40,000 Aussies have 6 or more investment properties

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The AFR reports that Mark Burgess, chairman of asset management firm Yarra Capital and the investment committee of industry fund HESTA said,“Two million people had investment properties in 2013 and I’m sure it’s much higher today, 40,000 had six or more.” 

It reminds me of the scene in The Big Short when Mark Baum is talking to the lap dancer about what she’ll do when mortgage rates reset  and admits she has 5 properties and a condo.

It also reminds me of a time when working in London in the early 2000s and my uncle mentioned one of his staff had nine properties. Nine. That’s what I call leverage.

Of course being on the property ladder is sort of a right of passage in Australia. The angst and wailing of first time property buyers not being able to pursue the Aussie dream is ringing louder. When the Victorian government offers 25% of the value of a home as an interest free loan or the federal government allows access to ring-fenced superannuation funds as a way of assisting them it is hard not to think that the bubble is reaching bursting point.

Unlike shares or bonds, properties aren’t liquid in a downturn. With private debt to GDP ratio of 180% and four spots in the global top 10 most expensive property markets what am I missing? Yes relentless overseas buying and a supply shortage but “affordability” exceeding 13x average income vs 7x prior to GFC doesn’t bode well.

Interesting to see another article which read,

“According to a new survey from Manulife Bank, nearly 75% of Canadian homeowners would have difficulty paying their mortgage every month if their payments increased by as little as 10%.”

I’m sure it’s nothing! I guess aliens haven’t entered the global property markets yet.

1,000,000 under age of 25 have registered to vote since snap election called by May

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More than a million people under the age of 25 applied for a vote in the general election in the five weeks after the snap poll was called. With the Corbyn free goodies bag and many of the youth against Brexit one wonders again whether Theresa May’s political gamble will backfire. The total number of UK parliamentary electors in December 2016 was 45,766,000, an increase of 2.3%, around 1 million, from December 2015. The gap of 12.2% would still still seem comfortable enough and the tragic Manchester terrorist suicide bombing will shift focus away from May’s muddled manifesto. This race maybe much closer than markets are betting especially as UKIP, The Greens and the LibDems slide into the abyss.

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Sir Roger Moore passes away

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Sir Roger Moore was the James Bond I grew up with as a kid. Where Sean Connery was suave, Moore was typecast as the toff deviant Casanova who always met up with Jaws. Sir Roger’s Bond films seemed more comedy than action. I was such a petrol head even then that I think I wore out the magnetic tape listening to Moore drive a stolen Alfa Romeo GTV6 to the US Air Force base in Octopussy. Who could forget him saying to the UK Minister of Defence ‘just keeping the British end up‘ as he was caught cavorting with Triple X in Stromberg’s escape pod when it landed on the back of a navy ship. Or ‘attempting re-entry’ in Moonraker or being ‘taken care of personally’ by MayDay (Grace Jones) in A View to a Kill. He made the safari suit look cool.

After Moore followed Timothy Dalton who was more of a wound up type. The kind of person that would tailgate you on a highway. Then came the dapper Brosnan and then the mysterious tough guy, Daniel Craig, we have today. Moore certainly typified the times. In a sense he was the least politically correct of the Bonds which is perhaps why he was one of my favourites, It would be nice to think the world would get off its hypersensitive victim culture and laugh at itself much like rolling the eyes at Moore’s corny one liners. Thank you for the memories Sir Roger.

Post Tsunami Tohoku – 2017 update

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Six years after the Great East Japan Disaster we visited the devastated towns that were all but wiped out by the tsunami that followed the M9.0 earthquake. Some 16,000 lives were lost and another 2,600 missing due to the events of March 11, 2011 according the Reconstruction Agency. More than 60% of casualties were over 60 years old. Over 400,000 homes were heavily damaged or destroyed. 726,000 homes were partially damaged. 470,000 people were evacuated from their homes. As of July 2016, the number of evacuees has decreased to less than 150,000 people, among 50,000 are still in temporary housing. We look at the changes in 2017. Report here Tohoku Recovery – Analogica KK

Rebels too old for a cause

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The average age of motorcyclists in Japan is 53 years old and continuing to climb as younger riders looking to obtain new licenses continues to drift. Between 2010 and 2016 the Japanese National Police Agency (JNPA) noted that large capacity motorcycle license holders (ogata – classified as 400cc+) have fallen by nearly 1,500,000. While mid-size (chugata – classified as below 400cc) have risen around 715,000. Female riders have shown a similar pattern of 178,000 fall in ogata licenses and 147,000 increase in chugata respectively. While there are still 9.175mn men and 625,000 women willing to get out on the highway with large capacity bikes, the trend is alarming. More frighteningly, new graduates aren’t lining up either. 30,000 fewer students lined up to get a mid or large size bike license between 2014 and 2016 representing a 12.3% dip. Latest report found here Motorcycles in Japan – Analogica KK

44% of Americans can’t raise $400 in an emergency. It is actually an improvement

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44%. This is actually an improvement on the 2015 survey that said 47% of Americans can’t raise $400 in an emergency without selling something. The consistency is the frightening part. The survey in 2013 showed 50% were under the $400 pressure line. Of the group that could not raise the cash, 45% said they would go further in debt and use a credit card to pay It off over time. while 25% would borrow from friends or family, 27% would forgo the emergency while the balance would turn to selling items or using a payday loan to get by. The report also noted just under a quarter of adults are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to the high cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being largely unprepared, indicating no retirement savings or pension whatsoever. Welcome to a gigantic problem ahead. Not to mention the massive unfunded liabilities in the public pension system which in certain cases has seen staff retire early so they can get a lump sum before it folds.

Farewell Kentucky Kid

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2006 MotoGP world champion Nicky Hayden aka the Kentucky Kid has passed away at the age of 35 after suffering a cycling accident last week in Rimini, Italy. The support for him from the motorsport community was huge. Even Aussie supercars had #gonicky hashtag stickers on their cars. Hayden was universally liked on and off the track.

Hayden’s death comes a month after Michele Scarponi, a veteran Italian professional cyclist, was killed after being hit by a van while out on a training ride.

Tommy Hayden issued the following message following the death of his brother,

On behalf of the whole Hayden family and Nicky’s fiancée Jackie I would like to thank everyone for their messages of support – it has been a great comfort to us all knowing that Nicky has touched so many people’s lives in such a positive way.

“Although this is obviously a sad time, we would like everyone to remember Nicky at his happiest – riding a motorcycle. He dreamed as a kid of being a pro rider and not only achieved that but also managed to reach the pinnacle of his chosen sport in becoming World Champion. We are all so proud of that.

“Apart from these ‘public’ memories, we will also have many great and happy memories of Nicky at home in Kentucky, in the heart of the family. We will all miss him terribly.”