do we just sit and wait for the axe to fall?, page-11

Thorburn, all Australians should be concerned by the exuberance in housing. But too few are (another sign of market complacency reflective of a peak in social mood).

The Australian govt is following the EZ path towards austerity, starting with its first budget next month. At a time of rising unemployment, slowing growth and falling tax revenues - coupled with an increasingly precarious housing bubble - our govt will cut the budget to the bone in its misguided goal of achieving a surplus in the near future. Their actions will only make the looming recession worse.

Record profits from our banks is reflective of the record household debt in Australia. So it's a weakness for the banks - with their mortgage-bloated balance sheets - and represents the greatest threat to Australia's banking stability and economic outlook.