Australia most exposed to housing debt downturn

Keen to find out what fellow investors think ????

Australia most exposed to housing debt downturn

Australia is the most vulnerable large advanced economy to a household-debt induced downturn, according to a new analysis by investment bank Morgan Stanley, which points to slowdown risks from a tightening in lending standards and Labor's planned tax changes for housing.

Morgan Stanley examined household debt burdens across G10 currency economies facing growth headwinds from households paying down their high debt levels and cutting back on spending.

Though Morgan Stanley economists Daniel Blake and Chris Read said Australia would enter a "benign" deleveraging phase, they highlighted risks of a sharper slowdown in consumption from the effects of weaker house prices and slower credit growth.



Morgan Stanley household deleveraging risk Morgan Stanley
"Strength in the global economy and support from public infrastructure spend are mitigating these headwinds, but the risk of a longer/deeper than usual balance sheet recession remains elevated, if these conditions change."

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Has any country with this extreme amount of household debt, ever pulled off an orderly correction? Or are they all quite violent?

How are our banks positioned? I understand they are quite leveraged and don't have enough loss absorbing CET1.

 

I reckon there's too much information that's been kept hidden to know how risky the situation really is. I heard the banks were doing all kinds of things prior to the gfc to hide the warnings of what was about to come.

In my opinion it's futile looking for certainty. All you can do is look at all the factors and judge whether the reward is worth the risk. I have a hard time believing any investors here think the reward in SydMelb outweighs the risk.

 

Stopped reading at "Morgan Stanley"

 

no worries guys,Australia is different,we can shrug of anything
we should be OK,good luck to you all

 

"She'll be right mate"

 

Morgan Stanley borrowed $107 billion, most of all banks, during 2008 financial companybailout. Turns out the multi-billion-dollarbailouts of financial firms and major companies during the 2008 financial crisis were just pocket change.Aug

 

Keep shiting yourself.

Their will ALWAYS BE a reason not to invest