Additionally the RBA misread the economy and .25 basis points did nothing. The current drop and more drops to come will not be done to boost the housing market but will be done to boost the retail sector and industry and possibly dislodge some of the money massing up in the banks to be invested elsewhere.
History shows from experience that 3/4 months and people feel all is sweet with rate drops. Too much theory and very evident lack of experience. If only the uninitiated people knew how difficult it is to get a loan if the figures don't stack up they might think twice before they talk. Even with a good deposit the banks will only lend under strict criteria and this they will discover to their horror when they go for a loan once they become qualified.
Keen has neither the runs on the board and is hardly an expert in this market - just a theoretician who should know the lending criteria in the US and the behaviour of the banks there is very different to here - oh yes wonder where the casino bank that just lost 2billion is domiciled? Where is our equivalent?
