Bill Evan's presentation

Sat through another one of great presentations from Bill Evans - chief economist at westpac. He spent quite a bit of time around resi prop today but incredible level of data he presented which they have and what that means for economy in general and prop values in particular:

Summary:

• low fixed rates expected to start creeping up - fix them sooner than later
• 10% expected growth in world economy over next 2 years - massive and unprecedented
• AUD strengthening significantly this year and next
• China is booming - massive growth in prop const - high iron ore prices to remain or move even higher
• China employment almost back to pre covid means Aus will experience very significant growth next 3 yrs
• consumer & business confid now at 10 yr high
• our performance better than all other countries in OECD except China
• NSW & VIC being weakest link - due to lack of immigration/ population growth
• Spectacular recovery in WA, QLD and SA
• New lending for investors 30% - FHB/OO - 70% now - investors coming in fast
• No regulator (APRA) activity this year - Don't believe the newspapers - they want it tomorrow - But NOT happening - he overstressed this point.
• Syd Mel took massive hit in 2017 & 2018 in prop values - and therefore not expecting regulators coming in quickly.
• Both markets expected to be 20% -25% high in 2 years which is around c16% up from 2017- and that is nowhere near bubble-territory
• Per and Bris much better shape to sustain long term growth
• GC & SS coast booming faster than Bris, Syd & Mel
• Syd and Mel based on 20% + growth will be at similar affordability levels end 2022 at levels of 2017
• Bris however has more scope of elongated growth & sustainable growth in prop values- followed by Per.
• Our long term future is 'selling services to asian middle class- education & tourism key'
• Absolutely no expectation of IR rising until after 2024

 

fantastic summary thanks for this, i agree with all points

media is dumb, never listen to them!

 

thankyou sir

 

You referring to this or something else?

 

Thats really good to hear from someone like Bill Evans, I put a lot more faith in him than sensationalist media commentators.

 

No - Rick Deverell from Macquarie and Bill Evans from Westpac do the monthly presentations if you are a Macquarie or Westpac private client - lasts for approx an hour and tons of graphs/ data presented. I like Bill Evans' presentations more as he has been the chief economist for 30 years, brings a lot more data, covers global geo-economic issues including China and he also assists virtually every gov agency around policies. Additionally westpac has a lot of credit card data which they dice and slice and use it to point to trends across every facet of the economy. This was done this afternoon.

 

Eventually it may happen. Or like japan not in the next 20 years.

Even though we are coming off stalled economies, I doubt that would happen.
As for "unprecedented", ole Bill fails history. But bankers just do, that's why taxpayers have to bail them out every decade or so.

He's been predicting aud in the 80s for years, sure Bill. Pantene ftw!

China has been slowing for 13 years. It's growth was
6.1% 2019
13.64% 2007
12.82% 1982
13.64% 1984
16.05% 1970
15.47% 1964

Unless Australia take up the communist cause and puts Chinese flags on council and school buildings...probably not as much he thinks. And of course "significant" is relative.

Those 2 states are 55% of the economy and population, and they grew last year by 2.48% / 0.95% and 2.71% / 1.49%.
They are the diesel engine that keeps on pushing not the weakest link.

Define "spectacular?Does that mean 2 wks? 2 mths? 5 yrs?

Well that might actually be "unprecedented".

Been hearing that for decades, and yet decades later neither have yet come anywhere close to Syd or Melb.

He's been saying this for years too, and yet mining is the hero.
Around 60% of exports to China is just Iron Ore. And Covid has killed tourism fo a long time.
Australia's major goods exports to Asia

Plenty time to fix rates, unless he knows Westpac will soon start squeezing it's customers regardless of reserve rates.

 

Hi mate, I suspect you are the next one in line to takeover Bill's role!

Couple of comments and lets keep perspective around things - China's growth rate is mentioned around its recovery post covid and not in relation to how much it grew each year over the past 50 years. What happened pre covid is history.

Weakest links around NSW and VIC was based on a combination of population growth, retail, consumer spending and state economies. Can't disagree with the data. I am in mel and vast majority of my portfolio here too and wish it was otherwise but it isn't and I can't fight the data.

Re exports to China, he has always maintained that iron ore and minerals is locked in and no change there, agri inc wine, wool, beef is at moderate risk and at serious risk is our services inc tourism and education. Great progress where we have got new markets but out of our total exports of c$120b to China, $90b is safe and $30b is at risk.

On the AUD vs USD and the basket of currencies, Bill is the only economist/ forecaster in Aus who has got it more right than wrong over the last 2 decades. He has consistently got it right over the past 4 years that I have been tracking his forecasts.

I look forward to your research paper in the near future and would love to update the forumites as soon as you are ready with your presentation.

Thank you

 

I can't ever spin a yarn like him.

The "data" is that Westpac is and has been the worst perfoming bank of the big 4 in the last 5,10,20 and 40 years.
If he was right westpac would be bigger than Apple.
Instead it's the assinine of the pack.

He said the audusd was headed for the 80s about 4 yrs ago.
Do he trade it? Did you? How did you go at 51c?

 

Would love for you to qualify that statement - just pulled up data from 1998 onwards across all 4 and the share price history doesn't support your statement at all - will do a new post in the morning - but would love your input in the meantime.

If you could support that statement for 5, 10 ,20 and 40 years of it being the worst performing bank out of the big 4, I would be grateful.

 

The percentage rate may be declining, but in absolute terms 8% GDP growth in 2021 and 6% in 2022 for an economy the size of China will still be massively beneficial for Australia.


Source: China’s Growth Set to Drive World Economy in Post-Pandemic Years

 

Well ok, here was my presentation.

And a few days later the market topped at 7197. Not perfect but pretty close.
Probly closer than any rambling from ole Bill ever did that's for sure.

And on the 3rd March when the SP200 was trading at around 6300 I called a buy at 4600.

Did Bill Evans ever in his 30yrs make a call like that or better?
I'd very keen to see it and give my compliments.

 

Hey mate, you now can compare my Apr 21 presentation to the "expert" Bill Evans. Who still is regarded and quoted as an expert and employed by Westpac as an expert.

He's a cluless hack that should be packing shelves at Coles, and yet his position of expert or economist IMO is borderline on a scam.

 

Money talks ******** walks.

 

Agreed PB! You were on the money..

My fav is this one though - where he went overboard highlighting this...

• "Absolutely no expectation of IR rising until after 2024"

yeah - right..

 

Well he does get paid lots of money

Haha thanks.
I learnt by following people like him and even believeing them in the 80s & 90's.

btw in 2019 he forecasted 5-10% property decline and rate cuts.
The AFR even had an article claiming "30 yrs of getting it right".

 

wow he sure got his forecasts wrong... 30 yrs of getting it right is a bit of a laugh - usually whatever Bill calls I'd do the opposite!

 

"Expert's" predictions... makes me laugh.