Australian Politics Forum - Australia's risk of recession? House of cards?

longweekend58

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Re: Australia's risk of recession? House of cards?
Reply #15 - May 25^th, 2015 at 7:06pm

Svengali wrote on May 24^th, 2015 at 8:17pm:

Australia had 10% unemployment in 1981 and 1990. However property prices and debt levels were much lower then. Furthermore the resources downturns were not as severe as present, and unemployment is increasing not abating.

The government has no tools left to stimulate the economy. The economy is sending signals to homeowners to reduce their spending which will have negative consequences for economic growth.

It could be something as trivial as a prolonged heat wave over most of Australia that triggers a recession.

http://www.rba.gov.au/speeches/2012/images/sp-dg-091012-graph1.gif

http://www.macrobusiness.com.au/wp-content/uploads/2012/01/realhouseprices1880to...

something you obviously didn't notice is that the USA trend largely matches the Australian trend. so if that is the case, why haven't we had housing process crashes - EVER???? Could it be that our housing markets, banking and general finance sector is vastly different, far more regulated and less volatile??

so why should the future be any different to the past?

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AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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Secret Wars

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Re: Australia's risk of recession? House of cards?
Reply #16 - May 25^th, 2015 at 7:23pm

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

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Svengali

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Re: Australia's risk of recession? House of cards?
Reply #17 - May 25^th, 2015 at 7:36pm

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

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We first fought the heathens in the name of religion, then Communism, and now in the name of drugs and terrorism. Our excuses for global domination always change.
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Svengali

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Re: Australia's risk of recession? House of cards?
Reply #18 - May 25^th, 2015 at 7:37pm

longweekend58 wrote on May 25^th, 2015 at 7:06pm:

Svengali wrote on May 24^th, 2015 at 8:17pm:

Australia had 10% unemployment in 1981 and 1990. However property prices and debt levels were much lower then. Furthermore the resources downturns were not as severe as present, and unemployment is increasing not abating.

The government has no tools left to stimulate the economy. The economy is sending signals to homeowners to reduce their spending which will have negative consequences for economic growth.

It could be something as trivial as a prolonged heat wave over most of Australia that triggers a recession.

http://www.rba.gov.au/speeches/2012/images/sp-dg-091012-graph1.gif

http://www.macrobusiness.com.au/wp-content/uploads/2012/01/realhouseprices1880to...

something you obviously didn't notice is that the USA trend largely matches the Australian trend. so if that is the case, why haven't we had housing process crashes - EVER???? Could it be that our housing markets, banking and general finance sector is vastly different, far more regulated and less volatile??

so why should the future be any different to the past?

Lessons from GFC!

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We first fought the heathens in the name of religion, then Communism, and now in the name of drugs and terrorism. Our excuses for global domination always change.
Serj Tankian

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longweekend58

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Re: Australia's risk of recession? House of cards?
Reply #19 - May 25^th, 2015 at 7:39pm

Svengali wrote on May 25^th, 2015 at 7:36pm:

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

not ion the USA. you can literally walk away from your house at any time with no recourse. and you don't think that turned a major downturn into an avalanche??????

but you cant do that here.

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AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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Svengali

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Re: Australia's risk of recession? House of cards?
Reply #20 - May 25^th, 2015 at 7:47pm

longweekend58 wrote on May 25^th, 2015 at 7:39pm:

Svengali wrote on May 25^th, 2015 at 7:36pm:

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

not ion the USA. you can literally walk away from your house at any time with no recourse. and you don't think that turned a major downturn into an avalanche??????

but you cant do that here.

That is not true. This came up in a much earlier discussion which demonstrated that defaulters could be sued in USA. The problem in USA with suing most defaulters is they have no assets, particularly American defaulters who mostly live from pay cheque to pay cheque and have no financial reserves and a mountain of credit card debt.

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We first fought the heathens in the name of religion, then Communism, and now in the name of drugs and terrorism. Our excuses for global domination always change.
Serj Tankian

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Secret Wars

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Re: Australia's risk of recession? House of cards?
Reply #21 - May 25^th, 2015 at 7:52pm

Svengali wrote on May 25^th, 2015 at 7:36pm:

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

result being....

Think it through....

Take your time....

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longweekend58

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Re: Australia's risk of recession? House of cards?
Reply #22 - May 25^th, 2015 at 7:55pm

Svengali wrote on May 25^th, 2015 at 7:47pm:

longweekend58 wrote on May 25^th, 2015 at 7:39pm:

Svengali wrote on May 25^th, 2015 at 7:36pm:

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

not ion the USA. you can literally walk away from your house at any time with no recourse. and you don't think that turned a major downturn into an avalanche??????

but you cant do that here.

That is not true. This came up in a much earlier discussion which demonstrated that defaulters could be sued in USA. The problem in USA with suing most defaulters is they have no assets, particularly American defaulters who mostly live from pay cheque to pay cheque and have no financial reserves and a mountain of credit card debt.

well... it still isn't true. American mortgagees CAN walk away from their homes without a comeback. That is why the avalanche of people doing just that occurred during the GFC.

and defaulters DO have assets. Most of them have jobs and go to alternate housing and often buy again.

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AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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Sir lastnail

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Re: Australia's risk of recession? House of cards?
Reply #23 - May 25^th, 2015 at 8:36pm

longweekend58 wrote on May 25^th, 2015 at 7:55pm:

Svengali wrote on May 25^th, 2015 at 7:47pm:

longweekend58 wrote on May 25^th, 2015 at 7:39pm:

Svengali wrote on May 25^th, 2015 at 7:36pm:

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

not ion the USA. you can literally walk away from your house at any time with no recourse. and you don't think that turned a major downturn into an avalanche??????

but you cant do that here.

That is not true. This came up in a much earlier discussion which demonstrated that defaulters could be sued in USA. The problem in USA with suing most defaulters is they have no assets, particularly American defaulters who mostly live from pay cheque to pay cheque and have no financial reserves and a mountain of credit card debt.

well... it still isn't true. American mortgagees CAN walk away from their homes without a comeback. That is why the avalanche of people doing just that occurred during the GFC.

and defaulters DO have assets. Most of them have jobs and go to alternate housing and often buy again.

That's exactly what we need here !! Let people walk away from their over priced bullshit and give the banks a dose of their own medicine Wink

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Bobby. Gold Member Offline Australian Politics Posts: 121310 Melbourne Gender:	Re: Australia's risk of recession? House of cards? Reply #24 - May 25^th, 2015 at 9:09pm And the recession will happen under Tony Abbott.
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Svengali

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Re: Australia's risk of recession? House of cards?
Reply #25 - May 25^th, 2015 at 9:37pm

longweekend58 wrote on May 25^th, 2015 at 7:55pm:

Svengali wrote on May 25^th, 2015 at 7:47pm:

longweekend58 wrote on May 25^th, 2015 at 7:39pm:

Svengali wrote on May 25^th, 2015 at 7:36pm:

Secret Wars wrote on May 25^th, 2015 at 7:23pm:

Non recourse loans is one hell of a big difference. Due to its depression legacy if you are in trouble with your housing loan just drop the keys off to the bank and walk away. Nuffin they can do.

Plus the antics of fanny Mae and fanny Mac mislaced (read weepy softcock) social housing initiatives offering loans to people who had been refused by every other institution that bothered to ask how poor folk with no history of saving, no assets, no job or prospect of a job on the horizon would ever reliably repay the loan.

That's not true. Banks and other financial institutions can sue you for their losses. In most cases they may choose not to because the defaulter has no assets worth suing for.

not ion the USA. you can literally walk away from your house at any time with no recourse. and you don't think that turned a major downturn into an avalanche??????

but you cant do that here.

That is not true. This came up in a much earlier discussion which demonstrated that defaulters could be sued in USA. The problem in USA with suing most defaulters is they have no assets, particularly American defaulters who mostly live from pay cheque to pay cheque and have no financial reserves and a mountain of credit card debt.

well... it still isn't true. American mortgagees CAN walk away from their homes without a comeback. That is why the avalanche of people doing just that occurred during the GFC.

and defaulters DO have assets. Most of them have jobs and go to alternate housing and often buy again.

Number of qualifications to this:

1. Non-recourse loans are generally for 50-60% of property value due to risk carried by lender.
2. In case of non-recourse debt forgiveness, the debtor incurs a taxable gain equal to the difference between the sale price and the outstanding debt. If the bank loses $20,000 that is registered as a $20,000 taxable gain by the debtor despite the fact the debtor receives no money from the transaction.
3. The lender records a loss of $20,000 which is deductible from taxable income.

http://en.wikipedia.org/wiki/Nonrecourse_debt

Note the reference in the Wikipedia article to "adjusted basis" where in the example above the taxpayer had equity of $45,000 and was considered to have received a taxable benefit of $45,000 which is considerably more than the difference between the debt and the market value of the property. This 'adjusted basis' appears to be a punishment for repudiation of debt.

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We first fought the heathens in the name of religion, then Communism, and now in the name of drugs and terrorism. Our excuses for global domination always change.
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Secret Wars Gold Member Offline Australian Politics Posts: 3928 Gender:	Re: Australia's risk of recession? House of cards? Reply #26 - May 25^th, 2015 at 9:41pm I was addressing the differences between the markets, to break it down, because you seem to getting lost in details. A major difference was government entities guaranteeing loans for people who otherwise could never get loans who could walk away from those loans. That is a big difference.
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Svengali

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Re: Australia's risk of recession? House of cards?
Reply #27 - May 26^th, 2015 at 10:28am

Secret Wars wrote on May 25^th, 2015 at 9:41pm:

I was addressing the differences between the markets, to break it down, because you seem to getting lost in details. A major difference was government entities guaranteeing loans for people who otherwise could never get loans who could walk away from those loans.

That is a big difference.

Same has been happening in Australia over the past 10 years. RBA had to impose in Australian banks to tighten their lending policies to avoid creating a bow wave of default in case of a recession.

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We first fought the heathens in the name of religion, then Communism, and now in the name of drugs and terrorism. Our excuses for global domination always change.
Serj Tankian

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longweekend58

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Re: Australia's risk of recession? House of cards?
Reply #28 - May 26^th, 2015 at 12:04pm

Svengali wrote on May 26^th, 2015 at 10:28am:

Secret Wars wrote on May 25^th, 2015 at 9:41pm:

I was addressing the differences between the markets, to break it down, because you seem to getting lost in details. A major difference was government entities guaranteeing loans for people who otherwise could never get loans who could walk away from those loans.

That is a big difference.

Same has been happening in Australia over the past 10 years. RBA had to impose in Australian banks to tighten their lending policies to avoid creating a bow wave of default in case of a recession.

it was Keating and Costello with their banking reforms that really saved Australia from the worst of the GFC.

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AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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Svengali

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Re: Australia's risk of recession? House of cards?
Reply #29 - May 26^th, 2015 at 12:14pm

longweekend58 wrote on May 26^th, 2015 at 12:04pm:

Svengali wrote on May 26^th, 2015 at 10:28am:

Secret Wars wrote on May 25^th, 2015 at 9:41pm:

I was addressing the differences between the markets, to break it down, because you seem to getting lost in details. A major difference was government entities guaranteeing loans for people who otherwise could never get loans who could walk away from those loans.

That is a big difference.

Same has been happening in Australia over the past 10 years. RBA had to impose in Australian banks to tighten their lending policies to avoid creating a bow wave of default in case of a recession.

it was Keating and Costello with their banking reforms that really saved Australia from the worst of the GFC.

Australia was just lucky it was too small to be of interest to the giants of international finance manipulation, otherwise the disease would have spread to Australia.

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We first fought the heathens in the name of religion, then Communism, and now in the name of drugs and terrorism. Our excuses for global domination always change.
Serj Tankian

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