Ah... Welcome to 2017... What will it bring?
Well, not much new according to my pals in the industry across the country.
They tell me it's pretty much the same - repetitive, predictable - across most of the country.
The main drama here in Sydney involved Breakfast super-star Alan Jones who is sidelined with serious spinal surgery (trust me Alan, I know where you're coming from with that one) and whether this would seriously impact on Survey 1. Ray Hadley stepped in and did a double-shift for a substantial part of the survey, losing a little traction 5.30 to 9 but actually picking up ground in Mornings. The end result is that GB, minus Jones, held up reasonably well to hang on to the overall lead. "Hads" to the rescue. Jones is now back in the chair after 4 months on the sidelines. WS, Smooth and KIIS are all fighting it out for the lead on the FM band, competing at around the 8 to 8.4% mark. Still really interested in the fate of a couple of elder statesmen UE and CH who are hanging on just below 4%. Will their fate be decided in 2017?
We've had another industry reunion recently but Yours Truly was not be a starter this time around, due to a "medical issue" which will not be discussed in this issue (or, indeed in any future issues). I can however report an appalling error of judgement by the Editorial Staff at the Sunday Telegraph. There I was leafing through the Tele one recent Sunday morning and for reasons unknown to your reporter I found myself at the end of the Paper amongst the Social pages. And there it was. Just as I thought I'd escaped the "Terrible Tims" back in the 80's at 2DAY FM, there they were grinning straight at me. Not only that, they'd managed to involve Ron Wilson in the pic. (Ron, Ron... How have you descended to this social level mate?) I offer the attached Sunday Tele photo without further comment except to advise parents that it would be sensible to have all children under 15 removed from the area immediately.
Now, finally I just can't help myself on this story because for the past few years I've been sitting here watching a train wreck, wondering if I'm the only person who can see what's coming. Today I can no longer contain myself. I'm looking at house prices here in Sydney and something in my brain keeps chanting, "1929... 1929... 1929..." Now 1929 was the Wall Street crash, the collapse of the Stock Market. What we're looking at here in 2017 is the collapse of the Real Estate Market. But read on... the similarities are stunning. Wall Street went south with the ducks because every man and his dog started investing in stocks in the USA. The problem was they BORROWED in order to buy the stocks, often using the value of the stock as collateral. So the market went crazy, prices were inflated beyond reality and when sanity returned, there were millions of people who couldn't service their debt. The banks stopped lending, businesses crashed and... do I need to go on?
Now get out the old microscope and have a look at 2017. The Sydney property market has gone berserk fuelled by overseas investors and thousands of local families who fear that if they don't get on the merry-go-round now they'll never get on .
Prices have tripled. In some western suburbs a house that cost $220,000 just a few years back is now changing hands for $650,000. There is no economic basis for this: it's just collective madness.
Nowadays a newly married couple are both working to afford their mortgage. It only takes a few weeks illness and it all goes kerplunk. Heaven help us if the wife gets pregnant. She has to keep working which means the Grandparents are called in as emergency baby sitters (we see them everywhere across the city nowadays) or fork out even more money to pay for child care. That means the woman has to work extra to afford the care which, in turn, means that's less time she has to be with her children. Tell me that makes sense.
It takes only a small amount of bad luck to send these couples to the financial wall, where they have to renege on their mortgage payments. The failures start mounting and the banks start getting edgy and foreclosing on these properties. They start cutting back on housing loans overall. Interest rates go up, forcing borrowers to pay even more per month. More and more have to admit defeat. House prices start to decline. And then the spiral really starts to hit. The bank manager rings borrowers to break the bad news that the value of their house, their collateral, is no longer enough to meet their repayment. The bank needs them to lower the loan. They're just able to meet repayments and haven't got a hope in Hell of paying anymore off the principal. The bank forecloses. Now all the political ducks are lined up in a row. There are hundreds, thousands of foreclosures. House prices collapse. Banks stop all lending. Businesses collapse. Workers are laid off and we're back to 1929 and the era of soup kitchens. How are you all feeling now? Uplifted? That's a prediction you can hold me to in the next 24 months.
Oh, one last social comment, this time about walking through the local supermarket.
They don't just stock pet food: THERE ARE WHOLE AISLES FULL OF IT. Aisles and Aisles of pet Food !!!
I watch TV and am assailed by ads about dog and cat food. Not just any food. The stuff they're trying to sell us is, like, luxurious. Here we have people trying desperately to put food on the table and the ads want us to buy gourmet pet food?
I think I finally realised that I'd gone to another planet when a caller rang recently to try to sell us Funeral Insurance. "No thanks," we said, "not interested". He replied, "well, do you have any pets?" It's not that I'm worried that there are companies out there selling funeral insurance for dogs: the thing that is going to keep me awake tonight is that there are actually people who are buying it.
Beam me Up Scotty...