Professor Alan Ahearne:

That is right. They were just that, anecdotes and rumours one would hear socially. I had always tried to base my commentary on evidence and facts. Perhaps occasionally I did write commentary in terms of when I talked about anecdotes but what I had been hearing was that the property market had stalled in mid-2006 into 2007. The price index was not falling but there were very few houses being transacted. Developers had finished projects. They might have been able to sell a couple of houses at the asking price. That meant that the index did not fall. It looked like the prices were not falling but they were selling very few. That meant that these developers were not able to pay back their loans. What happened was they were getting loans. They would sell off all these properties. They would then use the money from the properties to pay off their loans, but they must have been stuck at that stage. What I was hearing was that the some of the banks may have been rolling over these loans. They were not getting repaid by the developer, and that was a problem, but rather than a developer formally defaulting, they were making a new loan to the developer. The developer would use the money from the new loan to pay back the old one, and the developer would therefore not be in default. It would look on the bank's books that the loans were fine, but there was a big problem because the developer was not selling the properties. That is the sort of rumour I picked up on, and that worried me. It reminded me of the Japanese experience where the banks kept rolling over the property developers even though they were de facto bust, and that worried me a little bit.