Fitch fibs

Bizarre.  Fitch has done its own stress test on the Aussie banks.  It seems to have taken them about two weeks.  Fast turnaround for a comprehensive stress test.  And coming shortly after the Cth Bank was quizzed by international investors over the bubble in Oz house prices.  How… co-incidental.  And how efficient of Fitch to do their analysis so quickly.  They must have had very good access to the banks – which means they are very friendly with the banks.  Either that or it’s very sloppy work.  One or the other.

Fitch reckons a  40 per cent tumble in house prices and a home loan default rate of 8 per cent would be ‘manageable’ for the nation’s banks and mortgage insurers.

Errr…    no.

Have they thought of the knock-on effects to small businesses and builders and real estate agents and mortgage providers and banks and governments (at all levels) and … well … every human in Australia from a  40 per cent tumble in house prices?

Answer: No.

So their analysis is either stupid or deliberately deceptive. 

I suspect deliberately deceptive, but I don’t put ‘stupid’ past them.

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