There's the door

The further I stray from my intended mission with this blog, the closer I come to totally embarrassing myself. Lately, as you may have noticed, I've blabbed about areas that some agricultural economics subjects at UQ wouldn't qualify me to talk about.

So before I... meh, what mission statement? I'm more than happy to make a buffoon of myself, if that wasn't already clear. Time to draw some more long bows and continue joining ten tonne objects together with gossamer.

A couple of hours ago, ANZ announced they were lifting their variable mortgage rates. Cue those guys on news.com.au who announced they were shifting their CBA mortgage last week, to announce they're shifting their ANZ mortgage today.

ANZ offered one important concession to those outraged dual mortgage holders - no exit fees. Is it just me or is someone opening up the holding pen and letting the bovines loose so they can run mortgage free, or be slaughtered somewhere else? In fact, I wonder if someone knows their bovines have mad cow disease?

"But, but, but..."

Yeah, yeah I know, all those carrots ANZ are dangling to keep and attract customers with fixed rates. Cause we all know fixed rates are chocolate and variable rates are boiled lollies in this country. Just ask Mortgage Choice, they'll tell you:

Looks like I just mixed up that metaphor. This country must really hate fixed rates, I wonder if ANZ knows this? Nah I'm sure they're expecting big sign ups. Surely they wouldn't want to lose their most indebted, risky and militant customers, especially at a time when, "Canberra plans sweeping reforms to open up the mortgage market more widely to smaller lenders, by creating a bigger government-backstop to residential mortgage-backed securities."

Not only will those bovines get out of the holding pen, looks like they might just find another slaughterhouse - the tax payer funded slaughterhouse.

While we're on crazy arse analogies, why stop? If you're an investor in this circus, it's kind of like buying a cow and turning it into a racehorse. Stupid idea you wouldn't participate in to begin with, but then the government incentiveses the stupidity. So you run the thing, it breaks a leg, but you don't have to pay for the vet, the government has that, plus they'll pay you like the cow won the race anyway. AAA bitches!

Sure I could go further, take the cow to the Magic Millions with Singo and Gerry Harvey, but you get the drift. Does this really encourage sensible behaviour? You'd hope that the government getting involved would have some significant standards on what they'd stick their neck out for, but who could these lenders attract if they demanded something sensible, like 20% down?

Here's indication of what the AOFM has been prepared to swallow, will the standards get worse when they only have to vouch?

95% of $750,000? 10 years interest only? The government will cover that kind of nonsense? To once again quote Garth Turner, from Canada, but entirely applicable to this situation:

In short, the entire tilt of public policy in both countries has been towards home ownership – resulting in a stunning 70% or so of the population having one, with the overwhelming bulk of their net worth now in a single asset.


And maybe that’s exactly the problem. Maybe seven in ten people didn’t deserve to have houses in the first place. Couldn’t afford them. Should never scored mortgages. Were strung along, lured by house porn, cheap money and a bar that was far too low.


Why does anyone have a right to buy a $400,000 home when all they have is $20,000? Why should the government stand behind an idiot lender willing to finance a deal like that? Don’t pro-housing policies just drive prices higher and responsibility lower? So why should taxpayers move in and save a derelict homeowner’s ass when the inevitable happens?


Back to Tasmania soon.