So when will the sharemarket crash in 2014?

[Ocean1]

Hmmmm....................
http://www.stuff.co.nz/business/mone...going-to-burst

Yes.

Is he what we should accept as an experienced authority?

Does his data reveal any inherent bias?...

http://www.forbes.com/sites/jessecol...d-in-disaster/

I can think of just one reason someone would use historic house prices uncorrected for inflation, for example.

Well, two.

Incompetence, is the charitable one.

[Indiana_Jones]

"Colombo says the economic bubble will pop here as a result of rising interest rates, which will put pressure on the country's property and credit bubbles."

If people are getting $500,000+ mortgages for tiny houses in Auckland, someone is going to get burnt.

-Indy

[mashman]

Hmmmm....................
http://www.stuff.co.nz/business/mone...going-to-burst

Gets me all drippy like.

[scrivy]

Gets me all drippy like.

??? WTF??? Crusty knickers, pre-cum??? What??

[mashman]

??? WTF??? Crusty knickers, pre-cum??? What??

All of the above

[Voltaire]

When they go on a Rockstar Economy are they referring to the 'Johnny" in the Bad Company song Shooting Star.

some of the comments are good/funny.

So will the Labour/_______ coalition get the mess to tidy up?

[oldrider]

So will the Labour/_______ coalition get the mess to tidy up?

Thats akin to throwing petrol on a fire to put it out but it "is" a very Kiwi way of doing things, watch this space!

[ellipsis]

...I heard a large crash earlier...I thought it may have been it, but it was just a stock-truck dropping its ramp...

[Ocean1]

And if he is correct in claiming that NZ's agriculture only accounts for 5.1% of our GDP that seems a meagre return for the environmental cost of the dairy industry.

Not sure where he's getting his numbers from... http://www.stats.govt.nz/browse_for_...on-to-gdp.aspx
He's not far off.

By his own definition he's in the business of commenting on the bursting of economic bubbles, and making money in doing so requires bankable opinion quite different from that required to accurately define them. In short, if he's that good at predicting market fluctuations he'd be wealthy enough not to have to write about them.

And nobody's yet introduced that age old adage about weather forecasting having been invented purely to make economists look less bad.

The big fact he does have is NZ's overpriced housing, and his prediction based on that is directly taken from the US housing market collapse, as he said. But NZ's private debt hasn't been re-wrapped and on-sold until it's no longer recognisable. Nor can NZ homeowners simply walk away from their negative-equity problems with impunity as did a high percentage of US debtors.

Nonetheless, our debt is driven mostly by house prices, and most of us have been worried about that for a while. But as I've said before; if new houses were more readily available and their prices more closely aligned with their material and labour contents then second hand house prices wouldn't be where they are now. The market is being dominated by monopolies and bureaucratic interference. Like so: http://www.stuff.co.nz/business/mone...prices-English

[Ocean1]

"Colombo says the economic bubble will pop here as a result of rising interest rates, which will put pressure on the country's property and credit bubbles."

If people are getting $500,000+ mortgages for tiny houses in Auckland, someone is going to get burnt.

-Indy

As they deserve to. And as long as the consequences of individual financial mistakes are limited to that individual then everyone else will be fine.

And I see the cavalry have arrived: http://www.stuff.co.nz/business/indu...nalysts-bubble

Infometrics managing director Gareth Kiernan said Colombo had picked out all the high-risk metrics he could find to build an "end of the world scenario".

If his predictions ever came to pass then the economy would be in trouble, but no one was really forecasting that to happen, he said.

"You would need a bit of a catalyst to kill off the housing market so sharply and I don't think, given the outlook for economic growth over the next few years, a lift of a couple of percentage points in interest rates is going to do that."

[Tazz]

But as I've said before; if new houses were more readily available and their prices more closely aligned with their material and labour contents then second hand house prices wouldn't be where they are now. The market is being dominated by monopolies and bureaucratic interference. Like so: http://www.stuff.co.nz/business/mone...prices-English

Be nice if they made better use of the land they are putting new houses on too. The stupid subdivisions that look pretty with winding roads, trees and grass strips down the middle of the road which lead to odd shaped sections accommodation single story structures that are mass designed (so just plonked where they fit) not making decent use of indoor or outdoor space any where near efficiently. You could fit two or 3 well thought out appartments on that land and still live comfortably, as well as have a much smaller mortgage in comparison.
People who buy into those shitty houses are their own worst enemies and are feeding the problem.

'But I need a backyard for my dog or kids!' you say, ignoring the park just down the road with the awesome playground (NZ has some wicked playgrounds) or the fact you are surrounded by some of the best country in the world to get out amongst, or the fact you have some massive ass farm dog that you're trying to live in the city with and are to lazy to exercise properly...sigh.

/rant

[Indiana_Jones]

I see the banks have been quick to pass on the OCR increases for loans.....but the interest rate for my savings has not gone up (and doubt it will any time soon)

-Indy

[mashman]

Systemic global risks today may be greater than before the Lehman crisis, the BIS warns, as debts have risen. Across the developed world, the average combined public and private debt ratio is at 275 per cent of GDP, compared with 250 per cent in 2007. And no less than two fifths of new syndicated loans are now sold to dodgy ‘sub-prime’ borrowers, the BIS adds — above the pre–Lehman high.

‘I would be extremely wary of stock markets right now,’ says Professor Michael Dempster, co-founder of the Centre for Financial Research at Cambridge University. ‘The last crisis was caused by cheap money and it’s happening again via QE, which is very, very worrying. QE started as a way of priming the pump, but no one knows how to turn it off without causing financial havoc.’

‘Derivatives are now all about playing games, creating confusion to hide losses,’ Dempster says. Total global derivatives outstanding currently amount to $620 trillion, he calculates, a jaw-dropping ten times global GDP and back above the pre–Lehman total.

I know how to turn it off without causing financial havoc. Must be a bunch of dumb fucks running the show... which to be fair goes without saying. Then again I guess it shows just how dumb people are by allowing these sorts of things to happen

[Woodman]

I know how to turn it off without causing financial havoc.

How?

ftcr

[mashman]

How?

ftcr

One of a few ways. The easiest way is the usual ditching of the financial system (or at least leaving it as a shadow to produce financial figures)... but in the spirit of bringing myself down to Earth and putting myself in the position of your common garden financial system dependent fuckknuckle, the financial way is pretty simple too. Quite simply write off the BIG bad debt (not yours or my loans etc...) but the debt that's crippling country's... and then decide that there is no such thing as debt. You can keep printing as much money as you like and should you wish, be able to remove interest entirely. Greed can continue without affecting anything in particular, as can consumerism with all of the new money available, and any shite debt can get written-off.

Given that the entire financial system is based on nothing more than printing money and having the confidence to back that printed money against something, it's not a giant leap of the imagination to implement so long as confidence remains, which it should as no one will be losing anything at all... not even the banks as they can always print as much debt, I mean money, as they write-off.