The Silver Donut pumped up the gloom yesterday:
And how about this for an honest clanger:
Chief financial officer Alex Harvey said the company’s base case – with a likelihood of slightly more than 50 per cent – was for a 9 per cent fall in GDP by mid-year sparking an surge in unemployment to 9 per cent and a 15 per cent slide in house prices.
There was slightly less than even chance of a less optimistic scenario – a jobless rate of 11 per cent and a 30 per cent crash in the property market – occurring.
Mr Harvey said the company wasn’t betting on an economic snapback. “I’m not saying it’s zero [per cent chance] – it’s unlikely,” he said. The company said it was “unable to provide meaningful guidance” for its earnings over the coming year.
In short, the Donut sees a 100% chance of a major property price correction, which strikes me as about right.
- Bill Evans: “Substantial falls ahead for house prices” - August 14, 2020
- Andrews is a disaster but Morrison is a catastrophe - August 10, 2020
- US jobs preview - August 7, 2020