyway. Nothingnhas changed on that front.
And let's not foget how picky people are now. Everyone wants their first home to be a 4 x 2 with marble benchtops, double remote garage, spa, built in/walk in robes, 5 mins from work etc. No one want s to buy a basic 3 x 1 out in the outer subs anymore – there are Jones to keep up with.
Mind you, if prices do get too high in general, then they will level off in some pricepoints and some areas, but not all areas, and not all pricepoints.
A cheap house in a cheap suburb may sell really low today because some idiot has over-extended themselves with repayments, but that doesn't mean the next door neighbor has to sell cheaply, and can still get a decent price because there are always people looking to buy cheaper houses – they are more affordable and more in demand. The domino affect is a myth.
This is what annoys me about you types; you're all D&G about EVERY house and EVERY neighborhood, and it simply does not work that way.
Scamp wrote:Rudd said "I will fight inflation at all costs". Just look it up. Also , any country with a reasonable view on the future will fight inflation. The steps that the FED has taken so far have led to financial TERRORISM. Just look at this :USA heading for hyperinflation : http://www.bloomberg.com/avp/avp.htm?N=adv…VkI8WexWY2M.asf
Worse than '94 inflation : http://www.bloomberg.com/apps/news?pid=20601087&sid=aLyjKy00BA1AFed has no clue on what to do. They're in so deep that they have no way out. We're heading for 1929 crash.
Stockmarkets have dropped 20% already, the only reason why they haven't dropped more is that they are not ALLOWED to drop more by the stock exchange ( they will prohibit trade if dropping stocks reach 'critical levels' ( 2% or something ) ).The crisis is huge. People don't realize how big this is, and that's good, because if they knew, we'd have a mass hysteria on our hands.
Scamp, the point I was trying to make is that ozzie is one of the only markets that is addressing inflation not the Us not the UK. You are telling me things I already know on one hand and then telling us all that all gov will flight inflation then you are saying that the US is not. You are sending out an inconsistent message.
Some of us actually do follow the world economies rather closely so please dont imply that we are sitting in economic knowledge isolation because that is not the case.
ItalianDragon wrote:devo76 wrote:ormeau wrote:Oil is the key to doom guys, $143 record again. Watch it, and be afraid. War soon.Green energy is the key guys. Its happening. More oil discoveries soon anyway.Alternate fuel as well. Everything will be fine.
I think you should study a bit before to say incorrect things. Oil is ENDING and alternatiove energies require LOTS of time and LOTS of money to be build otherwise we were using them already. And even if we were starting NOW, we are already late of about 20 years. So for 20 years there will be lots of pain. Forget cars, forget crazy shopping…..let alone buying overinflated houses.
Totally agree. ( My point being i can throw up one liners to grab attention too) Where you ignoreed as a child?Things are changing. But your alarmist crap just shows you are one of those sheep that are easily led.
Oil will continue to go up( Although not at its current rate).So we must adapt
Use our cars less
Sell the V8
Carpool
Public transport
Buy a bike.
Drive only when necessary.These alone would halve most peoples fuel bill.Our thinking will have to change.
yes i know oil has a part to play in most other parts of our lives . Changes must be made there too.Bloody hell do you really believe the crap you are throwing at people. WE WILL ADAPT. just as we did when fuel hit that horrid $1.00 a litre.You are clearly trying to recruite people into this world ending belief.
Yes things are changing just as society has over many many years. Your outlook is not new. Its just twisted.
We have the abitity to develope new fuel sources. Its just that that black stuff is still the cheapest option at the moment. Do you realy believe the worlds major companies and organisations will use the last drop with no consideration for the next step and just ride the bike home holding there big sack of money. Get real. Have a little faith in the human race.I do have faith my friend, unfortunately if we were to continue our current lifestyle the action to avoid this new depression should have been enacted 20 years ago. There is no magic wand to save our current growth my friend. oil was $65 a barrel in January 2007 now 16 months on we are at $143 and i still look around and see no innovation considering our transportation costs have increased 60%. So when do you think we will be saved? I would really like to know.
For what its worth, i can say that i am far more optimistic than most considering the knowledge i have amassed concerning the upcoming collapse, I have put my plans in action to soften my own personal blow. I have sold my suburban properties and purchased a drought free farm, on deep water with ocean access and close rail. Talk is cheap and I hope your still around on this forum in 12 months time to ask how we might rebuild this mess we have created, I look forward to a debate and wish that I could see the look on your face. You seem to know more than me.
Take a look if you dare and tell me what you see before you try and lecture me with your unsubstantiated ramblings. http://www.abc.net.au/science/crude/
ormeau wrote:I do have faith my friend, unfortunately if we were to continue our current lifestyle the action to avoid this new depression should have been enacted 20 years ago. There is no magic wand to save our current growth my friend. oil was $65 a barrel in January 2007 now 16 months on we are at $143 and i still look around and see no innovation considering our transportation costs have increased 60%. So when do you think we will be saved? I would really like to know.For what its worth, i can say that i am far more optimistic than most considering the knowledge i have amassed concerning the upcoming collapse, I have put my plans in action to soften my own personal blow. I have sold my suburban properties and purchased a drought free farm, on deep water with ocean access and close rail. Talk is cheap and I hope your still around on this forum in 12 months time to ask how we might rebuild this mess we have created, I look forward to a debate and wish that I could see the look on your face. You seem to know more than me.
Take a look if you dare and tell me what you see before you try and lecture me with your unsubstantiated ramblings. http://www.abc.net.au/science/crude/
So when does construction start on your meteor proof bomb shelter mate.
Excuse me if i dont sell the house,divorce the wife and shoot the dog just yet.
I believe that there are people who believe all is lost (you). and people who have there head in the sand believing nothing is wrong and all is rosey. Common sense would have most believe that the truth is in the middle somewhere. Thats where i sit.The recent increase of new negative posting people are not going to swing me just by dropping site links and quoting one liners. Its getting like the mormons dropping off pamphlets on these forums. Ill stick to the realist frame of mind.You could pick any decade in the past 100 years and point to some group of nutters that follow the same lines of doom and gloom(oil,.nuclear war,famine,superbug,terrorist,etc)There will be more in the following years following god knows what lines.Ill continue with my plan and if you end up right. My debt to some bank is going to be the least of my problems.We will adapt,we will change.
Good to see you have debt "Mate". Take care.
I'm Prepared
ormeau wrote:Good to see you have debt "Mate". Take care.
Actually you would think that if things did come to a grinding stop. Surely the existing built houses around Australia would infact be worth even more due to the crazy cost of new housing.
Option 1#Nuclear power stations around australia powered by our own mining resources feeding a power grid that powers a country wide transport system. Thats plausible( I want nuclear power plants). So many options its crazy.Australia has what many countries want at the moment. This would be a good time to make the most of it and prepare for the next 50 years.
2# Water from the north west of australia during the wet to be piped and irrigated south to recapture the desert. This was laughed at many years ago but its looking more viable now.
3# Get the aliens that built the pyramids to whip back over here and build some more infrastructure. They have been a bit slack lately.Ah yes, breed breed breed, more humans more money right? You just don't get it do you? Exponential growth. 6.6 billion, then 7 then 8 then………opps
ormeau wrote:Ah yes, breed breed breed, more humans more money right? You just don't get it do you? Exponential growth. 6.6 billion, then 7 then 8 then………oppsOK OK then can i pitch a tent in your little garden of eden you have planned.
Mate ive got it. You im afraid have lost it.
But it takes all types to make the world go round i guess. I hope for your sake you are right otherwise you have lived your life in fear for nothing.Good luck with the impending armageddon.devo76 wrote:ormeau wrote:Good to see you have debt "Mate". Take care.
Actually you would think that if things did come to a grinding stop. Surely the existing built houses around Australia would infact be worth even more due to the crazy cost of new housing.
Option 1#Nuclear power stations around australia powered by our own mining resources feeding a power grid that powers a country wide transport system. Thats plausible( I want nuclear power plants). So many options its crazy.Australia has what many countries want at the moment. This would be a good time to make the most of it and prepare for the next 50 years.
2# Water from the north west of australia during the wet to be piped and irrigated south to recapture the desert. This was laughed at many years ago but its looking more viable now.
3# Get the aliens that built the pyramids to whip back over here and build some more infrastructure. They have been a bit slack lately.if you want NUCLEAR go to Chernobyl, the last few people still alive there have LOTS OF Cancer to share with you.
I don`t want that rubbish in Australia, it`s already enough the mess depleted uranium tests are doing.
God, I can`t believe how greed you people are. Anything to get money, you`d sell your own soul.
I`m done with this forum, it`s pointless.
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