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Australian Banks - Oh boy! Print
Written by Site admin   

It's gradually dawning on the Reserve Bank of Australia that they have a problem.

The big four Aussie banks are holding around 85% percent of all Aussie home mortages.

As worldwide interest rates were creeping up throughout 2018, repayment costs have increased at the same time as housing prices are falling back. No great problem for those who bought property a decade and more ago.

The problem is for those who invested in the last few years. Very soon a good many mortgages will be in negative equity. If, or when, mortgage defaults increase, bank capitalisations will tumble and it could become a spiral, starting slowly and then accelerating across the real estate, mortgage and banking sectors with the predictable effect on the Australian dollar.

 For a full assesment of the bind Ausralian banks are in, click and listen to this video from Chris at Casey Resaearch and Martin North of Digital Finance Analytics.

 

From the blog

Stock Market Manipulation

Stock market manipulation

The second story is how the stock market is about to collapse. The story is getting a little stale now as each mini sell off leads to another rally. Is it because the US Fed has put on hold any more rate rises or is it because of the impending wonderful US-China trade deal, etc?

Back in 1982 stock market manipulation was made legal. Not all manipulation of course but just share buy backs by companies. US congress is now getting hot and bothered. They have only just realised that Trumps tax cuts, and offshore repatriation of overseas company profits, were spent buying back their own shares, not paid out as special dividends. And so they want to ban buybacks again.

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