News That's Fit To Punt - 02/Oct/2015

The Bubble We Had To Have

Not sure how people construct notions like that, but here you can see it as the headline.

"The government has to try and talk it down and say it's inflated, but at the same time all they can try and do is control the ongoing growth as best they can," Mr Van-Petersen said. "If they wanted to prick it, they could, but Australia simply cannot afford to." 

New Zealand and Singapore have enacted strong policies to force adjustments in housing markets and Mr Van-Petersen said Australia could easily deflate the bubble by pulling the stamp duty tax charged to foreign buyers from properties of more than $15 million to, say, $1.5 million. 

But the property market is one of the few areas of the economy that is growing adequately as terms of trade plummet and mining companies shed value because commodity prices are falling in light of a slowing China. 

"Australia can't afford for property to have a hard landing. If housing prices bust, the banks will get hit hard. And then what is there? It's in everyone's interests right now."

Pretty spooky when they couch it that way. There are lots of places and things that can't afford to have hard landing - for instance China - but we know they're going through one as we speak; and if we are to understand correctly how our real estate market is connected to the Chinese economy and the money trying to get out of China, then it's likely not going to be the happy 9.8% growth prognostication.

What Banks Are Doing To Hide Bad Credit

You won't hear this anywhere else. This is my exclusive. :)
Recently a 20year old kid borrowed 25k from one of the Big Four banks. At the time he had a steady job, and he had the patter to sound like he was a good bet to pay it back. So they lent him 25k with a 5year repayment schedule. He then went and splurged the 25k on what you and I might surmise are more toys than chattels or assets. Then he lost his job and couldn't pay. Thus he marched into the bank and told them the situation. They asked him just how much he could pay, and he replied $20 a month. So the bank said that was okay and took the $20 per month on good faith. It took a few months for him to find a job again but by then the bank unilaterally closed out the account, saying the 25k had ben paid (news to the kid, he couldn't imagine who it might be). What happened is unclear, but basically the bank told him because the loan had been paid off, the loan account was closed.

I know it sound amazing but it's true. The bank closed out the 25k in bad debt by writing it off quietly, rather than pursue the money. The 20year old kid effectively walked out of the bank 20k or so richer, for no reason other than the bank didn't want that bad loan on its books. So the banks purged the bad loan off its books.

The question you should be asking yourself is, just how much of this kind of things going on? How safe then are the Big Four banks? I'll leave that with you to decide.

There's Water On Mars

The big announcement of the week was that NASA says there's liquid water on Mars. It seems like it's been coming for a long time, but it's taken until 2015 for NASA to verify all the data and say, yes, there's liquid water on Mars. If you stop to think about it, it seems quite obvious that there would be water, and liquid water at that given the conditions of the planet, but that is just an aside. Science says, not until all the data is in, is it incontrovertible, so here we are.

The weirder turn was how Ridley Scott knew that NASA knew, but couldn't revise his film 'The Martian' to include that new discovery, because it would have let the cat out of the bag. Ridley Scott also made news in that he spoke to Foreign Minister Julie Bishop saying he wanted to shoot the sequels to 'Prometheus' in Australia.

The fact that there is liquid water on Mars bodes well for a possible future human colony on Mars.What doesn't bode well still are the low gravity, thin atmosphere and punishingly cold temperatures. It's not like we can grow things with much ease on Mars which means we won't be getting a food cycle happening easily. Ironically, what Mars needs for human habitation is a good dose of greenhouse effect.