Tuesday, November 30, 2010

Atlas shrugged

Reader Atlas has down the heavy lifting and answered this blogger's challenge in fine style by explaining Michael Stutchbury clearly for us all:

...isn't Stuchbury simply saying:
a) much of the media has missed the point in that the RBA is saying we need to allow big banks fail without it killing the economy;
b) this flies in the face of much of the bank-bashing that is going on because it says that - far from expanding the overnment support from some players, we should remove it for all (over time); and finally
c) this is all really just a desperate plan to lower mortgage rates a little to help keep the final dying days of the housing bubble alive a little longer

Excellent and thank you Atlas.

The reason for this blogger's confusion is simple. Stuchbury has consistently and universally denied the banks were bailed out during the GFC. If that's the case, how can there be a moral hazard problem to address?

Glenn Stevens has smoked him out.


Anonymous said...

What really surprised me about Atlas Shrugged, given how so many people, including Greenspan, were basing their economic ideology on it, was finding out that is a work of fiction. How could they expect reality to follow it when it is simply the expression of one person's imagination?

Stavros said...

Thanks David and 'Atlas'...I totally agree that every piece of policy to do with housing or the RBA is centred on trying to keep money flowing into our housing bubble. Forget moral hazards or competition...they are just the justifications used by people trying to push this thing out a little longer. All the while Chris Joye is behind the scene pulling strings (word on the street was that Joye wrote the questions for Dwyer to ask).

But I think at the moment the bigger issue is what is colloquially called “back peddling”? Every major pundit seems to have changed their tune (which is allowed) in recent weeks. Kohler, Stutchbury, Gottliebesen...and many others denied the existence of a housing bubble, constantly repeated claims we had a housing shortage and praised the strength of our banks.
But now all that seems to have been forgotten and they are queuing up to jump on the housing crash bandwagon.

I would love to set up a website that tracks the form of economic pundits from 2007-present...I bet you will find a plethora of examples of the same people saying totally contradictory things depending on what side of the bed they got up on. There is no accountability for these talking heads. Kohler is the worst...I watch him on ABC talk with such confidence about what is going on, yet he changes with the wind.