how come the asx market is so stupid, page-17

House prices are ridiculous.

Over the last 10 years they have exceeded the CPI by more than 100%. Look back at some graphs.

They are 6-7 times the average wage whereas the correct balance is about 3 times. Real Estate Agents are off the planet. There is an advert in our local paper today proudly proclaiming that house prices in the area have gone up 19.5% in the last year. Madness. Greed, greed and stupidity is all these people know.

The House is a place to live, not an ATM machine.

And worse still, when 10% of house loans fail, our Banks have no capital. The government has stuck its head in a noose, giving unquantifiable guarantees. The country could be broke.

The rest of the world can see this. That's why they are bailing out.

There will not be any recovery until a firm base of VALUE has been established. Sectors of the market are there now. RE is off in fairyland.