a running list of warnings

Should children play with interest-only fireworks?

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Investor interest-only loans are a key risk factor threatening to destabilize Australia’s mountain of private debt, according to investment firm Standard Life Investments, a keen observer of interest rates. IO loans are often associated with thin equity buffers, risky investment strategies and the aggressive pursuit of capital gain over income. Standard Life says: “Much of […]

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Housing affordability and the changing debt burden of a typical mortgage

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by Philip Soos reposted from The Guardian Australia’s historically high and rising housing prices are widely debated and have prompted a number of government inquiries into housing affordability. The question stands open: is housing affordable in Australia? Affordability is often confused with related concepts such as ease of entry, serviceability and valuation. Ease of entry […]

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Retiring to live on the fat of the land may not be possible – rents are falling

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CoreLogic’s Quarterly Review of the residential property market released yesterday brings sobering news for land holders – particularly Australia’s 1.2 million strong Negatively Geared investor class. Rents are falling. Source: CoreLogic CoreLogic’s Tim Lawless observes: “Rental incomes are falling across the combined capital cities in the midst of the weakest rental market on record. A […]

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Bad taxes are destroying our jobs and enterprises – here’s proof

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World-class fertiliser producer Incitec Pivot Ltd has painfully written $105m off its Gibson Island plant in Brisbane – squeezed by high gas costs, low Urea prices and bad taxes – just as it enters a major ‘shut’ to refurbish this key national industrial asset. Turning gas into nitrogen fertiliser is genuine value-adding, unlike the three […]

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Australia’s housing bubble and the road to private serfdom

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by Philip Soos cross-posted from Independent Australia Banks, abetted by government, want you to keep getting crippling mortages to pay for vastly overpriced land, but the party can’t last forever. Over the last 20 years, housing has developed a reputation as a risk-free and high-gain asset. Property remains a coveted asset and can now be […]

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Malervescence: a government determined on tax deform

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Prime Minister Malcolm Turnbull has produced so many thought bubbles on tax reform he makes fresh beer look flat. His latest effervescence is for the states to levy their own income tax on top of the Commonwealth take. He needs to be warned: Be careful what you wish for. Should Australia proceed down this path, […]

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Property big short is long on price

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A letter in today’s Australian Financial Review by Dr Philipp Hoflin, a member of Lazard Asset Management’s equities team soberly expresses the discomfort among sharemarket investors about the Giant Australian Land Bubble. Property big short is long on price In reference to the piece by Christopher Joye (‘‘Don’t believe the big short’’, February 26), I […]

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See The Big Short, talk about The Big Short

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Based on Michael Lewis’s 2010 book, The Big Short is a critically acclaimed film about Wall Street in the lead-up to the 2008 Global Financial Crisis. “This business kills the part of life that is essential, the part that has nothing to do with business” – The Big Short Join Prosper President Catherine Cashmore, Don’t […]

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Oz takes Gold! Go you Good Thing!

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Last week, Philip Soos announced Australia had achieved global leadership in an exciting new arena: “Australian households have more debt compared to the size of the country’s economy than any other in the world.” According to LF Economics, we seized this dubious crown from the Danes in the last quarter. Denmark has been grinding away, […]

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Judgement Day arrives for illegal foreign buyers

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reposted from Macrobusiness by Leith van Onselen Today is 1 December, which means that the amnesty on illegal foreign buyers of Australian residential real estate is over and the Government’s new penalty regime comes into effect. From today, a foreign national that has been found to have purchased an established dwelling without prior Foreign Investment […]

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