02 January 2011

Coming soon to an asset market near you: Deleverage Down Under

To say the writing's on the wall would be banal, and stating the obvious. Meanwhile the MSM is generally upbeat -- hey, you have to sell those ads to the people who sell stuff consumers probably don't need, definitely can't afford, is exaggerated in terms of 'value' (subjective, I know) and has a relatively short 'wow' factor which lasts as long until the serotonin high wears off in that big primate brain of ours.

I predict that deleveraging is going to occur soon as more and more struggle with debt,and the increase in interest rates will make holding debt painful.

Below are news/ opinion articles which would support the logical fallacy of confirmation bias -- i.e. looking for 'evidence' to support what you already believe to be 'true'. Ah.. it's that damned pattern-seeking, agency detecting, causality-fixated large primate brain again.

...or... the stuff might actually be correct in the predicted outcomes, and crises-cum-opportunities are around the corner.

The Daily Telegraph 03 Jan 2011: Australians sinking under debt burden
Download PDF version here


Here is an interesting, though omnious blog post at the Australian Debt Clock blog:

"Growth in asset markets and median property values have been outstripping incomes in Australia, and the corresponding national and household debt levels are unsustainable.
It seems impossible for prices to keep rising faster than incomes, because eventually so much would be spent on debt servicing costs that there would be no money remaining for anything else.
Australia is hurtling towards peak debt, fueled by excess borrowing and an addiction to credit. It appears illogical to take on ever increasing debt just to bid against each other for the same assets."
Posted 26 Nov 2010
Links:
  1. Australia National Debt Clock
  2. Bubblepedia -- Australian Bubble Forum
  3. Switzerland -- a nation of renters  Surprised? I'm not. 

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