anz has topped, page-42

Nortiba

A lot of worthwhile idea in that post. Ive taken a particularly negative view of the EURO crisis (unsolvable) . I expect Italy is to big to save to we have the PIIGS likely decraling default, with even France being downgraded. CDO's lay most of the default losses on the doorsteps of the Americans, with German and French banks suffering massive losses as well. I take Friedmans view that you cant have a monetary union without a fiscal union, so assume an ugly break up of the Euro.

I also assume a collapse in China, this country has proved itself to be the most unstable large nation of the 17th-20 century. Domestic credit and monetary expansion there is at a level that historically precedes a collapse. Rogoff in his analyses of sovereign defaults found no different in risk between domestic and foreign debt. Centrally planned production over capacity has been noted as a core element of instability since Marx.

Japan is facing a demographic and debt abyss.

US is not as bad as the headlines claim but still faces a decade of austerity.

Which brings us back to Australia. Which has massive over exposure to RE debt. Debt to income ratios make us nearly 40% of the top 40 overvalued RE districts in the world. (Demographicia report).

Factually the risked scenarios that ANZ report on do not factor in the collapse we are likely to face. Most of its figured on Neo classic assumptions together with some degree of QE. A close read of various risk statements tell us they dont factor these scenarios as they are deemed unlikely and so serve no commercial purpose (so they are not included)

IMO we face something near the 41B in losses outlined in the worst case scenario outlined here

http://www.businessweek.com/news/2011-07-11/banks-could-lose-a-7-billion-on-homes-deutsche-bank-says.html