It rode the FHOG to higher loan values and volumes and market share. If those borrowers struggle with higher interest rates or – horror of horrors – Aussie house prices grow less fast (or even fall) – we’d expect to see the bad debt problem again affect earnings growth…
February 10th, 2010 | Dan Denning | 109 comments | ContinuedAll Posts Tagged With: "Commonwealth Bank of Australia"
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
Dubai Debt Story More Like Bear Stearns Less Like Lehman Brothers
But first things first. Dubai World is not nearly large, leveraged, or systemically important as either Bear Stearns or Lehman Brothers when both those firms failed. For those reasons, it’s unlikely that the failure of Dubai World (and we’re not saying it will fail) would, by itself, cause a global deleveraging.
November 30th, 2009 | Dan Denning | 18 comments | Continued
World of Super Collides With World of Credit Crunch
Meanwhile, mischief is still afoot in the world of superannuation. Australian super assets under management exceed $1.2 trillion. That’s the fourth largest pool of investable savings in the Western world.
November 11th, 2009 | Dan Denning | 2 comments | Continued
Rally in Stocks and Rise in Aussie Dollar is a Result of the Carry Trade
That’s just what happened last year. Only then, it was both a dollar and yen carry trade that led to a rise in Aussie assets. Once the credit crisis set in, the yen carry got dropped and investors fled risk assets and piled right back into the greenback and U.S. Treasuries.
October 29th, 2009 | Dan Denning | 9 comments | Continued