slukic @slukic01 - Twitter Profile

slukic @slukic01

6 months ago

@RayDalio @grok give me a TLDR

1

0

11

slukic01 retweeted

David Bird (ASX Trader) B.Ed, CFTe

@ASX__Trader

6 months ago

Most Aussies have no idea what’s coming. They’re feeling the first bit of pain from rate rises and thinking: “Surely this is a one-off… maybe just a couple more.” I’m telling you right now — it’s highly likely this isn’t a couple. It’s the beginning of something much bigger. I believe we’re heading toward an hiking cycle that could take the Australian 10-year yields toward 6.5% to 10.5%. Sounds ridiculous, right? It sounded ridiculous at the end of 2021 when I said rates were going up — no one saw it coming. It sounded ridiculous in 2024 when I said we’d get a healthy Zag retracement and everyone would start believing in cuts again — they did. It sounded ridiculous late last year when I said, “Guys we’re not cutting anymore… we’re not done hiking” — no one saw it coming. Here’s the truth: The market is forward-looking. And you can predict what’s next with a scary level of accuracy when you get confluency from multiple charts and cycles. That’s how you skate to where the puck is going. Now here’s the part Australians REALLY need to understand… Most Australian mortgages are on variable rates, not fixed — around 90–95%+ variable versus ~5% or less fixed — so most borrowers feel every RBA rate hike immediately. Australians are stress tested at 3% above the rate they borrowed at. And an amount of people took mortgages below 2%. So if you borrowed at 2%, the bank didn’t say: “You’ll be fine no matter what.” They said: “You can handle 5%.” (2% + 3%) And guess what? We’re basically AT that stress test level now. So what do you think happens when we get another 1–3% rise? You’re not stress tested for that. You’re beyond the model. And that’s when the chain reaction starts… I still remember the 2021 conversations… People earning 50 to 100 grand a year saying: “It’s cheaper to buy than rent… why wouldn’t I?” And that right there is the problem. That’s a short-term mindset. Because they don’t realise they’re not taking a loan for a couple of years… They’re taking a loan for 30 years. But here’s the question no one asked themselves: What happens when the cycle changes? What happens when: rates don’t just rise once… but keep rising, repayments jump again, cost of living keeps squeezing, It’s about whether you can survive the full credit cycle. When you make a 30-year decision using a multi year mindset… Eventually the market forces you to learn the lesson. Here’s what happens next: 1) Cashflow breaks first Eating out, holidays, shopping, renovations — gone. Offsets and savings get drained. 2) Arrears start creeping Not everyone defaults… but late payments rise. Hardship applications rise. 3) Forced selling begins It’s not “rates alone.” It’s rates + job loss + divorce + sickness. And you don’t need everyone to sell… Housing is priced at the margin. A small % of forced sellers resets the market. 4) Sentiment flips The “property only goes up” religion cracks. Buyers vanish. Days on market blows out. Vendors start chasing the market down. And here’s the kicker… This aligns perfectly with the 18–20 year property/credit cycle. Sentiment right now is EXACTLY what you see at the top: “Housing can only go up.” “There’s a housing crisis.” “Prices can’t fall.” If you want to stop inflation through rent… You don’t magically build houses overnight. You bring down prices. And I don’t know what the headline catalyst will be. Maybe they slow immigration. Maybe they change tax policy. Maybe they do something “unexpected.” But it’ll be blamed on the news. In reality? It’ll just be government reacting to what they have to do — not what they want to do. Do you think Canada wanted to implement immigration policy changes? Or were they forced to? The biggest lie Australians believe: “The government will save us.” They won’t. They’re not here to save you. They’re here to do what they have to do. And if you’re waiting for “normal” to come back… You’re going to get blindsided. Again.