From the AFR comes Gerard Minack:
“Every mum and dad who has a term deposit expiring in CBA [Commonwealth Bank of Australia] can roll it back into the term deposit and get a crummy yield, or they can roll it back into the equity and get a better yield.
…”I’m not saying you should buy banks, my point is that that if yields stay low, then that process will probably make them into a bigger bubble.”
But Mr Minack also warned that a more serious downturn in the Australian economy would hit bank valuations particularly hard.
My utterly unreliable guess is that there’s probably another year in the bank inflation trade before the greatest short since the GFC piles in from around the globe.
