On Thursday I debated and demolished my old foe Dr Steve Keen (of doomsday fame) on the contentious subject of Aussie housing. You might recall that Steve was the guy who garnered enormous media coverage for predicting a sensational 40 per cent drop in house prices during the 2008 global financial crisis. Aussie house prices are now 131 per cent higher than where Keen expected them to be. Adjusted for the appreciation since 2008, Keen is now divining a 57 per cent fall in the value of our bricks and mortar. As with my debate earlier in the year with one of Keen’s acolytes, gold promoter John Adams, which went viral online, this one ended with a brutal early knockout. Excerpt only (click here to read the full column or AFR subs can click here):
Keen presented a chart highlighting the correlation between the change in household debt and house prices over time, which he confidently declared represented his “prediction for house prices”. “I think I do pretty well in saying what the ups and downs are,” Keen asserted. Unwittingly, he had opened himself up horribly.
In response, I asked for Keen’s chart to be flashed back up on the screen. “Keen says he is a great forecaster, but I don’t see any forecast on this chart for a 40 per cent decline in house prices,” I countered. In fact, the worst loss Keen’s s“model” projected was just a circa 10 per cent decline during the 2008 episode. There was nothing remotely resembling the Armageddon he had relentlessly preached, and which had been the source of his outsized fame.
“No, it wouldn’t be forecasting,” Keen spluttered in response, blindsided. “I am not forecasting, I am sort of saying that is the driving factor behind .”
I retorted that Keen had not presented “any analytical basis for a 40 per cent decline in house prices”. Keen butted in again with what would prove to be his final, fatal mistake. “It is not analytical – it’s gut feeling,” he revealed. So the emperor has no clothes! For the first time, Keen had conceded that there was no evidentiary basis whatsoever for his scaremongering. He had simply pulled those unsubstantiated opinions out of his behind!
In a second AFR feature story this week, I profile the rise of Robert Whittaker from a young boy living in a Sydney housing commission with no hope of making something of his life to becoming Australia's first ever UFC world champion, triumphing over extreme physical and mental adversity along the way. Excerpt only (click here to read the full story or AFR subs can click here):
If it took Whittaker 26 years to believe he could be a champion, it would take less than three months for that belief to be tested to its limits.
Whittaker's next fight had him in his first battle for the UFC’s middleweight strap against the chiselled Cuban Yoel Romero. An Olympic silver medallist in freestyle wrestling, Romero had been lauded as one of the greatest athletes to ever compete in MMA.
Two weeks before facing-off against the Cuban adonis, Whittaker tore the medial collateral ligament (MCL) in his knee. As Whittaker tells it, 23 seconds into the first round Romero “stomped on the knee, caving it in and exacerbating the MCL damage”.
In the break between rounds, Whittaker can be heard telling his coach that the "left leg is completely f---ed". “From that point forth my knee buckled every time I threw a jab, cross or hook,” he recalls with a grimace.
Against the odds, a lame Whittaker managed to will a win, three rounds to two, accenting the victory by prevailing over the Olympic wrestler in a grappling exchange in the final minute. It's the sort of skill and bravery that has boxing great Danny Green describing Whittaker as Australia’s premier fighter across all combat disciplines.
The rematch 12 months later in Chicago is ranked by experts as among the greatest MMA fights ever. It began looking like it would be a one-sided event with Whittaker striking at will and obliterating Romero’s orbital bone around his right eye.
“Yet my Romero curse struck again,” Whittaker says. “Late in the opening round I badly broke my right hand, losing all feeling up to my elbow.” The injury would eventually require serious surgery to insert a plate and screws.
For Whittaker, it should have been the end of the contest. The Australian was reduced to throwing left jabs, right elbows and kicks. Defending his right-side from Romero’s explosive punches became almost impossible. He was soon dropped and was rocked repeatedly thereafter. In the end Whittaker clung on and landed enough blows to outpoint Romero in an even closer split decision than the one a year earlier. He was lucky not to be finished outright in the final few minutes.
The legacy of these two fights has been long-lasting. Whittaker was due to defend his title in Melbourne in February, but the night before the fight he suffered a twisted and collapsed bowel coupled with a hernia. Rushed in for emergency surgery, the doctors who opened him up said it looked like he had been in a car crash. That means Sunday's contest will be his first fight in 16 months, and just his fifth in three years.
When I am not hunting housing bears, I enjoy tracking great white sharks through our specialised search and rescue drone. My recent efforts to thwart one potential shark attack were covered by global media. Over the last week I have recorded many enormous great whites stalking Sydney’s beaches, and you can watch these majestic creatures in action from the comfort your home online here.
While Steve Keen has about as much credibility as Chicken Little when it comes to property price forecasting in Australia, it seems to me that many of Australia's most prominent financial pundits have lately been a little too self-assured with respect to the health of the Australian property market. This complacency feels eerily reminiscent of that which was seen in the United States from many finance experts there on the eve of the Global Financial Crisis.
I cannot get past the degree of hate going on. It makes me realize that I am too hateful at times. I actually don't like to see people in pain. And I ain't ever enjoyed watching MMA.
The hubris of Chris Joye and his ilk is breathtaking. These are the people who are always blindsided when the 'unthinkable' happens. But she'll be right. There couldn't possibly be compounding geopolitical tremors mounting.
In the last recession, China came to the rescue of Australia and secondly our interest rates were quite high so RBA was able to lower the rates and stimulate the economy. This time around, rates are pretty low already, any more lower the banks will not be able to pass on the lower rates to borrowers without going under.... and secondly China will not be building any more ghost cities this time [even if they do, forget about boom in mining since there are lot more African miners to supply this time, why do you think China has been spending so much in Africa in the last decade?]. Anyone who thinks this time it will be the same as 2008 is either dumb, dont know all the facts or has different agendas.