If we’re right, households have just begun reducing their debt loads. It will take years for the leverage in the system to be wound down. See Bill’s comments about that below. If you’re buying bank stocks you’re assuming credit and debt growth will resume once this recession is over. That’s a big assumption. And probably stupid.
August 12th, 2009 | Dan Denning | 4 comments | ContinuedAll Posts Tagged With: "commonwealth bank"
The Cash Flows Are Coming
National governments are demanding a larger portion of global savings. Government welfare transfer schemes and bailouts have to be funded from borrowing (unless from money printing), which also makes capital harder for private companies to get. Corporate cash flows will revert to the mean in the absence of huge infusions of credit to finance the growth of the balance sheet.
August 10th, 2009 | Dan Denning | 13 comments | Continued
The Trouble With Banks
Meanwhile, there is not much we can tell you that you don’t already know about the global rout in stocks. Wall Street is at twelve- year lows. The FTSE is at six-year lows. And here in Australia the market has opened lower than its five-year low, as you’d expect after such a wretched overnight performance on global markets.
March 3rd, 2009 | Dan Denning | 6 comments | Continued
Commonwealth Bank (ASX: CBA) Nearly Doubles Bad Debts Over Last Year
Should you be annoyed or relieved that the Commonwealth Bank (ASX:CBA) reported a cash profit increase of 5% yesterday morning? It would be a refreshing result in an otherwise gloomy reporting period for Aussie financials. But the news might not actually be as good as it first looks.
August 14th, 2008 | Dan Denning | 3 comments | Continued
Commonwealth Bank Profits Hit By Credit Crunch
It’s a dour day for the Commonwealth Bank of Australia. One of Australia’s four big banks, Commonwealth Bank (ASX: CBA) reported the slowest profit growth in three years today. Net income was up a modest 8% to A$2.37 billion. No one will have much sympathy for Commonwealth Bank. It raised interest rates on variable home loans by 30 basis points after the Reserve Bank’s last quarter point rise.
February 13th, 2008 | Dan Denning | 3 comments | Continued