just on channel 10, page-5

Turn arounds in herd mentality do not change in a day. Most who hear these subliminal messages will smirk and scoff them off, thinking they're just a natural release of excess energy from the market before normality resumes. However, each snippet of news released plants one seed of doubt in the minds of market participants. "Will I borrow that $750,000, even though rates could go up a lot further? What if the economy is effected as a result of high interest rates? Maybe I should wait and see what the market does, as I'm now not confident that house prices will go up forever. Because if they do go up, then I wouldn't hesitate getting the biggest loan possible, simply because the rising property prices will compensate for the large loan."

It's this kind of mentality that is to be expected when significant market changes occur. Most refute any change is permanent, whether it's stocks, commodities or houses. But when things continue to go against sentiment then that's when individuals sit up and take notice. Each seed builds up alongside another seed, before a great mindset reveals itself.

Go back into the eye of the GFC - let's say Sept/Oct 2008. What was market sentiment? It's was abominable! It was really the stuff of nightmares. It did not make things any better when all the experts were sticking their heads out of the windows saying "yes it will continue raining indefinitely". Well done numnutts! 6 months later the recovery begins its journey. "it's just a deadcat bounce", the experts say. Then 3 months into the recovery most are still playing it down - none of the tipsters say to buy any bank shares yet. They wait another 6 months then tell us to buy CBA when it hits $50 and MQG when it was $40! What the hell were they doing until then?

And the bottom line is it's monkey see monkey do (sorry - I hate that saying too). As they say the stock market is a leading indicator - it will lead us into a recession and it will lead us out of one as well. No one can directly say exactly what causes a market to suddenly turn around. To do that one needs to know the account books of every company and country around the world. But the market did rise - in the end we couldn't afford to question it, we just did what others did. Yes we thought the prices of stocks were now dearer than during the GFC, but everyone is buying them so that should push them up more so.

House prices in Australia cannot afford to move backwards - why? Because they are so overpriced to begin with. People were paying ransom money until now because 'they believed' that prices will increase indefinitely. If any of the young Australians get a whiff that housing is not at all what it's cracked up to be and that it was a Ponzi scheme after all then they will simply disappear from the market, and let existing home owners sought out their own mess.