50% drops in housing prices are not Armageddon they are the norm around the world.
Its a tool of the rhetoric of debate to label the contrary argument to yourself in extreme terms thereby inferring its irrelevant
It is coincident thats its exactly the same way the ANZ Bank risk managers explain why they do not contemplate such events.
Rather than such emotionally extreme arguments all I suggest is that Australia will experience the same conditions as the other economies have already and what might seem like Armageddon will retrospect seem like an extreme contraction
When you look very specifically at the RBA data about 30% of the population are significantly over indebted, about 46% have no debt whatsoever. When unemployment reaches +10% just above 90% will still have jobs.
We in Australia live in a fools paradise where our rising debt levels have masked our real economic circumstances. what we have claimed as prosperity is simply rising debt, all we have done is enjoy growth now at the expense of future income. Being a commodity economy we also enjoyed the fruits of a global growth in debt expansion.
So no its not the end of the world, at $8 ANZ Bank will be still alive and kicking.:)
ANZ Price at posting:
$18.50 Sentiment: Hold Disclosure: Held
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