the troubadour

Not quite. Although poor government policy certainly contributed by allowing banks to fully take advantage ....


USA housing crash was brought about by a few things but how about kicking off with the lack of regulation of mortgage brokers who made bad loans? Or hedge funds that used too much leverage .


Recognition of early credibility problems and that government would have to buy bad loans should have been foreseen.


Now do you spot a lot of difference in the Australian context, with one example being, with Westpack, admitting to having about half of loans on interest only?

GarryP

The US housing crash was caused by poor regulation of bankers and other finance types. Not only did they sell mortgages they knew could never be repaid for the commission, the treated them as financial assets to be bought and sold, and particularly bet on - with no understanding of the underlying realities. They trusted that the government would let them get away with it and bail them out.

And that's what happened - none of the fraudsters went to jail.

Stuck in Auckland

They just moved to Australia?

Beoz

You tell me how its nothing to do with government policy the go on to tell me how it is. You are amazing.

Beoz

In other words, the US government.

denzil73

In a way it was better that the people COULD walk away as it was the banks that had caused the problem so they should be penalised and not the people. Unfortunately the banks managed to wiggle out of taking the blame for what they caused.

Bankers and greedy bastards need to be held accountable for their scheming instead of being protected by our corrupt politicians.

the troubadour

Only in as much as protecting and encouraging banks with low interest rates and guarantees (too big to fail indeed)which enabled fiancé/real estate industry to continue their game for so long.


Government should have regulated banks long ago.... a lot of damage has now been done. The Lib's are not the ones to do the job.

the troubadour

No banksters. Reason why we are in the state we are. Just how much has changed? Banksters running riot with government backing, now biting the hand that fed them. A despicable lot to be sure.

the troubadour

Article appearing inside West Australian yesterday claiming 'WA Economy Has Turned Corner', not front page mind you, nor page two or three. But page 12. Not the first time such a heading has been used over the past few years. Suggests of course not to be taken too seriously, especially with sentences like "we're starting to see more self sustaining investment growth in WA. I would suggest starting to and actually proclaiming the corner has been turned are very different kettle's of fish. Meanwhile house prices experienced a further reduction last quarter surveyed.

DC10

The UK over the past 10 years is a case study in how to manage over-indebtedness and economic decline without a shock: hold interest rates and wage growth just below inflation for a decade and voila, most people are 10-20% poorer before they've even really noticed

Stuck in Auckland

most nz and australian homes are built for 50 years. so 10 years we should have 20% drop.

bcworld

Because the land they're built on isn't the valuable bit!?

Stuck in Auckland

Just refering to build cost element.

Beoz

Keeps the many employed (in Australia's case most) if the turn around is quick.

the troubadour

Hardly explains why other countries outside of perhaps NZ, can build houses that are more lasting and not either poorly built macmansions or garden sheds though......and at a highly inflated cost.......