Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Friday, 4 March 2016

Coercive persuasion

UK housing

Different data providers have hinted at different rates of growth for UK house prices, but the trends have been broadly similar. 

Nationwide released its house price index yesterday which showed avergae house prices ekeing out a fresh all-time high and growth picking up a little to +4.8 per cent.

Over the last decade growth has been overwhelmingly driven by London and the regions surrounding the capital city.


Capital growth has remained considerably slower away from the capital city.

There has been a likely pull forward of investor demand ahead of proposed changes to stamp duty on second homes which will kick in from the next tax year on April 5, though demand is expected to remain reasonably strong thereafter according to Nationwide, with UK employment at record highs.

Home ownership rates appear to have steadied at 63.6 per cent, well below the 2003 peak of 70.9 per cent. 

Ownership rates have notanly fallen in the 25 to 34 agre bracket, with 100 per cent mortgages no longer widely available for first time buyers. 

Forecasters now don't expect any interest rate hikes until Q1 2017.

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Xǐ năo

Popular culture has claimed that during the Korean War the Maoist Government used a brainwashing technique known as xǐ năo on prisoners of war, a technique of coercive persuasion. 

A prisoner might, for example, have been asked: "Do you agree that the west is not perfect?".

By starting with simple questions which were almost impossible to disagree with, the cleansing of the mind could begin, followed by the indoctrination.

Whether or not there is any truth in popular culture is another matter...

Negative gearing (again)

What is potentially an interesting and important debate - negative gearing rules in Australia - has blown straight past sublime and is now bordering on the ridiculous.

In the latest round of slapstick, the Labor-aligned McKell Institute, which has previously produced some excellent and enlightening reports* explaining the failure of Keating's 1985 quarantining of legislation, produced a poll of six carefully framed questions for 50 unnamed economists, the McKell view of some of which would be to argue against whether under extreme duress or not.

Worryingly only 80 per cent of respondents disagreed with this chestnut, that all new investors could be "disappeared" if negative gearing was removed:

Goodness alone knows what the other 20 per cent of respondent economists were thinking.

No matter, it was straight off to press: "Our poll shows that economists do not disagree with us...".

Aussie politics, lol.

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*some of their arguments are now questionable: for example, that the claim that incumbent legislation does not preduce an adequate supply of rental properties, with Australia in the midst of its biggest construction and rentals boom in its history.