Australia Follows US Property Market
Posted: March 3rd, 2009 | Author: M.Aaron Silverman | Filed under: Bailout | Tags: gfc, Global Financial Crisis, Minsky’s Hypothesis, The Lowy Institute | Comments Off
With house prices and incomes falling, 164,500 Australian households are at risk of having to sell or lose their homes, according to Fujitsu Australia’s February Mortgage Stress-o-meter.
“We are mirroring the US situation before the financial crisis three years ago,” report author Martin North, Fujitsu Consulting managing director, says.
“We expect unemployment to rise to 6% by September 2009, and to 7% by 2010. As a result, we are predicting that mortgage stress will lift again with a rise to 1.2 million households by September 2009, of which 419,000 will be in severe stress.”
There are a few must reads on the GFC and it’s consequences, The Lowy Institutes: GFC Causes and Consequence, Steve Keen also has an interesting take with Debtwatch, www.debtdeflation.com, specificaly article No41 www.debtdeflation.com/no-41/ Where Minsky’s hypothesis is discussed at some length.
Minsky’s hypothesis argued that a capitalist economy with sophisticated financial institutions could fall into a Depression as an excessive buildup of private debt occurred over a number of financially-driven business cycles.
