Forum Replies Created
Hi All[biggrin]
Its that pesky uninformed dude again.
Some of the funniest arguments were from some dude who had no facts to back his views but tried to shut me up with the line “I’m a fully licensed finacial advisor, so I know these things”…….all he knows is where his commision cheques come from.
1. I know how to spell Financial, you don’t.
2. I work for fee only.
3. You are up to your old trick of insulting people and/or their professions.
4. We the insulted don’t care what you think about usPerhaps we should widen the area of insulting professionals to include bankers and current banking practices, which may be more amusing to forumites than the drivel starting to appear in this post.
I believe that everyone but bankers would enjoy it[laughing]Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All,[biggrin]
I was trying hard to warn people about it using maths and other “black magic” stuff that was beyond the comprehension of many of the forumites (you being one of them),
I can see that you do your research very well
bugger…wrong link
I can also see that your research about ASIC, (incidentally on the topic that you introduced) leaves room for improvement
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All,[biggrin]
ASIC thought something was amiss at Westpoint as early as Feb 2004 but they ran into some jursidiction problems and didn’t/couldn’t do much. Likewise there have benn some other stories recently on how they have ignored or failed to act on companies that looked pretty shady from anyview point.
Nat,
I am puzzled why you have turned into an ASIC basher when during earlier posts on Derivex you enthused about their virtues
As the forums resident bankers advocate and with your level of experience (as you keep reminding us) you should know that ASIC is a Federal body that cannot operate at State level.
ASIC cannot interfere with State legislated direct property issues, and in the case with Westpoint can only act against them if it is proven by the courts that Westpoint operates as a managed property fund which falls under Federal jurisdiction.
This is what ASIC is attempting to do and it is not their fault if Court systems are slow or that errant companies try to delay proceedings further with appeals and challenges. If ASIC are successful with Westpoint in dealing with the current appeal, it will initiate legal action quickly against them.In short it is none of Asics business but they are trying to make it so, and it is not their fault if State legislation is weak in the areas of consumer protection in regards to property, or come to think of it anything else, and it is not their fault that the main lobbyists to the State governments are the Real Estate Institutes, both at State and National levels who want to preserve the status quo.
This makes me think about how quick and decisive they were to shut down our friends
This is a requirement of the ASIC Act, watch what happens to Westpoint once the legal issues preventing ASIC from acting are sorted out.
ASIC jumped on these guys and stopped them in their tracks within days of the news hitting the street
ASIC have proved once again that they respond quickly to all complaints brought to their attention independently of the outcome.
…which suggests they had an iron-clad case against them …
The above suggests nothing of the sort to someone who doesn’t think like a banker.
There is no iron clad case against Derivex, otherwise it would have been brought to a swift conclusion and this stage has not been reached after over 12 months of deliberation.
The time taken is due in part to Derivex being a new product. This is a process which takes ASIC at least 6 months to do its due diligence and to the difficulty caused by their understanding of all possible facets with the semi-academic explanations given to explain its operations.
This matter is further compounded because ASIC were issued with sequntial complaints (all made before the release of Derivex onto the market).The only way you could state that Derivex are shut down is if there has been a ruling that no one knows about and that you are the only one with confidential as yet to be released information to the public
Please I await your reply [exhappy]
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi Nat[biggrin]
I fail to see what an article on CDO’s has to do with ASIC, Westpoint or Derivex
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi Redwing[biggrin]
Perhaps we should transfer it to Forum Funnies
PS
love the colors,Red suits you very wellRegards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi Redwing,[biggrin]
I don’t go to wealth creation seminars, as under the Financial Services Reform Act they are only allowed to talk in generalities and includes a fair dose of claptrap.
Remember Wealth Creators usually know how to press their audience’s greed buttons and play down risk factors. Please bear this in mind when attending as all strategies involve some level of risk.
Emotional appeals to the audience abound, for example
“What is the ‘great Australian dream�
“I believe that there is no such thing as ‘the great Australian dream.â€
“Every person must have their very own dreamâ€.
“If you dare to dream big, you can achieve your dreams with some work and education. If you dream small, that is all you can expect to achieve. There is no limit to the wealth you can achieveâ€.
If you analyze this sort of thing you finish up with vomit material.
I don’t know his material so did a quick internet search, turned up the inevitable Jenman and others (it was usually uncomplimentary stuff), found his own site which didn’t impress and wondered why people would pay money for non specific advice.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
HI Terry[biggrin],
You say that a trust give no added protection. But what if someone is pursued by ASIC for corporations offences and is basically sued? Having their personal assets owned by a trust would surely add extra protection in this case.
Are you discussing a trust that owns assets, or a company owning the assets and the trust owns the company and distributes the profits?
In the Dale Gatherum-Goss Book, Trust magic, the author argues under the section “protecting your wealth†(page 15) that if a trust is sued then the appointer sacks the trustee and appoints a new trustee, the original trustee having lost all his assets, and that “a new trustee has taken control of your assets and they are safely tucked away out of reachâ€.
On a practical Level if you are pursued by ASIC these antics will only make them more relentless as being the new regulator on the block they are very determined and if anything this can make the penalty more severe.
I know personally know of two cases where one person was a whistleblower and the other was a witness for ASIC, the experience caused both of them to be traumatized (enough for one to leave the industry).
I can only surmise the affect of a person who is defending against an ASIC allegation and it is a position I would not recommend anyone to be in.In Summary my opinion is that mechanisms to evade the law will not stop legal proceedings by ASIC against all related parties.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All[biggrin],
A comprehensive guide (25 pages) on Capital Gains Tax is available at the Bantacs website and addresses your concerns, click on the link and then on the e-book Capital Gains Tax.
http://www.bantacs.com.au/booklets.php
A Capital gains tax property exemption tool is available from the ATO
From the introduction on this calculator on the ATO Website
What is the capital gains tax (CGT) property exemption tool?
If you had sole or joint ownership of a property that you sold or are going to sell (or otherwise dispose of), this tool will help you work out what proportion of your capital gain is exempt from capital gains tax. In the report at the end of the tool you will be given a percentage assessable, not a monetary figure.
Who is the CGT property exemption tool for?
This tool is for individuals who want to find out what proportion of their capital gain is exempt from tax on disposal of, for example, a:
• home
• home that they have lived in and vacated for a period of time
• home, part of which has been used to produce income
• rental property, or vacant block of land.The link is below
http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=CGT_AND_REAL_PROPERTY.XR4&go=ok
I hope the above information is of use
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All,[biggrin]
Is there a need for a Trust structure?
Addressing the potential of being sued?
It seems a popular ‘fad’ amongst accountants currently to sell a Trust structure on the basis of providing asset protection alone. Since Accountants may not be universally trained, or up to date in commercial law, they often miss what the full legal situation is surrounding Trusts.
The fundamental purpose of a trust, from a legal point of view, is to distribute funds or income held, or received, in trust.
This legal structure was never intended as such, to provide protection from litigation for companies or individuals who may be liable for their actions.
Whilst the CORPORATIONS ACT enshrines the legal notion that a PTY LTD company’s liability is limited to the value of it’s paid up or even nominal capital, plus whatever assets it has, ASIC has been quite rigorous in also defining the duties and responsibilities of directors in the same Act.
If it is clear that a director has acted improperly or irresponsibly or illegally, they also can be pursued as liable, if they have knowingly harboured away the assets of the company over time.
In a situation of sole directorship, the scrutiny of ASIC can also turn to employees of the company who may be complicit in any wrongdoing and receiving of assets from the company.
This makes for a situation where, despite whatever protective procedures may be put in place for assets transferred from the company to individuals, the common legal practice is now to sue both the company and those who had ‘control of it’, who might also be able to be shown, received assets from the company, as a means of avoiding payment of the company debts.
HIH is a good example, even though not a Pty Ltd company, of what happens when ASIC decides to pursue both directors and employees.
However, if an employee, or better still, a sub-contractor of the company, is simply doing their ordinary job and receiving their normal salary, there is NO precedent for them being sued by a creditor or a litigant, unless they personally failed to exercise a duty of care, which then lead to a loss by the litigant.
A Trust therefore gives no added protection in a tort (civil claim for loss or damages through the courts) that can accurately target responsibility under the CORPORATIONS ACT at any individual involved in a company in some way, which may have defrauded or failed in a duty of care to, a client or supplier, or even another employee.
Why TRUSTS are becoming so popular, apart from being cheap and easy for accountants to set up at a profitable price, is because of the (mistaken) belief that a Trust can somehow own or control assets in its own right. That is not true.
A Trust is NOT a legal entity in the sense that it can own anything itself. Only the trustees or members as trustees can legally own the assets of the trust, albeit jointly, on behalf of the members or beneficiaries of the Trust, or a separate Trust as beneficiary, or beneficiary-company.
Trustee Members and beneficiaries can still be individually sued and their assets seized or their share in assets held jointly with others frozen, if they are found liable.
So, what is the upshot of this long description? – Simply that setting up a trust to avoid having your assets attacked would give you no additional security, if you are thought to have been complicit in any illegal activity by the company or any failure of duty of care in a tort.
The fact that a Trust has separated your legal ownership from your beneficial ownership of the assets the company accumulates creates no limitation of personal liability under the law.
You can still end up with a judgement debt against you personally that will defacto force you to re-acquire the legal ownership of those assets from the Trust and sell them, or at least direct your trustee to sell, any assets you may now only hold (beneficially) through the Trust.
The point is, if you are sued successfully, no matter how your assets are ‘protected’ or legally disjoined from you or the company, you will still need to have sufficient capital to avoid going to jail or avoiding bankruptcy and barring from being a company director for five years.
Nevertheless, a trust does let you decide which assets you keep and which you sell, rather than a court or administrator/liquidator making that decision. You decide whether you want the extra expense (probably around $900+) of setting up a Trust which will have you as beneficiaries and the company as the Trustee for the Trust, Trust accordingly, with the investment company becoming the corporate trustee of that asset also.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi all[biggrin]
I have been criticized both here and thru private messaging by one individual who states in a private message to me;
Be very careful..the product does not work and never will…if you think it does and start representing as such, any credibility you have will be gone forever.
Show me your proof that it does not work.I have worked in very high level structure finance/money market, both here and in the UK for 15 years and I will tell you upfront …it does not work.
If you are as successful and knowledgeable as claimed, then why haven’t you retired by now as a wealthy person? Do you need a financial planner?You have no upside in supporting or recommending the product in an open forum and as a registered advisor you will realise that once your credibilty has been lost it is very hard to get it back !!Where were you when I lost my virginity and innocence, when I found that sometimes the world can be a cruel place?
There seems to be no factual evidence forthcoming from this individual to back her claims and I wonder if there are ulterior motives to her unsubstantiated claims.
From a post which was deleted before I could answer.
Why are you so keen to put forward your hard earned ASIC Rep Status as a “virtual” credibility wrap around the Derivex product and business??
The more I have examined and analyzed Derivex the more it looks like a product which can be an aid to the financial welfare of some individuals.
My job is to examine products for their risk and their return for clients who wish to use my services as directed under AFSL.Bryce. if you are not on the Derivex pay roll, then you should be….nobody but nobody other than staff or ex staff have ever tried so hard to stick their neck out that far to defend the product.
No I am not on the Derivex pay roll, however in your own words,Nat. if you are not on the conventional banks pay roll, then you should be….nobody but nobody other than staff or ex staff have ever tried so hard to stick their neck out that far to oppose the product.
Nat, judging from your above comments, either you are employed by a bank or you are an expert in a highly specialized field which causes your assessment of the Derivex product to be limited by those skills.
When I first looked at Derivex my first suspicion was of a forward fee scam, in due course this was diminished and I became more comfortable with the product in that regard.
The next hurdle for me to overcome was that it didn’t make sense from my perspective especially in regards to return.
As the product offering exists, it must be worthwhile to the original source of investment funds based on their return/risk ratio. Looking at it from their viewpoint will supply needed answers.
When we take all we can into consideration, then by a process of rejection or acceptance we will be left with the correct answer. If a logical conclusion is not achieved lateral thinking is required. Finally the theory should then be tested by others playing the role of devils advocate in order to reveal any holes in the argument.
Once we have established a motive then we can apply it and reassess the product.Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
hi unnanounced[biggrin]
I am just waiting at work for my lovely wife to pick me up so we can celebrate our 6th wedding anaversery at a very expensive resturant. My biggest problem is that I cant spell anaversery.
Regards
Bryce Inglis
Financial Advisor
[email protected]hi unannounced[biggrin]
Are you gay or straight?[bigeyes][daisy]
Regards
Bryce Inglis
Financial Advisor
[email protected]Hi All,[biggrin]
I’ve taken a while to recontribute to the forum as I was pondering how to get across the point that risk, or even a discussion about it is not negative, but is simply a matter of identifying what the risk is, and by doing so recognize it and be able to take early preemptive action to mitigate or prevent its affects on us.
I felt that the discussion was starting to make me feel negative ( I don’t know how you felt)and that it may possibly be time to talk about the steps to take in order to minimize risk caused by the macro picture , so we may be positive about the outcome and await any event that happens with eagerness. Remember there are only two times to invest, during a bust and during a boom.
We can return to the discussion on other forms of risk later together with identifying signs and what to watch out for. We can also explore defensive measures that can be taken against them.
I started by discussing budgeting, this was followed by a discussion on goal setting. We addressed credit card debt and touched on network marketing as well as interest rates and briefly looked at the international economic picture as presented by the US and Japan. We discussed how markets can sometimes behave irrationality, and even gave a little bit of a history lesson.I sometimes entertained (hopefully) and sometimes bored people I but have always tried to discuss issues in simple terms so that the newer less sophisticated forumites could understand, as well as realizing that there are differences present in the wide spectrum of readers here on the forum.
So to recap briefly,
Prepare a budget in the usual way, then tear it up and change it from a normal budget into a wealth creation tool. With credit card debt and I address my remarks to those with a balance that never returns to zero. In 2002 we had a credit card debt of $7.3 billion or putting it another way $7,300,000,000.00. Now that looks bigger, there’s a lot of zeros even if I did include the cents.
According to the AMP report just issued “Household debt in Australia†we have an average savings rate of minus 2%.
The link to the report is here
http://www.amp.com.au/group/3column/0,2449,CH5273%255FNI9917%255FSI3,00.htmlGoal setting is a necessary to keep focus on our aims. Reward yourself for each step attained. Recording your goals equates to giving your subconscious an instruction, and to carry it out with or without any awareness of the process.
The economy of the US is in poor shape and will implode in the future. The million dollar question is when this will happen; it’s no longer a Question of if. The Japanese (who after their bust are too frightened to spend their way out of it, even 9-10 years later,) are stagnating.Will this affect the Australian Economy and what will happen here? This is difficult to answer as there are some similarities and some differences, for instance the home mortgage industry in America is controlled by two large companies Fanny Mae and Farmer Mack who between them control 76% of the market.
From Barrons Dictionary of Finance and Investment Terms.
Fannie Mae (Federal National Mortgage Association) publicly owned, government sponsored corporation, is congressionally chartered, share holder owned company and is the largest source of home mortgages in the USThey are set up very differently to our system of banking, in being underwritten by the US government whilst being run as a public company. They are not subject to a regulatory body which limits risk exposure such as the Australian Prudential Regulatory Authority (APRA) http://www.apra.gov.au/ but rather are encouraged to heighten risk (in the interest of shareholders and in particular company directors who hold shares) as the US Government guarantees Fannie Mae against loss. This means the bank can increase return and whilst removing risk from the equation
Another difference is in their size, together they hold about $6,700,000,000,000.00 ($6.7 Trillion) in mortgages. This is in addition to the US Current Account Deficit of $3.7 Trillion. This is a lot of debt.
The situation in Australia is quite different with a large number of competitive providers in the mortgage market all regulated to operate in a prudential manner
Details of the Australian banking industry are found here
http://www.apra.gov.au/Insight/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=8006Also interest payments on all properties mortgaged in the US are tax deductible, whereas in Australia there are cost penalties on the purchase (stamp duties) and disposal of property (Capital Gains Tax).This tends to make Australian property less liquid than American properties. Australians tend to buy and hold so that property losses on paper are less likely to be realized. This situation does not apply to New Zealand as there less government taxes applied to the buying and selling of properties.
Next time I will discuss loan structures to minimize risk.Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi all,
Try this link
http://www.stretcher.com/menu/topic-a.htm#christmas[xmas][xmas][xmas][xmas][xmas][xmas]
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi all,[santa] [party] [xmas]
I went thru a phase of poverty in life when I was studying financial planning and my wife was finishing her masters. I now work and she is on a PhD scholarship which doesn’t provide a lot of money. During the poverty phase we purchased Christmas decorations during January saving up to 2/3rds of their cost. We store the decorations away in boxes covered in old Christmas wrappings. At Christmas time we store the boxes under the tree whilst the decorations are in use.
We also now make our presents for adult friends and family, consisting of items like home made jams, lemon butter, biscuits, and sweets. These are packaged together as a small hamper and are much appreciated by all.Merry Christmas to all
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi all,[biggrin]
Hi zen,[biggrin]
Did I read less than 3 percent drop in the last 12 months? I don’t know anything about property in Victoria but a drop of that size is not alarming considering how much it has gone up. I really don’t know who to believe, some say 10 – 15% drop some say still holding up. What is going on???
Your confusion stems from how statistics are interpreted and reported, and from the accuracy of the source and the size of the sample. The following link shows Victoria’s figures listed suburb by suburb for the quarter ending in September.http://www.heraldsun.news.com.au/common/story_page/0,5478,11231897%255E2862,00.html
From this list we see a capitol gain of 171.7% in the figures reported for East Melbourne, with a rise from $900,000 to $2,445,000.
Now does this mean a rise of this magnitude for units, or that more mansions were sold in this quarter than the last, or putting it another way were less units sold during this quarter.
The point here is that glitches can occur with gathered data.The next link is a summary from property reporter Kamahl Cogdon.
http://www.heraldsun.news.com.au/common/story_page/0,5478,11224700%255E2862,00.html
An extract from this article appears below.
We believe price growth and activity levels have bottomed out,” REIV chief executive Enzo Raimondo said. “We are likely to see a period of stable or minor growth in the foreseeable future.
The most important part of his original statement has been omitted, what he actually said is.
“We believe price growth and activity levels have bottomed out and, given the current economic environment, we are likely to see a period of stable or minor growth in the foreseeable future after three consecutive quarters of negative growth,’’
This puts a different slant on Enzo Raimondo’s statement,if you take into account that the economic definition of a recession is where growth is negative for two consecutive periods.Wakelin Property Advisory general manager Paul Nugent backed the forecast. “If ever the market ratchets up, it will do it from mid to late February and particularly through the course of March,” he said.
Paul Nugent is not backing up the statement he is stating that historically the property purchasing peak is during this period.
From the above it can be seen how statistical data can be altered according to the self interest of the party who makes information available to the public and can lead to conflicting statements and can cause confusion.Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All,[biggrin]
A little bored Bryce?
Hi crashy,[biggrin]
I agree and will try and make them shorter. History is dull reading for some people and yet we often use historical data to analyze situations. I also notice that your posts have been less fiery since March. (#;! $# ASIC)Get a job in a regional centre and your employer will often pay for your accommodation or give you subsidise rent.
Hi lukis p,[biggrin]
Your suggestion is along the theme of using others to subsidise rent or Mortgage payments.
A suggestion previously provided by happy couple[biggrin] uses the same theme.
You could investigate the suitability of purchasing management rights (permanent or holiday) this includes a real-estate component which you can live in or rent out
Another way is to provide board to university students or others.Just wondered – is anyone here network marketing?
Hi Rose,[biggrin]
We have had some discussion previously on pages 3, 4 and 5 on network marketing with contributions by marc 1, honkeytonk, wow and Y.
I am a member of a couple of organizations but am not active with them.Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All, [biggrin]
Awareness of risk is a necessary part of living; it is part of our lives and we use it subconsciously in most of our daily living activities such as driving, cooking, working, etc.
When it is stated that risk is inherent to all investing and that the amount of risk is proportional to return, it does not mean that because there is a risk that we shouldn’t invest, rather that we should understand where the risk is originating from so that steps can be taken to reduce its effects.The hardest risk factor to predict is that of greed, fortunately it is rare, but its effects can be devastating to the innocent victims affected by it.
Greed coupled with stupidity, arrogance, self pride and a lack of morals can have its affect on people individually or as a large group.One greedy person together with their cronies, accomplices, and dupes can also by their actions affect a whole nation as seen by the Enron crash, although it will take years for the full story to come out
A typical link of the blame game currently being played is found at,
http://www.accountancyage.com/News/1137608It can also be world wide as seen by the effects of the 1929 stock market crash, which led to the great depression.
When this Wall Street Bubble had reached gargantuan proportions in the autumn of 1929, Montague Norman (head of the Bank of England) sharply cut the British bank rate, repatriating British hot money, and pulling the rug out from under the Wall Street speculators, thus deliberately and consciously imploding the US markets.For the complete story,
http://www.tarpley.net/29crash.htmIt may also speculated that this led to economic conditions in Germany and thus to the rise of Hitler and World War 2
A very long story, covering economic history during the period 1929 up to the present (Possible reading for holidays or for Economic and history buffs) is found at;http://econ161.berkeley.edu/TCEH/Slouch_Crash14.html
A short excerpt is found below.
The substantial loan to Austria was not made because French internal politics entered the picture. At the beginning of his political career French Premier Pierre Laval had styled himself a politician of the left: the Clarence Darrow of France. But by the early 1930s he was shifting to the position of a strong nationalist. He blocked the proposed international support package for Austria, insisting that if France was to contribute France had to get something out of it. The price that Laval demanded was made up of a series of diplomatic concessions, most important of which was the renunciation of a prospective customs union with Germany. To Laval, playing the nationalist card in French politics, nothing that benefited Germany could be allowed by France.
The Austrian government refused to make the required political concessions fast enough for negotiations to be completed in time to be of use. Austria lost: the support package collapsed, and the Austrian economy abandoned the gold standard and went into recession. In the long run France lost too: what might have been a chance to moderate the Great Depression was lost. The ultimate consequences for France were dire. The rise of Adolph Hitler in Germany is inconceivable in the absence of the Great Depression. Nine years after the Credit-Anstalt crisis the French government surrendered to the Nazis.
The study of history can be helpful in predicting the future actions of those surrounded by the same circumstances, so I will go on with this theme with one last example.
I borrowed a book from my mother in law titled the Land Boomers written by Michael Cannon, Melbourne University Press (I hope that I don’t have to give it back as I think it’s out of print) .A copy of it may be found at your local Library.
It s a tale of greed and corruption in Victoria just prior to the Federalization of Australia which resulted in unemployment rates of 50% (approximation) and people starving to death in the streets of Melbourne.
It’s very hard to imagine this happening today just 100 odd years later.
It’s also a tale of individual heroes; men like Isaac Isaacs (later Sir) who started to lay down laws to prevent such a catastrophe from ever happening again. Preventing things like private arrangements with creditors. To only pay a penny in the pound, and in the case of one bankrupt being able to do this twice in one year.Imagine the antics of Henry Kay being able to go on and on and on.
Laws which evolved into current laws which we now take for granted.
Now the whole point in the above post is (hopefully not to send you to sleep and I will apologize if I have bored you), to make you aware of how important the new Financial Services Reform Act is for your protection against greed.
ASIC is charged with policing the FSRA, and the results of their endeavors are reported in the link below
The regulator’s enforcement activities in the 2004 financial year saw 28 criminals jailed, and 22 directors and 42 people from financial services banned.
Sixty illegal investment schemes were shut down, involving $110 millionhttp://www.theaustralian.news.com.au/common/story_page/0,5744,11418854%255E643,00.html
Greed can be fought through personal awareness and education, but we must all have the will and moral not to join in for motives of our own self gain.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi all,[biggrin]
Why wait for 2006
From the following link
http://www.realestateview.com.au
State of the market
10th November 2004
The latest housing market statistics confirm the end of the housing boom with median house and apartment prices and building approvals in Victoria continuing to decline.According to the latest REIV figures for the September quarter median house prices are down 1.3 per cent to $366,000, while apartment prices have fallen just 0.7 per cent to $290,000. The figures represent a reduction in median house and apartment prices of 2.4 per cent and 3.3 per cent respectively over the past 12 months.
The regional centres followed the trend with Ballarat’s median price down 1.6 per cent to $190,000, Bendigo down by 2.9 per cent to $203,000, and Geelong down by 2.5 per cent to $275,000.
REIV chief executive Enzo Raimondo said the figures provided further evidence that the residential market had returned to more sustainable growth patterns and had entered a new property cycle.
“We believe price growth and activity levels have bottomed out and, given the current economic environment, we are likely to see a period of stable or minor growth in the foreseeable future after three consecutive quarters of negative growth,’’ he said.
The REIV figures revealed Melbourne’s three most affordable suburbs were St Albans, Meadow Heights, and Hoppers Crossing and most expensive Toorak, Brighton, and Kew.
On building approvals, September quarter figures from the ABS show that, seasonally adjusted, total dwelling unit approvals fell 3.8 per cent to 12,928 nationally, the lowest figure since June 2001. In Victoria there were 3232 dwelling unit approvals for September, a fall of 10.3 per cent from August.
PS Enzo Raimondo always says figures provide further evidence that the Market is recovering blah blah.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All, [biggrin]
To continue with the subject of risk
“Government’s view of the economy could be summed up in a few short phrases:
If it moves, tax it.
If it keeps moving, regulate it. And
If it stops moving, subsidize it.â€
_ Ronald ReaganRobert Shiller PhD, Professor of Economics at Yale University has written a book titled ‘Irrational Exuberance’ with the assumption that the majority of investors buy shares or other investments based on dinner party conversations and were basing purchasing decisions on emotive issues rather than researched facts.
From his introductory remarks delivered at his 2002 Engle Lecture;
“First, I should make one point. I did not coin the phrase irrational exuberance (in regards to his book title) I testified before the Federal Reserve Board in December of 1996, and I told Alan Greenspan that the market was irrational. Then at lunch afterwards I asked him when was the last time that a Fed chairman had ever said the market was overpriced. And he said he didn’t know, but somebody else said, “That was William McChesney Martin in 1965.” So I think I might have put the idea in his mind to coin that term, which appeared 2 days later in a speech he gave. And the reason that that term is so famous is that stock markets all around the world dropped as soon as he uttered those words.â€So, a widely publicized idea about the irrationality of the stock market causes it to drop in value whilst people think about this until the next dinner party topic comes up.
“It will fluctuate.†J.P Morgan (founder of one of America’s first great investment banks, when asked what the stock market would do.)
Robert Shiller’s full lecture can be found at http://www.amercoll.edu/About_Us/Lectures/engle2002.asp
This is one reason why people can invest incorrectly, putting themselves at risk if they purchase an investment at the wrong time. For example, it explains why people buy apartments in areas where there is no capitol growth, the yields are poor and vacancy rates are high
Southbank and its surrounding area is an example of this. I covered this (rather badly) with an earlier post and I hadn’t taken the above into consideration. This was prior to the AFSL deadline for compliance when I was working as a property investment consultant.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=5540All investments are subject to external marketing forces, and marketing has four phases; Development, where money is placed into an investment and short term return is not expected
Growth, the investment starts to make money.
Maturity, the cost of making the investment rises causing the yield to fall.
Decline, leading to the death of the product, unless restructuring takes place, so the cycle may restart anew.By the time something is discussed at a dinner party it may be too late in the cycle and the risk of losing money may occur.
From Warren Buffett talking about stocks but applies equally well to all investment classes.
“Look at stocks as businesses. Look for businesses you understand, run by people you trust and are comfortable with, and leave them alone for a long time.â€until next time
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
