Housing Crisis in Australia

[tw]

Originally Posted by lushchocolateswirl

Well thanks for the answers but I think you all know where I'm coming from. Once people used to save up and buy their first 'home'.
But the trend over the last twenty years is to save up and buy your first 'investment'.

Nobody invests in something where the monthly costs increase from an affordable $800 to an unaffordable $2000. But when the 'investor' is not investing - is instead looking for something at a magical discount - then people sign for ARMs and praise the party in power for making it possible. They are not investing. They were doing what was encouraged at the highest levels of finance and government.

This 'free money' was not possible when loan companies had to worry about the 'quality' of their clients. NINJA. No Income No Job Apparent. Once loan companies were all but required to know such facts. Now we have a money game. Everyone involved was not investing. Everyone saw free money; including the George Jr tax cut. When does economics take revenge on an economy playing money games? In 1968 and 1970, Nixon was doing just that complete with lower interest rates. So in 1976 and 1979, economics took revenge. Deja vue.

In the late 1920s, a 'free money' mentality took hold. An early symptom of that revenge was in 1928 - a stock market crash. When did a Great Depression finally take revenge? Early 1930s. Deja vue. We must now pay for money games such as George Jr's tax cut, ignoring the reasons why Enron, et al occured, a war that is not even in the Federal Budget, a massive dependence on China, et al to finance our debt, and so many wacko extremists who both created this problem and would now blame it on anything but them.

It's silly to blame homeowners for doing only what people at highest levels wanted them to do and who encouraged it by massive "economic mismanagement". That's not my phrase. That phrase is what others in the world are blaming this on.

Let's see. George Jr's people said "Mission Accomplished" would only cost $2 billion and would be paid for by oil revenues. Worst case estimate posted here was $400 billion. I was wrong. Those costs have far exceeded even my expectations. Cheney said, "Reagan proved that deficits don't matter". Therefore there is no finanical market crisis? When does economics take revenge for economic lying?

Well his father fought a war that America did not pay for. George Sr's liberation of Kuwait was paid for by the world. How curious that one man can be so smart - and the son be so stupid. But then some will instead blame symptoms on greedy homeowners? And the S&L crisis was also created by the greedy consumers? Nonsense. Congress passed laws that made the S&L crisis possible - removed any requirements for responsible fiancial transactions - even after being properly warned.

To see these problems, start with those who created the money games. Even after Enron, the extremists in power refused to fix accounting fraud. NINJA - if you don't understand why, then you have no idea who to blame.