Economic deja vu as powers that be play same old tune
photo credit: GFX69
Prosper Australia’s long time Executive member Bryan Kavanagh had this excellent article published yesterday in The Age
NOTHING changes. In the 1970s, the collapse of Mainline Corporation and Cambridge Credit heralded a recession after the 1973 real estate bust. In the early 1990s it was Pyramid Building Society, Tricontinental and the State Savings Bank of Victoria after the 1989 real estate bust.
We will no doubt learn shortly which building developer or bank will come to be seen as the harbinger of this particular financial collapse.
Why don’t we simply end these damaging real estate bubbles? As recent US experience confirms, bubble-affected mortgages offer lenders no real security, so why didn’t the Australian Prudential Regulation Authority and the Reserve Bank act to protect Australians and their banks?