Just my opinion but gonna say I expect a full market collapse before the end of this financial year Many indicators are showing a squeeze has already started and will continue to play out an orchestrated collapse, many weary of another Black October have already started selling down assets and moving back to cash. As much as I dislike fiat currency unfortunately I think Cash will be King again, at least for a very short period of time. Time is almost out now to pick up short positions at a reasonable premium, obviously George Soros timed it well or knew something others didn't. Expect volatility to ramp up in October and it may even come down then, if not soon after. I don't expect any money printing to occur until after everything has collapsed, this will allow the large players time to swallow up all the smaller players again and further consolidate the wealth of the big boys. Gold and Silver will have further to fall, Gold bottom US$1000-$1055, Silver bottom US$14-16 however in Australian Dollars it won't be that much different than it is now, only slightly lower. Expect the USD to gain once again as the markets fall apart so we will probably end up at about AU$0.70 to the USD so I would not worry about selling down precious metals at this point however I would sit on cash ready for a bottom. This time it will be a little different however, a lot more smaller companies will collapse and we will need to see the Australian Government pass through some new wild legislation to keep some of our banks afloat while the Reserve Bank makes new arrangements with the big four. We may or may not get an emergency interest rate cut but there will be a lot of money printing happening after the fall, just not necessarily resulting in any real inflation effect. After the money printing I do expect the share market to stabilise, property will be hit hard in areas that are over-leverage with little equity however other areas will hold their ground fairly well. But the biggest gains will be precious metals, but only after the collapse and after the money printing has begun and after Gold and Silver have reached their bottom then they will start to come back up (1st Quarter 2015). Moves will be slow at first but then their will be an explosion in the price. I expect the price of precious metals to gain rapidly at this point for a few reasons; (#1) the technical bottom will have been formed so from a technical basis the chartists will see this as a huge buy signal, but only after it has come off the bottom and broken a few areas of resistance (#2) the fundamentals will be great, mines will nearly all be mining at a loss so you are buying at below global average production cost (#3) those that got burnt in the GFC and now again in GFC2.0 will not have the trust in trying again and will search out more sound investments such as precious metals (#4) which is the by far the biggest reason is while during the last 4 years only the Gold and Silver bugs continued to buy the precious metals creating a demand of say 0.5% or less of the population once the next bull leg is clearly in play we will see perhaps up to 5% of the population chasing this investment. The mob investment mentality is to Sell what is falling and Buy what is moving up so while it seemed like we were flooded with extra supply of precious metals these last 4 years it will all dry up very fast the second the price turns around creating another big leg up and eventually another bubble top in the price.
One-third of ASX-listed companies at risk of going bust The Australian Stock Exchange (ASX) counts more than 2,100 companies listed, but a recent survey suggests close to a third of them are classified as at risk of financial catastrophe... CPA Australia chief executive says the findings were "a sobering reminder of the fragility of the Australian economy and the challenges many business face." CPA Australia analysed 15,855 audit reports over the period 2005 to 2013, with auditors' 'going concern' warnings rising higher in 2013 than during the GFC. 58% of the bottom 500 companies are at risk with 40% of companies in the oil, gas and resources sectors in 2013. That's probably no surprise, with commodities prices including iron ore and coal falling dramatically over the past 12 months or so. And it may be a prompt to stick with larger industrial companies such as those in the S&P/ASX 200 Index. ...it underscores the simple reality that we have not done enough to fill the void the end of the mining boom is already leaving in our economy. The results come just as the number of company insolvencies jumped dramatically in the June 2014 quarter. With small-to-medium enterprises (SMEs) employing around 70% of private sector employees, this could be a huge concern for Australia's economy. The consequences could be rapidly rising unemployment and falling tax revenues, at the same time as lower commodity prices hit the total value of our exports and could flow into other sectors of the economy. Surge in auditor warnings for ASX-listed companies ...the sharpest rise in Australia's energy and mining sectors, where more than 40 per cent of companies were judged at risk in 2013. The news comes as mining companies are under increasing pressure from falling commodity prices, with iron ore on Monday night hitting a five-year low. ...the decline in iron ore prices had made "everyone nervous". BHP Billiton also announced plans on Tuesday to cut 700 workers from its Queensland metallurgical coal business, BMA Mitsubishi Alliance, representing about 8 per cent of BMA's 6000 full-time staff. That fresh round of job losses comes after 173 jobs were cut from BHP's Mt Arthur thermal coal operations in New South Wales' Hunter Valley in July. In the coal sector alone, about 12,500 jobs have now been cut over the past two years amid a string of mine closures and delays to projects by companies -including BHP, Rio, Glencore, Vale and Peabody Energy. Laboratory testing group ALS - which provides testing and analysis services for numerous companies - has also this week revealed plans to cut up to 1000 jobs. "It really begs the question how our economy would be placed were we to face another shock like the GFC?" he said.
Thanks to both Tozak and SilverPete for the excellent info that MSM just is'nt putting out their for all to see. SilverPete, I can't believe all the job losses happening but you never hear about them. Tozak, Things aint looking to good.... This could be the event that bursts the OZ RE bubble? (At least in some areas as you say).
if audusd at 0.7 and silver is at usd$14, we will be seeing spot @20 AUD, so current price is really good buy already (hedging to the future already). thoughts ?
I watched the ASX drop 3000 points in 2008 while capital city suburbs flat lined (maintained with CPI) and then entered a growth period again which is still going. It will be a first time event in Australia if a stock market crash leads into a RE crash. It would have to be a massive one on a global scale I would think.
You are right...Tozak is talking utter crap.....Nothing to read or see here! Apart from all the job losses going on
can you share with us what is happening in 1987? I am not smart enough to understand what is happening at that time. and also not in the country yet. ps: overseas born migrant. thx
Then you haven't been paying much attention. Over a quarter of a million jobs have vanished since the GFC (Jan 2014 figures). It's just getting scarier because our big ticket employers (coal and iron) are trimming wages and employees. Who knows if Tozak's prediction is accurate, I would've thought we would've crashed long before, it definitely is getting smellier though.
In 1987 the stock market here in Australia collapsed a bit more than 25% the day after Wall Street crashed around 20% or so. It was called Black Monday and it basically killed off Australian business for about 10 years. The real estate market was hit by drops of 20-40 percent depending on where you were selling, and prices were flat until the late nineties. There are a few articles about that are probably more accurate than my recollections. Here's one perspective http://www.shareswatch.com.au/blog/stockmarket/the-stock-market-crash-of-1987-a-time-to-relect/ This article has a good comparison and this image which is worth a thousand words. http://christopherjoye.blogspot.com.au/2010/05/comparing-1987-and-2007-stockmarket.html Source: comparison
Source: http://www.macrobusiness.com.au/2013/02/the-history-of-australian-property-values/ Doesn't look like a crash to me... A short term fear driven blip based off a stock market fall, followed by good growth (catch up). Seems like 1987 was similar to 2008 to me.
What im saying is for pure economic fundamentals to overthrow RE fundamentals would be a big thing here. It will take a lot to take out the 70% market share of owner occupiers, most of which own their homes outright. Not to mention the supply/demand ratios here are unmatched elsewhere in the developed world. It would take one hell of an economic event. I'm almost 100% sure it will not happen in Australia independently, as many of you here seem to think.
What happened is the stock market in 1987 crashed period.The property market did not drop until 1989-1991. How do I know? After the stock market crashed we were concerned because I was at University full time we had a home mortgage , we were living off of my wife's tiny wage and a little bit of weekend work I could get. We couldn't afford to eat meat more than once a fortnight. The wife was also pregnant. Property prices in Melbourne increased 39.4% after the stock market crashed in October 1987 until 1989 The wife had an investment unit in Caulfield with a girlfriend.She sold it in 1988 just ahead of when the commonwealth government in 1989 raised interest rates because their view was property prices were too high the mean was $105,000. Sound familiar ? the talk now about the gubermint restricting house prices. Read on. In 1990 We had the State Bank of Victoria Crash. The State bank of SA crash because of the disastrous tricontinental banking debacle, We had the pyramid Building society collapse and we also had the Estate mortgage trust collapse So if you are a student of history..... but past investment performances are no indication of future returns... but since interest rates have been at record lows property investors and home owners are on average two years ahead on their repayments. If there is another huge share market collapse my take is the bunnies will pull what is left of their diminished investments and pay top dollar for an over priced property that has climbed another 20-50% in the two years after the crash before... maybe a property correction of 20-50% Kind Regards non recourse
I'm not sure what State you're in but the job losses are pretty prominent in the papers in NSW and obviously the Hunter where coal companies are haemorraging money left right and centre. Look out for 2015 is what they have been saying as far back as 2009. I'm definately in self defence mode at present and intend on selling an investment property before xmas to balance my debts a bit in case I'm given a redundancy at work. By all accounts it won't be pretty but will look better circa 2017 and beyond when money will start to become available again. Start growing those veggies.
My view is it ain't over until the fat lady sings and that is not until post October 2017 when we reach the very bottom Kind Regards non recourse
I always love these extremly specific preditcions made by members that will happen on not to distant round about or exact dates. With 100% of every single one of them i always get to give it some of these . And alway good for a face palm. Good forum stuffers though.
Face palm away then all you like. Roll your eyes while you are there if you want. My statements were based on the coal industry only and are what the analysts are telling us. These predictions are already influencing my work as our London HQ is restricting the capital available until their predicted 2017.
