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Another Sea of Red for Aussie Markets; Australian shares took another big hit as blue chips plunge
Topic Started: 1 Sep 2015, 07:13 PM (13,780 Views)
Andrew Judd
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Sydneyite
21 Sep 2015, 06:32 PM
Are the banks assets the LOANS, or the PROPERTY? I'm pretty sure you will find the banks, the RBA, APRA and bank investors would all agree with me on this (simple!) point!

I'm not talking about how the loan assets are valued. I'm asking what the assets actually are! People here seem to have very strange ideas about this basic concept!

PS: Of course the value of loan assets may change based on a wide-spread fall in property values, but it would be due to increased risk of default, not directly related to the general property market value change at all. These are very different things! Ie a 10% fall in property values would NOT result in a straight 10% fall in bank asset values - surely you agree??? This is all I am trying to get across here.
Well yes of course the assets are the loans, but when the loans are valued we are going to also pay attention to the price of the houses and whatever impact that price might have on the loans value.
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The Whole Truth
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But how many loans do the banks actually hold. How many have been shuffled off as covered bonds?
Edited by The Whole Truth, 21 Sep 2015, 10:11 PM.
"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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Loki
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The Whole Truth
21 Sep 2015, 10:09 PM
But how many loans do the banks actually hold.
A LOT.
Quote:
 
How many have been shuffled off as covered bonds?
"An ADI must limit the value of its cover pools to a maximum of 8 per cent of its assets in Australia." The covered bond is geared by about 20%, so assuming banks haven't breached issuance limits, probably 6.75% of mortgages are securing covered bonds.


“Talk sense to a fool and he calls you foolish.” - Euripides
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The Whole Truth
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That sounds about right.
"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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The Whole Truth
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Down down down and getting perilously close to the 5000 support
"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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zaph
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The Whole Truth
23 Sep 2015, 01:29 PM
Down down down and getting perilously close to the 5000 support
Gold
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hidflect
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Poontang
21 Sep 2015, 04:33 PM
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.
Little birdie told me SBM is going to over $1. I'm holding with 70,000 as I don't want to miss that boat. Currently at 82.5.
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The Whole Truth
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Closed now.
ASX200 down 105 to 4998
All ords down 98 to 5032

"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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GloomBoomDoom
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http://www.news.com.au/finance/markets/asx-200-closes-below-5000-for-the-first-time-since-june-2013/story-fnu2pvla-1227540702992

A long over due slice of reality and fear beginning to return.
MSE
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The Whole Truth
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A lot of analysts not on the payroll of the big media are predicting this years action to be the next GFC event. We entered a bear market for stocks in 2000 but the markets were never allowed to clear, we had one more boost up to over 6000 and the US to 18000 but it's all speculation, the underlying companies are worth nothing like the prices they fetch even today.



"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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