What's happening in the land down under in the property market? Sounds like Australia hasn't had a recession in forever. You guys are invincible!
Thanks mate. You down there? Any color on which parts of the country are particularly in deep doo? Western? Queensland?
WA (west.Au) has very high debt due to previous Barnett Govt overspending and because WA gives more GST revenue away to the other non mining states than what it receives. However mining which slumped is now picking up. During the slump thousands of workers lost jobs, many were FIFO (fly in fly out) and were also not originally from WA, they departed back home. Consequently housing prices dropped here dramatically. I believe now would be a good time to look at WA again. QLD (Queensland) is predominantly coal country, that too saw a big slump. Imo, QLD has always been a basket case, always broke, roads over there are shocking, they fix the roads there one pot hole at a time. QLD is best known though for its tourist dollars, good climate, fantastic coast. So yeah, QLD & WA not travelling so well atm. SA (South Aus) is a mining state partially, also wine & fruit, but SA seems to hamstrung itself with red tape, can never get going for some reason, no one seems to want to live there. Tasmania is not too flush with cash, mainly forestry and fishing and farming, cold as hell sort of. NSW & VIC are the business states. VIC weather is shit, 4 seasons in one day, NSW is prolly the best pick of the lot. I like NSW, got the best of everything. NT (North. Territory) capital Darwin is good, hot and humid, mining, humidy will nearly drive you mad, they say you go 'troppo' which means crazy from the heat and humidity. The wet season is summer. Darwin has good vibes.
Fantastic, thanks for the walkthrough. So what can be driving the mining activity pickup again? I guess China hasn't run out of unneeded crap to build (one belt nonsense) yet? Laughed out loud at the 4 seasons in one day quip. Is it true that the government has enabled this bubble all throughout? Which of the banks do you think are most exposed? CBA?
Well our mining activity is driven by global mining activity which is often driven in part by investments which comes all the way back to the strength of the USD imo. China has had a lot to do with it for Aust. mining boom but although China may be waning slightly, India seems to be the next country to be gunning out of the blocks. We are close to Asia and there are heaps of Asian countries requiring resources, Indonesia, Korea, Malaysia, Vietnam etc. But imo, a weaker USD pushes up investments in mining. Regarding realestate, this is one of my pet bugbears. Govt's have encouraged RE to become big business. There are all sorts of tax rightoffs in RE if you speculate. Nothing for a homeowner, everything there for speculators and investors. Consequently big business has jumped on the bandwagon, namely banks and RE companies. Councils too want higher prices as that increases the rates they levvy. It has become a vicious circle where average joe blogg has all his money tied up in housing (or paying interest on a mortgage) and very little money is going into something more productive. Hence one reason business growth in Aust is stagnant, RE has all the money. The most exposed banks are prolly shared amongst what is called here the 'big four'. Wespac, ANZ, NAB, CBA. The one most likely to suffer the most will prolly be CBA, not for the reasons of RE, but because it is engulfed in a huge scandal, 53,000 occasions of money laundering which I hope kicks a lot of asses. Unfortunately in this day and age (probably always been this way) the people at the very bottom of the chain will be reamed while fat cat may lose his job but he won't lose any sleep as they have stashed their unearned fat cat salaries into RE and gold bars. http://www.smh.com.au/business/bank...money-laundering-scandal-20171005-gyvild.html
...."Mr Narev, who is stepping down by the end of this financial year".... Not instantly sacked or jailed but stepping down next year July. Truly pathetic. Be careful shorting banks as all within and without are teflon coated.
More money laundering exposed by CBA http://www.smh.com.au/business/bank...alleges-100-new-breaches-20171213-p4yxp0.html 53,800 breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act by CBA, the vast majority of which CBA has admitted to.
yeah a weaker dollar filters in through the Chinese dirty peg, but ultimately we're in a bullish phase of the global cycle. The latest jobs report seems to suggest as well, what kind of jobs were those btw? Gov. Lowe is on hold for now, I think he's well aware of the risks of popping the RE bubble, but ultimately gravity has to take effect. In what way are the banks Teflon coated? I'm aware of the many failed short attempts against them, but fail to see how they are particularly privileged?
The gummint here is a coalition of Liberals (business) and Nationals (Rural / farming) The main opposition party here is Labour (workers party/Unions) The prime minister is Malcolm Turnbull ex lawyer, GS merchant banker, and venture capitalist and multi-millionaire. There have been numerous bank scandals in Australia and a cry for a long time for a royal commission public inquiry into the big four's behavior. https://www.bloomberg.com/news/arti...urnbull-to-hold-inquiry-into-banking-industry Turnbull finally agreed but only after much kicking and screaming. My opinion, after a previous raging commodities bull market where Australia is left with a huge debt, something smells nasty about the behaviour of the gummint in this country.