Link to extended 7.30 Report Inter­view

Flattr this!

The 7.30 Report is mak­ing good use of the web with its extended inter­view fea­ture. These are the edited high­lights of the major inter­views it does for sto­ries, at best ten per cent of which sees the light of day in the final story.

Here is the link to the extended inter­view with me for their story on preda­tory lend­ing and the Cooks case.

7.30 Report on “Amer­i­can mort­gage shock waves hit Aus­tralia”

Flattr this!

Those of you who missed last night’s 7.30 Report (like myself–I was play­ing ten­nis at the time!) should check the link below:

 Amer­i­can mort­gage shock waves hit Aus­tralia

Apolo­gies again for a tardy update cycle on this blog, but as you can imag­ine, I’m busy as hell right now. When the dust settles–in early October–I hope to bring every­thing up to date.

I will also be releas­ing a mini-book on debt for the Cen­tre for Pol­icy Devel­op­ment on Sep­tem­ber 18th. Venue TBA, but please con­tact the CPD if you’d like to attend. The work­ing title is And Deeper in Debt…

Brief Report on the Home Loan Lend­ing Round­table

Flattr this!

To its credit, the House of Rep­re­sen­ta­tives Stand­ing Com­mit­tee on Eco­nom­ics, Finance and Pub­lic Admin­is­tra­tion decided to hold an “Inquiry into home loan lend­ing prac­tices and processes”, in the form of a one-day round-table dis­cus­sion with inter­ested par­ties.

They invited a diverse group: all the major banks were asked, as well as rep­re­sen­ta­tive of non-bank lenders, mort­gage insur­ers, val­uers, com­mu­nity rep­re­sen­ta­tives, reg­u­la­tors, and yours truly. We were asked to con­sider four top­ics:

  • To what extent have credit stan­dards declined in Aus­tralia in recent years?
  • Have declin­ing credit stan­dards caused an increase in the num­ber of loans in arrears and the num­ber of repos­ses­sions?

Total, total bull­shit”?

Flattr this!

Oh dear. When Nas­sim Khadim from The Age asked me to com­ment yes­terdy on the elec­toral asser­tion being made by the Lib­eral Party–that ris­ing State debt was putting upward pres­sure on inter­est rates–I responded that the asser­tion was:

Total, total bull­shit. It’s like say­ing that some­body dropped a peb­ble into the ocean and that caused a tsunami. And you can quote me on that.”

Well, I expected just to see the “peb­ble and tsunami” anal­ogy turn up in the report. Instead, I saw the first two sen­tences of the above–and learnt the hard way that edi­to­r­ial stan­dards at Australia’s major dailies are no longer as reserved as I took for granted:

Debt­watch No. 10: America’s Ponzi Schemes Unravel

Flattr this!

Named in mock hon­our of America’s great­est swindler, a Ponzi Scheme is a finan­cial ruse that, for a time,  gen­er­ates appar­ently great returns from an invest­ment that in fact pro­duces noth­ing. Ponzi Schemes ini­tially appear to work because the pro­mot­ers pay early entrants seem­ingly fan­tas­tic returns, by the sim­ple expe­di­ent of giv­ing them money deposited by later entrants. So long as the Scheme con­tin­ues to grow, it can appear successful–and indeed indi­vid­u­als who get in and out before the Scheme col­lapses can become fab­u­lously wealthy.

Sub­mis­sions to Par­lia­men­tary Enquiry released

Flattr this!

As you may know, the House of Rep­re­sen­ta­tives Stand­ing Com­mit­tee on Eco­nom­ics, Finance and Pub­lic Admin­is­tra­tion has arranged an Inquiry into home loan lend­ing prac­tices and processes, to which I have been invited. The sub­mis­sions have just been released; click on the link to access them.

My sub­mis­sion is here for speedy ref­er­ence. Apolo­gies to all for the absence of posts recently, but if can be allowed some Aussie ver­nac­u­lar here, I’ve been busier than a blue-arsed fly in recent weeks, and (now you’ll have to allow a very inept mix­ing of metaphors!) won’t get my head above water for some weeks yet.

Post com­ing shortly

Flattr this!

This is basi­cally an apol­ogy for a slow update rate on the blog right now. I have had two con­fer­ence trips sep­a­rated by exam mark­ing and stu­dent super­vi­sion loads; and I’m sit­ting in a con­fer­ence right now. I have two Debt­watch reports to post, updates to do to the Charts page, and plenty of press cov­er­age details to add, plus at least one com­ment to reply to. They will be forth­com­ing I hope by Fri­day.

The BIS Annual Report: From Goldilocks to the Three Bears

Flattr this!

Prior to the NASDAQ crash in early 2000, Amer­i­can com­men­ta­tors were fond of describ­ing their econ­omy as being in a “Goldilocks” phase–with all eco­nomic indi­ca­tors being “just right”.

That phrase dropped out of cir­cu­la­tion after April 2000, but a level of com­pla­cency still ruled when that stock mar­ket crash appeared to have lit­tle impact on the real econ­omy.

Com­pla­cency dra­mat­i­cally left the build­ing today, with the release of the Bank of Inter­na­tional Settlement’s (BIS) 77th Annual Report. The BIS turns the Goldilocks story around, and sees it not from Goldilocks’ per­spec­tive, but from that of the Bears. Just as the Bears’ domes­tic idyll was dis­turbed by Goldilocks the Home Invader, the appar­ently neat global finan­cial sys­tem has been put at risk by out of con­trol spec­u­la­tive lend­ing.