Australian banks

MacroBusiness covers Australian banks from the perspective of their macro-economic role, as political economy actors, as investment propositions and in terms of financial stability and capital adequacy. Australian banks have played a crucial role in inflating the Australian property bubble, exist within an utterly privileged position as “too big to fail” institutions and operate within a deeply distorted financial architecture that has Australian tax payers well and truly on the hook in the event of trouble. MacroBusiness seeks to define this role for investors as well as change it in the name of the Australian national interest.

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Australia’s regulators unwilling to investigate mortgage fraud

By Leith van Onselen LF Economics have lodged a submission to the Senate Standing Committee on Consumer Protection in the Banking, Insurance and Financial Sector, which highlights negligence by our financial regulators in their duty to protect consumers from mortgage fraud: … there appears to be adequate protections available to consumers afforded by the law

5

Good ‘ol days return as Big Iron crashes

Dalian is open and soft but holding: The good ‘ol days return today as Big Iron is getting hosed: FMG is falling -5% and describing a superb head and shoulders topping pattern: The uptrend is broken but we’ll need to see it breach the $5.80 neckline before the topping pattern is confirmed. RIO has a

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S&P slaps the Australian mortgage linchpin on downgrade watch

No worries, mate: On March 20, 2017, we revised our rating outlook on Genworth Financial Mortgage Insurance Pty Ltd. to negative from stable (see “Genworth Australia Outlook Revised To Negative From Stable; Ratings Affirmed At ‘A+’”). In this article, S&P Global Ratings addresses the current and potential issues the outlook change could have on its

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Westpac hikes rates on all mortgages

Hello Westpac: The bank said it would lift rates on variable rate loans for owner-occupiers with principal and interest payments by 3 basis points and for owner-occupiers with interest-only loans by 8 bps. For property investors the variable loan rate for customers with principal and interest payments will rise by 23 basis points and for

4

Mortgage delinquencies rise again

From Moody’s: Looking ahead, Moody’s expects delinquency rates for Australian prime residential mortgage-backed securities (RMBS) will continue to rise moderately in 2017. “Weaker economic conditions in states reliant on the mining industry, rising underemployment, weak wage growth and less favorable housing market conditions will drive delinquencies higher,” says Alena Chen, a Moody’s Senior Analyst. “Nevertheless,

1

Big Iron charts sicken as commodity traders puke

Dalian is open and following its recent pattern has launched again. We’ll see if it can hold this time during the day: Meanwhile, the sell-off for Big Iron is starting to do some chart damage. FMG is approaching the $5-handle again and its uptrend is busted: Any decent rebound at this point is going to

24

Mortgage keystone cracks widen as Genworth booted

Not much good news for GMA lately: Recall that the lenders mortgage insurer is still trading at its float price: And today it’s going to sink a long way below it. Thankfully APRA has been busy securing the cracking keystone in the Australian mortgage arch by letting it run its capital in extraordinary dividends since

0

Big Iron correction continues

Dalian futures launched out of the blocks this morning but have been falling ever since: Big Iron is down: More ahead in my view. Some of the charts are starting to look interesting. RIO has broken its steeper uptrend and may be setting up for a good correction: WHC is close to breaking a bearish

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Banks should have just agreed to the royal commission

From Australia’s last journalist standing, Adele Ferguson, today: The parliamentary inquiry into banking was always going to be entertaining with the big bosses stepping into the arena for a public smack down but it was never expected to descend into biting satire. That’s where those watching were taken on Tuesday. “It reminds me of Jim Hacker in Yes

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Swamped Citi slams door on foreign buyers

Via the AFR: Citigroup is set to limit overseas mortgage lending to elite high net worth clients with minimum deposits or investments of $250,000 because of concerns about its capacity to handle the number of applications following the withdrawal of most other major Australian banks. Citi, which last year banned key Asian currencies from buying

3

What would cutting the APRA investor loan limit do to banks?

Morgan Stanley takes a peak: We think regulators are increasingly likely to cut the 10% IPL speed limit given concerns on housing lending. This could slow total HL growth from ~6.5% to ~5%, with CBA and WBC most at risk given their recent strong IPL growth. However, all banks are likely to do further targeted