The Future?

 
A satirical look into the future for entertainment purposes only...

JOINT STANDING COMMITTEE ON UN-AUSTRALIAN ACTIVITIES (Effect of Negative Views on Real Estate)

SYDNEY

Monday, 5 December 2012

Committee met at 11.21 am

JAMES, Mr Craig, Former Chief Economist, CommSec 

CHAIR - I welcome the Former Chief Economist for Commsec to give evidence. I now remind witnesses that, although the committee does not require you to give evidence under oath, this hearing is a legal proceeding of parliament and warrants the same respect as proceedings of the House or Senate. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and will attract parliamentary privilege. Are there any corrections or amendments you would like to make to your submission?

Mr James - No.

CHAIR - Do you wish to make a statement in relation to the submission, or would you care to make some introductory remarks?

Mr James - A bit of both.

CHAIR - Ok.

Mr James - Australian home prices lifted sharply in 2007 and 2008 because population growth was outpacing supply of new homes. Interest rates rose to choke off some of the demand and dwelling starts rose. Again in late 2009/early 2010, there were double-digit gains in home prices. Super-low interest rates and government grants fed the lift in prices but they began to correct in response to higher interest rates.

As you'll be aware, around this same time, a group of determined and ultimately unaccountable individuals sought to undermine the housing market. Seizing on every piece of negative information regarding the cool down, they combined this information with their own misinformation and began to flood feedback channels to the media, capturing the attention of journalists who were looking for a headline. Many of us reasoned and respected figures did our best to stem the tide, pointing out the fallacies and the positives when I talked to Kochie.

Senator - Kochie from Sunrise?

Mr James - Yeah every morning on Sunrise I'd assure the mums and bubs it was all ok. I also used the platform Peter Switzer gave all property bulls to... uh well I used my Switzer column to give reasoned arguments why there wasn't a housing bubble.

Senator - But the market popped didn't it. Doesn't that mean there was a bubble?

Mr James - No because everywhere you looked there was a negative housing story or a doom blog appearing. If there was a positive housing story, a loud minority of bubble believers would flood online comments to sway opinion their way. This process began to frighten home buyers and investors, who chose to remain out of the market. Then Jeremy Grantham arrived...

Senator - Jeremy Grantham?

Mr James - Of investment firm, GMO. He arrived on his bubble tour, conducting shows all over the country, the press pack followed him with fawning attention. It was all bigger than Oprah; he sailed with Russell Crowe, danced with Hugh Jackman and even stood in as the lead singer of INXS. He changed the lyrics of 'Devil Inside' to 'Bubble Inside'. The bubble believing public loved him, but frankly I think the government was negligent in granting Grantham access to the country.

Senator - On what basis?

Mr James - The attention he had in the media cannot be underestimated, the ability to prey on confidence in this manner was fuel on the fire to crash the Australian housing market.

Senator - I'm finding this committee a loathsome task, but that's slightly farcical. I'm sure your side of the debate had equal access to the media, I mean you mentioned you had a daily spot on TV, in fact CommSec was ubiquitous

Mr James - Yes, until the government nationalised the CBA, but no one was listening to us any more and we didn't know why. It got so extreme that Chris Joye tried to rush the stage at Grantham's Opera House event, but had a heart attack running up the steps. That was not a good moment, thousands of TV cameras fixated on his 'No Bubble, Baby!' T-shirt, as it was torn off and he was resuscitated.

Senator - You don't believe that housing in Australia was overpriced, or that Australians were carrying too much debt?

Mr James - No. Look, there was so much misinformation on home prices. Some commentators and journalists made inaccurate and damaging comments about housing ‘bubbles’ and affordability without facing any consequences. While it may make an emotive story, inaccuracies uncorrected served to undermine confidence. They only told one side of the story and they lacked objectivity in every comment they made.

Senator - What consequences do you believe those commentators and journalists should face?

Mr James - It's a little late for consequences now.


[11:49 am]

TRET, blogger, Tasmanian Real Estate Trouble 

CHAIR - I call the blogger, TRET, to give evidence. I now remind witnesses that, although the committee does not require you to give evidence under oath, this hearing is a legal proceeding of parliament and warrants the same respect as proceedings of the House or Senate. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and will attract parliamentary privilege. Are there any corrections or amendments you would like to make to your submission?

TRET - No.

CHAIR - Do you wish to make a statement in relation to the submission, or would you care to make some introductory remarks?

TRET - Yes. I've been listening with great interest to Mr James' submission and he seems to be following the chorus line of every other rent-a-quote economist - that a bunch of journalists and bloggers brought down the housing market. It would be laughable, if I weren't now sitting before a joint standing committee on Un-Australian activities. Clearly someone has taken the line and run with it. Apparently pointing out facts was damaging to the housing market, now I, and others, should now be held accountable, or in Mr James' words, 'face consequences'.

Objectivity? Anyone who came to my blog was presented with facts. I don't dispute there was a colourful turn of phrase and I attempted, probably poorly, to piece together an entertaining narrative, but at the core I presented everything I had available through my meagre resources. Imagine if you were a multi billion dollar company with access to endless researchers and corporate communications staff. Imagine you produced a report which cherry picked figures to present a warped view of the Australian property market in comparison with the rest of the world.

Senator - Who are you talking about?

TRET - The Commonwealth Bank.

Senator - When?

TRET - September 2010.

Senator - I didn't hear of this, what was the response?

TRET - It was first pointed out on an investment blog by Kris Sayce, I believe he has a submission to this committee, the response from the mainstream media was a shoulder shrug. This is why the calls from Mr James for accountability are so galling. The CBA noted that chart was compiled from two sources of data. So it's clear they were fudging figures by presenting the lower UBS Australian figures against the higher Demographia  International figures. I've presented the following slide as evidence. The actual Demographia figures for Australia are now included for comparison against the rest of the world.

As you can see, it was kind of like trying to get laid on the internet; you've got a decent looking face, but you haven't worked out in years and you're kind of bloated, in this case with mortgages. So you photoshop your head onto Hugh Jackman's torso and hope that gets you in the door, then hope when you meet the girl your winning smile and personality will help her see past that massive set of guts you're carrying and make her ignore how dangerous it could be if you have a heart attack while riding her. That's basically what CBA did, went overseas with this bull shit and tried to get themselves some love, but international investors were a little more circumspect and wouldn't spread their legs for anyone.

Senator - Can we get back to the issue?

TRET - My defence will always be, I'm reporting the facts, if they're contrary to some CBA or housing spruiker fantasy, that doesn't mean they aren't objective.

[2:49 pm]

SYMOND, Mr John, Founder Aussie Home Loans


CHAIR - I call the Mr John Symond, to give evidence. I now remind witnesses that, although the committee does not require you to give evidence under oath, this hearing is a legal proceeding of parliament and warrants the same respect as proceedings of the House or Senate. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and will attract parliamentary privilege. Are there any corrections or amendments you would like to make to your submission?

Mr Symond - No.

CHAIR - Do you wish to make a statement in relation to the submission, or would you care to make some introductory remarks?

Mr Symond - These people should be strung up. They've destroyed the country. They destroyed the confidence in the market. I mean at one stage I was on Today Tonight every night of the week, trying to restore confidence. Cause I'm a friend to the mums and dads, I was there to help. And if Wayne Swan hadn't already hung himself he should be strung up too, in fact I say dig him up and string him up again. Along with these mongrel journalists and bloggers and their questions, he's partly responsible for this mess. He should have made $100 billion a year available for lenders, not doing so was Un-Australian. Right now we should be making $500 billion available to all lenders, the housing market would be back in no time, it would probably double again on top of that. Dad could take out the equity and buy a new Maloo ute and mum could buy a 10 metre plasma for the backyard and we could really get this country going again.

Senator - The country is bankrupt, Mr Symond.

Mr Symond - Well borrow the money then.