The commodity boom has created a “two track” economy. The mining and commodity boom benefits a small part of the economy whilst simultaneously creating problems for other parts. The mining and energy sector account for less than 10% of the Australian economy.
February 10th, 2012 | The Daily Reckoning | 1 comment | ContinuedAll Posts Tagged With: "australian banks"
Vulnerable to External Influences – The Economic State of Australia (Part I)
Australia’s future is inextricably linked to China and the commodity “super boom”. Australian economic prospects remain vulnerable to international developments outside its control.
February 9th, 2012 | The Daily Reckoning | 2 comments | Continued
Why Australian Banks Make Lousy Investments Right Now
Moody’s has just released a report claiming that Australian banks are the “most exposed” banks in the Asia-Pacific to a worsening of Europe’s sovereign-debt problem. What exactly does that mean?
February 7th, 2012 | Dan Denning | 1 comment | Continued
How the Banking Crisis Affects the Real Economy
What Australia has – commodity wealth – is strategically important. But what it doesn’t have – capital – is economically urgent.
The banking crisis will mean small Aussie businesses may start to feel the crunch of Europe’s credit crisis in 2012.
December 19th, 2011 | Dan Denning | 5 comments | Continued
Australian Debt – The Deleveraging Has Not Even Begun
While global leaders (we use the term very loosely) gather in the trendy French town of Cannes to ruminate on the myriad problems caused by too much debt, Aussie banks are still reaping the benefits of an increasing Australian debt.
November 3rd, 2011 | Greg Canavan | 6 comments | Continued
Widespread Asset Deflation
Even gold – which set a record high USD terms overnight – will not be immune. In fact, any time you see something making record highs, a correction is not far away. With gold, investment demand (as a hedge against bad monetary policy) is pushing the price up.
June 9th, 2010 | Dan Denning | 90 comments | Continued
Australia’s Banks Have to Compete in That Global Capital Market
“The quality of banks’ housing loan portfolios has proven to be very high by international standards, notwithstanding a modest increase in loan arrears. There has been a more significant deterioration in the quality of banks’ business loan portfolios, particularly for commercial property, and this remains an area to watch closely in the period ahead. Nonetheless, recent indications are that banks’ overall loan losses may have peaked…
March 26th, 2010 | Dan Denning | 7 comments | Continued
A Funds Industry Built on Turning Debt into an Income Paying Asset
The funding model for the funds industry was seriously strained by the outflows. As we understand it, the funds have three sources of funding: deposits, bank credit facilities, and the mortgage payments it receives from mortgagees (commercial and residential). The bank credit facilities are exercised either to make new mortgage loans or pay out withdrawals that exceed what the fund takes in via mortgage payments.
January 14th, 2010 | Dan Denning | 109 comments | Continued
Greek Banks Playing the Carry Trade and Investing in Government Bonds
Another day, another country looks to be heading towards bankruptcy.
Greece was last night downgraded by ratings agency Fitch from A- to BBB+ and was placed on negative credit watch. That means there could be more downgrades to come.
The Greek budget deficit is currently 12% of GDP.
December 9th, 2009 | Murray Dawes | 3 comments | Continued
What Kind of Investor is Happy to Lose Money Over 90 Days?
But there are some strange and perplexing crumbs to collect from news reports this morning. Yesterday we learned that for the first time in 70 years, yields on 90-day U.S. government securities were briefly negative. Investors – if you can call them that – were happy to loan money to the U.S. government for 90 days – and lose money.
November 25th, 2009 | Dan Denning | 20 comments | Continued
We Don’t Expect to See Australian Banks Suddenly Keen to Expand their Loan Books
Maybe this will sound like a bunch of whining by the end of the week. After all, three of the big four Aussie banks will report results this week. There will be billion dollar cash profit figures tossed around. But as we said last week, the earnings performance of financial firms in the last six months is a sham.
September 28th, 2009 | Dan Denning | 5 comments | Continued
Banks or BHP?
Are Australian banks going to be able to sustain their dividends? Over the last ten years, bank fee income has become a big driver of bank profitability (and the source of the dividends paid by banks). The credit crunch has crunched the amount of money banks make lending money.
August 13th, 2009 | Dan Denning | 3 comments | Continued
Organic Contraction at BHP
BHP announced yesterday it was cutting six thousand jobs globally. It will shut down the nickel operation at the Ravensthorpe mine indefinitely and reducing production at the Mt. Keith Nickel mine. What’s more, it will reduce coking coal production by 15% in Queensland and lay off 1,000 workers. BHP is the world’s largest producer of coking coal, so this tell you how much the global demand for steel has fallen off…
January 22nd, 2009 | Dan Denning | 1 comment | Continued
Australian Banks Must Increase Fees or Expand Loans to Remain Profitable
The news that’s all the rage today is Westpac’s (ASX: WBC) $19 billion bid for St. George (ASX: SGB). But in an age of rising interest rates and credit contraction, how will Australian banks remain profitable… Fees. If profitability on loans is declining (and it is), the banks could make it up charging you more fees. The growth rate in bank fees has actually declined, if you peruse the data from the Reserve Bank.
May 13th, 2008 | Dan Denning | 1 comment | Continued
