...Meanwhile, down in the “bilges” of the good ship of fools, it stinks! Housing costs in Australia are the fundamental cause of personal debt.

...Which one of us in the bilges had control of the real estate market that ramped up the cost of housing, assisted by the banks adding endless balls of string to the high flying kite of unregulated greed?

...The only hope for sanity and reality to traction, is a Greek style collapse to bring the whole mess down to ground level!

"Murray's exceptionalism is indicative of the mindset of Australian bankers who see themselves and their institutions as somehow different to the banks which caused the GFC."

What an extraordinary statement Bruce. Maybe a more honest criticism of Murray would be that he is just stating what is bleeding obvious. Net interest margins have declined over the long term and funding costs have increased.

The banks might be making good profits but it isn't coming from screwing the home mortgage market.

Ironically the GFC was caused by institutions which abandoned the sensible lending standards that Murray is supporting. It is remarkably shallow to tar them all with the same brush. Remember that the only mistake the Greek banks made was to lend money to their own government!

You have a good way with words Bruce; summed it up very nicely.

History does repeat itself; after the 30's depression we had not only bank regulation but also government banks. It think this time around when banks go bust some should be nationalised and sooner or later others will have to be allowed to go under.

Challenge is how to avoid the war and violence part of the 20th century story. It will mean providing meaningful work for the 'masses' who'll be left unemployed. The obscenely wealthy plunderers will have to be brought to heel by taxing them and their wealth and providing more jobs with the money they hoard for themselves. Close the share instruments they use as bonuses to entice them to keep plundering and taking over other companies and destroying competition. Governments are there for a purpose - to look after the interests of voters and they'll have to start doing that.

Might take a bit longer for some to realize how we've been conned by the unscrupulous corporate media and vote for more corporate regulation - including banks.

diver dan and roses1

sorry fellas but news for the past few weeks has made it reasonably clear that this particular part of the economic cycle has reached bottom and has turned.. Europe will remains mired for some time but US and Aus should turn up..

In other words the mess isn't going to collapse any time soon..

As for Murray, the briefest glance at his article shows that he has virtually no idea how the finance system actually works. I would have liked to hear an expanation for the increase in debt levels .. it could well be an indication of a more settled society with better job security, but I don't know. The RBA publishes material on this stuff regularly. What does it say?

The article is just a rant with nothing to offer.

I find it difficult to take this article at all seriously. It seems nothing more than a series of one-liner assertions. Slogans, in fact, that are more appropriate to placards than in a position assessment.

"Extraordinary bank profits have been made with great cheek at the expense of customers."

Ummm... errrr... actually, bank profits are being maintained only because the banks still have customers to serve, and are actually serving them.

The alternative to flooding the system with liquidity was to deny businesses a continuation of credit. And it is easy to see the impact that "turning off the tap" has, by strolling down a few UK High Streets, and counting the number of businesses that have gone tits-up. Sometimes it is easier to count the ones that are still open.

What amazes me still is the palpable ignorance that so many people demonstrate over the desirability of keeping the banking system liquid. They appear to believe that borrowing money is nothing less than the work of the devil.

The reality is, the faster you grow (i.e. the more successful your enterprise) the more cash you need to cover the gap between buying raw material (money out) and invoice payment for the product (money in). It is not unusual for business owners to have to walk away from otherwise healthy businesses, simply because the Bank has said "sorry, head office tells me, no more lending". By the time all the invoices are paid (which will be longer than usual; accounts receivables blow out mightily when there's blood in the water...) you've had to lay off the staff and close the factory.

So we are extremely fortunate not to be in that position.

It is also instructive that the writer, with his political background - not business, unsurprisingly - has nothing to offer as an alternative.

Unless...

>>At other points in history nations faced with a need to maintain growth in wealth and employment opportunities have resorted to arms manufacture.<<

Is he perhaps suggesting that we should prepare for war?

Isn't that a little... extreme?

Even for a retired public servant?

...Are you “God” Curmudgeon? I speak in terms of the here and now; and yourself? You hypothesise off into a blank future; you are predicting a real estate market already doomed under normal circumstances, to boom again I take it! But of course, circumstances will not always remain normal will they, since greed will prevail to the “end”; and that’s the rub!

...The property market is incapable of surviving on its own merits dealing windfall profits: That fact will deal the banks a problematic hand in the future. With a multifaceted propping up by Governments as Tax breaks, first home-owner grants unsustainable immigration levels, the waivering of stamp duty fees (for some), coupled with irresponsible lending by the Banking industry, what part of the fools-paradise of the housing market, do you predict as its saviour?

...I’d be very interested to know; since evidence is thin on the ground, that times will actually improve in the beleaguered property market anytime soon.