Minggu, 26 September 2010

The Commonwealth Bank controversy

A quick distraction from Social Housing Month - you may have heard mention recently of some controversy about a document put together by the Commonwealth Bank for the purpose of reassuring its overseas backers that Australia doesn't have a housing bubble, no no everything's fine, keep giving us your money. A number of commentators have pointed out some serious problems in the bank's arguments and evidence – serious enough that it makes you wonder if the effect of the document might be the opposite of that intended.

(The Commonwealth Bank)

This post is just to bring together some links:

  • Here's the CBA document in question (download);
  • Here's Money Morning's Kris Stace on the problems with the CBA's evidence;
  • Here's David Llewellyn-Smith (co-author, with Ross Garnaut, of The Great Crash of 2008) on the problems with the argument;
  • Here's the ABC with an overview of the controversy, a defence of the CBA by its own Craig James, and some further criticism of the evidence and arguments courtesy of Morgan Stanley's Gerard Minack (whose own recent piece on house prices and affordability makes a good deal more sense than the CBA's).