Glen Stevens sees something most don't?

Funny, I just read that same article and saw it as Glen trying to talk down even more leverage and staving off the housing bubble. He's commented on how good our asset quality is and debt servicability. But he warns that shocks can be unforseen and too much household leverage at a time of rising unemployment and economic recession is a bad combination.

Basically he says: We've got it good now so don't go overboard and drive prices up too far from here as who knows what might happen to us in a decades time.

Cheers,
Michael
 
I think many of the threads on here foresee these problems and more. the video that plays on the first link is interesting and pretty much sums it up... if china travles well then happy days, if it doesn't we are stuffed - and which way the cookie crumbles is pretty hard to predict from here. If a global bank can't form a view then how the heck can I?
 
MichaelW said:
don't go overboard and drive prices up too far from here as who knows what might happen to us in a decades time.
Click to expand...

That Stevens addresses Joe Public this way, indicates he believes the banks are incapable of foreseeing future risk as well as he, and are likely to keep miscalculating future risk by lending freely to marginal borrowers......

But oh....that's right, the banks pass all the risk to the mortgage insurer, and the borrower when borrower agrees to give the bank their house upon default.

Hmmmm....no wonder Stevens sees the bulk of the responsibility on the borrower....and addresses them rather than asking the banks to tighten lending standards.

Maybe it has taken rating agency Fitch's strongly worded warning about the UK's fiscal condition to realize how perilous risk to global credit flows are. I seriously wonder how in touch Stevens is. His team missed GFC totally.
 
he is freaking out, he knows that credit expansion peaked and we are entering in a dark room where he has not much power. He try to comunicate something but he doesn't want to effect sentiment.
Pretty much the message is: things will get hard from now on, but don't worried that everything is under my control :eek:
 
When the US and UK were cutting rates just before the GFC hit, the RBA were raising them. Then they cut the rate quickly. It's possible they've got it wrong again.

reserve-interest-rates.ashx


graphs are good :D
 
I think they got it wrong early on they keep them to low during the start of the global boom (2002) and were playing catch up in the end, I think the RBA have been doing a good job ever since the GFC and there comments recently warning people not to leverage up has renewed my confidence in them going forward.
 
Stevens knows one thing, rates wont stay as they are, but he doesn't yet know which way they'll have to go over the next year.

If he has to bring rates down then Joe Blow will over burden himself, if he puts them up Joe may have already over burdened himself. Either way the answer is the same, Joe has to lower his debt burden.

Joe is in a far different position to business/mining/agriculture in Australia which is generally when RBA governors feel they need to address Joe directly, so it seems.
 
avenger said:
When the US and UK were cutting rates just before the GFC hit, the RBA were raising them. Then they cut the rate quickly. It's possible they've got it wrong again.
Click to expand...

i've been saying this all along.

too much, too quick.

they're probably using the extra cash generated to pay all the overseas officials bribes for the "recommended" polymer money changes.
 
not necessarily - RESPECT has slashed economic growth and inflation to manageable levels. we can now have low interest rates and an economy that isn't on the rampage. it's a hell of a bet to lay down tho....these guys have a pair that's for sure
 
Ausprop said:
not necessarily - RESPECT has slashed economic growth and inflation to manageable levels. we can now have low interest rates and an economy that isn't on the rampage. it's a hell of a bet to lay down tho....these guys have a pair that's for sure
Click to expand...

well inflation in their lying terms is over the 3% they like

so lower rates to save your property *** and kill the country .. sorry i don't think more bailing out will be in favour next time

when you see numbers here times them by 15 then you get the = to the usa..

well in the handouts i did not get or want .we gave $900 to almost everyone
go find the total cost of that then times it by 15 ..

comes to over 600 billion dollars if our population the same as the usa
now look at the fhb grants compared to the usa we could get 3 times the amount they could .

see a pattern forming i can give you many more examples ..

we cant afford it and stuff the people that cant live on a budget .. i owe nothing pay alot of tax and they want more to pay you people that cant live in a budget ..

then i cant short sell a bank but what i own they can naked short .. geeees louise ya think thats a fair market
 
RESPECT will lower demand and hence inflation - it's the equivalent of a cold shower for the economy.it's a win win (at the expense of national reputation and general fairness but stuff that when the good times are rolling who cares?)

lower inflation
higher tax receipts
lower IRs - keep property pries stable and the electorate happy


Honestly - I dont know if the govt of the day are geniuses or fools that strike it lucky
 
Ausprop said:
RESPECT will lower demand and hence inflation - it's the equivalent of a cold shower for the economy.it's a win win (at the expense of national reputation and general fairness but stuff that when the good times are rolling who cares?)

lower inflation
higher tax receipts
lower IRs - keep property pries stable and the electorate happy


Honestly - I dont know if the govt of the day are geniuses or fools that strike it lucky
Click to expand...

please tell me where the higher tax going to come from ?

when our gdp is becoming more dependent on gov handouts and spending .

so the motorist smoker drinker will wear it again
 
RESPECT! that's the whole point of it.... higher taxes, less pressure onthe economy. and the real kicker...who is paying? mostly greedy foreigners!
 
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