Walk The World
Our latest Friday afternoon chat, picking over the latest charts, which are telling a confusing story, as Central Banks continue to hike into a head wind.
How will this play out?
You can get Tarric’s charts here: https://avidcom.substack.com/p/charts-that-matter-2nd-september and follow him on Twitter @Avidcommentator
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Caveat Emptor! Note: this is NOT financial or property advice!!
Podcast edition: https://episodes.castos.com/dfa/4054088d-dc33-4970-809a-d5653340acb0-Tarric-02-Sept-2022.mp3
When I look at the charts then 1)) the RBA will hike 0.50 % and 2)) the FED will raise rates by 0.25%. But this can change next week when Mr. Market forces rates lower.
17% OCR in Australia. Bring it, baby 😎
Tarric & Martin are national treasures.
88 likes, dislikes of rate hikes 88,888.
Compared to the Brazilian Genocide of the native people, this is nothing.
That 'Speed' movie analogy was gold.
NBN – No Bandwidth Network ??
Rates shouldn't go up if savings isn't, its just spending recklessly.
Nice to see you have gotten a hair cut but I think it's time for a new shirt
FED vs Old Euro Money. FED wins.
interest rates up is so that USD can remain relevant. to much debt in USD, BRICS making a move! so many political decisions that need to be right ref war in Europe, Pacific, Mid East, even USA is looking at internal conflict! Recession is coming to Europe and China is busy locking down cities. oh well interesting times
Son’s friends in their early 40’s have a $1.3m mortgage, they have been freaking for last 6 x mths as she is pregnant again, house valued at $1.6m Placed house on market 72 days ago, held an auction 2 x weeks ago with zero bids placed, since had 3 x offers with best being at $1.3m / they have accepted it yesterday. They are now back at zero losing all their invested money & moving back in Father's house for a while. He’s a Chemist & now starting out again. Oddly he’s far happier now knowing he’s out from under a debt he’d struggle with. Sad but they & son know of many hanging on by fingernail’s… the stress on family was massive
Be careful with that.
Just come from 'Pumped on Property".
Some pretty solid growth coming up for Brisbane it seems.
It could double by 2032.
Might be time to buy NOW!
Before you are locked out forever.
No capitulation yet, it must be soon surely? Grantham, Bury et all have said it must come. The super bubble is close to absolute burst.
22:00: Won't be any panic in Australia.
Essentially, ALL Aussies excluding airline staff have become insanely rich from covid,
Aussies are absolutely dripping with wealth. *excludes aircraft maintenance trades.
34:50: Aussie All Ords was 6800 in 2007. 15 years later it's 7100 or so. Nominal GDP has doubled in that time.
Aussie shares are OK I reckon.
I'M PREPARING FOR THE FIRE SALE NEXT YEAR! YUMMMMMMY!
iNVESTORS MAKE MONEY OUT OF OTHER PEOPLE MISERY/SLAVERY!
if china did not have a bu g , to use to lock the people down , the people of china would have over throwen their govt
As my family moto says, “ Don’t rent, get a tent “. Fxxxk the gorger.
Historical cash rates sit at 4-5%, this is the real world. People have gotten so used to ultra-low rates they think its normal. It isn't. What we are returning to is normal.
It always amazes me when people and govt officials talking about "higher productivity" without actually producing anything.
Rising interest rates will possibly effect renters too as landlords will attempt to pass on the rising costs (from rising rates) to renters.
This will effect all renters vs only some home owners (newer higher loan principals)
The news cycle has as much effect as interest rate policy.
Housing gets talked up, talked up and talked up. Then we have the FOMO kick in.
But if the news cycle starts to talk it down, talk it down and talk it down. Then we will have FONGO (fear of not getting out) start to kick in.
Taxes are too high, that is how you increase wages, get rid of the tares, the unproductive.
Isn’t it amazing how so many countries can’t have a healthy housing market if central bank settings are just at neutral or average setting. Shows interest rates to low for to long creating to much high debt. Central banks should be able to set neutral rates most of the time. Governments and the public need to wake up and central banks need to stop stuffing around getting interest rates wrong. In downturns central banks need to be more careful. Central banks should run at approximately 3% . Even the decade after the GFC central banks were under neutral. Assets are going to reset or central banks will back off to early and kick the can down the road
American and china’s housing market looks very bad. Didn’t housing get so stupid since the GFC that shadow banking took over normal banks lending for property. Something like 60% . Id hate to imagine whats in these non banks. There going to be something real bad come out very soon
Ok so; higher rates, higher power prices, higher food prices and lower real wages. Does anyone still believe that those in charge have the peoples best interests at heart?
A lot of very interesting food for thought.
Cheers,
Real estate never goes down? We have had mostly up, how far will it go down is the question. All those years of government intervention has paid off for the largest crack up boom.
Mark Bury knew he was right, he was just a tad early with his prediction.
Just a question here outside of property getting back to reality prices.The Question is..what is the best way excluding precious metals is there, to stop cash in the bank from dropping in value 6% a year as at this rate my savings will be reduced bu 50% by the time I retire .
Speculating here. The interest rate hikes in a supply-side inflation is to nip in the bud the emergence of psychology of the public expecting inflation to be enduring – resulting in higher wage demands and 'buy now before the price goes up'.
We have a very bad Liquidity problem brewing fast…When Punters stop borrowing the Ponzi FIAT System will grind to a halt
You should make that Cartoon at 5.30 into a T Shirt..I'd buy one
the people are not stressed cos they recon is a "cycle"
@ 24.20 that would make an awesome cartoon. Picture the Bus flying along full of Central Bankers heading off a Cliff with JP at the Helm
You guys should do this show weekly!!
7:00 Just a tad bit of maniacal laughter in that there pained laugh…….
There are reasons why jobs were offshored. Low wages. lower safety etc. Then add in "Availability of capital to buy the equipment" (Not happening in an uncertain environment with ever increasing interest rates and lower customer demand. Now add in – do we have a workforce skilled and willing to work at these jobs? (Not happening in full employment). Now look at the end price – a Teeshirt from China is $5 – if it were made 100% in USA you would need cotton farms and cheap sewing – on a good day that shirt is now $50USD. With no significant wage rises, that is not going to work. Just politicians virtue signaling.
The FED just paid its gym membership and its going to lift to make sure it gets its money's worth seeing the inflation next year their membership will be double the price.
Australian confidence and property is unshakeable. We will avoid a recession solely based on "she'll be right" mindset
bringing in more overseas workers might make it hard for Australians with liar loans.
Easy employment may dry up too!
Realpolitik
As inflation rises, people see the loosing purchasing power, so spend savings and spend their pay as fast as they earn. Which adds to inflation. Central planners / Communisms fifth plank of the communist manifesto = Central Bank.. Forced to act after they created the problem by having interest rates too low for too long. See Weimar Republic, pre WW2 Germany, Venezwalai, Argentina etc. Centrally planned inflation leading to deflation – recession / depression.