Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
This is an edited version of a live discussion with Head of Investments at Walk The World Funds and Nucleus Wealth, Damien Klassen as we dive into the current market chaos and explore what is really going on. Is this a replay of the DotCom bubble, or a minor glitch, and where will the markets pivot to next?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Another outing with Journalist Tarric Brooker, as we pick over the latest data, with a focus on what is happening in the real economy. We also discuss the real race many are running in terms of no real income growth, and the political and economic implications of this ahead.
You can find Tarric’s charts at https://www.burnouteconomics.com/
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Housing affordability is shot, as we have been discussing, thanks to demand stoked by high migration, higher lending multiples as the financial system was deregulation, and higher interest rates mirroring the RBA’s battel to tame inflation. As a result first time buyers are delaying their purchase by several years, and more borrowers are leveraged up to the gills, despite first home grant schemes, and shared equity schemes, which as the Productivity Commission showed did help a few get into the market, but lifted prices for everyone else, so did not help structurally.
Australians are already among the highest carriers of household debt in the world. In fact, according to Domain’s 2024 First Home Buyer Report, an entry-price home in Melbourne costs $678,000. In Sydney, it jumps to $927,250. Looking outside the two major cities reduces the cost to $545,000. To be lucky enough to secure any of these options, a 20 per cent deposit will set you back between $109,000 and $185,000.
So where do prospective buyers get that sort of cash? Well some might be able to get help from the Family Bank, as I showed recently, the average is more than $106,000 now, great if you have wealthy parents. Others may be able to save, but it’s a long road, and whilst interest rates are higher than they have been for some time on deposits, it will take years, and longer still if rates are cut later. Then of course there is the old chestnut, use accumulated super.
This week we got a draft report from the parliamentary committee chaired by prominent superannuation critic Andrew Bragg which has upped the ante on the Coalition’s super for housing policy, suggesting first home buyers should be able to withdraw all their retirement savings to buy a house or use it as collateral to help borrow.
My view is that this is actually a proxy political war on the purpose and nature of superannuation, rather than a real honest discussion about how to fix the broken property market. It is in essence a mixture of misdirection – look over there, not here, and avoid the more critical issues of migration control and increased and better-quality supply of affordable housing. Or in other words, it’s a case of fiddling while Rome burns, again.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
This is an edited version of a live discussion with Head of Investments at Nucleus Wealth and Walk The World Funds, Damien Klassen. Where are the markets heading, and what are the chances there will be a policy mistake as rates are taken higher?
You can ask a question live.
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited version of a live discussion about the financial markets with Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds.
We discussed the recent rises in the markets, and whether they are sustainable, policy errors, China, property prices, crypto and investing strategy.
Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live discussion about the financial markets with Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds.
You can ask a question live!
Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live discussion about the current state of the financial system and whether it’s fit for purpose.
I will be joined by John Adams and also by Robbie Barwick from the Citizens Party. https://citizensparty.org.au/
You can ask a question live.
Go to the Walk The World Universe at https://walktheworld.com.au/
Following on the amazing news from last week that John Adams and In the Interests of the People, didn’t just get one inquiry into ASIC, but two – we have new news!
One inquiry will be held by the Senate Economics References Committee – this inquiry was established by a 43-20 vote of the Australian Senate.
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/ASICinvestigation
The other inquiry will be held to the Parliamentary Joint Committee on Corporations and Financial Services
Yesterday, 2 November 2022, the Senate Economics References Committee officially called for public submissions. The deadline submissions are 3 February 2023 – which is 3 months from now.
For all those people across Australia who have had significantly difficult experiences with ASIC, this is your opportunity to share your stories with the inquiry.
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/How_to_make_a_submission
Go to the Walk The World Universe at https://walktheworld.com.au/
The Superannuation system is not fit for purpose, as many are finding out as balances decline, while fees do not but forced contributions increase. So today we look at data provided by APRA on fund performance (down more than 4% in the quarter to June 2022, and further now). And we feature an important contribution from Senator Gerard Rennick who addressed The Senate last week on this important issue.
Go to the Walk The World Universe at https://walktheworld.com.au/
News flash: Liberal Senator Andrew Bragg has given notice of a motion for a major inquiry into ASIC, which will be voted on tomorrow (Thursday). Labor currently opposes the inquiry, and the Greens haven’t taken a position yet.
Urgent: Call – today – the ALP and Greens Senators on the Economics References Committee to tell them they must support an inquiry. See their contact details below.
Whatever Senator Bragg’s motives, a major inquiry into ASIC is VERY important, as this will be the first specific, detailed, inquiry into ASIC since the 2018 Banking Royal Commission laid bare its many failures. And the Adams Report into ASIC’s very low rate of investigations – just 0.74% of all complaints – shows that it’s performance hasn’t improved.
An example of ASIC’s failure is Sterling First, which has left the lives of the elderly tenants ruined.
Below is the text of Senator Bragg’s motion:
Chair of the Economics References Committee (Senator Bragg): To move—
That the following matter be referred to the Economics References Committee for inquiry and report by the last sitting day in June 2024: (This will be a long, detailed inquiry.)
The capacity and capability of the Australian Securities and Investments Commission to undertake proportionate investigation and enforcement action arising from reports of alleged misconduct, with particular reference to:
(a) the potential for dispute resolution and compensation schemes to distort efficient market outcomes and regulatory action;
(b) the balance in policy settings that deliver an efficient market but also effectively deter poor behaviour;
(c) whether ASIC is meeting the expectations of government, business and the community with respect to regulatory action and enforcement;
(d) the range and use of various regulatory tools and their effectiveness in contributing to good market outcomes;
(e) the offences from which penalties can be considered and the nature of liability in these offences;
(f) the resourcing allocated to ensure investigations and enforcement action progresses in a timely manner;
(g) opportunities to reduce duplicative regulation; and
(h) any other related matters.
The Senators to call are:
Senator Nick McKim Greens:
02 6277 3601 senator.mckim@aph.gov.au
Senator David Shoebridge Greens:
02 6277 3169 senator.shoebridge@aph.gov.au
Senator Jess Walsh ALP:
02 6277 3744 senator.walsh@aph.gov.au
Senator Jana Stewart ALP:
02 6277 3004 senator.stewart@aph.gov.au