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.
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…
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:
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:
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.
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.
I have now posted the PDFs of my June and July reports; hopefully in the next week or so I’ll get a chance to post the text to the blog as well. Apologies again for the slowness here, but conferences and the sudden press coverage on debt worries!
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.
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.
It’s not yet the main topic of debate between Liberal and Labor, but some of the arguments in Debtwatch have at least made their way into Hansard courtesy of a speech by Laurie Ferguson. The full extract from the speech is shown below.
“This makes a mockery of the claim by the Prime Minister that we have never been better off. Whilst the Howard government crows about the success in the economy, which was largely inherited from Labor and fuelled by the raw materials demands of India and China, there is an alternative reality of an out-of-control personal debt spiral. Steve Keen from the University of Western Sydney writes:
