Wednesday, January 20, 2010
Deleveraging hasn’t yet started
Good slightly lengthy report that deleveraging hasn't begun yet, not for the UK, or any country in fact. Looks at historic examples and suggests austerity will be chosen as the way out. Japan debt not so bad because cancels out to 145% of GDP. Suggests that politicians must grasp the nettle of real estate leverage whether through regulation or deposit requirements. Suggests that there won't be the expected UK economic rebound for some time, more of a tepid style status-quo, growth being limited by debt essentially. Number of points all look bad for housing including suggested cancellation of favourable tax treatment.