More egg for the faces of Australia’s captured regulators today with the Bank of International Settlements (BIS) – the central banker’s central bank – confirming that clear and structured macroprudential tightening is a bit of a Bobby Dazzler:
Previous studies have shown that limits on loan-to-value (LTV) and debt-to-income (DTI) ratios can stabilise the housing market, and that tightening these limits tends to be more effective than loosening them. This paper examines whether the relative effectiveness of tightening vs. loosening macroprudential measures depends on where in the housing cycle they are implemented. I find that tightening measures have greater effects when credit is expanding quickly and when house prices are high relative to income. Loosening measures seem to have smaller effects than tightening, but the difference is negligible in downturns. Loosening being found to have small effects is consistent with where it occurs in the cycle.
Well blow me down with a feather! Works especially well when “when house prices are high relative to income.”
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
AFR “RBA sounds alarm on property speculators”.
About time!
Mind you, having helped build the pyre and tip copious amounts of diesel onto the construction, calling “Fire!!” and looking for ‘who done it’ is a bit hypocritical…..
Diesel does not burn. Substitute with Avgas and you have your accelerant.
Janet
We used diesel! It doesn’t combust like petrol ( I don’t know about Avgas! but I have seen petrol used on things like “Ridiculousness” when the children have it on), and when you’re burning a 20ft high pile of old shelter-belt, you need a controlled burn, not an explosion.
Having said that, maybe the RBA has used Avgas….in which case….stand back…..
Optimus
Diesel does not burn.
Correct that’s why they do not use it in internal combustion engines and only use it for making lollipops and ice creams.
Sack Stevens and Ellis and Lowe. They have had their turn. They have had 10yrs. They were warned repeatedly. They recklessly and deliberately cut without protection. This giant speculative mal-investment bubble is their legacy.
Sack them. Move on.
Timday
+1
DavidMEMBER
…and the people at APRA and the FIRB. Treasury could do with a clean out also.
“Financial system inquiry chairman David Murray said self-managed super funds should be prevented from borrowing to buy property because leverage in the super system will make the whole financial system less stable. ”
“The NSW Liberal Party has risked reigniting leadership tensions within the federal party by using Malcolm Turnbull in a last-minute push to shore up votes in marginal seats.
Fairfax Media has learned that voters in the state electorates of Coogee and Blue Mountains received recorded telephone messages – known as a “robocall” – from Mr Turnbull on Tuesday night.”
Wing Nut
Reckon the Libs are sceptical of the Newspoll bounce. Best keep Abbott away and if you do need to roll him out, gag him!
“Australia’s central bank said easy monetary policy globally is spurring demand for the nation’s office buildings, even as vacancies climb and rents fall, raising risks of a future price slump.
“Prices have continued to rise at a national level, driven in particular by investors’ search for yield in the global environment of low interest rates and ample liquidity, with the lower Australian dollar also likely to be adding some impetus to foreign demand,” the central bank said Wednesday in Sydney. The risk of a large repricing and associated market dislocation in the commercial property sector has increased.”
Wing Nut
The regulators have passed being captured to now being totally paralised with fear.
what amazes me is most of these idiots have been doing this line of work for 20 plus yrs, yet their main concern now is just looking after their own job.
I would love to know what these guys tell mates at bbq’s as it’s highly likley the reverse of what what they state publically.
It’s such a fk disaster how the public service are no longer independant thinkers, like back 30 yrs ago.
ceteris paribus
Calling regulators “captured” is speculation until there is evidence of such capture.
C.M.BurnsMEMBER
Calling them regulators is speculation until there is evidence of regulation.
ceteris paribus
I am ready to hear who is leaning upon whom, when, how and with what leverage. And I am talking about “leaning”, not “lobbying”.
AFR “RBA sounds alarm on property speculators”.
About time!
Mind you, having helped build the pyre and tip copious amounts of diesel onto the construction, calling “Fire!!” and looking for ‘who done it’ is a bit hypocritical…..
“Property market risks rising: RBA”
http://www.businessspectator.com.au/news/2015/3/25/reserve-bank-australia/property-market-risks-rising-rba
Show and tell
Thanks RBA scum
Diesel does not burn. Substitute with Avgas and you have your accelerant.
We used diesel! It doesn’t combust like petrol ( I don’t know about Avgas! but I have seen petrol used on things like “Ridiculousness” when the children have it on), and when you’re burning a 20ft high pile of old shelter-belt, you need a controlled burn, not an explosion.
Having said that, maybe the RBA has used Avgas….in which case….stand back…..
Diesel does not burn.
Correct that’s why they do not use it in internal combustion engines and only use it for making lollipops and ice creams.
https://www.youtube.com/watch?v=msCsKrrvEuU
Sack Stevens and Ellis and Lowe. They have had their turn. They have had 10yrs. They were warned repeatedly. They recklessly and deliberately cut without protection. This giant speculative mal-investment bubble is their legacy.
Sack them. Move on.
+1
…and the people at APRA and the FIRB. Treasury could do with a clean out also.
http://www.watoday.com.au/business/banking-and-finance/dont-let-selfmanaged-super-funds-borrow-to-buy-houses-david-murray-20150325-1m70j1.html
“Financial system inquiry chairman David Murray said self-managed super funds should be prevented from borrowing to buy property because leverage in the super system will make the whole financial system less stable. ”
Good advice.
Whos listening ?
http://www.watoday.com.au/federal-politics/political-news/liberals-snub-tony-abbott-by-wheeling-out-malcolm-turnbull-for-assault-on-marginal-state-seats-20150325-1m72a5.html
“The NSW Liberal Party has risked reigniting leadership tensions within the federal party by using Malcolm Turnbull in a last-minute push to shore up votes in marginal seats.
Fairfax Media has learned that voters in the state electorates of Coogee and Blue Mountains received recorded telephone messages – known as a “robocall” – from Mr Turnbull on Tuesday night.”
Reckon the Libs are sceptical of the Newspoll bounce. Best keep Abbott away and if you do need to roll him out, gag him!
http://www.watoday.com.au/business/property/rba-warns-of-potential-commercial-property-slump-20150325-1m75yb.html
“Australia’s central bank said easy monetary policy globally is spurring demand for the nation’s office buildings, even as vacancies climb and rents fall, raising risks of a future price slump.
“Prices have continued to rise at a national level, driven in particular by investors’ search for yield in the global environment of low interest rates and ample liquidity, with the lower Australian dollar also likely to be adding some impetus to foreign demand,” the central bank said Wednesday in Sydney. The risk of a large repricing and associated market dislocation in the commercial property sector has increased.”
The regulators have passed being captured to now being totally paralised with fear.
Thats it WN.
Excrementally apprehensive
what amazes me is most of these idiots have been doing this line of work for 20 plus yrs, yet their main concern now is just looking after their own job.
I would love to know what these guys tell mates at bbq’s as it’s highly likley the reverse of what what they state publically.
It’s such a fk disaster how the public service are no longer independant thinkers, like back 30 yrs ago.
Calling regulators “captured” is speculation until there is evidence of such capture.
Calling them regulators is speculation until there is evidence of regulation.
I am ready to hear who is leaning upon whom, when, how and with what leverage. And I am talking about “leaning”, not “lobbying”.
Otherwise, it’s a dry argument.