37:15 - 37:52 "If there is one thing people will take away from the Irish message and you in Australia, is, look out for one another. I can't stress it enough! Really look out for one another because its going to get rough!"
Al Bunyip no it’s the first time home buyers who missed out on that investment growth and put their life savings into a family home, only for it to fall in value by 50-70%. Fathers commuted suicide leaving their wives and children behind. So please don’t be so cynical, it was the the first time home buyers who bought last just before the bubble burst who got burnt the worst. www.irishexaminer.com/ireland/loss-of-homes-sparks-suicide-crisis-390060.html
@@JohnSmith-cu8yc yes but so did those fake investors who were in debt up to there eyeballs thinking that property prices only ever goes up they too suffered.
Great interview Martin and Eddie. As a health professional who worked in public health during 1991-1992 recession I saw how patients financial situation impacted on how they recovered from life changing diseases or accidents such as strokes and spinal cord injury. When you are at your lowest financially your mental health is impacted, then try dealing with other medical "stuff " and you don't have the will to go on. Our current mental health system is totally inadequate so god help us as a community and nation if we have to face a severe recession or depression. You only have to watch the news to see how violent our cities are becoming and the lack of respect that we have as nation for other people's lives. I know that I am a romantic but I wish we could go back to the way we used to be 20 years ago.
@ Angel Heart.... Agree it's already bad and will become unmanageable when the full extent of the economic downturn is upon us. I know a registered nurse who worked in the mental health area in a private hospital and changed circumstances led to her moving from the private system to the public system of mental health; a very different situation. First week was a self defence course conducted by an ex soldier who stressed they will be attacked and must know how to deal it. Of course most of those patients have a history of drugs where in some instances can turn from placid apparently normal behaviour to tearing the room apart and everything in their way in the next instance. You likely are familiar with this behaviour but needless to say she didn't last the week and took work in a safer doctor's surgery environment. Cheers from OD
I guess Im asking randomly but does anyone know of a tool to get back into an instagram account?? I stupidly forgot the account password. I appreciate any help you can offer me.
Ireland has certainly been on a rollercoaster. I remember visiting there in 1992 and was surprised how run down a lot of places were. Really lovely and generous people though.
Another great interview, one of the best, thank you Martin. Timely and sagely advice from Eddie Hobbs. His predictions ring more than true. Especially the part where he says more and more potential buyers' perceptions (rapidly turning into strong expectations by the hard data) of a falling market will sit on the sidelines waiting for a better deal. And this will be a self-fulfilling prophecy, accelerating the pace and increasing the depth and longevity of a crash as lower and lower prices of property add fuel to the downward spiral. Agree: the "correction" has only just begun. Agree: the self-interest groups (real estate, finance, banks, political classes, MS media), voices are blinded, delusional, or just plain lying. Agree: more pain for more to come. Agree: wealthy getting quietly out but will survive no matter what chaos ensues, they can afford "paper losses." Those in negative equity or no savings will find it harder to live. But the social pain, unrest and fallout will impact us all. Time to prepare for the worst today.
Australia is just going to have to take it's medicine. It needs to at this point. For the bubble to miraculously survive, I think, would just be the most awful thing for this country considering the damage it has already done by essentially swallowing the economy whole and leaving little room for anything else. And the social damage. It has, imo, turned Australia into a bunch of assholes. The country has sold it's soul to bankers and real estate agents. I just hope the bankers, the property industry, reserve bank, regulators and the corrupt politicians associated with them aren't able to control the narrative when things do go wrong. That the causes are correctly identified to ensure the probability of a repeat occurring is low to none. I think that is the most important thing. That the story in the public domain is the correct one.
It will always happen again. The causes have been known for centuries. Price bubbles have been happening since the 17th century Dutch tulip mania. People never learn, because of many vested interests and the entire political/economic/financial system is a gigantic mechanism designed specifically to keep blowing bubbles.
@ Mike Fleming.... The legal profession with class actions will be kept very busy. It's already started with Westpac in the firing line over their unsuitable loans approved using the HEM.
Really good interview Martin. Working on the front line of mental health in 2 emergency departments I can see the early warnings of what financial stress does to individual psychology and seeing a way out isn’t easy for most especially when the trotting noise of the black dog is being heard.
Thanks Martin. Easily the best interview to date. Agree the forgotten aspect will be the utter misery the unfolding housing decline and economic decline will cause. Front and centre of this debacle is the banks. Given the rate of private credit expansion is declining, the government is hell bent on achieving a surplus, it will be up to the RBA to QE the economy to mitigate the next recession. It's probably fair to say there is no way they are prepared for our future. What great advice from Eddie Hobbs, clear and concise. Unfortunately most who are in the firing line of this mess will be in denial until the mortgagee takes possession. Well done Martin for unearthing this gem which really reinforces our narrative for years. Cheers from OD
Oppose Deception Oppose Deception Remember that when a government has a surplus they are sucking money out of the economy making any recession even worse. They will come up with excuses like the bond vigilantes for austerity.
@@davidlazarus67 .... Agree and that is why I said it. Pollies are great at abrogation of responsibility. The problem lies with education and those studying economics. I exchange email correspondence with a former work colleague who is now in her last year of an economics degree and she at this stage of her degree has never heard of Hyman Minsky or Steve Keen with their economics alternative which appears to properly deal with what goes on in an economy and successfully model the cycles. Until education is sorted future generations will grow up ignorant of basic finances so it becomes a wash/rinse/hung out to dry repeat cycles. Cheers from OD
Oppose Deception Oppose Deception The teaching of economics is appalling for all the reasons you mentioned. I would regard myself as Post Keynesian to disassociate myself from those in office who have misappropriated the term Keynesian. I do think that Schempter, Hayek and Minsky have a lot of merit when it comes to bubbles. Financial literacy is another matter which should also be addressed.
For someone who has been through this in the UK, watching this video is an emotional and painful experience. I’m sure there will be many viewers still thinking it will not happen in Australia.... As Eddie Hobs explained, when the power shifts from the sellers to the buyers, it’s game over and too late to walk away.
He's right about how people justify their economic bias depending on their economic circumstances. Self-interest doesn't always win but at least you know it's in the race and usually is the favourite.
As an Irishman who has a huge respect for Eddie Hobbs who in did a huge amount of warning Irish people leading up to the Irish economic crash which we all ignored. I live here in WA now and certainly all the indicators are that as Eddie and Martin discuss here is that interventions and strategies need to be implemented at an individual, family, community and countrywide level to avoid what might hurt a great deal of Australians. Eddie talks about not just the financial cost but more importantly the human cost. Eddies advice to look out for each other cannot be stressed enough. It’s a shame this discussion is not aired on Australian national television and radio. This would at least give individuals time to prepare in a pro-active manner and to risk assess their levels of debt and if they need to take pro-active action to stress test. Thank you to Martin and Eddie.
Great to hear that Cork accent. We Tipperary people always concede that Corkonians have a superior gift of the gab! Seriously could Morgan Kelly be contacted for an analysis of the Australlian situation as he was one of the few with the judgement and courage to point out the true situation in Ireland? Also Eddie hit the nail on the head re the few in the media who steer public debate and information. I really resent having to pay a TV licence fee to pay for propaganda . One other point I have never seen publicly analysed in Ireland. How much of the money borrowed from Irish banks leaked out of the country pre 2009 and was simply gone missing from the Irish economy when the crash came? There was money borrowed from Irish banks to buy property in the UK which the Irish taxpayer had to pay eventually. There was also the wages earned by mainly Eastern European workers who sent much of it home to their own countries, the original source of which was borrowing by Irish builders and speculators. If say 400,000 Eastern Europeans sent 10,000 euro per annum each home for five years that would amount to 20 billion euro missing from the Irish economy when the time came to repay the debt. Because of the common currency it was probably Germany which benefited. Are these figures realistic?
The thing I always find amazing about bubbles is that people simply NEVER learn! The addictive feel-good effect of easy wealth is simply too strong for most people, at all levels in society, to resist. But I think there is even more to it than that. The very SYSTEM is designed and choreographed in order to facilitate speculative bubbles, and this is no co-incidence. The top strata of society, who control the politicians, the news media and financial systems want it so. How else are they going to use their financial muscle to preserve their lofty situation and get even richer? The only other way would be to actually do productive work, and who wants that?
I am certainly leaning towards the view that the Australian Property Bubble was engineered from the start. I used to think it was just stupid decisions but considering these things (property bubbles) keep on happening in country after country, decade after decade, I doubt we can keep saying they are accidental.
The system is geared toward "investing" getting rich at other people's expense. A real investment in society is one that helps society. If we taxed speculation, to cover the costs of all this gambling, we'd have a better handle over these bubbles, imo.
Fascinating guys!!! Thank you. I have been watching this crazy market since I moved here from the US 10 years ago. I started to believe it may never happen. I wonder how bad it can get. Scary
Excellent interview. Your most credible guest (apart from your dear wife of course) by a country mile and some tremendous perspective. Good to be mindful of his final comments even in your own approach in posts here, so hopefully very valuable to you too Martin. Again, well done both, I'm planning on holidaying in Ireland maybe next year...nice to hear it's on the upswing Ediide. Thankyou.
I imagine 95% of Australian's would choke when Eddie mentioned up to 80% falls in property values. Here's one example... For our business, we bought a nice Georgian property on the waterfront in a nice town on Ireland's east Coast (Google Carlingford Lough) We paid £85,000 in 2012 at the absolute bottom of the market It had last sold for £310,000 in 2007. Even then, people thought we were mad buying it as property was a dirty word Human psychology is weird and Eddie alluded to that well in this interview. You are NOT dealing with rational behaviour anymore in Australia. The game is up. The property we bought had fallen 75% not because of war, famine or some Chernobyl like incident. It was because the banks had lent too much money and that needed an 'adjustment'
@ Rock On The Lough.... When people say you are mad to buy at the price you did then, you know you have bought at the right time for a fair price particularly if the purchase price is below construction cost. Cheers from OD @ latitude 25 south
@@latitudetwentyfive Yes, I'd be that sort of contrarian investor. You have to remember that we had had over 3 years of negative news, Greece looked like it was going to fail...the EU was in turmoil...people actually thought values could fall FURTHER.. It was scary..there was only us and one other person putting in offers on the place. I remember coming out to Oz every Xmas at that time and being amazed how your radio news bulletins didn't start with economic news (and terrible news at that). I read at the time that it takes humans say 5 pieces of good need to offset one bit of bad news. We are wired to weight bad news more strongly. That's the negative feedback loop Eddie talks about and Oz is about to enter it I feel.
@@rockonthelough5417... I really appreciate your insights. I've known for years that there has been a property mania in Australia mainly in Sydney, Melbourne and not so much in other capitals and major provincial cities. I live in Bundaberg for the climate andcan tell you that our mania here ended in 2008. I remember property here doubled in value in less than 12 months and vividly recall instances of sellers listing property for sale in the morning and sold by lunchtime same day. I have acquaintances who were valuers at the time (now retired) reciting stories of buyers mainly from our southern capitals (Sydney and Melbourne) buying 3 or 4 Bundaberg properties using equity in their house. I am aware of one instance of a buyer phoning his son to see if he would put up the equity in his house so he could buy another property. Our local bubble deflated with the global financial crisis and property here became poisonous in 2013 when we suffered record floods but it is now slowly recovering although still down about 15% on 2007 mania levels. There are some horror stories already in Australia with the end of our mining investment boom adversely affecting Perth and other cities and towns in Western Australia and Queensland. Stories of properties in Moranbah Queensland sold for $900,000 in the boom now worth $200,000 and an investor with $3,000,000 in debt against mortgaged properties there now worth about $1,000,000. How a bank could entertain all this risk on one town amazes me. Our wage levels have barely increased for 10 years while property has been doubling every 7 years or so which cannot be sustained. Banks declining lending standards are to blame. I think our property decline and economic decline will be epic and frightening given we have not suffered a recession for over 27 years so we have a generation of people in the work force ( including bankers fearlessly lending money and fearless borrowers) who have never experienced a recession. I am as prepared as one can be given known unknowns ahead. Cheers from OD
@@latitudetwentyfive I need some brave souls to let me know what to do to 'prepare'... should I sell some of my property? Lock in interest rates? What?
Good informative interview, I was in Ireland 2 x months ago & friends there are still a good 20% below what they paid for their house, 1.2m they are hanging on trying to ride it out believing / praying it will come back, he is same age as me 65yrs old and plans now to work until 70. I feel for them as his retirement has been stolen, they had 3 x investment properties and dumped those to just break even with those debts, he planned carefully but alas got screwed by the Banks. What to do NOW ... Buy physical Gold & some Silver & hoard it for your own future. He is a professional Senior Manager.
Bwahahahaha! Thank you Gray, in all the gloom, you found a small light of humour. Kochie is just a shill for the big end of town. Martin’s interview with him was a classic example.
Important insights from our Irish cousins. Is it possible to have similar discussion with someone who has an Icelandic insider experience? Compelling interview once again Martin. Thankyou.
Absolute spitting image of Spain. 2007 bubble burst in a massive way. Yet in the last couple of years prices have gone crazy high especially in Madrid. Difference is the locals know it's going to crash yet again. But they still commit the massive mistake they committed in 2007. Weird.
Martin. Can you also do a comparison interview with a citizen of iceland? As they took the bankruptcy path, how was the impact socially / on property prices / recovery of families?
I’d love to hear an Icelandic opinion. We bailed out the banks in Ireland and i think it’s fair to say some people still haven’t t recovered even today. So many died by suicide and many are still completely screwed by high costs of living couples with woeful mortgage payments. A whole generation emigrated. I’m happy to say I don’t have a mortgage, may never have and don’t want one. How did the Icelanders get on telling the banks to go whistle ... we should have done that in Ireland.
I am watching it slowly self destruct in Sydney. We will soon have construction workers driving taxis. I seen this happen during the “recession we had to have”. Also the stories at the time of people turning up in near new 4wd’s looking for fruit picking work. Will many of the 457 visa Chinese go back to China? It would take the heat off the rental market.
Don't knock the “recession we had to have”. Recessions are necessary to purge the c.r.a.p out of the system. We have not had a recession for so long in Australia, and see what the result is? A huge housing bubble, useless politicians (ok, that's always a given), hopeless mainstream media captive to the system, armies of bureaucrats and accountants producing nothing of any value, an economy dependent on exporting a couple of commodities to one customer, a general society-wide mentality that to get ahead you have to speculate rather than do productive work, corrupt banks and a financial system so huge that it is consuming the entire economy in its voracious jaws.
I haven’t stopped mentioning the 1994 crisis in Mexico and how the banks took everything from my grandpa. He lost his bookstores, his properties...he received phone calls from lawyers until his day of death (heart attack) in 2006.
Great time to rewatch this interview with Eddie. I love his closing message of remembering to look out for one another. Can you arrange an update interview with him?
Enjoyed the lesson - nice flow on what happened. I was staying in Dublin a year before the crash. It was amazing how a cabbie told us the real estate market had to crash. He was right - dam Older white male cab drivers. Blame it on him .
Fantastic conversation with Eddie. Great advice for Aussies regarding reducing debt exposure but unfortunately the majority are sleep walking though what is about to happen to us. Its as clear as day for some but hard to convince others of the head winds on the horizon. Brace yourselves!
Long time listener, first time commenter - love your work Martin! I really appreciated this discussion and the advice Eddie passed on at personal level regarding debt exposure and loan servicing capability - and most importantly, to constantly monitor the wellbeing of our household bread winners. I think it's a larger discussion that we need to have with other as a community.
Martin, you should try to get hold of the economist Morgan Kelly. After reading Michael Lewis's book Boomerang, I can see a lot of similarities in Ireland and Australia. I think John and Morgan will get along 😊
Yeah I second this, it would be great to do a technical comparison of the economies at their bubble peaks and use this info to model what will happen to Australia. I did my economics thesis on the systemic banking crises/property bubbles and correctly estimated a 15% unemployment rate for Ireland post bubble. I saw in the news this week AMP estimating 50k job losses in construction. I roughly compared Ireland v Australia (and used job multiplier figures of 4.1 jobs per 1 construction job loss). I estimate 70k, not 50k, job losses with more job losses to follow (occurring over a longer time frame as these other jobs can 'hang on' longer. 350k would be the total eventually losses as a result of the first year of construction losses. Thats 8% unemployment. Throw in retail and a second and third year of impacts and i dont think 10%+ would be a crazy estimate. Obviously as a student i had time to run the numbers properly and i knew the irish economic data inside out. Id love to see this done to Australia
Ah great, just about to watch the interview and always liked Eddie's commentary during the recession here. I suspect I know what he's going to talk about. Mental Health definitely an issue the last decade here. We (personally) escaped lightly but I know others who didn't.
Thanks so much Martin for interviewing Eddie. It's so very true that we all need to band together and help each other for what's coming. Instead of playing the blame game - rather treat our fellow Aussies the way we would like to be treated. There will be times when we don't know what to say....but some advice I got today was. Ask yourself if you were in their position....what would you like to hear....what would make you feel encouraged to keep going. Stay strong Australia.
@Damian true I was thinking more the owner occupiers and first home buyers that bought at the peak. Or even the crazy interest only owner occupier. Property investors often just had greed run away with them and the institutions enabling this..... what's to come will be humbling and a lesson in itself.
Craig Douglas Yes the increasing domestic violence is one symptom. The opiate epidemic in America is another symptom. Suicides will follow. So push your MP’s for additional support funding.
Martin, the content you provide is getting better and better. I keep posting your videos in FB but no one seems to even care. I am frustrated. Only kittens and food grasp people’s attention.
Great discussion Martin and Eddie! I think Eddie hit on a key point. That we don’t have a good grasp of deflationary economics. I think there is a great deal of misunderstanding of the implications of deflation. Many see it as a positive thing, buying opportunity, or a just punishment. It seems people don’t grasp how much it slows and damages the economy.
Exactly. I expect slot seeing the forecast of say 30% drop in prices just think...well that takes us back to 2015 house values and we'll just carry on. Unfortunately, the ones caught up in negative equity make that impossible.
Excellent and important interview. Yes. Please continue on the subject of what our current system is regarding insolvency . Whether its expedient/ fair to both creditor and debtor/ and whether the loss is shared in negative equity situations by banks? We must ensure priorities of mental heath survival of our people ! Fighting over lost evaporated assets while loosing breadwinners to suicide is the greatest tragedy of all.
Does anyone think that the housing markets that went bust in Europe and US are simply going through a deadcat bounce before continuing the downturn. I don’t think the Irish downturn cycle has completed yet. Australia is just 8-10 years behind on their cycle
Housing markets move in slow motion (relative to other markets), we haven't really reached the effects of a GFC yet just the indications one is coming in the near future. It's very possible that they have not reached the real floor... Perhaps they did reach a floor (for their local situation), but may experience another downturn due to external factors.
Hi Martin, Fantastic interview. I suggested before trying to get David McWilliams or Morgan Kelly on but Eddie nailed it- fair play! Suggestion - If you have Eddie on again, it would be good to further explore the knock on impact of the €68 Billion he referred to in the piece (due to the bailout). This level of sovereign debt is massively impacting current and future generations of Irish families because they’ve been saddled with the debt through various forms eg income taxes, social levy’s and sneakiest of all the highest mortgage interest rates in the EU. It’s a vicious cycle as disposal income is therefore pretty much non-existent (particularly in Dublin) and as Eddie mentioned the credit lending rules are extremely conservative...... so the Irish can’t get the debt to buy. Then bare in mind his comments on the lack of supply - this is concurrently driving the rental prices through the roof......which people can’t afford because of Taxation. In summary the wealth erosion from this “vicious cycle” in Ireland has been crippling and as Eddie said people are still going through pain. If Scott Morrison delivers a giveaway tax budget (for political gain), Stamp Duties and CGT gains continue to erode (with likely property price falls) and worst of all a bank bailout is required, what does this mean to future cash flows for the average Ozzie as the government balance sheet need a lift?
My Irish cousin is an engineer in a good job. He told me that the bank bailout levy (called Universal Social Charge) is equivalent to him handing over ONE MONTHS salary per annum... Made me glad I live in Nth Ireland!!
Rock On The Lough sounds about right. If you combine the average persons tax bill there between 1. actual income tax, 2. The USC you refer to, 3. PRSI, 4. margin on mortgage rates (this is a stealth tax directly correlated to the debt although conveniently never hits the main stream media 5. The tax band changes which constitute “high earners “ you can see the impact. If your cousin earns €44-55k and has a mortgage obtained in last 10 years he/she is giving back ~60% in taxes (“tax” if he has a mortgage).
@@seamuscunningham6599 ...Yes, it just shows how pear shaped things can go when you're banking system is insolvent. The French, German, etc bondholders that went to bed on that September 2018 night thinking ..."Well that money in Ireland's gone"...instead woke up the next day to find..."It's all great...well get it all back care of every working Irish person". I still think at least one Ozzie banks going to need a bail out. Any under 45 year olds here just need to Google 'Pyramid Building Society Geelong" to see how even when a small one goes pop you all pay. That 5 year 3 cent/litre levy on petrol might seem like small change compared to what's coming..
@@blahblahboo2 ...Bank asset books full of toxic property assets AND a government keeping interest rates on the floor in frutile attempt to prop up said assets prices does not bode well for healthy deposits. And foreign money will be running for the hills...
Just as an aside, we have a huge construction boom going on here on the Gold Coast. I have said before about the 10 or 11 cranes up in our little suburb of Palm Beach....I have noticed the number of new concrete pumps being used....at any one time there can be a dozen of these new machines in operation just here in Palm Beach. These machines cost between half a million dollars to a million dollars and appear to be owner operator run..... When construction is flying it's not an issue having that lease or mortgage ....but what happens to these guys when it slows or stops....???? Multiply and duplicate the same affects for most of the other contractors, like plumbers, who can have hundreds of thousands of unpaid accounts running with the developers at any time. Great interview Martin ...as Eddie says there will be very real human factors to this bubble ending. Politicians have been badly misleading people here and they have been pressured by the developers lobbying and Councils have gone along for the ride....the developers have reaped the rewards, so have the banks and government s at all levels....what we are going to face is the other side....lower tax base, higher unemployment costs,, struggling families distraught people and a very very heavily indebted future for our younger generations who will be taxed to pay for this mess. Add into that mix overloaded roads, rail, hospital, schools thanks to idiot politicians who thought bringing in an extra couple of hundred thousand extra immigrants to satisfy the top developers/banks who will be laughing as the tax payers try to put the pieces back into some sort of working order.
After the Irish crash, the new stress test on a business was..."Can your business survive not being paid by clients for 6 months" because that's effectively what happened. That's if you ever got paid!! Aussies are going to learn what the term "Unsecured Creditor" means.
I watched a few episodes of Marie Kondo. The first exercise she gets people to do is put all their clothes in a pile before sorting them out. The piles are big. It got me thinking about family and friends houses and all the stuff they have. The observation I have made is that most of us have over spent dramatically not to mention consuming the earth's resources. Now when this kind of over spending stops....my word...a lot of jobs will go...even my own.
International money markets will also have to factor this in when loaning money to banks to fund local mortgages....it's why the RBA lowering interest rates might not mean alot to people on the ground
@@rockonthelough5417 You are absolutely right. Our big 4 banks wholesale foreign funding is about 30% of capital requirements and that is mostly short term. We better play nice with our foreign monied friends otherwise our banks are kaput.
Very interesting and informative. New Zealand has two separate insolvency and bankruptcy regimes. One is very old and punitive and contains a nasty moral and legal trap. The other is very modern, realistic and is based on recovery rather than punishment and only applies to the banks. This subject is worthy of a video of its own. I guess the same is true for Australia but I not informed on this.
What everyone is overlooking is that there is a possible situation where house prices could go up exponentially in the next few years. And still be worth and few ounces of gold. That situation is hyper inflation.
I don't believe it is being overlooked, I think they see it as a fairly remote possibility. Personally, I have prepared slightly for this possibility by purchasing some silver. I would have gold too, but it can be confiscated under law.
@ movieklump... I think that will only happen if wages also hyper inflates. Wages are going nowhere at present and banks tighter lending standards crimps loan sizes compared to pre Royal Commission times. But, what you suggest is not impossible. Cheers from OD
@@WalkTheWorldDFA The message is clear. But I can only think of Churches to put any weight behind the message. I am not comfortable with Churches: despite their good deeds, they carry an ancient infection .. some kind of rule about what community should be - which is the infection which always brings us back to this wall. At best, I can share it with my physical neighbors .. in the hope the "community-support" message gets some validation. Australians have been atomized away from their communities and families for generations. There are scant organizations outside the Churches who retain any idea of the value of community. All community infrastructure outside of the dictatorial Churches has long since been dismantled. But I will do my best by inserting your presentation into those I consider "opinion-makers" .. leaders .. although, I also don't like the concept of leaders. Healthy community does not require leadership. SO I will push this material into the health-worker community .. that is the only secular community outside the Churches in our society. Your Irish guest delivered more information than I think even you saw? (I serve the Irish culture in my craft by tradition .. so I suppose I have the advantage .. a bit .. hit my website to understand that ( www.ozwhistles.com). But yes, I have Church connections (many denominations - Christian, Muslim, Hindi, Buddhist etc) - and I will push the crash-social warning for them to expect a deluge .. they are mostly good people .. and a lot of them are already bracing for it.. Wish me luck? ))))) Keep telling truth Martin - you are a world treasure!
This is an exceptional Vlog today. It really summarises what only a few of us in Australia have previously seen and endured as a result of the GFC. This should be shown on national TV so people on the street can sort themselves out before it is too late. The point regarding the mental health effects is something that has never really been discussed. I have noticed personally over the last few years an increased aggression and selfishness in society and had recently concluded that it was result of the excessive debt we are all beginning to own. Before the GFC I noticed a supermarket in the UK selling wooden Tulips at the checkout. The lady in front of me suddenly grabbed one and placed it in her basket as she was at the checkout. It was clearly a last minute decision and I vividly remember thinking why would someone suddenly want to buy a wooden tulip...simply loading up their personal debt for pointless luxuries or perceived needs. Shortly after that the GFC happened and I have since referred to this as the Tulip Crash. I have been living in Australia for 10 years and have watched society living a life of increasing debt, the most significant note is the number of people using coffee shops to buy coffee on the way to work and even babycinos for the kids on the way to school. Mom doesn’t prep breakfast anymore the family simply buy breakfast at the coffee shop. It is very clear to me that society has lost its way and the exploding credit bubble is imminent. This time I will remember the crash as the Latte Crash. It is a shame that once again we are seeing a society in denial with only a small percentage actually prepared to acknowledge the issues that we are facing. Eddie has summed up the Ireland crisis very well and only someone in Australia who chooses to ignore the facts can avoid seeing the almost mirror image of the lead up to the Irish crisis. The question is....who will bail out Australia ???? Excellent work guys. 👍👍
A great video Martin, matched with excellent examples - the Australian fallout is starting to look a lot like Ireland’s. Remember the Chinese are now sellers not buyers, watch the immigration numbers from here - as well paid property related jobs disappear, people move on. This will compound the problem. Secondly the investor mkt has gone from investor buyers, to investor sellers. Residential property oversupply is the real issue here. Plenty of problems ahead - another warning sign, many high profile politicians jumping ship.
Yep, migration numbers can soon turn negative. Immigrants aren't stupid.. Even positive migration doesn't solve anything as Martin has pointed out logically many times!!.
What a tragic account of the Ireland crash. All of the signs are so strikingly similar to what is happening in Australia. I wonder if we have passed the point of no return yet in Australia.....I want to be hopeful but my gut feel is telling me that Australia will be going into the same direction. What we are hearing from every angle is so similar to what was being said in Ireland. I have to find out what happened to the price of gold and silver against the euro during the crash.....How did the people that could see the crash coming protect themselves or cushion themselves?
We were told that we didn't know what we were talking about. Traditional Labor voters were/are well versed in the feudality of debt. It was the Recession we had to have( Keating ) because Australians demanded large amounts of debt/credit irrespective. Here we are talking to a commentator from another country reminding people of the same 'Equity mate' dilemmas( from the Howard push)... that soon after middle America suffered long before what is about to happen here during their Sub-Prime. All in the light of some articles now declaring the nausea of Neo- Liberal Feudality. Excuse me but this is becoming a familiar pattern of Global behaviour even after prior warning. Sure look after ya mate but if he's doin' what everyone was warned against( since Keating)... shouldn't you think twice about that because really some people just don't want to know...OK? Generally this is a load of before eaten stuff that frankly will happen again in Australia because our English ancestors support it and demand it! As they are post Royal Commission now. Hey if you don't join they will find someone who will right? It's time to wake up Australia. Your goin' to have to accept a way lower standard of living....get used to it! C Ya!
No one is talking about the self harm, domestic violence, alcohol and drug abuse that is going to make Australia unrecognisable in a year. Are govts ramping up mental call centres ? Commentators talk about narrow financial aspects. These angry abandoned people vote, and may go to the extremes of politics that could affect the stability of the whole country for a decade. Is the new govt going to clean out the failed Neoclassical economists from Treasury, APRA etc and get some diverse lateral thinkers in regulatory positions ?
Good point: Funny the mention of prostitution in this vid. Supposedly the number one answer young women (in NZ anyway - but I bet it is similar in Australia) give in response to being asked why they do it is "it is the only chance I have to ever get enough money to buy a house". That's right - successive governments have driven more girls to prostitution than any drug pushing pimp could have ever dreamt of.
The problem is when he said that houses are being sold below their construction cost. In Australia the construction cost is ludicrously high because of the land costs alone. Were land costs in Ireland as high as they are here? Was the Irish government MILKING the citizens for land as badly as the Aussie government is now?
Yes, we had a land price bubble in Ireland which is exactly the same as what's happened in Oz.. Construction costs creep up with that of course. Eddie mentioned the housing shortage here. That was basically because ...what Developer sitting on a land bank is going to build houses in a market where they are competing against house sales at LESS THAN the cost of materials and labour ..you're giving away your land for free. If you Google Nama (National Assets Management Agency) it will make more sense...how alot land was essentially taken off Developers and put under government control who's only remit was to salvage something from the sale (not looking at the bigger picture)
@@Andre_XX You are right. Actually they are all AA- now. Well...that's why their overseas funding cost has gone up lately and they had to increase mortgage rates despite RBA cash rate freeze.
Absolute gold great content Martin and Eddie. Really good point that doesn’t get mentioned as much as it should is stress. Fire sales are coming, question is can anything be done to stop it or as Eddy says are we already past the point of no return 🤔
In many good burbs in Brissie martin still many sales for large amounts. No idea how or when Sydney and Melbourne neg sentiment will affect here. Thoughts?
The Australian insolvency system ie a part 10 bankruptcy will be a simple resolution for many people. It is certainly not as draconian as it was in Ireland.
Happy to discuss Ireland's political response. If any comfort exists for Australia, it is in the very different electoral cycles. Ireland had just re-elected Ahearn's FF party. They were the ones who had rounded on Kelly, Hobbs, McWilliams et al, and they went into complete denial until Lenihan grasped the nettle. In Oz, we might just get relatively new governments who're prepared to be ruthless and have the incentive/luxury of exposing the mismanagement of an earlier regime.
If there is a bank bail out and QE , we must demand " no recourse " ! . Life of misery people in DEBT both parents working dropping kids of to school , all so the politicians can say we have liberated women . Well if things get as bad as they are looking, maybe we will have to liberate children .
To do that you'd need more than riots, you would need an uprising. They do not have our interests in mind, if you owe 600k on a house and the bank can only sell it for 250k they don't care if you have to work for the next 30 years to pay off the debt.
@@nicolle_2944 I dont know why anyone thinks that men like working ,and that it would be a great idea to make women work , we men hate it , working is the pits . It takes us away from our family , we have to constantly compete , its stressful , the hours can be really long and physical , it diminishes the value of our time especially with targeted inflation . With all the mod cons we all should be working less , and only have one Adult in a family working weather it be the man or the woman. .
@@MrDaymien1 totally agree. Femism is just a tool to create more debt, divorce and broke families. Yes people should be working less, but that was another lie to the working class as they sent the manufacturing jobs overseas.
Greg Tyson They had mass emigration immediately afterwards. In fact they were losing some 50000 young citizens who emigrated many permanently. The EU migrants left pretty quickly as well so employers lost a lot of people.
Damian Yes in the year after the emigration was of everyone. Most EU went home and many returned over the last few years. There was concern that the emigration of Irish citizens was so high that it exceeded that of the potato famine in terms of numbers leaving annually.
There is still a significant percentage of people who believe the property market is almost ready to turnaround. These people are called buyers. The real downturn starts when these people evaporate. When no one is saying "now is the time to pick up a bargain", that is ironically the bottom, and precisely the time to buy.
If history has taught us anything, it is that we have learned nothing from history.
Great interview Martin!
Brilliant raw interview!! More of Eddie Hobbs please!
37:15 - 37:52 "If there is one thing people will take away from the Irish message and you in Australia, is, look out for one another. I can't stress it enough! Really look out for one another because its going to get rough!"
Like the boomers and slumlords looked after the renters they squeezed. The ones with 5 investment properties? Burn in Hell you bastards.
Al Bunyip no it’s the first time home buyers who missed out on that investment growth and put their life savings into a family home, only for it to fall in value by 50-70%. Fathers commuted suicide leaving their wives and children behind. So please don’t be so cynical, it was the the first time home buyers who bought last just before the bubble burst who got burnt the worst. www.irishexaminer.com/ireland/loss-of-homes-sparks-suicide-crisis-390060.html
@@JohnSmith-cu8yc yes but so did those fake investors who were in debt up to there eyeballs thinking that property prices only ever goes up they too suffered.
Great interview Martin and Eddie. As a health professional who worked in public health during 1991-1992 recession I saw how patients financial situation impacted on how they recovered from life changing diseases or accidents such as strokes and spinal cord injury. When you are at your lowest financially your mental health is impacted, then try dealing with other medical "stuff " and you don't have the will to go on. Our current mental health system is totally inadequate so god help us as a community and nation if we have to face a severe recession or depression. You only have to watch the news to see how violent our cities are becoming and the lack of respect that we have as nation for other people's lives. I know that I am a romantic but I wish we could go back to the way we used to be 20 years ago.
@ Angel Heart.... Agree it's already bad and will become unmanageable when the full extent of the economic downturn is upon us. I know a registered nurse who worked in the mental health area in a private hospital and changed circumstances led to her moving from the private system to the public system of mental health; a very different situation. First week was a self defence course conducted by an ex soldier who stressed they will be attacked and must know how to deal it. Of course most of those patients have a history of drugs where in some instances can turn from placid apparently normal behaviour to tearing the room apart and everything in their way in the next instance. You likely are familiar with this behaviour but needless to say she didn't last the week and took work in a safer doctor's surgery environment.
Cheers from OD
Best interview so far - to be sure, to be sure.
Thanks - yes I felt this was really important....
I guess Im asking randomly but does anyone know of a tool to get back into an instagram account??
I stupidly forgot the account password. I appreciate any help you can offer me.
@Jeremy Andy Instablaster =)
Ireland has certainly been on a rollercoaster. I remember visiting there in 1992 and was surprised how run down a lot of places were. Really lovely and generous people though.
Another great interview, one of the best, thank you Martin. Timely and sagely advice from Eddie Hobbs.
His predictions ring more than true. Especially the part where he says more and more potential buyers' perceptions (rapidly turning into strong expectations by the hard data) of a falling market will sit on the sidelines waiting for a better deal. And this will be a self-fulfilling prophecy, accelerating the pace and increasing the depth and longevity of a crash as lower and lower prices of property add fuel to the downward spiral. Agree: the "correction" has only just begun. Agree: the self-interest groups (real estate, finance, banks, political classes, MS media), voices are blinded, delusional, or just plain lying. Agree: more pain for more to come. Agree: wealthy getting quietly out but will survive no matter what chaos ensues, they can afford "paper losses." Those in negative equity or no savings will find it harder to live. But the social pain, unrest and fallout will impact us all. Time to prepare for the worst today.
Australia is just going to have to take it's medicine. It needs to at this point. For the bubble to miraculously survive, I think, would just be the most awful thing for this country considering the damage it has already done by essentially swallowing the economy whole and leaving little room for anything else. And the social damage. It has, imo, turned Australia into a bunch of assholes. The country has sold it's soul to bankers and real estate agents.
I just hope the bankers, the property industry, reserve bank, regulators and the corrupt politicians associated with them aren't able to control the narrative when things do go wrong. That the causes are correctly identified to ensure the probability of a repeat occurring is low to none. I think that is the most important thing. That the story in the public domain is the correct one.
Agree but the public domain is controlled by MSM who, in turn, is controlled by......... The 'establishment' are a smug, cynical, cold blooded litter.
Mike Fleming AustrIsrael
It will always happen again. The causes have been known for centuries. Price bubbles have been happening since the 17th century Dutch tulip mania. People never learn, because of many vested interests and the entire political/economic/financial system is a gigantic mechanism designed specifically to keep blowing bubbles.
@ Mike Fleming.... The legal profession with class actions will be kept very busy. It's already started with Westpac in the firing line over their unsuitable loans approved using the HEM.
"This baby's going to blow, and its taking the banks with it"
Really good interview Martin. Working on the front line of mental health in 2 emergency departments I can see the early warnings of what financial stress does to individual psychology and seeing a way out isn’t easy for most especially when the trotting noise of the black dog is being heard.
Thanks Martin. Easily the best interview to date. Agree the forgotten aspect will be the utter misery the unfolding housing decline and economic decline will cause. Front and centre of this debacle is the banks. Given the rate of private credit expansion is declining, the government is hell bent on achieving a surplus, it will be up to the RBA to QE the economy to mitigate the next recession. It's probably fair to say there is no way they are prepared for our future.
What great advice from Eddie Hobbs, clear and concise. Unfortunately most who are in the firing line of this mess will be in denial until the mortgagee takes possession.
Well done Martin for unearthing this gem which really reinforces our narrative for years.
Cheers from OD
Oppose Deception Oppose Deception Remember that when a government has a surplus they are sucking money out of the economy making any recession even worse. They will come up with excuses like the bond vigilantes for austerity.
@@davidlazarus67 .... Agree and that is why I said it. Pollies are great at abrogation of responsibility. The problem lies with education and those studying economics.
I exchange email correspondence with a former work colleague who is now in her last year of an economics degree and she at this stage of her degree has never heard of Hyman Minsky or Steve Keen with their economics alternative which appears to properly deal with what goes on in an economy and successfully model the cycles. Until education is sorted future generations will grow up ignorant of basic finances so it becomes a wash/rinse/hung out to dry repeat cycles.
Cheers from OD
Oppose Deception Oppose Deception The teaching of economics is appalling for all the reasons you mentioned. I would regard myself as Post Keynesian to disassociate myself from those in office who have misappropriated the term Keynesian. I do think that Schempter, Hayek and Minsky have a lot of merit when it comes to bubbles.
Financial literacy is another matter which should also be addressed.
For someone who has been through this in the UK, watching this video is an emotional and painful experience. I’m sure there will be many viewers still thinking it will not happen in Australia.... As Eddie Hobs explained, when the power shifts from the sellers to the buyers, it’s game over and too late to walk away.
He's right about how people justify their economic bias depending on their economic circumstances. Self-interest doesn't always win but at least you know it's in the race and usually is the favourite.
Very powerful interview, well done (again) Martin ! Eddie is an absolute wealth of information
As an Irishman who has a huge respect for Eddie Hobbs who in did a huge amount of warning Irish people leading up to the Irish economic crash which we all ignored. I live here in WA now and certainly all the indicators are that as Eddie and Martin discuss here is that interventions and strategies need to be implemented at an individual, family, community and countrywide level to avoid what might hurt a great deal of Australians. Eddie talks about not just the financial cost but more importantly the human cost. Eddies advice to look out for each other cannot be stressed enough. It’s a shame this discussion is not aired on Australian national television and radio. This would at least give individuals time to prepare in a pro-active manner and to risk assess their levels of debt and if they need to take pro-active action to stress test. Thank you to Martin and Eddie.
This time is not different.
Great to hear that Cork accent. We Tipperary people always concede that Corkonians have a superior gift of the gab! Seriously could Morgan Kelly be contacted for an analysis of the Australlian situation as he was one of the few with the judgement and courage to point out the true situation in Ireland? Also Eddie hit the nail on the head re the few in the media who steer public debate and information. I really resent having to pay a TV licence fee to pay for propaganda . One other point I have never seen publicly analysed in Ireland. How much of the money borrowed from Irish banks leaked out of the country pre 2009 and was simply gone missing from the Irish economy when the crash came? There was money borrowed from Irish banks to buy property in the UK which the Irish taxpayer had to pay eventually. There was also the wages earned by mainly Eastern European workers who sent much of it home to their own countries, the original source of which was borrowing by Irish builders and speculators. If say 400,000 Eastern Europeans sent 10,000 euro per annum each home for five years that would amount to 20 billion euro missing from the Irish economy when the time came to repay the debt. Because of the common currency it was probably Germany which benefited. Are these figures realistic?
Thanks, Martin. 👍👏. These analogy or comparison discussions are very valuable. Do keep them coming.
Eddie Hobbs thanks for your insight
and thank you Martin
The thing I always find amazing about bubbles is that people simply NEVER learn! The addictive feel-good effect of easy wealth is simply too strong for most people, at all levels in society, to resist. But I think there is even more to it than that. The very SYSTEM is designed and choreographed in order to facilitate speculative bubbles, and this is no co-incidence. The top strata of society, who control the politicians, the news media and financial systems want it so. How else are they going to use their financial muscle to preserve their lofty situation and get even richer? The only other way would be to actually do productive work, and who wants that?
I am certainly leaning towards the view that the Australian Property Bubble was engineered from the start. I used to think it was just stupid decisions but considering these things (property bubbles) keep on happening in country after country, decade after decade, I doubt we can keep saying they are accidental.
The system is geared toward "investing" getting rich at other people's expense. A real investment in society is one that helps society. If we taxed speculation, to cover the costs of all this gambling, we'd have a better handle over these bubbles, imo.
Excellent! Head & shoulders above the msm.
Fascinating guys!!! Thank you. I have been watching this crazy market since I moved here from the US 10 years ago. I started to believe it may never happen. I wonder how bad it can get. Scary
Excellent interview and incite.
A great post Martin, very informative and interesting. Thank you
Excellent interview. Your most credible guest (apart from your dear wife of course) by a country mile and some tremendous perspective. Good to be mindful of his final comments even in your own approach in posts here, so hopefully very valuable to you too Martin. Again, well done both, I'm planning on holidaying in Ireland maybe next year...nice to hear it's on the upswing Ediide. Thankyou.
Shay checking in from dublin Ireland thank you Eddie ❤❤❤❤
I imagine 95% of Australian's would choke when Eddie mentioned up to 80% falls in property values. Here's one example...
For our business, we bought a nice Georgian property on the waterfront in a nice town on Ireland's east Coast (Google Carlingford Lough)
We paid £85,000 in 2012 at the absolute bottom of the market
It had last sold for £310,000 in 2007.
Even then, people thought we were mad buying it as property was a dirty word
Human psychology is weird and Eddie alluded to that well in this interview. You are NOT dealing with rational behaviour anymore in Australia. The game is up.
The property we bought had fallen 75% not because of war, famine or some Chernobyl like incident. It was because the banks had lent too much money and that needed an 'adjustment'
@ Rock On The Lough.... When people say you are mad to buy at the price you did then, you know you have bought at the right time for a fair price particularly if the purchase price is below construction cost.
Cheers from OD @ latitude 25 south
@@latitudetwentyfive Yes, I'd be that sort of contrarian investor. You have to remember that we had had over 3 years of negative news, Greece looked like it was going to fail...the EU was in turmoil...people actually thought values could fall FURTHER..
It was scary..there was only us and one other person putting in offers on the place.
I remember coming out to Oz every Xmas at that time and being amazed how your radio news bulletins didn't start with economic news (and terrible news at that).
I read at the time that it takes humans say 5 pieces of good need to offset one bit of bad news. We are wired to weight bad news more strongly. That's the negative feedback loop Eddie talks about and Oz is about to enter it I feel.
@@rockonthelough5417... I really appreciate your insights.
I've known for years that there has been a property mania in Australia mainly in Sydney, Melbourne and not so much in other capitals and major provincial cities.
I live in Bundaberg for the climate andcan tell you that our mania here ended in 2008. I remember property here doubled in value in less than 12 months and vividly recall instances of sellers listing property for sale in the morning and sold by lunchtime same day.
I have acquaintances who were valuers at the time (now retired) reciting stories of buyers mainly from our southern capitals (Sydney and Melbourne) buying 3 or 4 Bundaberg properties using equity in their house. I am aware of one instance of a buyer phoning his son to see if he would put up the equity in his house so he could buy another property.
Our local bubble deflated with the global financial crisis and property here became poisonous in 2013 when we suffered record floods but it is now slowly recovering although still down about 15% on 2007 mania levels.
There are some horror stories already in Australia with the end of our mining investment boom adversely affecting Perth and other cities and towns in Western Australia and Queensland. Stories of properties in Moranbah Queensland sold for $900,000 in the boom now worth $200,000 and an investor with $3,000,000 in debt against mortgaged properties there now worth about $1,000,000. How a bank could entertain all this risk on one town amazes me.
Our wage levels have barely increased for 10 years while property has been doubling every 7 years or so which cannot be sustained. Banks declining lending standards are to blame.
I think our property decline and economic decline will be epic and frightening given we have not suffered a recession for over 27 years so we have a generation of people in the work force ( including bankers fearlessly lending money and fearless borrowers) who have never experienced a recession.
I am as prepared as one can be given known unknowns ahead.
Cheers from OD
Rock On The Lough
Our media in Australia is pure manipulation. Cannot watch/ read it no longer
@@latitudetwentyfive I need some brave souls to let me know what to do to 'prepare'... should I sell some of my property? Lock in interest rates? What?
One of your best posts Martin. The pluses and minuses of exchange rate buffer will be at best neutral but quite possibly negative
You found him.
I remember this guy from ages ago and thought about him and his message since.
Fantastic advice about closely monitoring the breadwinner...
Great interview, hope you get this guest on again.
Good informative interview, I was in Ireland 2 x months ago & friends there are still a good 20% below what they paid for their house, 1.2m they are hanging on trying to ride it out believing / praying it will come back, he is same age as me 65yrs old and plans now to work until 70. I feel for them as his retirement has been stolen, they had 3 x investment properties and dumped those to just break even with those debts, he planned carefully but alas got screwed by the Banks. What to do NOW ... Buy physical Gold & some Silver & hoard it for your own future. He is a professional Senior Manager.
If you invest to people`s need then you will faced working until 70-80`s.. roflol..
Downsize from his 1.2m mansion. Rich fucking baby boomer. Boo hoo
Amazing discussion. What better teacher then from the past and those that experienced it.
Does this mean Koshie and Peter Switzer might be wrong
Gray Morkem kochi is kosher Jewish. No truth from him.
Bwahahahaha! Thank you Gray, in all the gloom, you found a small light of humour. Kochie is just a shill for the big end of town. Martin’s interview with him was a classic example.
Who watches tv? Had my dose of brainwashing in my life before 40 !
Thanks Martin, thanks Eddie. Bloody good talk, loved it!!
Important insights from our Irish cousins.
Is it possible to have similar discussion with someone who has an Icelandic insider experience?
Compelling interview once again Martin.
Thankyou.
Thank you Eddie .
Hi Martin! It was gr8 interview! I totally agree with you and Eddie! It looks like movie called `the big short` !!
Early post today! thanks!
Thanks Eddie and Martin!
Absolute spitting image of Spain.
2007 bubble burst in a massive way.
Yet in the last couple of years prices have gone crazy high especially in Madrid.
Difference is the locals know it's going to crash yet again.
But they still commit the massive mistake they committed in 2007.
Weird.
Thanks Martin. Great video again!
Best interview so far. Bring on the crash
Martin. Can you also do a comparison interview with a citizen of iceland? As they took the bankruptcy path, how was the impact socially / on property prices / recovery of families?
Yeah Mr.Martin. I think the other side would be worth a look. Nice one Mr. Geoff.
Yes a view from the harder bounce in your scenarios...
I’d love to hear an Icelandic opinion. We bailed out the banks in Ireland and i think it’s fair to say some people still haven’t t recovered even today. So many died by suicide and many are still completely screwed by high costs of living couples with woeful mortgage payments. A whole generation emigrated. I’m happy to say I don’t have a mortgage, may never have and don’t want one. How did the Icelanders get on telling the banks to go whistle ... we should have done that in Ireland.
Thank you as always.
I am watching it slowly self destruct in Sydney. We will soon have construction workers driving taxis. I seen this happen during the “recession we had to have”. Also the stories at the time of people turning up in near new 4wd’s looking for fruit picking work. Will many of the 457 visa Chinese go back to China? It would take the heat off the rental market.
Except Taxis are no longer an option - taken by Uber...
Don't knock the “recession we had to have”. Recessions are necessary to purge the c.r.a.p out of the system. We have not had a recession for so long in Australia, and see what the result is? A huge housing bubble, useless politicians (ok, that's always a given), hopeless mainstream media captive to the system, armies of bureaucrats and accountants producing nothing of any value, an economy dependent on exporting a couple of commodities to one customer, a general society-wide mentality that to get ahead you have to speculate rather than do productive work, corrupt banks and a financial system so huge that it is consuming the entire economy in its voracious jaws.
I haven’t stopped mentioning the 1994 crisis in Mexico and how the banks took everything from my grandpa. He lost his bookstores, his properties...he received phone calls from lawyers until his day of death (heart attack) in 2006.
Great time to rewatch this interview with Eddie. I love his closing message of remembering to look out for one another. Can you arrange an update interview with him?
I swear you must have a time machine, no way you can produce so much content on the same timeline as everyone else.
Just very well organised...
@@WalkTheWorldDFA maybe you could teach a course on being organised - I could do with help
Enjoyed the lesson - nice flow on what happened. I was staying in Dublin a year before the crash. It was amazing how a cabbie told us the real estate market had to crash. He was right - dam Older white male cab drivers. Blame it on him .
@@ronpd1982 Haha - those old white males - cheers
DeLorean?
A year on, things have only become worse.
Thank you Martin
Fantastic conversation with Eddie. Great advice for Aussies regarding reducing debt exposure but unfortunately the majority are sleep walking though what is about to happen to us. Its as clear as day for some but hard to convince others of the head winds on the horizon. Brace yourselves!
Long time listener, first time commenter - love your work Martin! I really appreciated this discussion and the advice Eddie passed on at personal level regarding debt exposure and loan servicing capability - and most importantly, to constantly monitor the wellbeing of our household bread winners. I think it's a larger discussion that we need to have with other as a community.
Thanks, appreciated. Yes, its important.
Thankyou Martin for your fantastic efforts.
Martin, you should try to get hold of the economist Morgan Kelly. After reading Michael Lewis's book Boomerang, I can see a lot of similarities in Ireland and Australia. I think John and Morgan will get along 😊
Yeah I second this, it would be great to do a technical comparison of the economies at their bubble peaks and use this info to model what will happen to Australia. I did my economics thesis on the systemic banking crises/property bubbles and correctly estimated a 15% unemployment rate for Ireland post bubble. I saw in the news this week AMP estimating 50k job losses in construction. I roughly compared Ireland v Australia (and used job multiplier figures of 4.1 jobs per 1 construction job loss). I estimate 70k, not 50k, job losses with more job losses to follow (occurring over a longer time frame as these other jobs can 'hang on' longer. 350k would be the total eventually losses as a result of the first year of construction losses. Thats 8% unemployment. Throw in retail and a second and third year of impacts and i dont think 10%+ would be a crazy estimate. Obviously as a student i had time to run the numbers properly and i knew the irish economic data inside out. Id love to see this done to Australia
Get hold of John Mauldin too!
Ah great, just about to watch the interview and always liked Eddie's commentary during the recession here. I suspect I know what he's going to talk about. Mental Health definitely an issue the last decade here. We (personally) escaped lightly but I know others who didn't.
Thanks so much Martin for interviewing Eddie. It's so very true that we all need to band together and help each other for what's coming. Instead of playing the blame game - rather treat our fellow Aussies the way we would like to be treated. There will be times when we don't know what to say....but some advice I got today was. Ask yourself if you were in their position....what would you like to hear....what would make you feel encouraged to keep going. Stay strong Australia.
@Damian true I was thinking more the owner occupiers and first home buyers that bought at the peak. Or even the crazy interest only owner occupier. Property investors often just had greed run away with them and the institutions enabling this..... what's to come will be humbling and a lesson in itself.
Fantastic interview. SHARED.
Great interview Martin
If you dont wish to watch all of it please watch from 37 minutes on. This is what life is about.
Craig Douglas Yes the increasing domestic violence is one symptom. The opiate epidemic in America is another symptom. Suicides will follow. So push your MP’s for additional support funding.
Martin, the content you provide is getting better and better. I keep posting your videos in FB but no one seems to even care. I am frustrated. Only kittens and food grasp people’s attention.
Thanks - yes many people prefer to look the other way...
Great discussion Martin and Eddie! I think Eddie hit on a key point. That we don’t have a good grasp of deflationary economics. I think there is a great deal of misunderstanding of the implications of deflation. Many see it as a positive thing, buying opportunity, or a just punishment. It seems people don’t grasp how much it slows and damages the economy.
Exactly. I expect slot seeing the forecast of say 30% drop in prices just think...well that takes us back to 2015 house values and we'll just carry on.
Unfortunately, the ones caught up in negative equity make that impossible.
40% interest only mortgages to investors that make up 40% of housing market...worse than ireland
Excellent and important interview.
Yes. Please continue on the subject of what our current system is regarding insolvency . Whether its expedient/ fair to both creditor and debtor/ and whether the loss is shared in negative equity situations by banks?
We must ensure priorities of mental heath survival of our people ! Fighting over lost evaporated assets while loosing breadwinners to suicide is the greatest tragedy of all.
what a good person eddie hobbs is
Does anyone think that the housing markets that went bust in Europe and US are simply going through a deadcat bounce before continuing the downturn. I don’t think the Irish downturn cycle has completed yet. Australia is just 8-10 years behind on their cycle
very possible, lots of economies showing signs of slowdown atm. Time will tell
Housing markets move in slow motion (relative to other markets), we haven't really reached the effects of a GFC yet just the indications one is coming in the near future. It's very possible that they have not reached the real floor... Perhaps they did reach a floor (for their local situation), but may experience another downturn due to external factors.
Hi Martin,
Fantastic interview. I suggested before trying to get David McWilliams or Morgan Kelly on but Eddie nailed it- fair play!
Suggestion - If you have Eddie on again, it would be good to further explore the knock on impact of the €68 Billion he referred to in the piece (due to the bailout). This level of sovereign debt is massively impacting current and future generations of Irish families because they’ve been saddled with the debt through various forms eg income taxes, social levy’s and sneakiest of all the highest mortgage interest rates in the EU. It’s a vicious cycle as disposal income is therefore pretty much non-existent (particularly in Dublin) and as Eddie mentioned the credit lending rules are extremely conservative...... so the Irish can’t get the debt to buy. Then bare in mind his comments on the lack of supply - this is concurrently driving the rental prices through the roof......which people can’t afford because of Taxation.
In summary the wealth erosion from this “vicious cycle” in Ireland has been crippling and as Eddie said people are still going through pain. If Scott Morrison delivers a giveaway tax budget (for political gain), Stamp Duties and CGT gains continue to erode (with likely property price falls) and worst of all a bank bailout is required, what does this mean to future cash flows for the average Ozzie as the government balance sheet need a lift?
My Irish cousin is an engineer in a good job. He told me that the bank bailout levy (called Universal Social Charge) is equivalent to him handing over ONE MONTHS salary per annum...
Made me glad I live in Nth Ireland!!
Rock On The Lough sounds about right. If you combine the average persons tax bill there between 1. actual income tax, 2. The USC you refer to, 3. PRSI, 4. margin on mortgage rates (this is a stealth tax directly correlated to the debt although conveniently never hits the main stream media 5. The tax band changes which constitute “high earners “ you can see the impact. If your cousin earns €44-55k and has a mortgage obtained in last 10 years he/she is giving back ~60% in taxes (“tax” if he has a mortgage).
@@seamuscunningham6599 ...Yes, it just shows how pear shaped things can go when you're banking system is insolvent.
The French, German, etc bondholders that went to bed on that September 2018 night thinking ..."Well that money in Ireland's gone"...instead woke up the next day to find..."It's all great...well get it all back care of every working Irish person".
I still think at least one Ozzie banks going to need a bail out.
Any under 45 year olds here just need to Google 'Pyramid Building Society Geelong" to see how even when a small one goes pop you all pay. That 5 year 3 cent/litre levy on petrol might seem like small change compared to what's coming..
@@rockonthelough5417 yeah I agree, I really cant see how the banks can weather whats coming without state support
@@blahblahboo2 ...Bank asset books full of toxic property assets AND a government keeping interest rates on the floor in frutile attempt to prop up said assets prices does not bode well for healthy deposits. And foreign money will be running for the hills...
Just as an aside, we have a huge construction boom going on here on the Gold Coast. I have said before about the 10 or 11 cranes up in our little suburb of Palm Beach....I have noticed the number of new concrete pumps being used....at any one time there can be a dozen of these new machines in operation just here in Palm Beach. These machines cost between half a million dollars to a million dollars and appear to be owner operator run..... When construction is flying it's not an issue having that lease or mortgage ....but what happens to these guys when it slows or stops....???? Multiply and duplicate the same affects for most of the other contractors, like plumbers, who can have hundreds of thousands of unpaid accounts running with the developers at any time. Great interview Martin ...as Eddie says there will be very real human factors to this bubble ending. Politicians have been badly misleading people here and they have been pressured by the developers lobbying and Councils have gone along for the ride....the developers have reaped the rewards, so have the banks and government s at all levels....what we are going to face is the other side....lower tax base, higher unemployment costs,, struggling families distraught people and a very very heavily indebted future for our younger generations who will be taxed to pay for this mess. Add into that mix overloaded roads, rail, hospital, schools thanks to idiot politicians who thought bringing in an extra couple of hundred thousand extra immigrants to satisfy the top developers/banks who will be laughing as the tax payers try to put the pieces back into some sort of working order.
After the Irish crash, the new stress test on a business was..."Can your business survive not being paid by clients for 6 months" because that's effectively what happened. That's if you ever got paid!!
Aussies are going to learn what the term "Unsecured Creditor" means.
I watched a few episodes of Marie Kondo. The first exercise she gets people to do is put all their clothes in a pile before sorting them out. The piles are big. It got me thinking about family and friends houses and all the stuff they have. The observation I have made is that most of us have over spent dramatically not to mention consuming the earth's resources. Now when this kind of over spending stops....my word...a lot of jobs will go...even my own.
"as you approach 20% banks begin to panic and tighten credit even further". We are about.... HERE!
International money markets will also have to factor this in when loaning money to banks to fund local mortgages....it's why the RBA lowering interest rates might not mean alot to people on the ground
Exactly rock, it's why we have the out of cycle rate rises. Australia cannot fully deflate the debt via currency printing
@@rockonthelough5417 You are absolutely right. Our big 4 banks wholesale foreign funding is about 30% of capital requirements and that is mostly short term. We better play nice with our foreign monied friends otherwise our banks are kaput.
Again, that's something else mainstream media isn't explaining...
Very interesting and informative. New Zealand has two separate insolvency and bankruptcy regimes. One is very old and punitive and contains a nasty moral and legal trap. The other is very modern, realistic and is based on recovery rather than punishment and only applies to the banks. This subject is worthy of a video of its own. I guess the same is true for Australia but I not informed on this.
Interview Morgan Kelly next!!!
What everyone is overlooking is that there is a possible situation where house prices could go up exponentially in the next few years. And still be worth and few ounces of gold.
That situation is hyper inflation.
I don't believe it is being overlooked, I think they see it as a fairly remote possibility. Personally, I have prepared slightly for this possibility by purchasing some silver. I would have gold too, but it can be confiscated under law.
@ movieklump... I think that will only happen if wages also hyper inflates. Wages are going nowhere at present and banks tighter lending standards crimps loan sizes compared to pre Royal Commission times. But, what you suggest is not impossible.
Cheers from OD
Thank you martin. I will share this .. a lot.
Thanks great!!
@@WalkTheWorldDFA The message is clear. But I can only think of Churches to put any weight behind the message.
I am not comfortable with Churches: despite their good deeds, they carry an ancient infection .. some kind of rule about what community should be - which is the infection which always brings us back to this wall.
At best, I can share it with my physical neighbors .. in the hope the "community-support" message gets some validation.
Australians have been atomized away from their communities and families for generations.
There are scant organizations outside the Churches who retain any idea of the value of community.
All community infrastructure outside of the dictatorial Churches has long since been dismantled.
But I will do my best by inserting your presentation into those I consider "opinion-makers" .. leaders .. although, I also don't like the concept of leaders.
Healthy community does not require leadership.
SO I will push this material into the health-worker community .. that is the only secular community outside the Churches in our society.
Your Irish guest delivered more information than I think even you saw?
(I serve the Irish culture in my craft by tradition .. so I suppose I have the advantage .. a bit .. hit my website to understand that ( www.ozwhistles.com).
But yes, I have Church connections (many denominations - Christian, Muslim, Hindi, Buddhist etc) - and I will push the crash-social warning for them to expect a deluge .. they are mostly good people .. and a lot of them are already bracing for it..
Wish me luck?
)))))
Keep telling truth Martin - you are a world treasure!
This is an exceptional Vlog today. It really summarises what only a few of us in Australia have previously seen and endured as a result of the GFC. This should be shown on national TV so people on the street can sort themselves out before it is too late. The point regarding the mental health effects is something that has never really been discussed. I have noticed personally over the last few years an increased aggression and selfishness in society and had recently concluded that it was result of the excessive debt we are all beginning to own. Before the GFC I noticed a supermarket in the UK selling wooden Tulips at the checkout. The lady in front of me suddenly grabbed one and placed it in her basket as she was at the checkout. It was clearly a last minute decision and I vividly remember thinking why would someone suddenly want to buy a wooden tulip...simply loading up their personal debt for pointless luxuries or perceived needs. Shortly after that the GFC happened and I have since referred to this as the Tulip Crash. I have been living in Australia for 10 years and have watched society living a life of increasing debt, the most significant note is the number of people using coffee shops to buy coffee on the way to work and even babycinos for the kids on the way to school. Mom doesn’t prep breakfast anymore the family simply buy breakfast at the coffee shop. It is very clear to me that society has lost its way and the exploding credit bubble is imminent. This time I will remember the crash as the Latte Crash. It is a shame that once again we are seeing a society in denial with only a small percentage actually prepared to acknowledge the issues that we are facing. Eddie has summed up the Ireland crisis very well and only someone in Australia who chooses to ignore the facts can avoid seeing the almost mirror image of the lead up to the Irish crisis. The question is....who will bail out Australia ???? Excellent work guys. 👍👍
You my friend are spot on.
You talk about selfishness in society and debt...just look at drug use in Australia....people splurging on cocaine $250 - $300 a gram.
Real estate isn't always dublin
Yeah, sometimes it's worse...
We're feckin' eejits if we think that we're different from Ireland.
Alot of Aussies have Irish blood in them for a start!!
A great video Martin, matched with excellent examples - the Australian fallout is starting to look a lot like Ireland’s. Remember the Chinese are now sellers not buyers, watch the immigration numbers from here - as well paid property related jobs disappear, people move on. This will compound the problem. Secondly the investor mkt has gone from investor buyers, to investor sellers. Residential property oversupply is the real issue here. Plenty of problems ahead - another warning sign, many high profile politicians jumping ship.
Yep, migration numbers can soon turn negative. Immigrants aren't stupid.. Even positive migration doesn't solve anything as Martin has pointed out logically many times!!.
@@rockonthelough5417 "positive migration" What is that?
@@now591 Meant ...Positive Net Migration = more people entering than leaving the country (Negative Net Migration is obviously the opposite)
What a tragic account of the Ireland crash. All of the signs are so strikingly similar to what is happening in Australia. I wonder if we have passed the point of no return yet in Australia.....I want to be hopeful but my gut feel is telling me that Australia will be going into the same direction. What we are hearing from every angle is so similar to what was being said in Ireland. I have to find out what happened to the price of gold and silver against the euro during the crash.....How did the people that could see the crash coming protect themselves or cushion themselves?
We were told that we didn't know what we were talking about. Traditional Labor voters were/are well versed in the feudality of debt. It was the Recession we had to have( Keating ) because Australians demanded large amounts of debt/credit irrespective. Here we are talking to a commentator from another country reminding people of the same 'Equity mate' dilemmas( from the Howard push)... that soon after middle America suffered long before what is about to happen here during their Sub-Prime. All in the light of some articles now declaring the nausea of Neo- Liberal Feudality. Excuse me but this is becoming a familiar pattern of Global behaviour even after prior warning. Sure look after ya mate but if he's doin' what everyone was warned against( since Keating)... shouldn't you think twice about that because really some people just don't want to know...OK? Generally this is a load of before eaten stuff that frankly will happen again in Australia because our English ancestors support it and demand it! As they are post Royal Commission now. Hey if you don't join they will find someone who will right? It's time to wake up Australia. Your goin' to have to accept a way lower standard of living....get used to it! C Ya!
No one is talking about the self harm, domestic violence, alcohol and drug abuse that is going to make Australia unrecognisable in a year. Are govts ramping up mental call centres ? Commentators talk about narrow financial aspects.
These angry abandoned people vote, and may go to the extremes of politics that could affect the stability of the whole country for a decade.
Is the new govt going to clean out the failed Neoclassical economists from Treasury, APRA etc and get some diverse lateral thinkers in regulatory positions ?
Good point: Funny the mention of prostitution in this vid. Supposedly the number one answer young women (in NZ anyway - but I bet it is similar in Australia) give in response to being asked why they do it is "it is the only chance I have to ever get enough money to buy a house". That's right - successive governments have driven more girls to prostitution than any drug pushing pimp could have ever dreamt of.
@Damian But did you notice how these two were sniggering about it? Odd and inappropriate I thought .
The problem is when he said that houses are being sold below their construction cost. In Australia the construction cost is ludicrously high because of the land costs alone. Were land costs in Ireland as high as they are here? Was the Irish government MILKING the citizens for land as badly as the Aussie government is now?
Yes, we had a land price bubble in Ireland which is exactly the same as what's happened in Oz.. Construction costs creep up with that of course.
Eddie mentioned the housing shortage here. That was basically because ...what Developer sitting on a land bank is going to build houses in a market where they are competing against house sales at LESS THAN the cost of materials and labour ..you're giving away your land for free.
If you Google Nama (National Assets Management Agency) it will make more sense...how alot land was essentially taken off Developers and put under government control who's only remit was to salvage something from the sale (not looking at the bigger picture)
Are there any AAA rated banks in Australia?
Yes , a safe at your own home.
Unfortunately yes. All big 4 are AAA currently.
@@totalrecall8385 Haha :)
@@김동곤-m1z I don't think the big 4 are AAA rated anymore. They were all downgraded a while ago.
@@Andre_XX You are right. Actually they are all AA- now. Well...that's why their overseas funding cost has gone up lately and they had to increase mortgage rates despite RBA cash rate freeze.
Absolute gold great content Martin and Eddie. Really good point that doesn’t get mentioned as much as it should is stress. Fire sales are coming, question is can anything be done to stop it or as Eddy says are we already past the point of no return 🤔
Never fear I'm here to help and I'm from the government
The mental welfare part got me right in the feels! It's a crying shame what happens to families at the hands of banks and governments.
"Oi'm shoor dis is all resonetin'" LOL
In many good burbs in Brissie martin still many sales for large amounts. No idea how or when Sydney and Melbourne neg sentiment will affect here. Thoughts?
The Australian insolvency system ie a part 10 bankruptcy will be a simple resolution for many people. It is certainly not as draconian as it was in Ireland.
I'm feeling very sorry for those MPs who has/had an extraordinary number of properties....
Happy to discuss Ireland's political response. If any comfort exists for Australia, it is in the very different electoral cycles. Ireland had just re-elected Ahearn's FF party. They were the ones who had rounded on Kelly, Hobbs, McWilliams et al, and they went into complete denial until Lenihan grasped the nettle. In Oz, we might just get relatively new governments who're prepared to be ruthless and have the incentive/luxury of exposing the mismanagement of an earlier regime.
If there is a bank bail out and QE , we must demand " no recourse " ! .
Life of misery people in DEBT both parents working dropping kids of to school , all so the politicians can say we have liberated women . Well if things get as bad as they are looking, maybe we will have to liberate children .
To do that you'd need more than riots, you would need an uprising. They do not have our interests in mind, if you owe 600k on a house and the bank can only sell it for 250k they don't care if you have to work for the next 30 years to pay off the debt.
Yes, feminism has never been for the' benefit of women or families. Sadly, the majority cannot see how they have been duped.
@@nicolle_2944 I dont know why anyone thinks that men like working ,and that it would be a great idea to make women work , we men hate it , working is the pits . It takes us away from our family , we have to constantly compete , its stressful , the hours can be really long and physical , it diminishes the value of our time especially with targeted inflation . With all the mod cons we all should be working less , and only have one Adult in a family working weather it be the man or the woman. .
@@MrDaymien1 totally agree. Femism is just a tool to create more debt, divorce and broke families. Yes people should be working less, but that was another lie to the working class as they sent the manufacturing jobs overseas.
Anyone watching this after the John Adams interview?
Major drought in Australia for another 4-6 years (very little or no grain -meat exports) so can’t see this going away quickly
End of "The Lucky Country"
What's Ireland's immigration intake? Large increases since 2008?
Greg Tyson They had mass emigration immediately afterwards. In fact they were losing some 50000 young citizens who emigrated many permanently. The EU migrants left pretty quickly as well so employers lost a lot of people.
this is a graph and stats links to Irish government web site www.cso.ie/en/releasesandpublications/er/pme/populationandmigrationestimatesapril2018/
Damian Yes in the year after the emigration was of everyone. Most EU went home and many returned over the last few years. There was concern that the emigration of Irish citizens was so high that it exceeded that of the potato famine in terms of numbers leaving annually.
Negative migration can also happen in Oz if/when the employment market turns...be sure about that..
@@MrScoobiess Thanks
There is still a significant percentage of people who believe the property market is almost ready to turnaround. These people are called buyers. The real downturn starts when these people evaporate. When no one is saying "now is the time to pick up a bargain", that is ironically the bottom, and precisely the time to buy.
This assumes that Australia is different
Wow! 2 years later in 2021 the RBA cash rate has gone from 1.5% to 0.1% and property prices have increased proportionately. What could go wrong?
Great report very informative. Just goes to show you how hopeless our leaders are we’ve learned nothing!
The "Separation of banks" enquiry has come too late!
excellent ,informative content as allways , many thanks . interested how you conduct your own surveys,gather your own data.