We're getting close to the end of this 12-video series on Munger's mental models.
Here is number 10 - become friends with the eminent dead - tune in here (or click on the image below):
Saturday 5 October 2024
US unemployment rate falls to 4.1pc!
Soft landing
Been in the US for the past little while - east coast and west coast - and it's been pretty interesting, to say the least.
On the one hand - and this is hardly an original observation - it appears all too easy to fall through the safety net, and the easy access to both legal and illegal drugs evidently isn't helping matters.
On the other hand, while I've largely been in areas populated by many tourists, you'd be hard pressed to conclude anything other than that the consumer economy is still fairly romping along.
A couple of other things of note.
New weight loss drugs have become widely available and are being advertised all over the place, to the extent that for the first time in decades obesity rates are actually in decline, despite the alarming levels of sugar consumption (it's darned hard to avoid consuming the donuts, I must admit).
Also, housing prices remain at record highs...and in Los Angeles are fairly roaring ahead.
Despite all of the monetary tightening, in nominal terms housing and stock markets have seemed almost unbreakable.
The trend for housing prices appears to be similar in Boston on the east coast, and indeed nationally.
My Uber driver told me that residents in LA often don't even look at homes priced below US$700-800k, because they know in advance that won't be liveable.
Housing that you'd be happily prepared to live in generally seems to be extremely expensive on the west coast (especially when you convert to Aussie dollar terms), leading some prospective homeowners to move to other states further south, such as Texas and Georgia.
Jobs data beats
In that context, the Bureau of Labor Statistics released the latest payrolls figures, which were far stronger than expected, with employment rising +254,000, and revisions to the preceding months adding a further +72,000.
This was far better than median market expectations, and bond yields jumped.
As with Australia, much of the hiring has been for government and healthcare roles, and in aggregate employment has increased for 45 months consecutively.
The unemployment rate dropped lower at 4.1 per cent, down from 4.3 per cent two months earlier.
Average hourly earnings were also hotter than expected, rising +4 per cent over the year.
Ahead of this report it had been expected that the Federal Reserve would deliver another 50 basis points interest rate cut at the next meeting.
However, these numbers were far better than expected, and expectations have been pared back to a much more likely 25 basis points easing.
Oil prices have also jumped by around +10 per cent from their lows this week on escalation in the Middle East, which will further temper some of the expectations around interest rates.
Friday 4 October 2024
Housing lending rose 1pc in August
Lending rises
Total housing loans rose 1 per cent in August to $30.4 billion.
Investment lending continued to rise, up 1.4 per cent to $11.7 billion.
Investor lending is up 34 per cent from a year earlier, and isn't too far off previous highs.
Source: ABS
The average loan size increased again, partly because lower income earners are locked out.
First homebuyer numbers remained solid - with deposits ably assisted by the bank of Mum and Dad - but the number of loans to buy newly erected dwellings fell 4.1 per cent.
"Have banks de-risked too far? Let banks lend"
Research by Jonathan Mott at Barrenjoey shows that there's been a huge lift in the share of loans going to households with a household income of above $200,000, while lower income earners are shut out by the 3 percentage points lending assessment buffer.
In essence, housing credit is becoming the purview of the wealthy, as detailed in a paper submitted by Barrenjoey to the Parliament of Australia.
One suggestion, from Dr Alex Joiner of IFM Investors among others, has been to reduce the 3 percentage points lending assessment buffer for first homebuyers only, rather than for all borrowers.
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P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:
- Boom or Bust – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan - book in here
You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.
2. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property investment purchases here.
Get in contact with us today if strategic property investment is your thing.
3. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
4. Subscribe for my free daily blog
Subscribe for my free daily blog with some 3.7 million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,500 followers.
By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - follow our book release on Facebook here and at our Buy Right podcast series here.
5. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Wednesday 2 October 2024
Fixed rates set to fall
Fixed rate cuts
Escalating tensions in the middle east over the past 24 hours have lit up oil prices a bit...and of course are a major concern in their own right.
Still, Australia's 3-year bond yield has moved considerably lower over recent months.
Not sure too many people will be taking them up just yet, but fixed mortgage rates should be available from below 5½ per cent in due course.
Indeed, cue the following via Macquarie Bank/broker channels this morning, from 5.39 per cent:
There should be plenty more of this to follow over the months ahead.
---
P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:
- Boom or Bust – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan - book in here
You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.
2. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property investment purchases here.
Get in contact with us today if strategic property investment is your thing.
3. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
4. Subscribe for my free daily blog
Subscribe for my free daily blog with some 3.7 million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,500 followers.
By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - follow our book release on Facebook here and at our Buy Right podcast series here.
5. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Tuesday 1 October 2024
Munger's mental models #9: Simplicity!
Mental models
The next video in the series on Charlie Munger's mental models...simplicity!
Check it out here (or click on the image below):
Munger's mental models #8: The fat pitch strategy
Mental models
It's been a while since I looked at one of these...today, the fat pitch strategy.
Check it out here (or click on the image below):
Building approvals fall, but past cycle lows
Approvals drop back
After a solid rise in July, dwelling approvals fell back by -6 per cent in August to a seasonally adjusted 13,991.
Attached dwelling approvals were weak in Sydney (825) and Melbourne (1,472), but picked up a bit across Greater Brisbane (716).
House approvals were fairly steady at 9,338, seasonally adjusted, but are now trending higher in Melbourne, Brisbane, and especially Perth.
Overall, building approvals remain weak, but are at least beyond their cycle lows now.
Over the year, there were just 166,200 dwellings approved, and they probably need to be about 50 per cent higher to help address the housing shortage over the next few years.
There's still a lot of competition from infrastructure and non-residential building.
Retail sales were a bit better than expected after a warm month in August, at +0.7 per cent, moving the Aussie dollar slightly higher to 69.3 cents, though bond yields weren't much moved.
Inflation expectations lowest in 3 years
Consumer inflation expectations fall
Yes, the economy is sluggish, but the central bank might just have played a blinder on its battle with inflation.
As the monthly inflation gauge looks set to drop towards 2 per cent, consumer inflation expectations have also now dropped to the equal lowest level since three years ago, in September 2021:
Chart via CommSec:
The medicine seems to be working!
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In other news, housing values increased more modestly over the past month, with house prices nationally up +0.4 per cent (driven by strong gains in Perth, Brisbane, and Adelaide), and unit prices up +0.6 per cent (with solid increases in Perth, Adelaide, Brisbane and Sydney).
Source: CoreLogic
Rents increased only marginally over the September quarter, confirming that inflationary pressures here are easing.
---
P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:
- Boom or Bust – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan - book in here
You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.
2. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property investment purchases here.
Get in contact with us today if strategic property investment is your thing.
3. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
4. Subscribe for my free daily blog
Subscribe for my free daily blog with some 3.7 million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,500 followers.
By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - follow our book release on Facebook here and at our Buy Right podcast series here.
5. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
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