$50 per share in 2017, page-39

Tcisboss

thats the point it isnt the end of the world, nor is it extreme, Abmrose Evans-Pritchard isnt an extreme guy, if guys like this start ringing the fire alarm (and I have many examples of equally credentialed folk saying similar things I can link ), then if they are saying these things and think they are probably then we are prudent if we prepare for those risks.

Civilizations history its punctuated with such things, these situations are not unusual when looked at in the longer time. In a sense the folks that want to label these events as shrill or overly pessimistic are displaying a reverse form of emotional reaction , which can be kind of labeled hyper optimism, or head in the sand type behavior.

If the economy is tied to the tracks and the train is coming are the deluded ones the folks that turn their head the other way and start singing or the ones that point to the train ?

Its a difficult area because folks dont want to deal with it, they would rather label it emotionally as unlikely because thats the core of their own emotional reaction. its also outside the experience range of most folk, my father father for instance an elderly PHD economist has no problem with it, another friend who fought in New Guinea a the age of 17y and the author of 9 books on economics has no problem with it either , because their experience range includes such events.

For most folks reading this they have no reference emotionally and intellectually, so they initially try to deny the reality, this phase will pass as we move into acceptance and through to taking action.

it will happen at ever level of our society, the cultural assumption was that civilization had passed this phase , that we had vanquished it and so as we realize that this was a poor assumption we will find the skills to deal with it. In some these skills will come easily in others it will be a life long challenge. many lives will be ruined in the process, some folks will rise above it and prosper.

Its this belief that we vanquished these hard times or the depression part of the business cycle that is the actual genesis of the problem, if you study business cycles its the loss of generational memory that causes society to forget these hard lessons and creates the conditions for them to reoccur.

To some extent its this lack of generational memory that caused the bankers at ANZ to take these kinds or risks in the first place. If your read the accounts of the great depression its surreal how so many similar things happened, how folks lost control of their senses and did rash things, these generations leanrt the hard way, we are about to as well.

The bright side of things is we are Australian and we are a long way away from the trouble, however hard it is going to be for us it will be several degrees harder for the rest. from this w e can gain some comfort.

I dont say these things lightly, we can debate all the finer points, eg is housing in a bubble in Australia, is it affordable, will it collapse, how will it collapse, in what segments will it collapse and what order and to the extent that ANZ is transparent we can predict how it will effect their business but to suggest its going to be ok from here isnt acknowledging the train that is heading our way

Its time for all us to lower our risk profile, including ANZ over time this will happen anyway whether they like it or not.