Great story indeed, but it is stale I argue. Jobs growth has slumped. Economic growth in real terms has declined. Lowering interest rates or keeping them low is like drinking water, lots of it to keep your belly protruding and make it look like you've eaten well.
Unless of course you believe Saul Eslake and his Howardesque rhetoric that jobs growth can be measured by the number of job advertisements in the week end newspapers of each major capital cities.
Add to that, the clown pair insist that government intervention in the economy, the housing sector, where they channel valuable resources to provide the first home owners grant to prop up home buyers who get into debt (increasing bank and other financial sector company assets), then overgear and have little or no equity and resort to more borrowing as economic growth.
If you look at a sector by sector analysis of the economy including the banking and non banking financial sector, you'll find that the ANZ, Westpac, NAB and the Commonwealth Banks have the potential to go back to single digit share prices if the government alters its policy to a more realistic one in terms of credit, subsidising and liquidity.
AN economists or accountant's evaluation of the banks assets if done by accepted existing standards carry a caveat on their profitability warning of the weakness in their assets.
Think. For a country wih a population of just under 20 million and nearly 0 population growth, the demand for housing is distorted. Why then is it so? There are nearly 1 million 'Illegals' in the country who form an active part of the overall black economy and contribute towards the greater economy.
The vast majority of these are from Britain and China. It is no credit to the system that many of these are gainfully employed and have access to liberal credit even though they are illegal.
Credit fraud is an industry. It thrives because government has decided for the sake of political expediency to let it pass in support of the outcomes which suits its terms in office well.
