Actually, "Fozz", the headline "low interest road to ruin" was created by a sub-editor at the Melbourne Age (where the article was originally published); my headline was "inappropriately low interest rates are as potentially damaging as inappropriately high ones", but that's too long for a headline in a newspaper. I'm not trying to 'ruin' anyone; rather, my proposition is that more people are likely to be ruined if interest rates are kept at what the Reserve Bank has characterized as 'emergency settings' for too long after that 'emergency' has passed.

Maybe the US federal Reserve could now do what Greenspan didn't do, however speaking of Australia our loan money is always priced at a premium compared with other countries.

If the Australian government wishes to reduce the pressure on housing it could easily reduce its obscene record levels of immigration. That would also reduce pressure on the environment, infrastructure, water, energy and so on.

Aren't Australian banks making enough profit already?

I accept that thick skin is a prerequisite for anyone in the business of forecasting, Saul E, and I'm pleased that my observations did not cause distress.

But as well as simply identifying a dubious analysis, I was also bemoaning the priority that is increasingly given these days to the sensational, as opposed to the factual.

You make the point yourself, somewhat obliquely, in the manner in which you disown the subbie's headline.

I simply noted that it is only now, as opposed to in your piece in March, that you choose to bring up the role that historical interest rate policy/strategy plays in the management of a financial crisis.

"One of the reasons Australia's experience of the financial crisis has been less severe than has that of most other Western countries is that Australia's central bank was one of the few that didn't make the mistake of leaving interest rates too low for too long in the early years of this decade."

If you deem this to be significant now, how come it didn't rate a mention six months ago? It's not as if it is new information.

I guess all that I was trying to point out is that these articles - both of them - started with a premise, and only the facts or observations that supported your position were included.

This may be admissible as a form of "it's my opinion, and this is why" proposition, but ultimately devalues the medium.

If the question readers ask themselves is increasingly "I wonder what relevant information has been omitted from this article?", it will soon have the credibility of that piece of seaweed.

Only seeing what you want to see in order to make the story is, after all, the modus operandi of the conspiracy-nut.

And heaven knows we have enough of those already.

Fair enough Saul.

It seems to me though that good regulation could be just as effective and potentially less harmfull. Those signing up the loans in the US knew that many of the people they were signing up would not be able to pay back in the long run. They must have had some inkling of what the collective effect of all their deliberate creation of eventual bankrupcies might lead to. Many, if not most of these borrowers would have been unlikely to have been able to secure mortgages in the first place in Australia. As Cornflower alluded to, greed was allowed to run wild through lack of effective oversight.

Poorly regulated financial capitalism has wiped it's bum all over the efficient markets hypothosis.

Just as rising interest rates did not dampen borrowers appetite for risk, low interest rates would seem unlikely to fuel an orgy of wildly risky borrowing now. Tighter credit, tighter lending standards, looming new regulations and rising underemployment are all against it.