Investing In The Current Financial Climate

[Flashermac]

It's a "must have new car" mentality with most Thais nowadays. Traffic is horrible and parking in Bangkok is a major problem, but you still see plenty of "red plates" on the roads. I bought a 7-year-old Honda Jazz in great shape from a Farang owner for 240,000 baht when I lived near Pattaya. A brand new Honda would have cost me over 800,000 and got me where I was going no faster. Plus that now 11-year-old car has never given me the least bit of trouble. There are plenty of storage lots in southwest Bangkok that are filled with nearly new cars that were repossessed because their owners couldn't keep up the payments, but would a Thai look at them? Nope, gotta have a new one ... even if the payments equal half or more of their monthly income. Then either the husband or wife loses their job and the car gets reclaimed. Bye bye all that money.

p.s. Years ago, you could have a dollar account at the Bank of America here. I'd keep half my money in dollars, and the rest in baht. That meant that either way the dollar/baht rate went, I was covered. Then the Thai government decided that accounts in Thailand could only be in Thai baht. So much for that. 

 

 

[Mekong]

Must have a “New Everything” more like, those of us who have been in Thailand / Asia have seen this for decades but the West is turning just as egotistical nowadays. 

I know people who have the cheapest model “Benz” (But its a Benz) and live in a squalid 26 SQM Studio 2 hours commute from work just for face, people see what I drive but don’t know where I live mentality    ...   like Arai Gor Dai.

The bottom will drop out of the Vehicle and Property market in Thailand just like it did in 1997, but this time I am ready for it, have a few bucks squirreled away to take advantage of the situation 

[Steve]

The UK (as well as most industrialized nations, basically the G8 for the most part) has a housing bubble. London is particularly susceptible. I've read Austrailia is particularly vulnerable when the next global recession hits. 

So, if we do believe there is definitely a recession, crash, whatever you want to call it, happens, what do you do?  Debt free and cash on hand is what is recommended by experts. You have to then look at your source of income. If its a job, will it be there after a crash? Certain jobs will always be in demand. There is a nursing shortage globally. There are all kinds of nurses so the more specialized ones (Emergency, surgery, pediatrics, etc.) will be in demand. Specific skills in tech/STEM will still be in demand. Rental income from property will still make money in certan markets. There will always be a need for housing in London, NYC, LA. 

[Steve]

https://www.theguardian.com/politics/2019/feb/09/william-keegan-nine-british-financial-crises-since-1967

[Coss]

G'day: 

re Straya - https://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=12203584 

yes, many sad house owners, soon. Ectually, I've been watching the 'fringe' little stories for some time and I remember distinctly, seeing a bit on a Sydney couple whose, ordinary house at auction, instead of fetching 1.7million as their flossed up, pride and joy, passed in at 900K.

They were devastated. Like so many in Straya and Kiwi-land, they'd placed their entire worth, financial and personal, in their house and making it appear,  as House and Garden Magazine worthy.

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and:

'It's extreme': Bill Gates hits back at Ocasio-Cortez tax plan

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12203647 

worth a look

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Dear Mr Bill Gates,

whilst I have a large amount of respect for you and your wife and the good you are doing in the world, please remember, amongst the numbers of billionaires/trillionaire in the world, you are in the minority, there rest of them are making out like bandits and chuckling all the way back to their fiefdoms.

And the good that you are doing, is still an inadequate recompense, for foisting Windows 3 and subsequent shoddy software on the world, when you could done something elegant and bullet proof, like the Mac OS, and now IOS.

But then, you were still, in your greed phase.

How's that Zune going? have you got any lying around I could buy? I've been looking for one, out of curiosity, but I can't find one anywhere. 

Yours sincerely,

A Mac guy.

[Stickman]

23 hours ago, Coss said:

yes, many sad house owners, soon. Ectually, I've been watching the 'fringe' little stories for some time and I remember distinctly, seeing a bit on a Sydney couple whose, ordinary house at auction, instead of fetching 1.7million as their flossed up, pride and joy, passed in at 900K.

Auckland house prices are up 120% since 2009. If there is a retreat of even 25% - which seems VERY unlikely - most will still be so far ahead it's not funny. Prices in Auckland might retreat 15% from their highs, then they will plateau and then they're going back up, albeit not as fast as they did the last time.

The real worry is for those renting. As more properties go on the market, rental numbers will reduce and the price of renting is going to go up, especially in Auckland. I'd hate to be a renter in Auckland over the coming few years.

[Steve]

New Zealand has also been a place where the rich want to retire or hide out from the apocalyps...lol. I'm not rich by any one's standards but I was/am looking seriously at NZ as well. 

https://www.theguardian.com/news/2018/feb/15/why-silicon-valley-billionaires-are-prepping-for-the-apocalypse-in-new-zealand

[Steve]

Anyway, the unanswered questions is what is going to happen if the next crash/recession, collapse, what ever it will be named happens. It's suppoesd to dwarf 2008. My guess is whole countries/societies will be changed socially and/or ideologically, America among them. I think America will shift far to the left. 

Europe will be under a lot of economic stress if, as expected, a few countries already economically weak now such as Spain, Italy and Greece simply collapse. France might end up farther right. There are debates now if Germany is actually in a recession. There are accepted data that says you are or aren't in a recession but that's just a stat. https://www.theguardian.com/business/live/2019/feb/14/germany-economy-recession-gdp-eurozone-growt-trade-talks-business-live

The one thing that may result out of is that the dollar is no longer the world reserve currency. 

[Coss]

1 hour ago, Stickman said:

Auckland house prices are up 120% since 2009. If there is a retreat of even 25% - which seems VERY unlikely - most will still be so far ahead it's not funny. Prices in Auckland might retreat 15% from their highs, then they will plateau and then they're going back up, albeit not as fast as they did the last time.

The real worry is for those renting. As more properties go on the market, rental numbers will reduce and the price of renting is going to go up, especially in Auckland. I'd hate to be a renter in Auckland over the coming few years.

G'day, I'm unfortunately a renter in Auckland, I agree with you in the most part.  

but if I may ::

what you are saying about a retreat is what my Dad says too and it has ever been so.

But when I was CIO for the REINZ, when it was still a large organisation and not the crippled 3 person, excuse for an institute is is now, I did the Stats, (at least me and my team as it was then ). I did quite a lot of historical research in the wake of the Fanny May crisis the states, a problem NZ, by and large escaped, because back then, our banks were reasonably honest and restrained. Not so any more, in the wake of the devastatingly critical reports into the Aussie banks (who own ours), the NZ industry is running around saying, "never happen here", "not us" blah blah.

Tui say - "Yeah Right".

So two points I'd like to make ::

1/. the difference between a 25% and 15% retreat seems like a significant gap, but if you factor in the relative personal incomes and consumer price indices etc, the people paying the mortgages are hit about the same as a 25% retreat in the good times as a 15% retreat in more harsh times. Ergo, a big crisis won't be measured in a retreat percentage, it'll be in the number of mortgages that go pfffft!   I note that Straya saw a drop in mortgages of 20% last year.

2/. If the housing stock remains constant in number and many people can no longer afford to own, they'll end up renting. But their house will be bought and rented out, so I see more rentals available to a poorer bunch of renters, and just with me, my rent has gone up $20 a week over the last 4 years...

Bugger...

[Coss]

17 minutes ago, chocolat steve said:

Anyway, the unanswered questions is what is going to happen if the next crash/recession, collapse, what ever it will be named happens. It's suppoesd to dwarf 2008. My guess is whole countries/societies will be changed socially and/or ideologically, America among them. I think America will shift far to the left. 

Europe will be under a lot of economic stress if, as expected, a few countries already economically weak now such as Spain, Italy and Greece simply collapse. France might end up farther right. There are debates now if Germany is actually in a recession. There are accepted data that says you are or aren't in a recession but that's just a stat. https://www.theguardian.com/business/live/2019/feb/14/germany-economy-recession-gdp-eurozone-growt-trade-talks-business-live

The one thing that may result out of is that the dollar is no longer the world reserve currency. 

Wot you said...

I'm worried about what'll happen with China, not from a Macro Economic view,  but because Laos, where I plan to idle out my days, will behave towards westerners,  like China does, in the same way a 5 year old boy will mimic his 17 year old, spackhead, violent, teenage brother.

So I hope that for the next 20 years, Laos remains pretty much as it is.