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.
Via the AFR: Senator Xenophon said the state needed to ensure the best possible investment conditions were in place to try to reinvigorate the local economy at a time when carmaker Holden was getting ready to close its operations in October. “My concern is that it will damage investment,” he said. “It’s quite a different
A little bid in Dalian today: Big iron too: And Big Gas: Big Gold down a bit: Big Bubble mostly down too: And Big Liar continues to reach for the stars anyway: Because Australia is different.
The MSM bank protection racket is in full swing, at the AFR: London-based investors have warned National Australia Bank chief executive Andrew Thorburn that they consider Australia a less stable and less consistent economy for investment after the South Australian budget hit the big four banks and Macquarie with a surprise $370 million tax. Speaking
From Dick Holden professor of economics at UNSW Sydney Business School via AFR: We are now through the looking glass on company taxation. We have industry-specific taxes based simply on which companies are profitable and what focus groups think about those companies. This is terrible tax policy. Though all taxes are distortionary, the primary goal of sound
Dalian continues its recent pattern of firming at night and sagging during the day today: Big Iron is mixed: Big Gas is still stinky: Big Gold is up: Big Bubble is reeling: And Big Liar is as mendacious as usual as REA breaks out: As Australia goes ex-growth so does it’s share market. Avagoodweekend.
From NAB: NAB has today announced changes to its variable home loan interest rates, effective Friday 30 June 2017. The following three changes have been announced: The interest rate for owner occupiers making principal and interest repayments will decrease by 0.08% per annum, to 5.24% per annum The interest rate for owner occupiers making interest
A fading China, downgrades, levies, housing bubbles and no growth. Why would you own an Aussie bank? UBS see more to come: South Australia hits the banks with a further State Bank Levy In today’s South Australian budget, Treasurer Tom Koutsantonis announced it will be introducing a state based Bank Levy on the Major banks
The conniption begins, from Chanticleer: Bad policy clearly breeds bad policy, as shown by South Australia’s $370 million tax on the big four banks and Macquarie Group. But South Australian Treasurer Tom Koutsantonis has created a problem for himself by aligning his “super profits” tax on the banks with the state’s share of the national
Cat meet pigeons: Australia’s big four banks plus Macquarie will be hit with a new state-based version of the major bank levy which will reap $370 million over the next four years for the South Australia Government as it ramps up spending on infrastructure in a struggling economy. South Australian Treasurer Tom Koutsantonis said the
Dalian has opened flat: Big Iron has broken with FMG right at new intraday lows, BHP crashed through them, and even coconut vendor RIO under pressure: Big Gas is now burning out of control with STO pointing straight towards new 40 year lows: Big Gold is chopping wood in its correction: Big Bubble is bursting
It should, via Bloomie: …announcement in coming days from the Australian Prudential Regulatory Authority, which is due to say whether it will require the banks to hold more capital against their mortgage books as part of a wider update on capital requirements. Despite recent steps to rein in their exposure to the riskier areas of
Dalian is wandering aimlessly today: Big Iron is mostly up: Big Gas is burning: Big Gold is correcting: Big Bubble has had its run seemingly: Big Liar is soldiering on: And a bonus chart today, hope your enjoying Australian exceptionalism: If not, try the MB Fund launching July 1st with a 70% international equities allocation. Sign
Via S&P: The number of delinquent housing loans underlying Australian prime residential mortgage-backed securities (RMBS) increased to 1.21% in April from 1.16% a month earlier, according to a recent report by S&P Global Ratings. Part of the increase reflects a decline in outstanding loan balances, but we believe interest-rate rises announced by different lenders during
By Leith van Onselen In a slice of good news, the Senate last night passed the bank levy bill after Labor voted for it. However, One Nation opposed the levy, with Senator Brian Burston describing it as a “lazy, ugly, cheap solution”. Meanwhile, the Senate’s economics legislation committee has recommended that the levy should be
Via the AFR: On the basis of anonymity, a former Macquarie insider said debate around redomiciling was real in 2006 and 2007, when the concept was debated and investigated. But despite a work stream being set up to assess the idea, it didn’t get as far as speaking to regulators in other markets. “It’s easy
Drip, drip, drip. The Dumb Bubble cops another downgrade in Australia: Moody’s Investors Service has today downgraded the Baseline Credit Assessments (BCAs), long-term ratings and Counterparty Risk Assessments (CRAs) of 12 Australian banks and their affiliates, reflecting elevated risks in the household sector which heighten the sensitivity of the banks’ credit profiles to an adverse
Dalian is holding up today: But Big Iron is getting hit with FMG at new closing lows as Citi downgrades: There is a very long and embarrassed list of brokers to follow… Big Gas is getting a little relief: Oil has further to fall… Big Gold is off as DXY rebounds: Big Credit is up
Via the AFR: The chief executive of the Australian Bankers’ Association Anna Bligh has zeroed in on the development of government’s major bank levy by criticising the lack of industry consultation and the shifting series of rationales put forward for the levy. “Neither appropriate process have been followed or sufficient consultation been allowed,” Ms Bligh said.
By Leith van Onselen After narrowly holding-off a banking Royal Commission last September, the banks narrowly avoided facing a Commission of Inquiry (CoI) after a Greens bill to establish a CoI was passed by the Senate (supported by Labor), but fell just one vote short in the House of Representatives. From The AFR: Because Deputy
The ASX two day boomlet has fallen over today, down 1.4% as I write. It started badly but then got worse with the good jobs number: I guess the market was sneakily readying for more rate cuts. Not yet. Meanwhile, Dalian is stable: But Big Iron is getting slammed (even coconut vendor RIO): As oil
Don’t look for rationality here. Dalian is soft: But Big Iron is mostly up: FMG is up 1% even as iron ore hits new lows. Makes no sense but the 58% discount has eased a little so not entirely crazy, either. More losses ahead. Big Gas is mixed: No upside here as oil falls with
By Leith van Onselen Fairfax has posted an interesting article on the blow-out in Federal Government debt, which is about to pass $500 billion: The Turnbull government will break through the country’s former debt ceiling this week, breaching the $500 billion mark as it doubles the credit card bill it inherited from Labor. On Tuesday,
That seems to be the depth of reasoning overtaking the share market today as banks soar. After all, nothing says buy banks more than a crashing global yield curve and an even more rapidly deteriorating local economy. Booya! Go figure. Meanwhile, Dalian is OK so far: Though Big Iron is not so good following overnight
By Leith van Onselen Chris Joye aside, The AFR has been a key conduit of the banking sector’s campaign against the Turnbull Government’s 0.06% levy on big bank liabilities. Since the policy was announced in the May Budget, The AFR has published reams of articles decrying the levy as either “populist”, “ill-conceived”, “inefficient”, or “incoherent”. Today’s
From Morgan Stanley: ANZ lowers P+I rates by5bp, but lifts IOLrates by30bp: On Friday, ANZ announced a 5bp reduction in variable rates for principal and interest (P+I) loans and a 30bp increase for interest only loans (IOLs) “in response toregulatory and market conditions”. This means ANZ’s rate for OOL P+I loans will be the lowest
