You don’t need a catalyst for a crash

In any discussion of the Australian housing market, it’s impossible to avoid discussion of a catalyst. “We see no immediate catalysts for a crash,” has become the cry of the perpetual housing bull. But Dr Philipp Hofflin from the Lazard Australian Equity Team believes a catalyst is unnecessary.

“When we look for catalysts, we have to be aware that a sufficiently expensive market can sometimes fall just because momentum switches… To this day, nobody really knows why the stock market crashed in October ’87; why not six months earlier?”

Hofflin quotes a plethora of examples, such as the NASDAQ in 2000, Spain and Ireland in the GFC, or Japan in ’89. In the short video below, he discusses why the RBA may struggle to cut rates while the Fed is hiking. 

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