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Archive for the ‘Economy’ Category

Michael lashes out

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Considering that any traffic this site gets relates to a fictional character that managed to capture the imagination of news.com.au readers, I think it would be remiss to mention another character that has cropped up. However, I am not sure whether he is taking the piss. In fact, the tone of his comments suggest quite the opposite. He seems deadly serious, which is scary in itself.

His main discussion revolves around property. It seems that every single news story that revolves around houses is a buy signal to him. Or some story about the economy, regardless of the type of news it is, it’s yet another factor that favours buying property. I am referring to Michael of Sydney.

In the beginning it seemed that we should all marvel at his business acumen. When the Reserve Bank slashed rates, Michael jumped quickly up to the podium to thank the academy for providing him with this great reward for his tireless work.

RBA slash rates

Early in 2009, when things started to turn a little less peachy, it did not phase Michael in the slightest. Just like the true Aussie battler he is, a stiff upper lip in the face of adversity was maintained. And with such humility, too…

2009 write off

That link also has a clueless and sarcastic tirade by Yours Truly. You see, I’m just not smart enough to get into property like the good capitalist men of steel like Michael of Sydney.

The year progresses and things continue to look shaky. The stiff upper lip of Michael begins to tremble just a little, I feel.

home buyer doubts

Retards, eh? Of course, in any business there are always the corporate rivals that must be smitten into dust like the insubordinates they are. I mean, we all know that the property mogul’s natural enemy is the evil, twisted and ultimately carefree debt-free “Renter”. Through their insidious use of the evil practise of “saving” and their laughable fear of the holy “Equity”, they will bring society into disarray, one two-minute-noodle cup at a time. However, I’m pretty sure that even Republicans don’t stoop to the level to be claiming their adversary as having a disability.

But the recent news where the ABS announces a decrease in the price of property is met with some skepticism.

ABS

Much has been discussed about “housing affordability”, especially on news.com.au. What Michael describes here is the mortgage stress o’ meter which denotes that anything greater than 30% of a household income is simply far too much for the Battler family to withstand. I’m not exactly sure what the median house price was in 1970, but I’m pretty sure that in Sydney today it is roughly $500k-ish.

Let’s say that you borrow $500,000 at the RBA rate of 3% (even though I’m sure they don’t scatter about money for Bob Punter to buy bricks) for 30 years. A simple loan calculator vomits out this:

500k

$2,000 a month, eh? So, an individual would need to be earning roughly $6,000 a month (after tax) for it to be on the threshold of “mortgage stress”? Roughly $72,000 (very roughly) a year? I’m pretty sure that an IT Consultant isn’t the average Sydney vocation, especially when “lowly” Software Engineers are fetching around $51,000.

I think Michael assumes that the two people in the house want to work full time for their entire lives, kicking their kids off to child care so that Shazza and Sebastyen’s Bonanza Play Pen can rear their sprog to be good, functional and drunk members of society.

But “property doubles every ten years” is an interesting thing. It’s up there with “property never goes down” or “people always need a place to live”. On the surface, these claims seem to be fairly basic and in some cases fundamentally true. However, I’m not concerned with the validity of the claims as I’m sure that people with far better understanding of economics would be better to analyse these than me. What concerns me more is how widespread these claims go, and how often they are repeated. I am also concerned at how property moguls often denigrate those outside their circles.

The never ending flow of information that they are required to purchase. The never ending seminars they must attend. Venerated “experts”. Black and white answers. People thinking that they’re better than the “have-nots”. Idioms that are accepted truths repeated over and over again in a chant-like manner… property doubles every 10 years… rent money is dead money… property always goes up…

Property investment… it’s a cult. Seriously.

Written by Andy

May 9, 2009 at 12:39 am

Rudd is a four letter word

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Quite a day in the news. When Minister’s aren’t resigning over the fact that they are merely human… repeatedly merely human, the Prime Minister comes forward with a startlingly fresh idea. Honesty.

Yep, it seems that Australia isn’t all that it’s cracked up to be, and all the magic of The Secret isn’t going to help us out, either. And with such harsh times bearing down on us like a runaway locomotive upon a fragile bunny, the people rally behind our honourable and honest leader.

bad-rudd

Yeah. He hasn’t said one positive word. Totally.

There’s that fucking Secret method of approaching economics again. Yes, I can understand that sentiment plays a rather large role with the demand side of the equation, but I think that people don’t study these kinds of things at university year upon year just to walk out the other side with the conclusion that spend = good. Heaven forbid that things as academic as job prospects, debt serviceability, and job market strength might have an impact upon households’ willingness to buy four cent shite at vastly inflated (but discount at the retailer) prices.

And I’m not an economist by any stretch of the imagination.

economy2

I think he might be talking about the $900 vote-bribe that’s coming to all Australians who paid tax last year. Or maybe the Christmas bonus that was handed out to (gag) “Working Families”, and pensioners.

Even as a childless non-pensioner, I can see the rationale behind plying the populace with free cash. That’s not to say I agree with it. However, isn’t slagging off these orgies of cash on the basis that they were giving much of it to those who didn’t pay tax, is to also suggest that maybe the other “much” part of it was also given out to those who actually… well… did…?

It’s heartening to know that even during times of decline, where we could end up feasting upon cans of dog food as we huddle beneath the underpass, there will always be an armchair there, where we can sit and be experts.

Written by Andy

April 21, 2009 at 12:10 am

It’s all in your head

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There’s this persisting idea that Australia’s current rough spot isn’t in fact caused by global economic factors and the fact that China is suffering what could be the world’s worst hangover after the Olympics, but by thinking bad thoughts.

Take today’s news that BHP are fobbing off two thousand odd workers.

secret

That’s right. I guess all previous economic disasters were simply a manifestation of glumness? Those bread lines shouldn’t have existed, huh?

snprelief1a

Chin up, boys. Your kids are starving, but that’s all in your heads.

It’s the kind of stupid thinking that believes that depression is merely “the blues”

But, you know, feel free to stick your fingers in your ears instead of preparing for the worst. Why be prudent when you can be in denial?

Interesting idea about how China is intentionally fucking us, though. I mean, we know that their history of treating people isn’t all that good, but I’m pretty sure that after they’ve put on the biggest show the earth has ever seen as a means of showing their national might, intentionally circulating that they’re not all in that great a shape probably isn’t on the Chinese government’s agenda.

It’s like the guy who walks around, talking himself up, only to quickly turn on the waterworks just so people don’t pick on him.

Written by Andy

January 21, 2009 at 10:27 pm

Posted in Economy, Politics

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