#28: Liar Loans - Peter White

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Welcome to Part 4 of our Property Special. Fraud is a hallmark of bubbles, as mania turns to greed. It’s also key in predicting whether Australia’s housing market will crash.

In this episode, we drill into the question of fraud in the housing market, speaking with a true industry insider. Peter White, a former mortgage broker who helped establish RAMS Home Loans and Wizard Home Loans, is the Executive Director of the Finance Brokers’ Association of Australia. He represents many of the 26,000-something brokers across the country.

How do broker incentives lead to larger and possibly unaffordable home loans? What’s Peter’s response to the UBS ‘Liar Loans’ report that argued brokers had been encouraging borrowers to falsify documents to apply for loans? Do brokers have any skin in the game? We asked all these questions and more. Hear for yourself.

Show Notes:

UBS Liar Loans Report - [link]
- The Stages of a Bubble - [link]
- The ASIC Report on the Mortgage Market & Remuneration - [PDF

 

#27: Not If, When - Jonathan Tepper

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In Part 3 of our Property Series we consult the 'housing bubble whisperer', Jonathan Tepper (@jtepper2). He is the founder of research house Variant Perception, which provides macroeconomic advice to the biggest hedge funds in the world. Jonathan successfully predicted the Irish, Spanish, and US housing bubbles before they all spectacularly burst. He is a Rhodes Scholar, former Bank of America VP of Proprietary Trading, and founded and exited a media company, Demotix. Jonathan also co-authored two best-selling books, Endgame: The End of the Debt SuperCycle and Code Red, a book on unconventional monetary policy.

Jonathan has now turned his attention to Australia. He believes Australia's housing market will crash very soon. In this episode, we explore the psychological nature of what drives bubbles, how to predict a crash using key leading indicators, and why Australia is currently experimenting with one of the biggest housing bubbles in history.

Show Notes:

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- Things Hidden Since the Foundation of the World - Rene Girard   
- Manias, Panics, and Crashes - Charles Poor Kindleberger
- Boomerang - Michael Lewis
- Building Approvals (ABS)
- Check out the ABS App if you really want to nerd out (we did & do)
- Jonathan's website: www.jonathan-tepper.com

#26: What's in a Bubble? - Professor Richard Holden

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Welcome to part 2 of our Property Series! The term "bubble" gets bandied about a lot these days, but what is it? How do you separate intrinsic value from true mania? And is the Australian housing market in a Michael Bublé of its own?

We brought in leading Australian economist Richard Holden to help us answer these questions and more. Richard received a PhD from Harvard University in 2006, as a Frank Knox Scholar. He has been a Visiting Professor at Harvard, MIT, and the University of Chicago, and now teaches at the University of New South Wales in Sydney. He also edits the Journal of Law and Economics on the side.

Are we in a bubble? You're about to find out...

Show Notes:
- Betting the House - the Four Corners episode on the Australian housing market where ANZ CEO Shayne Elliott says that the risks of individual mortgages are uncorrelated
- Keep up to date with Prof Holden on Twitter - @profholden

 

#25: Safe as Houses - John Flavell

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Welcome to episode 1 of our 4-part series on the Australian property market. In this episode, Mortgage Choice CEO and former NAB senior executive John Flavell gives us his best reasons to believe that the housing market is no such bubble. Mortgage Choice is one of Australia’s leading brokerage firms.

Mortgage brokers have been in the driver’s seat of the housing boom. In March, ASIC released a report on brokerage remuneration practices in response to allegations that brokers were receiving huge bonuses and “soft pay” for pushing borrowers into larger loans. In September, UBS published another report, arguing that about one-third, or $500 billion, of home loans were “liar loans”, and that in many cases it was brokers who encouraged applicants to not be totally honest. 

So has the role of mortgage brokers been harmful or benign? We put this question and more to our guest John Flavell. As you’d expect, he’s in support of responsible brokerage. And he’s bullish on the housing market. Listen to hear exactly why.

#24: Saving Capitalism - Luigi Zingales

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Trump. Cronyism. Inequality. Monopolies. Weren’t we promised better than this? What happened to a “new nation, conceived in Liberty"?  What’s happening to capitalism?

Professor Luigi Zingales knows a thing or two about the destructive powers of nepotism and corruption. Emigrating from the land of Berlusconi to the home of the brave, he received his PhD in economics from MIT in 1992, before joining the Chicago Booth School of Business. He has written two acclaimed books, A Capitalism for the People (2012) and Saving Capitalism from the Capitalists (2003), the latter being hailed as “one of the most powerful defences of the free market ever written" by the National Review Online. In 2014 Luigi was the President of the American Finance Association, and in 2015 he became the director of the Stigler Center at the University of Chicago, which he has refocused on the various distortions that special interest groups impose on capitalism. He also co-developed the Financial Trust Index, which is designed to monitor the level of trust that Americans have towards their financial system.

In this conversation, the Swagmen prepare for a tour de force on American Capitalism. Luigi shows how we can combat populism, reclaim meritocracy, and even opens up about why the US government should break up mammoths like Amazon. Strap yourselves in for an uncommon discussion with an exceptional guest!

Show notes:

A Capitalism for the People - Luigi Zingales
- Saving Capitalism from the Capitalists - Luigi Zingales

- Zero to One - Peter Thiel

- Capital in the Twenty-First Century - Thomas Picketty

- The Stigler Center's blog, Pro-Market

#23: “Small-l liberal, Big-L Lesbian” - Christine Forster

Christine Forster is currently the only Liberal party member of the City of Sydney Council, having left a career in journalism in 2012 to pursue her local government stripes in one of the world’s great global cities. She is a well-known member of the Abbott family, and is the sister of former Prime Minister Tony Abbott. But belonging to the same party doesn’t mean they see eye to eye on every matter. Tony is the staunchest crusader for maintaining the current definition of marriage under Australian law, while Christine is the most prominent figure in favour of extending it to same-sex couples. In fact, she and her partner Virginia Edwards, both active ‘Yes’ campaigners in the current postal survey, share a loving same-sex relationship. Both have children from previous marriages, and originally met while taking their kids to school. They have been engaged since 2013.

In this episode, the Swagmen sit down with Christine and Virginia to dissect the vicissitudes, contours and hidden agendas of marriage debate in Australia right now. We hear why the ‘Yes’ campaign needs to cease quibbling over the mechanism of change and focus on an outcome; what real motivations may be behind the ‘No’ case; and how the debate has affected Christine’s relationship with her brother. The outcome of the vote will be announced on 15 November 2017.

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#22: Bittersweet: How To Make Money On A Housing Market Crash - Andrew Baker

Andrew Baker is an INCREDIBLY successful self-taught investor based in Sydney. During the day he specialises in building machine learning at global firm Accenture; by night he's trading cryptocurrency, ASX stocks and NASDAQ derivatives. He began his investing journey after seeing the Global Financial Crisis unfold around him, and he hasn't looked back since. Although we can't give over too many details about Andrew, we can say: watch this space!

Andrew is a strident critique of mania, bubbles, and the latest incarnation of lemming-like behaviour in financial markets: the Australian housing market. Like another guest and friend of the pod, Steve Keen, Andrew believes Australia is hurtling towards a crash by the end of the decade. Dismal news, yes, but now is not the time to bury your head in the sand! If you want to understand WHY this bubble is likely to burst, and how you can not only protect yourself and your family but PROFIT from this rare event, this fascinating discussion is made for you. Andrew is a true practitioner, not a talking head or policy sheep, and his money is always where his mouth is.

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Show notes: 

- APRAs Policy Hand Brake: Further measures to reinforce sound measures of mortgage lending practices
- Michael Burry Youtube Clip
- Ray Dalio ($164 Billion under management) on How Economics Works
- UBS Report On How F*cked We Are

- Follow these guru's on Twitter:
Steve Keen - @profstevekeen
Jonathan Tepper - @jtepper2
Marc Cohodes - @AlderLaneeggs
 

Books:

The Intelligent Investor - Benjamin Graham
Can we avoid another financial crisis? - Steve Keen
Debunking Economics - Steve Keen
Capital in the Twenty-First Century - Thomas Pickerty
The Euro - Joseph Stiglitz
 


 

 

#21: Beating My Ice Addiction - Dave Oliver

Dave Oliver is Australia’s first openly gay premiership rugby coach. Throughout his school and sporting career spanning the first 30 years of his life, he hid his homosexuality from his teammates, friends and family. This pressure eventually drove Dave to try Methamphetamine (Ice) one evening after the end of a long work day at his pub in Cowra. Over the next 18 months Dave entered a downward spiral as he tried to manage his pub, maintain his ice addiction and deal with his sexuality. This cycle was only broken when one Sunday afternoon his mates drove from Sydney to Cowra and intervened.


We sat down with Dave to hear what it is like to live with an ice addiction and the lengths he went to, just to get some gear. Dave has recently founded ‘Recovery Now’, a movement he hopes will encourage others to speak out and tell their story.

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Show Notes:

- Check out Recovery Now

Some links to the 'Coal Face Counselors' that Dave recommends:
- Steve Stokes -  http://www.stevestokescounsellingandconsulting.com/
- Changes - https://www.changes-psychotherapy.com/

#20: Changing the Constitution Is As Easy As - Anne Twomey

Professor Anne Twomey is one of Australia's leading constitutional law experts. She has practiced as a solicitor at the High Court of Australia, worked as a researcher for High Court Justices, and advised the Commonwealth Parliament on legal issues. She currently teaches at the famous University of Sydney Law School.

In this charming constitutional conversation, Anne reveals some of the intricacies and tricks involved in changing a nation's founding document - it's not as easy as you think! We shine the light of her knowledge on the question of an Australian Republic - one of our pet issues. We also discuss why the Australian public is at odds over the two republican models - and whether there's a third, smarter way to reach constitutional independence. This is law at its most epic!

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#19: Columbia MBA Professor Teaches You How to Find Strategic Insight in Any Scenario - William Duggan

Would you like the ability to reliably experience those "breakthrough moments"? We've found your guru. William Duggan teaches Executive MBA courses at the renowned Columbia Business School in New York. He has taught innovation and strategy to 1000s of company executives around the world. William has written three books on innovation and "strategic intuition," that elusive spark of insight which helps you creatively solve hard problems. His 2007 book, Strategic Intuition, was named "Best Strategy Book of the Year" by the journal Strategy+Business. William has three degrees, including a PhD, from Columbia University. He also likes corn-based tortillas.

In this expert chat, the Swagmen hear William's definition of "strategic intuition" and how you can develop it in your own life. We learn about Napoleon's weird habits of insight and why more work is sometimes the enemy of brilliant ideas.

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Show notes

- New York Times article on the power of taking a 'Schultz hour'

- Steve Jobs' 2005 Stanford Commencement Address, where he regales the typography story

- William's book Strategic Intuition

William's other books: Napoleon's Glance (2004), Creative Strategy (2012), and The Seventh Sense (2015)

Vipassana meditation, and a course available near Sydney