Amen 🙂

I know – and I think I’ve said in prior threads before that if the spam comment is good enough, I will keep it and answer it 🙂

FYI, if a comment has a random URL in it, it is usually spam Matt:)

“I’d also add that any handouts to first home buyers will quickly show up
in the price of the type of houses that first home buyers like to buy.”

This is very true – I touched on it in a cursory way with this:

“At the moment political parties want to loosen financial conditions for
home owners, and introduce all sorts of schemes that will get
capitalised into house prices.”

But it is a point that needs more air.

“Bank capital is hard to measure”

This is fact. I suspect that is why there is a growing push for clearer, flat, minimum equity requirements for bank funding … the whole “bankers new clothes” shalarky.

Bank capital is hard to measure (http://www.interfluidity.com/v2/716.html) and if you think sell side bank analysts and fund managers have a deep understanding of this stuff you probably haven’t talked to many bank analysts.

That is a fair point – I’m pretty cautious myself. I usually convince myself that the clever wonk at the RBNZ have looked into it deeply enough to justify what is going on, and then as a result I update my priors on issues given that belief 😀

Agree with all that, just not sure that the implicit subsidy is large enough to merit a policy response.