The first page of the housing time bomb recipe reads.
- Unrestrained credit growth
- Central Bank denial
- Government incentives
- Government intervention.
- False promises; containing 1 parts population, 1 part underlying demand and 1 part undersupply.
Allow unrestrained credit to outgrow income by a factor of 6 adding government incentives and central bank denial as required. After 8 years of mixing wait for mixture to fall slightly, then desperately add government intervention and a heaped tablespoon of false promises. The mixture should rise quickly then fall at a similar rate, when this occurs it is time to prepare the fuse.
We seem to have lost the page that describes how to make the fuse, but thats ok, because we found some ingredients today that we think will do.
As we talked about in early October the banking Admirals are getting restless about their profit margins. Today we note that once again the CBA boss has left no doubt about his intentions; indebted be damned.
Commonwealth Bank chief executive Ralph Norris says the rising cost of funding will push up interest rates independent of changes to the central bank’s cash rate.
“There is no doubt when we look at the current cost of funding that rates are going to increase,” Mr Norris told media following a business lunch in Sydney on Thursday.
We can only guess he accidentally read one of his own stress test reports and believed it.
INDIAN student enrolments at Australian universities are set to plunge by at least 80 per cent in the 2011 academic year, a leading academic says.
Melbourne University vice-chancellor Glyn Davis warns that higher education across the country, including Victoria where it is the state’s biggest export earner, is taking a massive hit after reports of attacks against students from the sub-continent.
“According to our best sources … the fall in applications from India into Australian tertiary education … are predicting at around 80 per cent, some institutions are reporting up to 90,” Professor Davis told reporters in Melbourne
Mix in a good dose of falling demand from first home buyers and investors and it looks like we might just be there. What is that ticking noise??
Disclaimer: The content on this blog is the opinion of the author only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense, to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The author has no position in any company or advertiser reference unless explicitly specified. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult someone who claims to have a qualification before making any investment decisions.