Hello UT I apologise I should not have made a general sweeping...

Hello UT I apologise I should not have made a general sweeping statement about anger it does not accurately include you it seems. I should have been specific but then it becomes personal. It was an observation and I also see baiting going on. OK to the issues.

I am with yellowcake because for one I do not see Europe being solved - the structure prevents it. Currency union without fiscal union cannot work as Armstrong states the speculation has to show up in the bond markets if it is excluded from currency as a balancing mechanism.

How obvious when you think about it. They have just papered over the causes yet again without a solution; as if this will not reignite. This is relevant because of our external funding needs. No solution - no return to boom time funding conditions and secularization markets etc.

The hot money - the other elephant in the room. Of course it will exit.

The RBA states that is cannot see a problem but they are not traders. They work with lagging indicators and have a narrow view - hence their settings of the OCR (rates) in 2007 - 2008 and even since.

So just because they cannot see a problem does not mean there isn't one. Put it this way why would the banks go to the trouble and expense of extending 'duration' of funding if they did not see a risk - they know it is there. Hot money will exit and this will result in great volatility but worse it will create a funding vacuum in our banking system. That is bad for housing which requires debt.

Deterioration in economic conditions due to the mining boom contraction and property will put pressure on savings which is also supporting the banks - at the moment.

Kingy - the dates - 'recent' is as close as i can get but I can assure you this is not getting better - the problem is not going away it is structural.

I get to talk to all sorts of interesting people in my work and cannot share what else I am hearing as confirmation of this view because I am unable to substantiate it here in writing. That does not make it untrue however. My point is that I am basing my views on more than media and have even tested the concept first hand.

Last point - I have great respect for many of the bulls - Kincella included we are on the same page in so many respects. He has pointed out that cashed up property holders that bought a long time ago like his commercial RE is not under duress and this is true with his conditions included. The duress is there in the market though - newer purchases and people with leverage and other risk exposures, like their incomes.

Just take care if you are considering property like any investment, falling markets are far higher risk. Property is usually leveraged so the risk is worse - the trend has changed for the coming few years IMO and changed a couple of years back. The negative trend and leverage required for this type of investment (unless you have the cash) is a recipe for disaster unless you have very solid backing.

Keene was right in concept; he just underestimated the stupidity of government to pump prime a bubble at its peak entrapping thousands of new home buyers. So his timing was a little out - because he understood the dynamics but those who did not kept the music playing longer. Banks too, just wanted to keep the glory days of big bonus's and growth going and who could blame them this is what they do.

Cheers,
CW