I became increasingly concerned as the Australian banks eschewed any semblance of proper risk management when they continued their aggressive lending against bubble-inflated land values over the last sixteen years. (Don’t bubbles burst?)
Australia’s bubble is amongst the world’s largest and it’s certainly primed to burst, despite the vacuous arguments of bubble denialists. The Rudd government merely delayed the pricking of the bubble, and Tony Abbott now has few options available to keep it inflated. One can only hope the Liberal government can satisfactorily manage its deflation, but there’s little reason to believe Tony Abbott even understands the problem.
So, the US having led the world with its bubble experience, I’m not at all surprised to see yesterday’s Bloomberg headline US bank legal bills exceed $100 billion as a result of their financial crisis. Running to the law won’t deal with the intrinsic problem, but it may help banks brazen it out.
In recent years, as all the action hasn’t been residential, I’ve also watched the excellent work Denise Brailey’s BFCSA has been doing trying to rectify the misfortunes of investors who’ve been ripped off by the banks and property-based investment schemes.
Throughout all this, I hear people argue the banks are only doing their job by providing credit, and that people have to take responsibility for their own purchases and investments. That’s true, but most people don’t understand a thing about real estate bubbles, whereas the banks are experienced in cynically playing them for all they are worth – then seek to be bailed out when they burst. Absolutely incredible corruption!
That’s why I can’t vote for either major party in the upcoming election. They’ve both presided over part of the period of Australia’s greatest banking scandal without intervention. I’ll be looking for a smaller party in the Lower House and voting for Denise Brailey’s Australian Voice Party in the Senate.