Stan R wrote:
> So how are the US-based correspondents coping with this?
>
> Both Charlie Cross and George Zimek live in California, which seems to
> have been not only on the forefront of the green madness, but also
> leading the pack on the residential property bubble.
>
> With $1 trillion of losses now becoming the "accepted" wisdom and with
> literally tens of millions of Americans looking down the barrel of
> negative home equity and the "jingle mail" option looking more
> attractive by the day, how have you guys been affected?
>
> To be honest, Australia has had even more of a property bubble than the
> US and the blow up is only just beginning here - like in the UK & NZ and
> elsewhere. This will be exacerbated by the recent election of a totally
> inept Labor government (in Aus.) and I have no doubt many Australians
> will be in for a rude shock when they discover property in fact does not
> always go up in value, nor are their jobs guaranteed to last forever.
>
> It will certainly be interesting to see how it all develops, given that
> "jingle mail" is not an option for Australians (the banks do have
> recourse to your other assets if your home auction does not cover the
> debt).
>
> The word "depression" seems to be gaining traction, however. If/when the
> $145 trillion credit derivative sector blows up, then it's all over and
> anything is possible.
>
> Stress levels at work over the last three or so months do make me look
> wistfully at islands for sale in Tonga/Vanuatu, with no power, no
> Internet and no phones, so as to get away from it all...
>
> Your comments would be welcome.
Has Australia had the same type of mortgages offered in the States, the
below prime mortgages that caused the problem in the first place?
Here in Canada nothing like that happened. It seems that our financial
institutions are much more conservative.
No real estate bubble either. Property values have been going up quite
steadily, but reasons were not cheap money, rather an economic expansion
in
several provinces, namely BC, AB, SK and NL.
If there is a recession in Canada it would be nothing of her doing. As
thay say, if USA sneezes, Canada catches the cold. However, this time and
with oil prices at current levels, the recession would probably be
structural and hitting only some of the provinces, namely ON and QC.
Anyway, I carry no debts and the majority of my assets is in precious
metals :-)
Cheers
Frank
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