All Topics / General Property / Bill Gates predicts 10 year recession …

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  • Profile photo of harbharb
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    Mister wrote:
    I believe our property market could well be in for a 10 yr recession because our boom and prices being so ridiculous , plus , umm burn out . If we're not burnt out after the last 5 years spending spree we'll never be .

    Wow, that sounds more bearish then Keen. Do you also think that our current problems are caused by failing to " heed the warnings of Karl Marx"  ?

    http://news.smh.com.au/breaking-news-business/big-slump-because-marx-ignored-academic-20090130-7tln.html

    Profile photo of MisterMister
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    harb wrote:
    Mister wrote:
    I believe our property market could well be in for a 10 yr recession because our boom and prices being so ridiculous , plus , umm burn out . If we're not burnt out after the last 5 years spending spree we'll never be .

    Hi Harb.

    My thoughts aren't really from a knowledgeable angle just the common sense corner staring us in the face for the last 4 or 5 yrs

    I do reckon plenty could have definitely been done though, rather than Howard just telling us all we just need to work harder and mums need to work more – What a great idea , and we were all richer than we'd ever been , weird !
    We were working harder than ever , paying higher and more rediculous bills than ever and couldn't afford a house , fuel or much food anymore, education or medical and we have no doctors either because neither could they !

    Given a human being at the helm I reckon the brakes should have been on years ago but owell . Just MO .

    But with these guys who can tell until after the fact.
    Personally I feel property just from the simple fact that we had virtually 20 – 40 yrs growth in only 6 or 7 ,   a 5 or 10yr slump is surely getting of lightly .

    Cheers

    Wow, that sounds more bearish then Keen. Do you also think that our current problems are caused by failing to " heed the warnings of Karl Marx" ?

    http://news.smh.com.au/breaking-news-business/big-slump-because-marx-ignored-academic-20090130-7tln.html

    Profile photo of craigsedcraigsed
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    Interesting to see how people think they are making rational predictions of the future based on what they 'believe'. Just look at how many times the word has been used in this topic so far.

    Dictionary definition of belief:

    1. The mental act, condition, or habit of placing trust or confidence in another: My belief in you is as strong as ever.
    2. Mental acceptance of and conviction in the truth, actuality, or validity of something: His explanation of what happened defies belief.
    3. Something believed or accepted as true, especially a particular tenet or a body of tenets accepted by a group of persons.

    As you can see BELIEVING in something is far from something being a fact. How many people would really like to substitute BELIEVE for HOPE/WISH/PRAY?

    None of the luminaries quoted above claim to know the future (as far as I can tell). They are making informed assumptions based on history and also on what is presently known. This may be enough to get a pretty good handle on what will happen and over what time period…. or it may not. So far the pace and depth of this financial turmoil has caught the financial boffins out many times, with regularly downgraded expectations being issued. Each time they make a revised prediction they are admitting they got the last one wrong.

    My point is that whilst we all need to prepare for the future, it is largely unknown at present – this event takes us into new territory.

    For every commentator you can find that says the recession will be shallow and last six months you can find another who will say we are heading for a depression and it will last for years. For every economist who says the Australian property market will hold up well as we have a huge undersupply of homes and way less sub-prime (type) loans than the USA, you can find another to say that there are actually a huge number of available (vacant) homes and that affordability is at an all time low and property is going to fall 40%!

    If you must seek out expert opinion to help you decide what to do, what qualities might you look for in your guide? As a start:
    1. proven track record of making broadly correct forecasts of macro events
    2. old enough to have lived through (managed funds/investments) at least a few financial cycles
    3. has his/her own money on the line
    4. does not have an agenda in setting public opinion (this knocks out ninety-something percent of them doesn't it – nearly all of them are pushing some wheel-barrow even if it is not obvious). Even when it might not be obvious (a supposedly innocuous economist for example) – how many of these poor, otherwise pitiful creatures seek out their 15 minutes of fame with headline grabbing statements when the opportunity arises

    Jim Rogers is probably one of the few commentators I can think of that comes close to fitting the bill, though others may well disagree.

    The thing that scares me the most is that we are going to have to rely (mostly) on politicians to fix this. As has already been demonstrated any institution deemed 'to big to fail' is going to be bailed out (note current definition of bailout seems to imply passing over at least enough funds to continue paying executive bonuses – ha ha). So the option of allowing the week to fail and getting a clean start is apparently not an option (for better or worse). The decision has been taken that the western world will buy it's way out this problem. Didn't work for Japan, but what do they know hey???? The man spending the big bucks (Obama) has submitted his plan – part 1, version 1. Despite the rhetoric it includes as much pork barrelling as could be stuffed into the package – only a small percentage seems destined for true infrastructure development and jobs creation activity (key stated objectives). And it is to be implemented (if passed as it stands) with highly protectionist clauses, despite history indicating protectionism contributed significantly to the length and depth of the Great Depression.

    In summary, I BELEIVE that the machinations of politics will ensure this current downtrend will last longer and cut deeper than it otherwise would have. That's a fact I will be counting on……..

    Craig.

    Profile photo of Boshy888Boshy888
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    I am buying a property (my next home) and am buying 'down'  to reduce debt.  R.E. has been talking about getting gazumped as we wait for what seems to be a ridiculously long time for our lender to allow us to exchange.

    Well… if we get gazumped (skunks), we will just rent and wait for the property prices to fall further and sometime in the next 12 to 18 months buy a place for less than we can now.  No bidding wars are going to happen with us.  Because I also believe the downtrend will continue.

    Thanks Mister.  Good to hear that someone else feels a similar way too.

    Profile photo of condogcondog
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    I hope its not correct but so many experts are prediciting the same thing that it is  concern. I hope for everyones sake that they are wrong.

    Unfortunately there are a LOT of hurdles to overcome prior to any sort of recovery. US debt stands at $56,000 per man woman and child, we have a 20 year bubble of easy credit and leverage to unwind and revalue risk. The aging population. There is a qwerky theory proven time and time again eg: Japan that the economy of any modern country follows the birth rate with a 47 year lag. If thats the case wee are in trouble.  There is also the Elliot Wave theory which would still indicate the stock market has not fully bottomed.

    Robert Kyosaki's book "Prophecy accurately predicted this mess" but whats worse is it also predict the mother of all currency collapses in the US and currencies linked to US.  So if you believe that you should sell everything you have  and turn it into Gold and silver. But keep it offshore or hidden as if this happened the govt would ban private ownership of large quantities of gold. Im not a financial planner or advisor so please dont act on this advice. Its a figure of speech.

    Sorry to be so negative as i really cant stand pesimists, but their really is some continually  mounting indicators of sustained problems rather then a quick recovery. There is no point pretending it isnt true..

    Our issue in this forum is whether the property market can weather the storm and all indications so far are for continued downward pressure as the economy unwinds with pockets of hope where pent up demand exists. The US and UK are different to Aust but the correction their now places an even greater "regression to the mean" force upon our property market to fall in line with competing asset classes.  ie to fall and become relatively priced with the stock market and OS property markets.

    The secondary isssue is running scared to cash will not attain any meaningful investment return, but it may well preserve capital.  Lets just hope that Krudds bank guarantee isnt needed or the treasurey and banks will both  be broke. There are currently some fantastic share yeilds on offer, but if the economic downturn is prolonged those returns will surely evaporate with time.

    My amatuer opinion is to diversify significantly, including your income sources. Its probably the next  few  year where having  three jobs is far better then one.  At present IMF is only prediciting 0.2% recession which is insignificant, but it was only a month ago they where saying Aust would have 1.5% growth.   Ive gone so far as creating multiple online incomes in my spare time and been very pleasantly surprised with my success.

    A massive interest rate cut and stimulus through fast tracking of productivitiy boosting infrastructure like transport and communication is what is necesary to get through this mess.

    I suggest keeping your feelers to the ground on your emloyers performance. If they are running late paying bills or collecting payments from customers, if they have rising inventories and limited stock these warning bells might indicate you should jump ship and look for safer employment prior to your work place closing and your local employment market being flooded with similarly qualified people.

    A transfer to more recession proof jobs is possible a good idea if things start to get far worse.

    Profile photo of Easy Beach ShowerEasy Beach Shower
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    I believe the population statistics that Australian property valuers are following show a steady up and down fluctuation for the next 9 years. No real high positive direction.

    one quarter of working population is to retire. Devaluation of assets and costs may occur. charges and costs of living may deflate at same time.

    Average boom bust cycle length over last 400 years  – Average is 25 year cycle with average of 2 down turns in this cycle. In recent 25 years we have had 18 yr positive growth, maybe we will need double dip down say 3 years recession to clean out scams and low productivity. (History shows we have had recessions of 35 years or more in Europe in the past 400 years)

    I predict Bill Gates unreliable company will be extinct in 10 years.

    Profile photo of MisterMister
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    craigsed wrote:
    Interesting to see how people think they are making rational predictions of the future based on what they 'believe'. Just look at how many times the word has been used in this topic so far.

    Dictionary definition of belief:

    1. The mental act, condition, or habit of placing trust or confidence in another: My belief in you is as strong as ever.
    2. Mental acceptance of and conviction in the truth, actuality, or validity of something: His explanation of what happened defies belief.
    3. Something believed or accepted as true, especially a particular tenet or a body of tenets accepted by a group of persons.

    As you can see BELIEVING in something is far from something being a fact. How many people would really like to substitute BELIEVE for HOPE/WISH/PRAY?

    None of the luminaries quoted above claim to know the future (as far as I can tell). They are making informed assumptions based on history and also on what is presently known. This may be enough to get a pretty good handle on what will happen and over what time period…. or it may not. So far the pace and depth of this financial turmoil has caught the financial boffins out many times, with regularly downgraded expectations being issued. Each time they make a revised prediction they are admitting they got the last one wrong.

    My point is that whilst we all need to prepare for the future, it is largely unknown at present – this event takes us into new territory.

    For every commentator you can find that says the recession will be shallow and last six months you can find another who will say we are heading for a depression and it will last for years. For every economist who says the Australian property market will hold up well as we have a huge undersupply of homes and way less sub-prime (type) loans than the USA, you can find another to say that there are actually a huge number of available (vacant) homes and that affordability is at an all time low and property is going to fall 40%!

    If you must seek out expert opinion to help you decide what to do, what qualities might you look for in your guide? As a start:
    1. proven track record of making broadly correct forecasts of macro events
    2. old enough to have lived through (managed funds/investments) at least a few financial cycles
    3. has his/her own money on the line
    4. does not have an agenda in setting public opinion (this knocks out ninety-something percent of them doesn't it – nearly all of them are pushing some wheel-barrow even if it is not obvious). Even when it might not be obvious (a supposedly innocuous economist for example) – how many of these poor, otherwise pitiful creatures seek out their 15 minutes of fame with headline grabbing statements when the opportunity arises

    Jim Rogers is probably one of the few commentators I can think of that comes close to fitting the bill, though others may well disagree.

    The thing that scares me the most is that we are going to have to rely (mostly) on politicians to fix this. As has already been demonstrated any institution deemed 'to big to fail' is going to be bailed out (note current definition of bailout seems to imply passing over at least enough funds to continue paying executive bonuses – ha ha). So the option of allowing the week to fail and getting a clean start is apparently not an option (for better or worse). The decision has been taken that the western world will buy it's way out this problem. Didn't work for Japan, but what do they know hey???? The man spending the big bucks (Obama) has submitted his plan – part 1, version 1. Despite the rhetoric it includes as much pork barrelling as could be stuffed into the package – only a small percentage seems destined for true infrastructure development and jobs creation activity (key stated objectives). And it is to be implemented (if passed as it stands) with highly protectionist clauses, despite history indicating protectionism contributed significantly to the length and depth of the Great Depression.

    In summary, I BELEIVE that the machinations of politics will ensure this current downtrend will last longer and cut deeper than it otherwise would have. That's a fact I will be counting on……..

    Craig.

    Hi Graig.

    I mean your right in allot of ways . Basing something on what you believe doesn't seem very factual does it but it does also depend on your own track record as far as instincts go and mine are usually right and in most case I can count on them.
    Not always but most.

    Any extremely successfully person will tell you their success as much come from following their instincts , doing things as they believe and often in despite of what is being advised or recommend , as anything else . Often it is the main reason for their success . They usually do and think 'very differently' and have bloody good instincts in their field .

    Most stock markets reports were predicting 73-7600 in 08 , only a few were saying it was burnt out and due for a major correction . Most said we can depend on China in 08-09 , I doubt it but time will tell .
    I felt there was no way the stock market could have kept it up through 08 – 09 so I pulled out most of my stuff like RIO at 108$ and 112$ .
    I kept a little and look at it now , should be back one day but me still upset as not rich yet .
    Really at the end of the day , what I thought was all I had to go on . The opinions great and small were as diverse as you could possibly get .

    Realestates the same . Listen to it all and you hear everything from major 10yr dump, to a soft landing –  to a boom .
    And everyone has their reasons and logical arguments that all make sense and most are experts in the field , just like the stock market – so what do ya do .

    From my experience at the end of the day your left with your own assessment and that's pretty well about it .

    Cheers

    Profile photo of MisterMister
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    Boshy888 wrote:
    I am buying a property (my next home) and am buying 'down' to reduce debt. R.E. has been talking about getting gazumped as we wait for what seems to be a ridiculously long time for our lender to allow us to exchange.

    Well… if we get gazumped (skunks), we will just rent and wait for the property prices to fall further and sometime in the next 12 to 18 months buy a place for less than we can now. No bidding wars are going to happen with us. Because I also believe the downtrend will continue.

    Thanks Mister. Good to hear that someone else feels a similar way too.

    No worries Boshy.

    Who knows whos right , how can you tell , they all have their logics eh !

    But that was pretty freaky when I just noticed your post because we have the exact same situation bythe sounds of it and the RE's are doing the same with us , but then of course they would wouldn't they .

    Now we've found a place that we just love , it's perfect but it's also still 360$ and when prices in my area – Great Ocean Rd are coming down . And the 36o is still their original asking price  .
    But some others have lowered 35% before they sold so we are renting to right now and fed up with it but waiting.
    I mean what happens if we try for this place at 360 and in 12 mths time it is valued at 35% less too – what happens then . I mean it would be back one day but what if it is 5 or 10 yrs , one very grumpy bank manager .
    So it's very bloody tricky right now.
    The other thing is one of the locals told me that last time the stock market crashed prices along here were too high then and they dropped back to 1/2 so !

    Anyway we do have two other places I'm messing around with but that's it and they aren't worth near as much as the one we want but at the moment we've decided to atleast finsh them of  first we've decided [  a mth or so  for the first one ] and by then the Xmas crowd and sales would have all gone home and we'll atleast see what they are willing to do with the price on the 360 then .
    Must admit though the wait is killing me . If I was loaded I'd just go buy it !

    Cheers

    Profile photo of ummesterummester
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    Mister wrote:
    But that was pretty freaky when I just noticed your post because we have the exact same situation bythe sounds of it and the RE's are doing the same with us , but then of course they would wouldn't they .

    It would be even more freaky if you were both putting an offer in on the same property… gazumping each other:)

    Profile photo of Boshy888Boshy888
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    Nope – Mister and I are buying in different areas all together.  But I can see how that scenario would be a possibility!

    Profile photo of MisterMister
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    It is worrying though when you do have something in mind , a buyer can easily turn up as with the last one we'd found but things are looking allot slower now .

    I ' m also really surprised that with locals along the coast here the common expectancy  is  a 40 -50 % drop in prices which I thought was a bit keen.
    But a lot of them have lived through and watched 4 or 5 cycles so I'm actually putting a lot of stock in that for better or worse .

    Profile photo of harbharb
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    Mister wrote:
    Now we've found a place that we just love ,

    Have you had a look at this one or is it to far away from what you had in mind ?

    http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104682499&f=0&p=10&t=res&ty=&fmt=&header=&cc=&c=46243480&s=vic&snf=rbs&tm=1233537783

    Don't know much about the area but it looks like its priced at land value only.

    cheers

    Profile photo of MisterMister
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    harb wrote:
    Mister wrote:
    Now we've found a place that we just love ,

    Have you had a look at this one or is it to far away from what you had in mind ?

    http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104682499&f=0&p=10&t=res&ty=&fmt=&header=&cc=&c=46243480&s=vic&snf=rbs&tm=1233537783

    Don't know much about the area but it looks like its priced at land value only.

    cheers

    Thanks Harb , nice views.

    No I haven't , we usually go for places on a few ac's
    You could do a lot with that one though by the sounds of , with the views and block size . Could be a good buy really , built in backup.

    How do you manage to get the link into the forum post ?

    Cheers

    Profile photo of harbharb
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    Mister wrote:
    You could do a lot with that one though by the sounds of , with the views and block size . Could be a good buy really , built in backup.

    They won't show any pics so it may need a bit more then a coat of paint but would probably be suitable for renting now and redeveloping later, or even short term holiday rental for someone living close to it. If it wasn't so far from Perth I may have dropped in to have a closer look.

    Mister wrote:
    How do you manage to get the link into the forum post ?

    copy and paste, how do you do it ?

    Profile photo of MisterMister
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    harb wrote:
    Mister wrote:
    You could do a lot with that one though by the sounds of , with the views and block size . Could be a good buy really , built in backup.

    They won't show any pics so it may need a bit more then a coat of paint but would probably be suitable for renting now and redeveloping later, or even short term holiday rental for someone living close to it. If it wasn't so far from Perth I may have dropped in to have a closer look.

    Mister wrote:
    How do you manage to get the link into the forum post ?

    copy and paste, how do you do it ?

     I haven't had any luck trying yet but will try the copy and paste.

    Profile photo of freelancefreelance
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    Mister wrote:

     I haven't had any luck trying yet but will try the copy and paste.

    Hi Mister,

    Try using the hyperlink button that appears in the comment toolbar (it looks like a chain).

    Profile photo of MisterMister
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    freelance2020 wrote:
    Mister wrote:

    I haven't had any luck trying yet but will try the copy and paste.

    Hi Mister,

    Try using the hyperlink button that appears in the comment toolbar (it looks like a chain).

    Thanks Freelance will do !

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