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That is what The Emperor (Kevin Rudd) thought and now they are fighting words where Fort Fumble (Federal Government) will be forced to perform yet another monumental back – flip on policy. Back to that over-worked drawing board where a 2010 federal budget is on the political rack.  The gloves are off as government and miners trade blows over tax as Wayne’s world comes unstuck which should not come as a great surprise when one looks at a government built around crumbling policy failures.

Ross Gittins in the Sydney Morning Herald wrote this  interesting story “Shonky advisers have led Rudd badly astray” It’s not just The Emperor’s reputation on the line, the Australian economy is on the nose too. The Minister for Mining, Ken Henry, who these days is wearing many hats, has a different interpretation.

Rudd’s dollar delusion – Since the end of April, the Australian dollar has been hit much harder than the euro, so for our decline to be entirely linked to the global crisis, Australia would need to be on its knees with a huge debt problem. But, of course, as Kevin Rudd correctly points out, the Australian government is in a strong borrowing position.  Leaving aside what was apparent in the marketplace, logic dictates that the mining tax had to be part of the slump.  A cavalier effort last Friday when dollar rout ‘stemmed by Reserve Bank’.

Let’s look back at The Emperor’s blackboard of back – flips: save the whales, fuelwatch, grocerywatch, kids laptops, takeover of hospitals by mid 2009, hospital reform, schools stimulus infrastructure programme, 2020 Summit (where he met Kate Blanchet), insulation program, refugees,  insulation industry, foreign investment review board removal, mining tax, childcare centre building program, carbon emissions programme and of course his “greatest moral challenge of our time” the list goes on. Is this the worst CV in Australia’s political history? In search of a photographic capture that best describes Fort Fumble’s business and economic outlook?

BUY PRINT

On Q&A this week, former Australian Prime Minister Malcolm Fraser (stole the show for mine) when he took this question from the audience and what a wordsmith he  is (and resigned from the Liberal party).

Paul Sherrington: “Controversial Melbourne columnists like Andrew Bolt and others have declared the Rudd Government to be the worst and most wasteful government in living memory, perhaps unfairly. Given a choice between the Whitlam Government, as you intimately know it, Mr Fraser, and the Rudd Government so far, which do you think is better?”

Malcolm Fraser: “Oh, you’ve got to say – I’d use different terms; “least worst”. The Rudd Government so far, but you didn’t take a very good – I don’t want to criticise journalists, because you know, some journalists have very extreme views and generally only report one side of a question, as we’ve heard, perhaps. The administrative failures of the current government, whether it’s in delivering houses to indigenous people, or whether it’s in putting insulation in roofs or building classrooms for schools with government schools costing several times what it costs private schools, or what other things they have sought to administer? They’re going to muck up the hospitals next. The administrative failures are gross and half of them aren’t pursued by the opposition and the administrative  failures are as great, if not greater, than the administrative failures in Gough Whitlam’s government. But Gough’s failures were of a different kind, of a different quality, and I don’t want to go into those now. It wasn’t straight out of administering what should have been a plain, straightforward programme, which for some reason this government seems totally incapable of doing.”

Now to those other deposits – not mineral but banking.  This week, we saw the “Big Four” banks  realise, given the current economic movements, (downwards) that they now ant your hard earned monies trapped away in their vaults – the banking oxygen of the future. Global Financial Crisis II looms if debt woes grow so it is reasonable to assume that our banks urgently require a topping up of liquid funds. Lending ratios have fallen from 100 per cent to 60 per cent in a matter of months for residential properties. The current offers are 6.00 + which is much higher than the current cash rate of 4.50 per cent. I would not lock and load in yet as it will get higher given the global demand for money. Throw in the fact that the Reserve Bank of Australia announced this week that credit card purchases rose 12.2 per cent over the year to March 2010. The value of purchases made in March was $19.9 billion, up by $2.1 billion from the previous year.

A busy few weeks for the Reserve Bank of Australia – who just released its Competition in the Deposit Market. See a pattern forming? For depositors, retribution, given term deposits are now challenging investment in the shock market, hedge funds can’t short you now and no more wild ride for Australian equities.
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We are definitely witnessing a shift where businesses and households are actively paying down debt as a direct result of the uncertain times ahead. Unsustainable home loans are of great concern where we now have a rise in middle – class bankrupts where even the Pope, ECB chief slam spendthrift governments. In Australia, we are already witnessing first hand interest rises kicking the stuffing out of auction clearance rates.

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This explains why deposit rates are suddenly attracting all the attention at the moment and in all probability will remain a major player for the foreseeable future. Work within the markets and not without them as this is not a viable time to pinch – hit profit taking models. Ever seen a correction before? Not sure if Hedge funds are actually not Dredge funds and it should also be noted that  Fort Crumble (NSW government) has successfully dredged NSW where in terms of infrastructure, it is now paralysed by parliamentary past performances. Prepare for 20 years of transport despair given it will be decades before any new roads are built.

Fort Crumble approves 4,500 new North shore houses where residents will now spend their annual leave on the Pacific Highway. Cashed – up foreigners snap up homes who spent $14.900 billion on houses and land last year. Once again The Emperor identified that he is an economic  illiterate and foreign investors selected Victoria and Queensland ahead of NSW. NSW once upon a time, like the fairytale, was the number one choice.

Sydney one of the world’s top 10 cities Australia’s other state capitals are out of the world’s top 20, but still in the top 40, with Perth ranked 21, Canberra 26, Adelaide 32 and Brisbane at 36.

• Vienna, Austria
• Zurich, Switzerland
• Geneva, Switzerland
• (tie) Auckland, New Zealand
• (tie) Vancouver, Canada
• Dusseldorf, Germany
• (tie) Frankfurt, Germany
• (tie) Munich, Germany
• Bern, Switzerland
• Sydney, Australia

As Malcolm Fraser once said “life was not meant to be easy” which he scripted from within his very own government. I wonder what it should be under the present Labor regime? A suggestion: hey “big spender” bankruptcy is our very own act of life!

The number of security clearances of asylum seekers by ASIO has risen tenfold in recent years. (Security clearances by asylum seekers up) in 2008/09 ASIO processed 207 irregular security assessments and in the period of July 2009 to March 2010 – 2028 assessments, which is attributed to KRudd border security – and guess who pays for that?

Our website sponsors announced this week - First Home Buyers offered a helping hand from Mortgageport which many subscribers to Virtual Realty News will find interesting. Also, the Balmoral Burn is on this Sunday and this event has become an iconic Sydney event.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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28.05.10Robert Simeon9 Comments »

My curiosity was stirred last week by M Jackson, who said that, (subject to approval) the Australian Securities and Investment Commission (ASIC) may allow you to have a punt on our property markets. Described as a world first, ASX punters can take out a derivative contract based on Rismark/RP Data market indices which are in turn quoted daily to the share market. I did laugh when I read ‘daily’ – try months after the event if real estate agents decide to block data sales access.

Back to M Jackson’s comment on last week’s blog – “Contrary to popular myth, the water in Australian plugholes goes down the same way as everywhere else. So, too, the housing market. Figures from the Bureau of Statistics (ABS) on Monday showed that prices in eight capital cities were down by a record 2.2 per cent between December and March. The fourth quarterly fall in a row brought the year – on – year rate of decline to almost 7 per cent.”

Rismark/RP Data reported national dwelling values increased by 1.52 per cent for March 2009. Then the ABS reports a 2.2 per cent decline. Somebody got it wrong – but hey, take a punt?

Tim Mooney Photography

www.timmooneyphotography.com

Back to M Jackson’s comment – “Gross rentals yields of about 3 per cent, meanwhile, are near all – time lows; if houses were stocks, they’d be trading on wobbly price/earnings multiples of more than 30 times. Unemployment data, to be released on Thursday, may show a rise to almost 6 per cent, the highest level in six years. Job ads fell again in April. Mortgage flows are sputtering. The props are falling away. Currently the SFE is constructing a tradeable index on Australian housing, which should be completed by and ready by August 2009. I can’t wait to go short. If there was one specific to the Lower North Shore in Sydney. I would have double the size positions.”

I thank M Jackson for his input and look forward to reading more responses to our blogs.

The Global Financial Crisis was brought about by global banking institutions investing in (probable and possible) markets based on high debt ratios – otherwise known as gambling. The process for aggregating property data has always been flawed – highlighted by the simple fact that the ABS and Rismark/RP Data constantly report conflicting property data positions. Definitely not an each – way bet!

Consider the property market reality, if ASIC approves the trade derivative contracts and the Australian real estate agencies automatically cease providing all sales data to all the aggregators? It would then be one, two, three, four, five and six months until such data became available. Just who would punt on such irregularities? The data aggregators don’t act in harmony with real estate agencies in Australia where there is not the slightest possibility of any change – anytime soon. I would predict (and support) a total real estate data black–out.

After all, we act for our vendors (first and foremost) and are under absolutely no obligation to report sales data that aggregator’s then on-sell to institutions. One only has to look at the banning of shorting banking stocks to observe that this is conducive to assisting economic growth in a recession. The real estate industry is the largest employer in Australia where our economy is only in a sound position because our banking system is world’s best practise and world’s best profits too.

Simply put: real estate agencies would cease reporting sales and rental data and agents would then lengthen the odds quite considerably. If such a market was created where (just say) you could bet on the Mosman market – I would hope that collectively, Mosman agencies would turn such a proposal into a blank canvas with data support.

From “bricks and mortar” to “punt and hunt” derivative markets! The only people that I can see making money from these proposed markets are actually the real estate agents. Is this Australia’s financial version of subprime – a buy position without actually owning a house? Short on being exact and very long on accuracy.

I thought Malcolm Turnbull’s Budget response to be lame (to say the least). However, with the possibility of a double dissolution around the corner, it makes sense to keep ones “powder dry”. As one subscriber said this week, “depending upon the government for your future financial security, is like hiring an accountant who is a compulsive gambler!”

Ruddy Fantastic and Wayne Swans’ missing word disorder’ may have been cured this week when it was revealed on www.smh.com.au “It’s been suggested that Kevin Rudd would not utter the phrase “$300 billion” for fears his words will be used in coalition advertisements during the next election campaign.” So much for “sticks and stones may break my bones but words will never hurt me.” Then “Mr Rudd said Australia’s debt would peak at “around 200, or gross debt at about 300” in 2013 – 14. Now journalists are on to this political spin game and will play this to their hearts’ content. Very petty, although Australia’s deficit needs much more than petty cash as we will continually be reminded for many years to come.

Australia’s housing prices are at their most affordable level in seven years and in the March quarter the Housing Industry Association – Commonwealth Bank First Home Buyer Affordability Index recorded a 14.6 per cent increase. The average home loan fell by 11 per cent from $2056 a month to $1831 last year.

Despite confidence levels still being down, car sales in April were up on the March figures. Just as interesting is that in Mosman on www.domain.com.au there are only 118 houses/semis (I removed double entries, apartments, and out of area listings from the listed 135) available for sale which is an all time low in available stock levels. This will only get tighter over winter given that purchasers are now engaging with vendors.

This week’s video is a brilliant story about the annual Balmoral Burn Race Day which happens next Sunday on May 31. The Balmoral Burn Sponsors’ Dinner takes place on Friday May 29, 2009 so watch the video for more details. Keeping in the theme, this week’s aerial photograph by Tim Mooney Photography, highlights the best beach on our planet and in the background Awaba Street – the Balmoral Burn tread mill. Congratulations to Phil and Julie Kearns who started this brilliant fundraising event back in 2001. Given that I have won the race three times now, I am no longer eligible to compete.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales http://www.rwm.com.au/news/

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22.05.09Robert Simeon8 Comments »