Don't worry it won't "CRASH' suddenly. It will gradually...

Don't worry it won't "CRASH' suddenly. It will gradually dissipate thats how the government will plan it with the banks.

The NAtional, Commonwelath, ANZ and Westpac not to mention Suncorp and others have loan portfolios that will fall like a lead baloon if the factor of interest rates and expected rises of up to 2.5% by end of third quater next year eventuate.

When and not if that occurs assuming that no other major world even forces us to up rates before then, there will be massive unemployment, lay offs, bankruptcies, closures of businesses, insurance companie and banks will face massive write downs which the reserve bank will be forced to underwrite and subsidise to avoid a total meltdown/

This goes back to an issue I have constantly raised during the 'boom' period. What economic Boom?? a one product basket is what we had. Housing and that too heavily subsidised by the Howard government to create the fiction of a boom and economic prosperity.

That 'prosperity' cannot survive much longer because of the taking with the other hand from consumers whose properties have been inextricably tied to consmer loans or 'equity' loans and credit card debt that has fuelled the amazing levels of spending we have witnessed over the past 7 years.

The NAB and ANZ alone will have their assets down by 25% if and when this occurs. The actual credit worthiness of most borrowers has been a non starter for many of them with the new type of lending frenzy.

If this meltdown occurs next year. The Howard government will go out and a populist labour government will come in spending what zero balances we have as a result making a bad situation even worse.

Prepare yourself for it. Insolvency experts and bankruptcy lawyers have most to gainas will the Chinese from South East Asia waiting for bargains in distress property sales.