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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

The Isaac Newton Trade

Isaac Newton was a very clever man. Mathematician, Astronomer, Agriculturist, Theologian and Physicist, read about his incredible achievements here in Wickpedia.

Regrettably, clever men are just as falible (dumb stupid) as anyone else when it comes to playing in the markets as a newbie. Our egos tell us it can't be that difficult as we know all there is to know about Astronomy, Physics, Banking Finance, HR, electronics, being a big shot entreprenuer, etc., etc. For those to whom humility doesn't come easily, the markets will be a painfully great leveller. 

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