From Business Spectator:
Today’s commentary is all about lessons learned and not learned in the GFC.
ABARE has rained on the commodity bulls’ parade with forecasts of falling commodity prices in the medium term, and a falling dollar from next year. This is no surprise to this column, which has argued consistently that the prices of the last cycle will not be repeated because that cycle’s global building boom – from Shanghai to Dubai – was a once-in-a-lifetime event, characterised in the worst cases by massive empty buildings. Mine supply has also now caught up.
The commentary then goes on to critique Michael Stutchbury’s recent article regarding the Australian housing bubble:
Heavens to Betsy. This column will simply observe that house prices reached unprecedented multiples of income in the last cycle and are now threatening to go higher still. And even in Stutchbury’s own terms the boom is based upon easy money – this time fiscal – the First Home Buyers’ Grant (FHBG). We might also note that it was coupled with the lowest cost of mortgages in fifty years. Let’s call a spade a spade. The FHBG was, in the long run, a calamitous policy. It has re-inflated the great Australian housing bubble, underpinned it with moral hazard and badly compromised monetary options… A historic opportunity to de-risk the Australian economy was missed.
If we learned anything form the GFC it is not to trust financial advice, and John Durie of The Australian analyses where new regulation to protect small investors is headed. “Myriad studies have revealed that 50 per cent of Australian adults don’t understand what 50 per cent means.
Barnaby Is Right 
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