Financial Armageddon!!

[Wayne]

So therefore ignore them?

No - take it for what it is, another piece of the puzzle.
No one really has a crystal ball so if you think someone will give you all the answers then you will be disappointed.

A good economist will tell you what they think will happen and how they came to that conclusion.
It is then up to you to weight the info as you see fit.

[eri]

^

what he said

at the moment all the people predicting a crash

acknowledge that it is unlikely to happen until demand is exceeded

city apartment prices crashed in 2009 when too many came on line at once

AND when the seriousness of the financial crisis caught out those who had bought off the plan with $5000 down and 2 year rent guarantees

that caused a 4? year flat-lining of their prices and prevented any new stock being added

demand slowly sucked up what was available and now everyone is building again

if there is another major financial wobble when the new builds are finished

there will be another period of flat prices

but because it's hard to see any massive over-supply happening

it's hard to see there will ever need to be serious discounting to move unsold stock

[genius]

I think Shamubeel's tactic is to continue and say "Auckland house prices are too high"!!!
As all assets are cyclical, when property prices hit a slump, Shamubeel would say "SEE, I TOLD YOU SO"!!

[Bluekiwi]

I listened to friends in 1997 and went backwards.
I listened to my wife in 2002 and went backwards.
I listened to economists in 2003 and went backwards.

I educated myself and backed myself and my gut feeling from 2008.
Then to use famous words took Massive Action.
Its working.

[Bluekiwi]

I think Shamubeel's tactic is to continue and say "Auckland house prices are too high"!!!
As all assets are cyclical, when property prices hit a slump, Shamubeel would say "SEE, I TOLD YOU SO"!!

He is doing a rehash of the old Olly and Westpac skit of 2003.

[PTILoveYou]

I think Shamubeel's tactic is to continue and say "Auckland house prices are too high"!!!

That strategy works, look at Bernard Hickey, he pounded the internet with his doom theories and mad predictions about market dropping 30% in 2008/09, but he did manage to turn himself from a wanabe 'journalist' to an 'expert' in just a few years.

[Davo36]

Sham and Weekend at Bernies are in the same situation: Don't own a house in Auckland, and talking it down.

[eri]

black swan stuff

esp. interesting if your livelihood

rests on the city of 50 volcanoes

in the land of many more


Mount Tambora ... in April 1815 .. blew its top off in spectacular fashion.

On the 10th and 11th it sent molten rock more than 40 kilometres into the sky in the most powerful eruption of the past 500 years.

The umbrella of ash spread out over a million square kilometres; in its shadow day was as night.

Billions of tonnes of dust, gas, rock and ash scoured the mountain’s flanks in pyroclastic flows, hitting the surrounding sea hard enough to set off deadly tsunamis; the wave that hit eastern Java, 500km away, two hours later was still two metres high when it did so.

The dying mountain’s roar was heard 2,000km away

....

A repeat of the Tambora-sized blast at Taupo in New Zealand ... took place 1,800 years ago

...

Some 26,500 years ago the Taupo volcano in New Zealand erupted with well over ten times the power it mustered 1,800 years ago

http://www.economist.com/news/briefi...lf-felt-around

[chrisgoh]

Scary! We are doomed...

[speights boy]

[eri]

Scary! We are doomed...

true

as keynes said

"in the long run

we're all dead"

[Perry]

Is it in the long run
or
at the end of the day?

[eri]

http://www.brainyquote.com/quotes/au...rd_keynes.html

[muppet]

Comment on Auckland's housing crisis.

The laws of economics dictate that a correction will happen.
House prices must stop rising at some point. The very real danger is that those who have bought at the market high then panic
that values may tumble and put their houses back on the market to cut their losses.
The net result will be the opposite of what they intended.
There will be a glut of houses on the market
as sellers who bought in at lower price levels likewise
try to offload their properties while they still retain their value.

Demand will dry up.
Would-be buyers will either opt out of the market
for fear of it collapsing,
leaving them paying off a mortgage
far higher than the equity left in their new home.

Or they will wait
until prices stop falling in the expectation
that they can count on purchasing a house
at far less expense than they had expected.
Those who stay put in their homes will suffer a drop in wealth.

http://www.nzherald.co.nz/nz/news/ar...ectid=11434497

[Perry]

I suspect that such talk will prove to be empty,
given the number of people needing a roof over
their heads.