Friday, March 26, 2010

The graphs that tell the story - our financial institutions

From the Financial Stability Review:

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carbonsink said...

Our banks have become "giant building societies" -- Don Argus

60 percent of the CBA's loan book is residential mortgages, Westpac's is 50%. Insane, yet the market rewards CBA and WBC and punishes the NAB for lending to business.

The Australian economy: Resource income, leveraged up and blown on housing. Not new housing mind, existing housing.

And what's the financial media doing? Cheering house prices higher of course!

Anonymous said...

It is a story repeated globally, including now China. But as per the Treausry? RBA? analysis the other day at least the majority of home loans are with good equity and reasonable payment schedules. I think only 0.6% were termed as being in difficulty.

However an increase in unemployment changes everything.

To that end what is going to be net effect on Australia of the USA dropping into a Depression, as it certainly will do from the second half of this year.

China's / Asia market will shrink considerably on that, though it should at least still have enough domestic growth into to at least give us a trickle of money to keep the ship from sinking entirely.

Cash will be king - assets will be risky things to hold in a deflation. And thus the risk of over commitment to housing becomes topid...aka the USA

carbonsink said...

More property mania in Melbourne over the weekend

What on earth is going on in Melbourne?! Has everyone taken leave of their senses or is it mainland Chinese buying homes for their kids while they study? The same mania certainly isn't happening in Brisbane, which is (after all) the capital of a resource state.

I reckon the Vics need an extra 100bps whack on the head from the RBA.

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