Wonder how the PP acts in this scenario....

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Hal
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Wonder how the PP acts in this scenario....

Post by Hal » Sat Apr 27, 2019 1:29 pm

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ochotona
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Re: Wonder how the PP acts in this scenario....

Post by ochotona » Sat Apr 27, 2019 5:03 pm

Better than most any other portfolio, you can be sure of that.
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I Shrugged
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Re: Wonder how the PP acts in this scenario....

Post by I Shrugged » Sat Apr 27, 2019 6:25 pm

76 minutes? I would need an executive summary. :)
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Ad Orientem
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Re: Wonder how the PP acts in this scenario....

Post by Ad Orientem » Sat Apr 27, 2019 9:29 pm

Just did a quick Google. This guy appears to be something of a gold bug and prophet of doom. Haven't delved too deep into the specifics, but we have been hearing this sort of stuff for a very long time (1933?). The future is unpredictable.
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Re: Wonder how the PP acts in this scenario....

Post by Hal » Sun Apr 28, 2019 2:44 am

Executive Summary :)

Basically Australia's turn to go through what the US did back in 2008 due to bad bank loans for housing

And your are correct, he is a bit of a prophet of doom, but unless you visit Australia you have no idea of the property bubble !

I am writing this in a small country town, population of about 7000, basically zero chances of getting a job, but they are building town houses here. Who are they going to sell them too? The sheep?

Will still stay on with the PP, however if the AUD takes a dive, that's half the PP assets that will be affected, not to mention what will happen to the share market.

"But" no one knows the timing so you cannot be sitting up in the hills with your canned beans and shotgun forever :)
Went through a similar thing in the 80's when the interest rates went up to 18% and some banks failed

http://fsgstudy.treasury.gov.au/content ... dix4-2.pdf

People I know have $500,000 loans with minuscule deposits - cannot help but feel uneasy.

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europeanwizard
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Re: Wonder how the PP acts in this scenario....

Post by europeanwizard » Sun Apr 28, 2019 1:55 pm

I Shrugged wrote:
Sat Apr 27, 2019 6:25 pm
76 minutes? I would need an executive summary. :)
I think it's too long as well, however -- in the first couple of minutes, he refers to a debate he had with Christopher Joye:
https://www.youtube.com/watch?v=nQuKMsmVq5c

It's about 25 minutes long and very fast paced. What I like, is that both sides of the issue get some spotlight. However, they do agree on two things:
1) the prices are crazy high, up to the point that banks offer to borrow you 10x your annual income
2) in case of a depression, the prices not just go down but utterly collapse

What they don't agree on, is calling it a bubble or not. Furthermore, Christopher Joye maintains that the mortgage debt is very serviceable due to the strong economy. And John Adams is saying that historically, there's always a monkey that throws a wrench in the gears.
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Re: Wonder how the PP acts in this scenario....

Post by Hal » Mon Apr 29, 2019 6:55 am

europeanwizard wrote:
Sun Apr 28, 2019 1:55 pm
I Shrugged wrote:
Sat Apr 27, 2019 6:25 pm
76 minutes? I would need an executive summary. :)
I think it's too long as well, however -- in the first couple of minutes, he refers to a debate he had with Christopher Joye:
https://www.youtube.com/watch?v=nQuKMsmVq5c

It's about 25 minutes long and very fast paced. What I like, is that both sides of the issue get some spotlight. However, they do agree on two things:
1) the prices are crazy high, up to the point that banks offer to borrow you 10x your annual income
2) in case of a depression, the prices not just go down but utterly collapse

What they don't agree on, is calling it a bubble or not. Furthermore, Christopher Joye maintains that the mortgage debt is very serviceable due to the strong economy. And John Adams is saying that historically, there's always a monkey that throws a wrench in the gears.
Thanks Europeanwizard et al,

Your post got me curious. In Europe, back around 2008 when Greece and other countries were in trouble, credit contacting (depressionary), I noted the the German Bond prices didn't spike.
Any ideas why? Would have thought the German Bonds would have been the safest in Europe?

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Cortopassi
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Re: Wonder how the PP acts in this scenario....

Post by Cortopassi » Mon Apr 29, 2019 8:42 am

Talking about bond rates, I've posted similar before, and still don't understand why the US 10 year is basically on par with a country like Italy?!? And not too much lower than Greece?

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Re: Wonder how the PP acts in this scenario....

Post by pmward » Mon Apr 29, 2019 9:17 am

Cortopassi wrote:
Mon Apr 29, 2019 8:42 am
Talking about bond rates, I've posted similar before, and still don't understand why the US 10 year is basically on par with a country like Italy?!? And not too much lower than Greece?

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It's purely supply and demand.
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Re: Wonder how the PP acts in this scenario....

Post by Ad Orientem » Mon Apr 29, 2019 9:49 am

At the risk of crystaballing, I'm going to opine that global bond markets in the developed world are, with a few exceptions, pretty expensive right now. Yields are shockingly low (thanks in part to government manipulation of interest rates) while debt at every level of society... government, corporate and private, is at such high levels that the IMF and World Bank as well as numerous private think tanks have been telegraphing warnings that we may not be far from a tipping point. If I were speculating, I'd say the bond market is high risk and low reward right now.
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Cortopassi
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Re: Wonder how the PP acts in this scenario....

Post by Cortopassi » Mon Apr 29, 2019 1:24 pm

pmward wrote:
Mon Apr 29, 2019 9:17 am
Cortopassi wrote:
Mon Apr 29, 2019 8:42 am
Talking about bond rates, I've posted similar before, and still don't understand why the US 10 year is basically on par with a country like Italy?!? And not too much lower than Greece?

Image
It's purely supply and demand.
Meaning as you go down the list, demand is higher? Why on earth, for example, would Spain's bonds be more attractive than US bonds?
pmward
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Re: Wonder how the PP acts in this scenario....

Post by pmward » Mon Apr 29, 2019 1:59 pm

Cortopassi wrote:
Mon Apr 29, 2019 1:24 pm
pmward wrote:
Mon Apr 29, 2019 9:17 am
Cortopassi wrote:
Mon Apr 29, 2019 8:42 am
Talking about bond rates, I've posted similar before, and still don't understand why the US 10 year is basically on par with a country like Italy?!? And not too much lower than Greece?

Image
It's purely supply and demand.
Meaning as you go down the list, demand is higher? Why on earth, for example, would Spain's bonds be more attractive than US bonds?
Demand is only 1/2 of the equation. The EU is in a strange situation where it is easy on the monetary side and pursing austerity on the fiscal side. That’s the crux of the issue right there.
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