Not so long ago, the MB boys were bringing out bundles of bear-gasms as they predicted a plummet off the mortgage repayment cliff…
Gaily the guys gushed:
The mortgage repayment “cliff”, alongside tightening credit availability, is a clear downside risk for Australia’s property market. Easy credit was behind much of the meteoric rise in Australian property values. Therefore, any contraction of credit and/or forced sales will necessarily weigh on the market.
Of course, this was very misguided, wishful thinking, founded on a complete misunderstanding of the EZFKA.
…naturally, the wishfulness of this thinking was immediately pointed out by someone who does understand the EZFKA, and how the EZFKA ‘takes care of business’:
As usual, all we’ve had to do is sit back and wait a while for the MB blokes to catch up and catch on, and yesterday we finally had our admission of defeat:
yes, yes, they yelped:
Overall, deferred mortgages and forced sales no longer present a systemic threat to the Australian property market or economy.
No, of course they don’t and they never did!
Peachy Post Preview: there is lots of material in the MB back catalogue to write about…maybe some day soon I’ll write about this one… or perhaps we can have a guest post. Maybe Kiwi Hughey could do one?
If DLS was smart he’d get his real estate licence right now. Great time to get into the game and learn the ropes. Not sure he’s cut out for the finance game.
Leith would be good at a bank I reckon. He’s good at making up those graphs in excel I think he could put that on his resume.
Chris maybe journalist for The Guardian or the The Age.
They must wake up every morning praying that markets imploded over night. It’s not a healthy way to live hoping for disaster and scared of the boogie man.
They got too silly, too cute with other peoples money. I think they wanted a book written about them one day like the Big Short.
Calling the pandemic wasn’t enough they wanted to call the end of the financial system.
Remember when they were doing visits around Aust to promote their fund? They were referring to themselves as rock stars! And the amount of nuthugging retards lapping up their BS was astounding …looking at you brenten (u gimp!), arrow, timmeh, bcbitch 😂
Their thesis has always been backstopped by the big “global shock”…now thats appeared in the form of covid how that thesis looking?
nuthugging is a beautiful and intimate thing if done in a stable relationship, so don’t knock it! 😔
It is quite hilarious how when the big global shock – that has been the bogeyman for so long -arrived, it clearly demonstrated how wrong they were. They wouldn’t be told for years…. indeed they still won’t be told, but now it’s quite obvious.
But you do see the bubble bursting at some point yes, and leaving “the biggest possible crater”? That has to be pretty damaging. What do you see as the likely evolution of that, or is it too far down the track to know? Bursting bubbles would normally involve deferred mortgages and/or forced sales.
Ah, Ben, you’ve done the smart thing and read up on Previous Peachy Posts!
(for those who haven’t – https://www.macrobusiness.com.au/2019/02/macro-afternoon-591/#comment-3293718)
To answer your question and clarify the Peachy Proposition: I wouldn’t say that there necessarily needs to be a burst. But, if there is to be a burst, it would only come after the last ounce of vigour and was spent on supporting the status quo. Not because of an overt act to remove support or – god forbid – exert resistance^.
^I can only imagine resistance being exerted if there is some terrible threat that is even scarier to EZFKA residents than the threat of lower house prices. What that threat might be, I don’t know. But it would need to be truly terrible for house prices to be deliberately traded against it.