Default looms for millions of Australians – Sydney Morning Herald

Australia stub

Australia stub (Photo credit: Wikipedia)

The is an important story from the Sydney Morning Herald. Check it out!

via Default looms for millions of Australians.

A new credit risk reporting system has highlighted that a large number of Australians are at risk of defaulting on loans. Similar systems in the US and the UK equated poor credit ratings with penal rates of interest, years ago – this predated the 2008 the sub-prime saga.

For me, Australia has a number of related special stories.

I remember vividly working out in a gym in Sydney, watching the TV news, early in the morning in 2008, after the world’s stock markets had gone into global free-fall, at the start the financial crisis. Momentarily, I thought about my pension savings and then reality took over from fear – I convinced myself that what goes down must come up, eventually.

Many years ago, when I was in my twenties, I remember a conversation in a bar in Brisbane, the night before I left for the Far East. I was working with American Express at the time. The friendly lady behind the bar asked me why I was leaving Australia. I explained that I had a job that I liked. She told me a story:

I have a friend who a year ago had nothing and now he’s on the top of world. He’s got a lovely house, a new car and a boat.

I responded:

What, he’s managed to buy all of those things for cash?

She replied:

Well no, not exactly – he got credit…

I remember all those years ago, thinking about the the UK in economic chaos, yet in Australia everybody was laid back. The public sector was massive, the unions controlled the car industry, people worked short days, and lived to get on the beach.

These days, of course, Australia has lost the majority of its manufacturing. But the country survives on its massive natural resources. At an individual level, people still live on credit, perhaps more than ever.

It’s a bubble, waiting to burst on a global shock, in my view. After all, Australia has not really had her sub-prime crisis yet…


The Mythical 70s – – Paul Krugman

This is a very interesting and reflective blog from Paul Krugman, Nobel Prize winning, liberal, economist, writing in the Op-Ed column in the NYT. It’s well worth a read. Check it out!

The Mythical 70s –

I am one of those to whom Krugman refers, in their sixties, with first hand memories of life in the seventies. Krugman is right that the reality of the seventies is not as is being currently portrayed by the “austerians“.

I have many vivid memories of the seventies in the UK and Europe, including the three-day week and the miners’ strike.

Perhaps, one  my most vivid memories is from when I was working for American Express and had a conversation with a Swiss lady on a plane. She said to me in all seriousness:

 Oh you are English. How terrible! I can’t imagine how you can live with all those strikes!

What do you remember of the seventies?

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Swedish Academy of Science in Stockholm (Photo credit: Wikipedia)

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