Via the excellent Damien Boey at Credit Suisse:
Duration of the credit crunch
Yesterday, we published an article explaining why we think that credit tightening will be deeper for longer (attached). Our argument is as follows:
1. 1Q APRA data and credit spreads point to a 10-20% drop in loan approvals in the next few months. But we think that weakness in credit creation is very quickly being priced in.