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2016 Blog:

  • 29 Feb 2016. Tepper predicting 50% falls in houses in Sydney and Melbourne.
  • 22 Feb 2016. Negative interest rates - important development.
  • 17 Feb 2016. Australian recession warning flashing red.
  • 12 Feb 2016. During 2008-2009, what rose as shares fell? Trend followers.
  • 6 Feb 2016. Are all asset prices falling? Not gold. Inverse relationship.
  • 4 Feb 2016. Do Western central banks know where they are taking us?
  • 2 Feb 2016. Gold - and Why Marc Faber says he won't see another bull market.
  • 14 Jan 2016. Albert Edwards - If I'm right, the US stock market will fall 75%.
  • 22 June 2015. Susan Gosling's views on the strange state of the investment world.
  • 5 Jun 2015. Minack sees falls for banks and house. Parallels with Japan post-1990.
  • Blog for 2013-2015.
  • Knowledge base - investment knowledge resource for you.
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    29 Feb 2016. Tepper predicting 50% falls in houses in Sydney and Melbourne.

    23/2/16 Historic house price crash. Bank shares crash.
  • "We anticipate most bank shares will cut dividends entirely, raise capital and stock prices will likely decline 80 per cent," says economist Jonathan Tepper of Variant Perception.
  • Tepper in his report bluntly warns "Australia now has one of the biggest housing bubbles in history", noting the country's real estate value to GDP is 3.8 times compared with Ireland and Japan, which both were at multiples of 3.5 times before they before they experienced a housing market crash.

  • 26 Feb 2016 Jon Tepper also correctly predicted Spain's GFC crisis.
  • Jonathan Tepper is no stranger to criticism. When the founder of research house Variant Perception published a report in August 2009 that described Spain as "the hole in Europe's Balance Sheet" he was condemned by journalists, analysts and some government officials. At one point he was even described as an "enemy of Spain". However, the report turned out to be prescient. As Tepper predicted, Spain experienced "a spectacularly high unemployment level for an industrialised economy, a real estate collapse and general banking insolvencies". The self-described "nerd" was proved right.

  • Related commentary.
    19/3/15 The coming Aussie house price crash.
    6/4/15 On the Aussie bank share price bubble.
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    22 Feb 2016. Negative interest rates - important development.

    Some points and articles of interest.
  • Swiss Bonds paying negative interest rates out to 15 years. German bonds paying negative interest rates out to 8 years.
  • Stephen Roach. Central bankers missing the point. This is aftermath of Western balance sheet recession.
    For more on balance sheet recessions, go to this link. Balance sheet recessions explained.
  • Russell Napier. Politicians, the only one who can fix it, are going to do nothing until we have a crisis ... and then they will fix it. In the mean time, they will let central bankers fail by themselves.
  • The Telegraph. Central bank negative interest rates - calamitous misadventure.

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    17 Feb 2016. Australian recession warning flashing red.

    Australian recession warning flashes red.
  • "A little known group of researchers at the US central bank in New York spent five years looking for a predictor of financial crises, and they found only one: bank lending standards. It's the simple idea that the cost of credit is not what suffocates an expansion, it's the availability of credit," Dr Robert Gay, managing partner at Fenwick Advisors, said at an investment forum on Tuesday. "As long as you can roll over the principal at whatever price, things don't shut down," My Gay said. "Finance lubricates growth and when you stop the lubrication, you stop rolling over debt, then it becomes contagious."
  • In fact, "there is only one country where the line is going up, and that's in Australia".

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    12 Feb 2016. During 2008-2009, what rose as shares fell? Trend followers.



    Trend following hedge funds can make money in rising and falling share markets. When share markets are rising, they can go long. When share markets are falling, they can go short.
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    6 Feb 2016. Are all asset prices falling? Not gold.



    Gold price in US$ tends to do very well in periods of negative real US cash rates, when the S&P500 is in a cyclical bear market.
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    4 Feb 2016. Do Western central banks know where they are taking us?

  • Sadly, the simple answer is no. We are caught up in a massive monetary experiment, orchestrated by Western central banks under the leadership of the US Fed. In the 2008-2009 Global Financial Crisis (GFC), it became very clear that Classical School economics was deeply flawed. This is important to understand because classical economics is the primary intellectual framework that most central banks rely on, when making decisions.

    If you would to see some discussion on the economic theory flaws exposed by the GFC, go to this web site. Institute for New Economic Thinking. Please watch the youtube video on this web page.

    Consider this for example. Historically, when central banks have embarked on money printing like they have in recent years, it has resulted in hyperinflation and ultimately destruction of the value of the paper money system.
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    2 Feb 2016. Gold - and Why Marc Faber says he won't see another bull market.

  • Marc Faber, Western banking system risks. Explanation of why Marc Faber might argue that. Risks to depositors in the Western banking system. This could push Western investors into gold.
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    14 Jan 2016. Albert Edwards - If I'm right, the US stock market will fall 75%.

  • Societe General economist, says US shares to fall 75 percent. If I am right, the S&P would fall to 550, a 75% decline from the recent 2100 peak. That obviously will be a catastrophe for the economy via the wealth effect and all the Fed's QE hard work will turn dust. That is why I believe the Fed will fight the next bear market with every weapon available including deeply negative Fed Funds rates in addition to more QE. Indeed, negative policy rates will become ubiquitous.
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    22 June 2015. Susan Gosling's views on the strange state of the investment world.

  • 22 June 2015. Susan Gosling's views on the strange state of the investment world. Susan Gosling is head of MLC investments (owned by NAB). She is one of the best investment brains among the big Aussie institutions.
  • "Defensive investments such as cash and bonds won't weather a severe storm, which is why Susan Gosling focuses on currencies, derivatives and gold, writes Kate Cowling."
  • This article is worth reading, if you want to get a sense of the strange state of the investment world. --------------------------------------------------------------------------------------------------------------------

    5 Jun 2015. Minack sees falls for banks and house. Parallels with Japan post-1990.

  • He would be surprised if we avoided recession over the next 2-3 years. Parallels with Japan (post 1990, of course). "Housing is a huge macro risk". "We have one of the most levered households in the world with clearly one of the most expensive housing stocks." (Around the rest of the developed world), "what you have seen persistently over the last 2 decades where you have had job losses, you have had double digit price house price declines. So if we see job losses across the economy, I would be surprised if we don't get double digit house price declines - and all the tensions and stresses that will create.". "If we tip over into recession, the sector this would effect most are the banks and the broader financials, which are not a trivial part of our market". "If we tip over into recession, you can expect very significant equity losses (in Australia)."


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    There is a “tendency of capitalism to grave instability”. In “The Economy Since The Wars”, John Kenneth Galbraith notes that “built into the systems are recurrent episodes of devastation”. Kerr Neilson 12/4/00 also reports George Soros‘s view “that markets are inherently unstable.”