Sorry there was a typo in that headline.
“Bank CEOs deny Australian Housing is in a bubble” is what it should have said but in terms of denying the obvious it is right up there with the mass denial by tobacco CEOs that nicotine is addictive.
The Sydney Morning Herald covered the denials this week.
So what delicately expressed sentiments did our very dear bankers provide to help Mr Morrison sleep soundly in his “bubble boy” bubble?
“I would draw the distinction between a speculative bubble in prices and prices beyond what fundamentals would justify,”
National Australia Bank
“There are increasing risks, but I still believe the answer is no,”
“..”lending at levels we are comfortable with”
“..wasn’t anticipating “a calamity or a disaster…”
Reserve Bank of Australia provide the excuses.
As the RBA and APRA are primarily responsible for creating the massive bubble in household debt (by driving down interest rates) and external liabilities by our banking sector (by green lighting massive offshore borrowing) that have been driving house prices higher and higher over the last two decades, is it really surprising that the RBA and APRA deny that there are bubbles in any of them?
So there you have it.
The bubble makers, RBA and APRA deny there are bubbles in household debt, banking sector external liabilities and house prices and their 4 “little” banking sector dwarves do the same. Alice in Wonderland would be impressed.
And just in case you have forgotten what a really professional denial of the bleeding obvious looks like here are the professionals!
Excessive household debt and excessive Australian banking system foreign debt/liabilities secured by inflated asset prices is a bit like smoking as well
Whatever you do don’t do it.