re: housing to crash again..longhair
you say "Now everyone has a house but no one can pay for it. Everyone has the latest Daewoo and Toyota but can't pay for it either. So the Japanese offer cheap finance to our banks who on lend it to our car buyers at a slight mark up. Remember for the past few years interest rates in Japan were below 1 per cent. Yes minus 1%. So when the NAb offers you car finance at 10% it is not cheap. Not even relatively cheap. The money returns to Japan anyway and thats expensive economically."
Sorry Longhair, but you appear to not have a clue on this point. What have interest rate of zero got to do with an Aussie bank lending you money- you can't buy a house or a car with JPY (Japanese Yen). This is where the financial markets come into play with a thing called a CCIRS (cross currency interest rate swap). Essentially, NAB will borrow JPY, and swap the JPY funds back into AUD - effectively they on-lend the JPY and borrow AUD. End result is they will probably end up with AUD a few bp under the local cost of funds. If it was as simple (and cheap) as you suggest then a borrower would apply straight to a Japanese bank.
