The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."
Monday, May 21, 2012
Rory Robertson smashes Crikey's Adam Schwab
It's nice that Adam Schwab (Friday, comments) is unconcerned that his fact -- in this case, housing turnover per annum -- was shown to be out by a factor greater than two. And now he's keen to correct me on the Canberra-to- Kosciuszko bet on house prices I agreed with Steve Keen nearly four years ago.
In fact, the bet turned on whether or not the "peak to trough" fall from Steve's chosen "peak" of 131.0 on the ABS house price index was less than 20% (Steve walks) or at least 40% (Rory walks). In the event, the index fell by 5.5% (chart) before zooming to new highs on the back of 4 percentage points worth of mortgage-rate cuts and a sharp turnaround in the economy. Steve walked in 2010 and I've congratulated him in person on a job well done. Also, I've said I will walk if average house prices ever fall by 40% from any future peak.
I've already dropped 10 kilograms in advance of any future challenge -- how I did it is documented at www.australianparadox.com -- but before I ever break into a sweat in training, let's wait and see if prices ever fall back to Steve's previously forecast "peak" (chart). Finally, I'm not sure why Schwab thinks I have a particularly "bullish" house-price view. Yes, I own a house and I live in it. Beyond that, I just try to keep my eyes open. I note that auction-clearance rates in recent weeks in Sydney and Melbourne have come in closer to 60% than the low-to-mid 50s seen previously.
Apparently housing markets like rate cuts more than rate hikes.