The sense of security more frequently springs from habit than
from conviction, and for this reason it often subsists after a
change in conditions as might have been expected to suggest alarm.
The lapse of time during which a given event has not happened
is, in this logic of habit, constantly alleged as a reason why
the event should never happen, even when the lapse of time is
precisely the condition which makes the event imminent. A man
will tell you that he has worked in a mine for forty years unhurt
by an accident as a reason why he should apprehend no danger,
though the roof is beginning to sink; and it is often observable,
that the older a man gets, the more difficult it is to him to
retain a believing conception of his own death.
George
Eliot (a.k.a. Mary Anne Evans)
Silas Marner: The Weaver of Raveloe (1861)
When
the Reserve Bank meets tomorrow to decide whether to wind back
Australia’s inflation by raising interest rates for the
third time this year, it will also be deciding the future for
thousands of Australians on the brink of financial ruin.... For some, the hammer has already come down. The collision of rising
interest rates, falling house prices and easy money has led to
an unprecedented number of mortgagee sales. In the outer suburbs
of Sydney and Melbourne, the sheriffs are busy locking out more
and more homeowners who can’t make their payments.The
proportion of household income that is used to pay interest is
at an all-time high by a considerable amount. People are spending
more money on interest than they are on education and health combined.
That’s an extraordinary phenomenon. And The World Today
can reveal that the banks and the other mortgage lenders are working
to conceal the scale of the sell-off, telling real estate agents
not to market the properties as mortgagee auctions.... In
fact, one Sydney real estate agent told the program that he estimates
nine out of 10 auction sales in outer western areas of Sydney
are now the results of mortgage defaults.
Radio National
“The World Today” (6 November 2006)
Of Black Swans and Out-of-Cycle Events
The end of one calendar year and the beginning of the next is an
appropriate time to reflect upon the outgoing year’s twists
and turns, triumphs, trials and tribulations. It is also a good
time to place these things into a broader context, consider their
possible causes and consequences, learn one’s lessons and
set a course for the twelve months to come. With this objective
in mind, and focussing upon finance and investments in Australia
(and to greater or lesser extents Britain, Canada, New Zealand and
the U.S.), it seems to me that four points are most salient. None
is cheery. So if you strive to radiate merriness and festiveness
at this time of year, put this Letter aside until January.
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