They'll blow another bubble TWT. It's how banks make money: working around reserve requirements. Soon, there won't be reserve requirements when RBA turns up the printing press.
What "reserve" requirements do you think currently exist now?
For Aussie property bears, "denial", is not just a long river in North Africa.....
What "reserve" requirements do you think currently exist now?
Well none. But they're required to keep capital (l use the term loosely and interchangeably mmmkay?), as evidenced by the capital raising by ANZ and CBA.
ASX down 2.8% as I write - LOL - It does me ole bear heart glad ...
Though if this shit goes on too long, I'll just naturally want to tip a bit of loot my aged parents' way given they do have some minimal stock market exposure.
Still, it's not over 'til the lassie with the large luv handles bellows - So we'll just have to wait 'n see what the close brings I suppose ...
ASX down 2.8% as I write - LOL - It does me ole bear heart glad ...
Though if this shit goes on too long, I'll just naturally want to tip a bit of loot my aged parents' way given they do have some minimal stock market exposure.
Still, it's not over 'til the lassie with the large luv handles bellows - So we'll just have to wait 'n see what the close brings I suppose ...
Sold 50000 of my SBM shares for .85 each this morning. 200000 @ .85 was $170000 making up a very large portion of my portfolio so took some off the table.
Price has dropped to .82 currently.
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
Well none. But they're required to keep capital (l use the term loosely and interchangeably mmmkay?), as evidenced by the capital raising by ANZ and CBA.
Ok I'll accept that, but the difference between "reserves" and "capital" is a very important one if discussing banking regulation!
However, regardless, I still think this undermines your point about "zero" reserve capital requirements in the future. In fact the opposite is going on right now - capital ratio's / requirements for banks are INCREASING, hence the very reason why ANZ and CBA etc recently did their capital raisings. So the regulatory trend is actually going in the opposite direction to that suggested by your "heading towards zero reserves" comment.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Ok I'll accept that, but the difference between "reserves" and "capital" is a very important one if discussing banking regulation!
However, regardless, I still think this undermines your point about "zero" reserve capital requirements in the future. In fact the opposite is going on right now - capital ratio's / requirements for banks are INCREASING, hence the very reason why ANZ and CBA etc recently did their capital raisings. So the regulatory trend is actually going in the opposite direction to that suggested by your "heading towards zero reserves" comment.
Capital raising based on bank assets even the RBA or APRA couldn't have even a peek of. Yeah your bank solvency and liquidity is based on bullshit books made up of make believe housing valuations. Those capital raising will be worth zero when your taxes and deposits are confiscated to keep these ponzi machines alive.
I'll go with 95 off, that will put the close under 5100.
So were down 98, looks like I win the sweep If anyone wants some hot tips just pm me, I'll give you my account details lolhere comes some dribble from sydneyBlight
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
Capital raising based on bank assets even the RBA or APRA couldn't have even a peek of. Yeah your bank solvency and liquidity is based on bullshit books made up of make believe housing valuations. Those capital raising will be worth zero when your taxes and deposits are confiscated to keep these ponzi machines alive.
No,wrong! You are losing the plot again.
The banks assets are NOT based on housing valuations. They are based on the value of the loans they have issued! APRA and the RBA have full visibility of these assets. The housing values underpin the loans as collateral - the average LVR across most of the big banks books is something like 50 or 60% (will have to check for exact current number), so it would take something far more catastrophic than even you are envisaging for any of them to get into real trouble across the board. Remember the bank doesn't lose on a loan until is a) defaults and is foreclosed on, and then b) the bank cannot recover the outstanding loan amount after disposal of any collateral, and claiming on any mortgage insurance policy if there is a shortfall even then.
And besides, their position is currently only getting stronger, not weaker, at the moment, with respect to capital / asset ratios, the quality of new loans etc - in case you hadn't noticed investor lending is currently being rationed! And as you mentioned, they have also been RAISING capital in order to meet APRA/RBAs enhanced requirements flowing out from the Basel III rules. There is also a LOT of other stuff going on behind the scenes in terms if tightening of other regulations, increasing of the visibility of interest rate swap derivative positions to the regulators, requirements for central clearing of such derivative positions and so on, that you are probably unaware of.
You are stuck in a 2007/2008 paradigm I think with respect to how you view AU banks systemic risk etc. A lot has changed since then - for the better. They survived then - so why would they all fall in a steaming heap now when there is so much more awareness, tightened regulation and so on? Loan default rates are currently at multi-decade lows!
For Aussie property bears, "denial", is not just a long river in North Africa.....
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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