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#241 | |||||
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Kids have to jump from job to job, chasing pay increase after pay increase until they might one day be able to afford a horse. Then they get the "old folks" criticising them for their lack of loyalty towards a business that's willing to take a chance on them. Sounds like they can't win, hey? Quote:
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#242 | ||
FF.Com.Au Hardcore
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#243 | ||
FF.Com.Au Hardcore
Join Date: Feb 2005
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Its always better to slowly let the air out of a balloon than to pop it. It wouldn't matter that houses were dirt cheap, no one would be able to get a deposit together.
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#244 | |||
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![]() I still can't grasp the concept of wanting constant growth. How would that benefit anyone other than the investor? How about a a constant growth in car prices, equal to the ratio of housing There is nothing in the world that constantly grows until the end of time, without eventually exploding/shrinking/whatever. Things can't just keep on growing. |
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#245 | ||
FF.Com.Au Hardcore
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#246 | ||
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I don't know anything about entropy but google says it's the second law of thermodynamics. Apparently the first law is that energy cannot be created or destroyed.
That aside, my google-foo isn't showing me anything about "entropy" constantly growing but I'm hesitant to take your word for it as it seems like you're not entirely sure either. ;) |
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#247 | ||
FF.Com.Au Hardcore
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#248 | ||
WT GT
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#249 | |||
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There are theories about what might happen. One is called the big crunch where it suggests that once the universe reaches the extent to which it can expand, that it will then start to contract back into a singularity before exploding again into a new universe. Another theory is called the big rip where it keeps expanding and eventually rips apart as if overstretched. Another is called the big freeze where the universe just keeps expanding forever but eventually runs out of all resources. Stars run out of fuel and stop shining, turn into blackholes, and there's no fuel for anything to work anymore. The temperature cools beyond the point where life is sustainable and we all freeze to death. My favourite is the big crunch though it's considered unlikely but is still a theory. They're all theories because noone knows, but all of them end with a situation where we're all ****ed so it seems even the universe can't go on growing forever and still be ok. https://en.wikipedia.org/wiki/Future...nding_universe Last edited by leesa; 27-08-2017 at 09:20 AM. |
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#250 | ||
Moderator
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Location: Melbourne
Posts: 7,940
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In my opinion the best advice I would give young people today who are struggling to buy their first home, and have say saved a deposit of $50K or more....
Hold off for a few years, rent instead or live with parents etc, and instead take your deposit and invest in crypto currencies like Bitcoin or Dash. In a few years, there is a very good chance you will have enough money to cash in to buy a home with a much smaller mortgage or even be totally mortgage free! I purchased a small quantity of Dash 12 months ago at US$11.72 per Dash and today 12 months later each Dash is worth US$387. As another example...One Bitcoin Was $US$477 a year ago...Today it is worth US$4,372 !! Some industry experts say Bitcoin will be worth $15,000 in 2 years. Like land.... There are only so many Bitcoins... It's a finite supply. Its like digital gold! If I had put US$50K in Dash .... That would be worth US$1,651,023 today .... Enough to buy a nice home in any major city in Australia. ![]() Whether you believe crypto currencies are a fad, a scam or will crash and burn in the future.... One thing is fact.... They are rising in value at a greater rate than Australian house prices currently, and look like continuing for at least the next few years. Last edited by GO FURTHER; 27-08-2017 at 02:07 PM. |
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#251 | ||
FF.Com.Au Hardcore
Join Date: Jul 2009
Location: melbourne
Posts: 4,649
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The Reserve Bank of Australia has all but conceded that Australia is trapped in a debt and asset price bubble which it can’t get out of without significant pain.
Last month, the RBA, through its July board meeting minutes, introduced into the economic lexicon the concept of ‘neutral real interest rates’ which it defines as the nominal cash rate (set by the RBA board) minus inflation that facilitates economic growth at its potential while simultaneously achieving stable inflation. Despite being unobservable and subject to estimation uncertainty, the central bank has estimated that the neutral real interest rate for Australia is currently equivalent to a nominal cash rate of 3.5%. In layman’s terms, the RBA is saying that it is unable to raise its overnight cash rate above 3.5% or the economy will grow below potential gross domestic product (GDP) which the 2017 Federal Budget stated would be 2.75% per annum over the medium term. Given recent Australian economic history, this is a stunning statement. It was only in 2009 in the aftermath of the GFC that the then RBA Governor Glenn Stevens told Australians that the RBA board’s decision to cut the cash rate to 3% was an ‘emergency setting’. Eight years later, a cash rate of just 50 basis points higher than this emergency setting is now alleged to be the maximum of what the Australian economy can take before placing significant downward pressure on GDP growth. The RBA argues that lower potential GDP growth and greater risk aversion have played a role in reducing the neutral real interest rate by 150 basis points since 2007, which in part explains their 3.5% estimation. However, consider that from April 1990 to September 2008, the average RBA cash rate was 6.29% and even if the post-GFC period is considered with its very low rates of interest, the long-term cash rate average since the last recession is 5.24%. What this means is that the RBA is unable to normalise monetary policy back to its long-term average without some form of economic disruption given record economy-wide debt, particularly household debt, and record asset prices such as in housing. The rate of interest which would cause disruption to economic growth remains a point of debate among some economists, especially the potential scale of that disruption resulting from adjustments to asset valuations, household consumption, debt servicing obligations and delinquencies. Chief Economist Dr Shane Oliver from AMP Capital, for example, recently stated that the economy is likely to be able to only handle a cash rate of 2.75%. The inability and the justification of why the RBA is not able to normalise its overnight cash rate to its long-term average is significant and requires closer scrutiny. With respect to the RBA’s claims regarding potential GDP, consider that from 1983 to 2011, the Australian economy experienced lower average real GDP growth across four subsequent periods when unemployment was falling. For example, average GDP growth across October 1983 – December 1989, September 1993 – July 2000, October 2001 – August 2008 and July 2009 – June 2011 when unemployment fell was 4.6%, 4.2%, 3.5% and 2.2% respectively. While factors such as ageing demographics, increasing taxation and regulatory costs and sluggish multifactor productivity growth may in-part explain this phenomenon, Australia’s record and growing debt, particularly in the non-government sector, is likely to be a much more significant factor in explaining declining average GDP growth and therefore potential GDP growth than what mainstream economists and policy makers currently give credit to. In an economy whose growth has been significantly fuelled by growing consumption and debt, it makes intuitive sense that there are natural mathematical limits to how much debt individuals and corporations can assume and service relative to their income. In Australia’s case, those natural limits have been expanded since the GFC through record low interest rates and the take-up of innovative financial products such as interest-only loans. Importantly, the inability to normalise the overnight cash rate poses additional risks. To date as judged by their current policy settings and official statements, the RBA has assessed the current level of systemic risk to the financial sector and to the broader macroeconomy to be manageable, especially as new aggressive macroprudential controls have been introduced by the Australia Prudential Regulation Authority. However, despite these new controls, Australia’s macroeconomic structural imbalances continue to worsen as measured by household debt relative to disposable income, a point which the RBA board conceded in its August 2017 board meeting minutes. Lending for housing continues to grow faster than the growth in household incomes and has now reached in excess of $AUD 1.69 trillion, larger than Australia’s current GDP. Central bank officials should heed the words of former Governor Stevens who warned in 2012 that interest rates which are left too low for too long are likely to render macroprudential controls ineffective in stemming systemic financial risk. It remains to be seen whether the RBA has a full comprehension of the systemic risk profile facing the Australian economy. Absent from its official statements and speeches by senior officials is any serious discussion or assessment regarding the robustness of foreign economic institutions, the quality of their regulatory frameworks and administrative oversight or the behaviour of significant market participants. Given the high degree of interconnectedness among the world’s largest financial institutions as reported by the International Monetary Fund in 2016, monetary and financial policy deliberations by the RBA must encompass not only considerations of domestic institutional and regulatory settings, but the settings of other major economies, especially that of the United States and China. The previous performance of the RBA has not been particularly strong in this regard as they were effectively blindsided in the lead-up to the GFC to the failures of American institutional and regulatory frameworks that contributed to the sub-prime mortgage crisis and the subsequent collapse of Bear Sterns and Lehman Brothers. Alarmingly, many deficiencies in the American system responsible for the GFC were never addressed by the Obama administration or the US Congress and are not core tenets of the Trump agenda. Moreover, the quality of institutional, regulatory frameworks and administrative enforcement by the Chinese Government remain immature and highly questionable given the geopolitical priorities of its ruling communist party. The RBA is trapped, yet economic history tells us that the current cycle of record debt, record asset prices and ultra low interest rates cannot go on forever. The longer the RBA waits to normalise interest rates, the more that macroeconomic structural imbalances and systemic risk will continue to grow. This means that it will only take a relatively smaller increase in interest rates, emanating either domestically or internationally, to deflate Australia’s largest ever debt bubble most likely in a catastrophic manner. From the Spectator |
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#252 | |||
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"propped up" the australian economy indeed. You (sarcastically) say that mum and dad investors are rotten people trying to get ahead in life but that's exactly what they are. What a lazy way to try and get ahead in life. Creating an epidemic where people come and snap up all the houses which then makes them more expensive and it's a vicious cycle where they keep getting so much more expensive until people either can't afford their mortgage anymore or can't afford to buy a house at all. Buy a few and then sit back for a few years while the market continues to inflate as people thrash like piranhas in a feeding frenzy to grab hold of whatever is left. No different from those assholes who take more than they need from the grocery store shelf when there's bad weather on the way. No care or consideration for what they're denying from others as long as they have more than they need. It's a perfect example of the average lazy aussie - wanting to get ahead without doing a damn thing, just climbing up off the backs of others. Ironically..... there's another thread here called "Australia - No Infrastructure" about how Australia doesn't have the ability to create awesome things. It's because we're lazy assholes who want maximum profit with no effort, and at any cost... even if it means stiffing every generation who is born after yours. Now it sounds like the economy is ****ed and the banks can't move left or right without the whole bloody country falling down. Great job! Looks like the propping up worked a treat! |
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#253 | ||
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And like that wasn't bad enough then came the national effort to keep wages low so that they didn't also increase in proportion to the houses, just to scrape even more money out of people.
We introduced visas so that companies could claim they couldn't find suitably-qualified aussies to hire and instead bring someone over on dirt cheap wages. How many people lost their jobs? Couldn't find qualified people, my ***. More like 'couldn't find qualified people at the ridiculously low price that I want to pay'. And whats-his-face introduced Work Choices which really sunk the boot in. Anyway, my point is that there has been a concerted effort to block wage growth in this country. Now we're in this predicament for no other reason than the sheer greed of your average australian. |
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#254 | ||
Regular Member
Join Date: May 2007
Location: Sydney
Posts: 439
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I know in my younger years that the pension and super can't help you retire and get the lifestyle that I want,
that's why i start investing in properties in Sydney, Mel and Brissy. The rental is good and i have never ever look back now, my life is still the same nothing have change. Never ever trust what you read and the housing will never ever bubble if you were to buy or invest in property for the long term as every 7 to 10 years property prices double or come close to double and this have been a fact. |
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#255 | |||
FF.Com.Au Hardcore
Join Date: Nov 2011
Posts: 1,547
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I own one house - the one I live in (well, me and the bank own it)...but I don't begrudge average Aussie's putting their nuts on the line to secure a better future for themselves and their families. They don't make the rules, they just play by them...bit rough putting it all on them. And yes, they do take a risk...investing in property is not a guarantee of success - it can and has gone wrong for many in the past, and will go wrong for some in the future. Do agree there are issues, always has been...different issues for different reasons to different degrees...but putting the blame on the average Aussie is missing the mark. Several governments from both sides of politics have got us here. |
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#256 | ||
FF.Com.Au Hardcore
Join Date: Jun 2017
Posts: 1,341
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Greed and aggression. Two of mans worst traits and everything that is wrong in the world.
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#257 | ||
T3/Sprint8
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Location: Australia
Posts: 16,363
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Its a vicious circle And isn't it life.
No matter the decade era it is what it is. How would could it get any better fellas/gals seriously ? Think about it - todays Govs can't change the course as once it could, once upon a time we were isolated so to speak, back in the day is was simpler, we were dying to be part of the rest of the world, now part of the world is/has come and with that life is changing drastically. That wonderful saying - be careful what you wish for, it sure did arrive. Now people biatch,complain and to be honest what can you do about it ? people biatched before as well. Well, the Gov ain't gonna change any course because it can't, well unless the global market makes a sudden shift. Reserve Bank imo are scared but to sit as it is for now. So, just get on with it - if there is ever a time to just look after yourself and future this is it. leesa does make a point, us aussies have been greedy and have always looked for the easy buck BUT tell me that isn't done anywhere else in the world ?! so it isn't fair putting blame on ordinary aussies for most are looking after themselves for blame the Govs all we want but who put them there in the first place lol....... Yep Mans worst traits keep taking chunks from us law abiding over taxed citizens. As I said, just get on with it - Mal said Life wasn't meant to be easy haha. Want easy, want less. Makes sense.
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#258 | |||
FF.Com.Au Hardcore
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#259 | ||
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#260 | ||||
WT GT
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#261 | |||
T3/Sprint8
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Location: Australia
Posts: 16,363
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I never said anything of long ago interest rates but that it's never easy but unless your born with a silver spoon. Banging your head just adds more headache no ![]()
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Tickfords T3/TS50 '02 Sprint8 manual Sept 24 '16 Daily Macan GTS "Don't believe everything you read on the internet. Abraham Lincoln" |
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#262 | ||
Banned
Join Date: Mar 2017
Posts: 130
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Rent vs buy will always be debated but history paints a one sided scorecard.
A friend i know about 15 years ago got married and said she would initially rent and then buy. That was 15 years ago and she fell into the rent trap, still rents shifting from place to place depending upon her landlords wishes. I caught up with her a few weeks ago and topic of house prices come up. She was red faced. This topic was like a red flag to a bull as she knows everyone else made their money. She was actually in a position back then to buy a house too but her husband thought he knew better, but the housing market has left them for dead. My advice today was still to get in, you gotta jump in somewhere. otherwise she would just continue to be left even further behind. Fast forward another 15 years, does anyone think a renter will be better off? Last edited by Bayson; 30-08-2017 at 05:27 PM. |
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#263 | |||
WT GT
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I couldn't make any inroad on my mortgage back then, but I could afford to buy a house initially. It's the reverse situation for many now. Just jump in, any way you can. It will hurt like hell but don't still be a victim 20 years from now. |
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#264 | ||
FF.Com.Au Hardcore
Join Date: Feb 2005
Posts: 5,047
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Something few consider. Interest rates may be lower, but the house is far more as a % of income. Trying to get a deposit together is way harder, with prices often rising faster than people can save.
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#265 | |||
FF.Com.Au Hardcore
Join Date: Dec 2012
Location: Adelaide
Posts: 2,252
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Im a firm believer that renting long term is financially beneficial over bying early. as long as you don't want to decorate, or need the capital improvement, and are disciplined to save the balance between renting and a mortgage. Another plus I've always lived city side or closer. We have renovated our Australian house before putting it up for rent with fully fitted kitchen, solar, air and heat to all living spaces, new flooring, replastered, repainted, skirtings and architraves throughout, repointed, gardens, and insulation, so should also benefit from capital growth if we decide we have to sell to buy here. All of savings accumulated while renting. I don't believe we would be in this position if we had bought at 20 years old. JP |
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#266 | ||||
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When "chasing the easy buck" results in what we have today, I personally think that you have to be almost morally bankrupt to willingly do that to others whether those "others" are perfect strangers, your kids or your kids' kids. I don't think that is done everywhere else in the world. Actually, maybe except for China where they repeatedly chase the easy buck by doing things like selling melamine-tainted baby formula to falsely prop up protein content in lab tests. That one caused deaths of children and the people behind it were executed. The housing industry obviously isn't quite as serious as that but what has happened here has still had quite an effect on the lives of the younger generations and will change the future of our Country. Expensive housing results in people waiting longer to leave home and start renting (if they ever do), it results in people holding off having kids until they're older... which results in increased numbers of abnormalities like downs syndrome which has knock-on effects for the rest of the country in terms of $$ care required for that child's life. As for the government not being able to do anything, they absolutely could have done something the moment they saw it happening. Instead they sat back and marveled at the dollars that it was bringing in and how it made our country seem rich on paper. Look at how many politicians own investment houses. They have been grooming the system because their own bloody snouts are in the trough! Why would they want to change it when they themselves are profiting from it?! The next logical step was for other countries to notice how our housing market was going up and so overseas investors started buying our houses to offshore their money in a more stable market than their own country, the government AGAIN didn't step in. They just gobbled that **** up and let it happen. Why would they want to stop it? That just compounded the problem because those overseas investors weren't actually interested in renting out those houses, they just bought it to park their funds in a more financially-stable country. So the removal of those houses as rentable properties caused even less supply of houses in our country with already such a high demand that we couldn't satisfy. Did the government step in THEN? **** no! Allowing overseas investors to buy - but not rent out - houses had a knock-on effect of driving up the prices of homes even more because the supply kept being reduced. With so many pollies having a vested interest in their own personal property portfolio, why would they get involved and stop it? It's quite the opposite - it made them happy as a pig in mud because it increased the value and equity in their own properties. http://www.abc.net.au/news/2017-04-2...etails/8453782 David Gillespie has EIGHTEEN investment properties. That's eighteen families forced to rent houses at inflated prices. Barry O'sullivan has 33. http://www.abc.net.au/news/2017-04-2...estors/8454978 Quote:
http://www.smh.com.au/federal-politi...20-gvp2g5.html When this article was printed it began with the sentence "When Fairfax Media asked MPs to talk about their investment properties, an email went out telling them not to cooperate". That particular line has since been removed and every copy of the article that I can find has been scrubbed of it. It's now only visible in old copies of google cache. The government won't fix this. They have too much of a vested interest in it themselves. |
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#267 | ||
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#268 | ||||||
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I feel like our government has betrayed us, the average aussie. |
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#269 | ||
Virtuous Bogan (TM)
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Location: TAS
Posts: 27,561
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IMO the gov will protect housing to the death because its the only thing they can rely on to prop the economy. Look how fast they poop their paints when construction slows down.
What should of happened when mining down turned is that the economy should of had a reality check. When times are good fine, prices rise, but what is actually keeping the economy going at the moment? Auto industry is all but gone (follow on from that to come into effect next year), mining has actually picked up not and Govco is splashing out on construction because there is nothing else. If it wasnt sure property prices rising most people would be going backwards, whats scary is that many have used up that equity, so when/if it goes pear shaped its going to hurt. Like I said, I wish we did have a readjustment in the downturn and post GFC. I dont think we are out of the woods yet, Im not sure what is driving the economy at the moment that is actually sustainable. Mind you I dont research it either so I could be way off, but its a general feeling from what I see in the market place.
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#270 | ||
FF.Com.Au Hardcore
Join Date: Nov 2011
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Going to show my ignorance here...if prices crash would that be a good time to upgrade to a better home? I get that a crash would suck for investors, but would it really be bad for owner/occupiers that just want somewhere to live and aren't living it up on equity?
Say I owe $100k on my home that is currently worth $400k, and I want to upgrade to a house currently worth $600k. If I do that upgrade now I end up with a mortgage of $300k. If **** hits the fan and prices drop by 50%, I only get $200k for my current house (instead of $400k) but then I only have to pay $300k for the 'better' house (instead of $600k). So I end up with the better house with a mortgage of $200k instead of $300k. I get I won't have as much equity, but if I am just after somewhere to live and pay down then that doesn't matter. Obviously a crash would hurt those downsizing, but if the crash is pretty much relative/proportional across all segments then it would be a good time to upgrade/upsize, yeah? |
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