This morning Robert Gottliebsen attempts something of a backflip with three million twists after his egregious defence of housing bubble interests late last week that was deconstructed nicely by Delusional Economics.
Gotti begins:
The Australian newspaper followed up by revealing that the manager of Treasury’s Macro Financial Linkages unit, Phil Garton, believes that if financial deregulation was “reversed significantly” there would be risks to the current level of high house prices. He does not isolate the Greens' proposal but I would suggest that’s exactly what Treasury is referring to. I don’t always agree with Treasury officials, but in this case it is good to have Garton on my side.
Only problem is, The Australian makes clear the Garton comments were part of preparation of the Red Book for the incoming government, long before the current bank debate and the Greens' push for regulated interest rates:
Documents obtained by The Weekend Australian under Freedom of Information laws show the Treasury officials preparing the so-called Red Book of briefs for the incoming government were as divided as private sector economists about the strength of the property market.
Phil Garton, the manager of Treasury's Macro Financial Linkages Unit, sent colleagues a draft paper on the rise in household debt, prospects for further growth in the debt-to-income ratio and the potential implications of slower household debt growth.
3 comments:
What a pathetic contorted backflip by Gotti, who is clearly totally captured by the housing/banking lobby.
I like it how he rips apart the following quote from the Australian and then disingenuously makes the whole thing about "financial deregulation", forgetting the bit about interest rates and unemployment (and not to mention his attempt at time travel).
"Mr Garton agreed that there would be risks if the fundamentals of low interest rates, unemployment, and financial deregulation "reversed significantly"."
RBA intervened to avert housing slump. Read Now.
Ms Ellis, in a private email to Mr Richards and several colleagues, insisted there was no evidence the boom in the early part of the decade was caused by changes in supply-side conditions, more the price and availability of credit.
...
"The people pointing to supply-side factors really believed at the time that if only these supply restrictions didn't exist, prices would not have risen quickly. This is just rubbish, and we said so.
...
Six months earlier, she warned the RBA against statements that supply was more of a problem than demand and "housing would be affordable if only those nasty supply restrictions were abolished".
Go Luci!
It's interesting seeing everyone from Robert Gottliebsen through to Christopher Joye now moving to a more neautral or bearish view on housing, despite months and in some cases years of 'she'll be right mate'.
It's always most concerning when we start seeing the traditional bulls turning to bears.
A tipping point, or perhaps the early signs of a perfect storm brewing?
Post a Comment