Clik here to view.
How Malcolm Turnbull helped pump Howard’s House Price Bubble
https://barnabyisright.com/tag/malcolm-turnbull/ Click the LINK and read the LIST OF NAMES
Page 12
For centuries now, businesses in need of funds have been able to avail themselves of both debt and equity. Yet for households who aspire to expand, mortgage finance has been their one and only option. And so, despite the ever-growing sophistication of corporate capital markets, consumers around the world are forced to use only the crudest of financial instruments.3
3 This begs the question as to the absence of equity finance in the first instance. One answer instantly offers itself: securitisation. In the past, it was not practicable for a single unsponsored entity to go around gobbling up interests in individual properties in the vain hope that they could bundle these contracts into something that would look like a regulated holding. Fortunately, there has been spectacular progress of late in terms of the ability of private sector participants to package otherwise illiquid instruments into marketable securities.
Page 14
The report itself consists of four distinct ‘parts’. Parts One and Two take up the challenge of introducing the economic rationale underpinning our desire to eliminate the ‘indivisibility’ of the housing asset (which, in layperson’s terms, simply means allowing individuals to hold less than 100 percent of the equity in their home).
Page 21
It would appear that the prevailing legal and regulatory framework can flex to accommodate
the introduction of equity finance. Most exciting though is the revelation that we can fashion these
arrangements as either equity or hybrid debt instruments. The latter is an especially attractive alternative
since it enables one to circumvent all of the legal and psychological complications implicit in
‘co-ownership’.
Page 22
Irrespective of what is decided in the post-publication period, we are convinced that the application of
both debt and equity finance will eventually become standard industry practice.
It is more a matter of whether that day will arrive in the near term or in the far-flung future; and that, truth be known, is a question that only you (i.e., consumers, decision-makers, investors and opinion-shapers) can answer.
Unsurprisingly, it is our belief that Australia is well positioned to push the intellectual envelope and
become the very first nationto develop primary and secondary markets in real estate equity. And at $2.5
trillion, that is no small cheese.
Page 24
Readers will become familiar with our argument that it makes no sense whatsoever for the average Australian family to have to tie up over two-thirds of all their wealth in the world in one highly illiquid and very risky asset: viz., the owner-occupied residence. Indeed, in Part Two of the report we find that one in four families lose money (in real terms) when they come to sell the roof over their heads. For roughly one in ten dwellers, the situation is even more dire – these poor souls are subject to real price declines in excess of 13.4 percent! In this context, it is high time that we brought capitalism to the home front and
provided all Australians with the option of issuing both debt and equity capital when purchasing their
properties.