Sunday, 26 April 2015

Study Finds Best Time to Buy House is 20 Years Ago

SYDNEY, NSW - The Australian Institute of Real Estate Research (AIRER) today released a report analysing the best time for new property buyers to enter the market.  The detailed report, which studies the impact of seasonal trends and macroeconomic factors on the market, concludes that best time for first-time buyers to enter the market is precisely twenty years ago.

“The mid nineties are a solid time to buy – much better than today,” said AIRER President Mr Vouchsafe, at a specially held press conference today.  “Our study clearly shows that the best path of action for new homebuyers is to set up a high interest savings account, cut back their expenses, and purchase in the year 1995.”

“And the results aren’t time specific either,” Mr Vouchsafe continued. “No matter what stage of life you’re in, no matter when you are thinking to buy, the study shows you would be much better purchasing the same property some 7300 days previously.”

“It’s that simple.”

In what Mr Vouchsafe said was somewhat of a surprise to researchers, the findings are also believed to have applications outside of the real estate sector.  

“We also found that two decades ago would be the perfect time to start up that business venture you’ve always been considering, as well as the ideal time to embark on that dream career,” he stated.  “We think the study’s results have a wide range of applications, from getting your foot into the property market, to averting the 1996 Port Arthur Massacre.”

“The Australian dream is well and truly alive and within the reach of all.” 

Sunday, 19 April 2015

The Unasked Questions

The Spear has previously written ‘The burden of having to think of what is NOT said or NOT written lies with the critic’.  So, given his critical nature, when he read this week about a woman defending a Muslim woman from another racist rant this week, he started to think of the unasked questions.

While The Spear congratulates Ms Eden for having the courage to stand up to such obvious harassment and disturbance of the peace, he is a little concerned that what she specifically said may assume too much. 

He understands that it is hard to form an iron-clad defence in the heat of the moment, and it was surely better to say something to stop the abuse than nothing at all.  However, The Spear feels that there may have been an element of ‘putting words into the mouth’ of the abused by Ms Eden.

She specifically defends the Muslim woman’s dress by saying “She wears it because she wants to be modest with her body, not because of people like you who are going to sit there and disrespect her."  Fair enough. 

Understandably, for someone of a western background who has grown up in Australia there is a strong presumption that an individual’s freedom of choice underlies their decisions.  Society has never really threatened you with expulsion, jail time or death based on your choice of garb, however modest or immodest that may be.  You’ve had that freedom of choice. 

But the Muslim woman in question actually didn’t verbalise this choice at the time; the presumption was made.  Sure, she probably doesn’t have a problem wearing those clothes because that is her culture’s tradition in which she was raised.  But it’s also possible she didn’t grow up in a society that grants this presumed freedom of choice which we take for granted (like say, the freedom to be in public without a male guardian or the freedom to drive).

Has feminism really gone from bra-burning to pro-hijab in fifty years?  Or is supporting the right of women to be what could only termed as ‘oppressed’ by western standards, acceptable in the name of racial diversity / multiculturalism?  As the racial demography of Australia continues to change over time, these types of tough questions are going to keep cropping up whether we like it or not.

Saturday, 18 April 2015

10 Signs the New Renters have Moved In

1.       Clothes are slung haphazardly over the common washing line without pegs.
2.       There is a new and particularly annoying cat lurking around your building.
3.       Your car has been parked in three times this week.
4.       Furniture on a rope is floating up past your window on a regular basis.
5.       A new genre of alternative rock music has overtaken your building.
6.       The late night moans emanating from the next floor seem to have changed pitch and/or frequency.
7.       Subcontinental fragrances pervade your dwelling thrice daily.
8.       There is a new brand of cigarette butt extinguished on all common surfaces.
9.       You can recite all the common swearwords in a new language.
10.  Random shirtless man knocking on your door asking you for a blanket.

Sunday, 12 April 2015

Monetary Unionism and Antifragility

After noticing the emergence of a paunch, The Spear has taken to halving his historical portion of breakfast over the past few months.  As a result, he feels a little hungry throughout the day, but finds this allows him to better enjoy his lunch and dinner.  He also feels less bloated, and has subsequently sent the paunch packing from whence it came.  All in all, it seems he was simply eating more than was good for him previously, out of nothing more than habit.

It seems that our reluctance to put up with a little short-term hunger or other discomfort can often do more long-term harm than good, and in matters far removed from paunch-related qualms.  Take, for instance, the never-ending search for stability in the currency markets (as evidenced lately by Adam Creighton of The Australian arguing for Australia and New Zealand to use a common currency).

While the benefits of a stable currency to a nation or monetary union are quite clear (price stability, risk reduction, promotion of trade, increased transparency and reduced transaction costs), too much integration in the name of stability can have very serious long-term consequences, which are often harder to predict.

Take the 1997 Asian Financial Crisis, the 1998-2002 Argentinian Depression or the current Greek debacle.  Inflexible exchange rate mechanisms were key factors in all three crises, whereby the nations’ currency was pegged (Thailand), fixed (Argentina) or integrated (Greece) past fundamental value for too long, ultimately unravelling the prior benefits of stability in spectacular fashion.

Closer to home, but perhaps harder to recognise, is the long-term damage which has been done to Australia’s economy due to the latest mining boom. 

The monetary union between South-East and North-West Australia has played havoc over the past decade, whereby a sole currency has had to straddle two rapidly diverging economies.  As the mining boom now unravels, the long-term impacts are becoming clearer: a gutted manufacturing sector, a glutted commodities sector, and a less diversified economy which is based on little more than credit, houses and holes (oh and of course, bureaucracy).

Being a united continent with one currency certainly helped Australia avoid the worst of the GFC.  Unemployment sub 6%, house prices barely affected and without even a technical recession, the red dirt from the west helped fill the void left in government coffers from lower consumer spending.

However, the red-hot dirt and gas sectors ultimately led the RBA to instigate a tightening cycle from 2009 to 2012, helping the Aussie dollar reach its zenith of $US1.10 in July 2011.  This reigned in resource-related inflationary pressure, but at the same time encouraged the off-shoring of the Adelaide/Melbourne manufacturing base.

Now, with the RBA seemingly reluctant to drop rates due to a hot Sydney/Melbourne housing sector, it is WA’s time to get beaten by the currency stick, as the AUD can’t depreciate fast enough to counteract the commodity price slide.  It is ironic that it is the hot housing sector, which the mining boom prevented from faltering during the GFC, which is now squeezing the mining sector’s profitability. 

WA is now desperately seeking a greater share of the GST pie, which is distributed via a Horizontal Fiscal Equation which is set to leave it with only 30cents in the dollar of GST that it collects, in a pathetic, bureaucratically-fashioned imitation of what separate free-floating currencies for each member state could achieve.

Now The Spear is not calling for WA to secede - he is merely using it as an example of how currency unions are complicated beasts, and are not to be entered into lightly out of calls for ‘stability’.  The Spear thinks most New Zealander’s, aside from shuddering at the idea of being Australianised, would be pretty happy that their currency and monetary policy were kept at bay from the Australian resources boom, helping to pave the way for their current cheese/milk/tourism based success. 

In all of this The Spear is reminded somewhat of Nassim Taleb’s Antifragile (2012), in which he describes how some things benefit from shocks and volatility (which is largely at odds with our modern obsession of risk aversion by trying to limit volatility).  By trying to limit some types of volatility, such as bouts of hunger or exchange rate fluctuation, we may be setting ourselves up for long-term shock of much greater magnitude, such as diabetes or the scrapping of a currency peg.

It now appears that The Spear may not be the only Australian eating half-portions of breakfast over the next few years, although not as a matter of choice.  Let’s hope that a little hunger will go a long way to some meaningful reforms.

Saturday, 28 March 2015

Interview Season - If You Are the One

“You’re maths just wasn’t fast enough,”

“You came across as a bit too casual,”

“Next time try and relax a bit more,”

“You’re good with numbers, but you need to work on your storytelling,”

“We thought you were very, very, very good, but we just don’t have a spot for you right now,”

“This is an automated rejection.  Do not respond to this message.”

The Spear is no stranger to failure when it comes to job interviews.  At last count, he has done 20 in the past year alone, the vast majority of which ended in some form of “thanks, but no thanks.”  And that number of rejections is set to swell as we once again enter Interview Season; that brief period from late March to early May when aspiring graduates affix their armour and fight each other to the death in an eruption of no-holds-barred orgiastic violence, the lucky few emerging from the melee with a contract in hand.

Or so he’s told.

Yes, there will be many an interview to be had in the next few weeks.  So now would be a good time for The Spear to recap some of his previous learnings, and perhaps an opportunity for the reader to garner a little knowledge from his many tales of woe - for there are many.

Now the first thing to understand is that not all interviews are created equal.  What type of interview you have managed to wrangle will play a big role in your chances of eventual success, and some are uniquely suited to certain types of individual.  The Spear categorises the four main types of interview as Video, Phone, Face to Face and Assessment Centre.

The Video Interview is a fairly recent addition to the toolkit of your standard HR department that many applicants find rather awkward, like meeting a colleague on the bus, or that first RSVP date.  Used as a screening device early-on in the recruitment process, candidates must answer a series of automated, timed questions to show how well they can present and cope under pressure. 

The Spear has undertaken three or four Video Interviews and found them to be quite manageable, given the questions are usually quite standard.  So long as you do your prep, dress right, can handle talking to a small image of yourself and can manage your time well, you’ll do fine.

Unfortunately the same can’t be said for The Spear’s favourite type of interview; The Phone interview.  While much more natural, and able to be done while in your underwear, the phone interviewee has to deal with those pesky squishy things called actual people.  What’s that, The Spear hears you say?  You’re a Millennial who has never had to use a phone to talk to a squishy person before?  Well you better get some practise in son, because this type of interview requires the ability to interpret and imbue verbal nuance. 

You can also expect the overall experience to be much more of a grilling as the interviewer hones in on any perceived weaknesses in your responses.  Unlike a video interview where you may be able to generalise your way through, dropping in such terms as ‘innovation’, ‘digital’ or ‘thought-leadership’ for good measure, expect to be asked to apply or explain those buzzwords.  On the plus side, you can have all your materials laid out in front of you, and you don’t have to look good (a talent of The Spear).

Face-to-Face interviews are on the other hand uniquely suited for the better-looking among us, but are by no means an insurmountable obstacle for the beauty-challenged.  That said, you will have to prepare for them as you would have for the aforementioned RSVP dates.  For The Spear, this usually involves bathing sometime in the preceding three days and applying a piquant dash from that little bottle he picked up on special from Priceline, but to each his own.

No matter what your fragrance, the real challenge of face-to-face interviews is that all of your vulnerabilities are on immediate display.  No second-try videos, no phone ‘interference’, no written questions.  Everything - from your inability to think quickly to that nervous twitch that you just can’t control - is being assessed by the interviewer the moment you walk through the door, consciously or not.  So if you’re the jumpy type, you might want to practise reverting to your ‘happy place’ in a bid to present a cool, calm and collected self.

And it is exactly these kinds of self-control techniques which the final gate of hell, the Assessment Centre, is designed to break down.  If you’ve been successful throughout the process thus-far by erecting defences to your true self, be prepared to have them put under sustained attack for a prolonged period in an attempt to flush out your true colours.

Like The Spear’s favourite Chinese dating show, If You Are the One - where male a suitor tries to woo 24 single ladies for the chance of a date - the hiring organisation to an extent relies on the passage of time for you to reveal your own weaknesses.  On the brutal dating show it is a given that the longer a contestant is on stage, the more girls will reject him by switching off their light.  

Similarly, in the Assessment Centre - a potentially multi-day event where you will be interviewed, tested, given group tasks and asked to present to, wine and dine senior employees – there is little hope of ultimately hiding the underlying you.  So it’s best to make sure that whatever lies beneath that interview-veneer of yours is squeaky clean. 

That’s not to say that there isn’t a certain amount of fake-it-till-you-make-it involved.  Employers like confident applicants, however confidence may be exactly what a new, inexperienced graduate is most lacking.  

The Spear’s advice is to remember that the interviewers know this too.  They know you’re not a seasoned professional.  They know your knowledge is limited.  They know you probably can’t remember everything you’ve ever been taught.  They’ll understand if you’re not perfect.  So take confidence in the fact that you don’t have to be.

Sunday, 22 March 2015

Choose Your Recession

Carrying on from his last post, The Spear has gotten to wondering how he would create the next recession if he were given control of the levers to the economy.  Muahahahaahaahaa.  Yes, The Spear can see it now, stroking his white cat while looking out from his ivory tower at the ants people below.  Well, if you were hoodwinked by The Spear into voting for The Recession Party, then this is what you wanted, right?

To paraphrase Tolstoy, “All periods of economic prosperity are the same; each recession is calamitous in its own way”.  Well, at least they are if The Spear is involved.  And boy, The Spear has to be careful not to accidently knock the wrong lever, as it’s not going to take much to trigger a recession in the current climate.

To begin with the obvious, The Spear could simply jack up interest rates by a few hundred basis points; crude, yet effective, like swatting a fly with a newspaper.  The hordes of ultra-leveraged landlords, flipping their third or fourth property in a bid to better Steve McKnight’s 150 in 3.5 years, would be insolvent overnight.  As for those already under mortgage-stress, well, they may be taking a more literal interpretation of their ‘mortgage’ as the ‘death pledge’ annihilates their finances.  Non-performing loans and the number of properties on the market would jump, prices would fall and negative equity would look like a real prospect for some.  Oh, and the banks would get smashed.

A more creative, yet less-guaranteed way to get the rate rise could be to dramatically increase the money supply to massively depreciate the Australian Dollar in the hope that inflationary forces would take hold.  Unable to buy all the goodies that we want from offshore for less than a fortune, businesses would be forced to pass the cost onto consumers, who would in turn demand higher wages from their employers due to the increased cost of living.  Employers would then need to raise prices further in order to keep up with wage inflation; and thus an inflationary cycle is born.  And in would come the nasty RBA to jack up rates to keep it in check, unless they have forgotten their primary function. 

Potential pitfalls to a recession in the above case include increased exports due to the lower dollar and the potential for inflation to eat away at debt before higher rates get to make it inflict pain.

An alternative approach to recession using a minimalist approach may be to simply stop immigration and the population ponzi, Japan-style.  If all you need is two quarters of negative GDP growth to technically have a recession, and if the GDP is within the ball park of the immigration rate (GDP growth ~2.5%, immigration ~1.5%), then you may just get lucky and hit two quarters in a row if things got a bit worse (and there’s a good chance we would have already done so since the GFC).

Then again, why is The Spear worrying about this at all?  Another federal budget is around the corner, and given the effect the last one had on consumer confidence, perhaps the politicians will do his job for him.  But, oh, that’s right, this is going to be a dull budget, so perhaps The Spear and his white cat will be needed after all.

Wednesday, 18 March 2015

The Recession Party

It has been a long time - almost 25 years - since former Treasurer Paul Keating was at the helm of the Australian economy, overseeing the ‘recession we had to have’: our most recent recession.  His choice of words is interesting, as they imply that a recession may not necessarily be the bogey man it is cracked up to be.  As a believer in some degree of Creative Destruction, and given there have been calls recently for another recession (which is looking more likely anyway), The Spear posits the question: could a political party justify a mandate for a recession?

The Spear can think of several planks that The Recession Party could use to help build their political platform:

1.       Housing Affordability: Sure, you may be unemployed, subject to a margin call and paying sky-high interest rates on your crushing debt burden, but on the upside, all of these factors will make housing mighty cheap, and perchance even affordable.  Add in likely reductions to immigration and birth rates, and any first home buyers left standing will find themselves in a buyers’ market.

2.       Less Congestion:  More people at home whiling their days away rummaging through bogus adds on equals less congestion.  Less commercial traffic, less building work and fewer people able to afford vehicular transport means anyone left on the road will be making record time.

3.       Lower Dollar (& fewer iPhones): By throwing a spanner in the economic works, The Recession Party would surely be more successful at instigating what the RBA has found tough-going: sharp depreciation in the Aussie Dollar.  What better way to encourage spending onshore than to undermine our international purchasing power?  Ok, so the cost of our capital-intensive goods like heavy machinery that we currently import would skyrocket, but then again, so would the cost of an iPhone.  And by the Law of Demand, that means less of them sold in Australia. You see, it’s not all bad…

4.       Less Industrial Action / Increased Productivity: What need for a Productivity or Construction Commission when the biggest driver of workplace improvement, the palpable fear of enduring unemployment, is lingering in the air?  When times get tough, organisations will seek to become leaner, and they will look for cost savings where they never thought possible, like oh hell, maybe one of those 26 rostered days off a year, or maybe even one less taxpayer funded ‘study tour’ or two?