The Australian economy to collapse.

[jamjar]

Housing market is coming down and there are bargains to be had but I think we are at the bottom. Today bought a decent size block (527m) 500m from beach for $180k with views. It might come down a bit more, but happy to live there. My work is secure fore long term as gold price only needs to stay over $800 for what I do

 

Mind sharing which area that is in mate?

 

Cheers

[Skani]

FWIW if you're going to point at one bank from the UK or Aus that you'd pick out as particularly well run, managing to avoid big exposures whilst still retaining good margins AND being a very large operation throughout the sh1tstorm, it would be HSBC

 

Again, I'm not knocking Aussie banks. But I detect some smugness at times in the Aus press on this issue that's not justified

 

It is HSBC which is the UK bank in the latest top 18 "safest" banks.

And I'm not a cheer squad leader for Aussie banks - just unable to let pass a factual error in the first post in this thread.

[Guest The Ropey HOFF]

I also read that economists are saying that the doom-mongers are out in force (again) and that figures aren't nearly as bad as they are being made out. They said that the next quarter figures should show modest growth. However, the Jubilee holidays are going to knock numbers big time. I would hope this would be a bit offset by the Olympics!

 

I too would like a recession in Oz, although I'd be happy for a 24 hour one; just long enough for us to make a currency trade!!

 

 

The people who are predicting modest growth are the same people who predicted slight growth now and they have been proved wrong, because the UK is now in recession.

[Johndoe]

Really all the banks are you sure?Or are you believing the local press reports? If you read the report given to the Senate Committee by Mark Joiner, Director of Finance, of one of the bid 4 banks,who stated there were two periods the the crisis when our credit rating(one of big 4)was in negative which could have resulted in the loss of the banks AA status.

These two perods were in Nov 08 and July 09.

This desite claims by ABA (Australian Banking Authority)that Australia's banks were strongly capitalised. Indeed. So strong that NAB had to raise$6 billion on the markets and another $4.5 billion in secret from the US Fed.

 

Not quite as safe after all. They were not the only bank either....

 

I didn't say that they were "blameless"..............I said that they behaved more prudently (than the UK or USA)

[4lan]

The bigger factor in recklessness than nationality was size - the Aussie banks are all quite considerably smaller (when measured by revenue or assets, rather than market cap, as the latter is distorted by current depressed share prices)

 

Not knocking them (the Aussie banks) - they were managed decently in torrid times, but I note are regularly bashed in the press for the same conservative view on margins that led to this......

 

UK High Street banks? Recklessness in direct lending was a speciality of demutualised, medium-sized, ex-building societies who typically had a model of using short term debt to fund long term lending and inflated their loan books excessively using this. Northern Rock, Alliance & Leicester, Bradford & Bingley, HBOS

 

RBS acquired recklessly - esp. ABN Amro which was the real thing that broke them. Lloyds got tucked up by Gordon Brown persuading them to throw HBOS a lifeline. Not a huge amount of recklessness at the other big two UK banks. Barclays, Lloyds, RBS got caught as did most globally large banks by the size of their exposure to dodgy derivatives after AIG fell apart. Almost all banks had some exposure to this, but it was the big boys that really got caught just by dint of their size

 

FWIW if you're going to point at one bank from the UK or Aus that you'd pick out as particularly well run, managing to avoid big exposures whilst still retaining good margins AND being a very large operation throughout the sh1tstorm, it would be HSBC

 

Again, I'm not knocking Aussie banks. But I detect some smugness at times in the Aus press on this issue that's not justified

 

This appears to be a dispassionate and balanced review however I'd appreciate some substaniating evidence please?

 

Also for the sake of 'clarity' or 'pedantism' 'Northern Rock' is not and never was a 'bank'. It was certainly reckless and irresponsible but calling a tiger a leopard is not cricket.. (;¬P)

 

I'll try to shut up now..

 

4lan

[pintpot]

This appears to be a dispassionate and balanced review however I'd appreciate some substaniating evidence please?

Not sure what you want really - cba to google up a load of old news stories or trawl through companies' annual reports for the financials

 

RBS overextending themselves when they took over (and paid largely, if not entirely in cash rather than paper) ABN Amro is a good story to follow. Originally Barclays were going to do that deal, but RBS stole in at a late hour and got involved in a bidding war. When RBS "won" they reckoned they'd stolen a really big march on Barclays. Possibly one of the worst "victories" in corporate history, they hugely overpaid at the top of the market and ABN Amro turned out to have a load of issues both operationally and because they were holding a lot of ropey derivatives. It's reasonable to argue that, had RBS failed in that takeover attempt, they would not have needed the bailout - they would have had a much higher capital ratio when the poo hit the fan for a start, because they wouldn't have shelled out all that cash, and they wouldn't have bought so much bad stuff either. Hard to be sure - RBS had been one of the most aggressive banks in terms of trying to operate globally and take over a lot of others for years, so who knows what their expsoure would have been to the credit crunch? You can be sure they'd have been a lot better off without ABN Amro though

 

Lloyds TSB being persuaded to take on HBOS (and its liabilities) is another one that's worth looking for some old stories on. HBOS got in trouble at the same time as NR and for similar reasons, although as it was (a lot) bigger it was a little less exposed than NR but conversely represented a bigger risk to the UK financial system. So Brown and Darling brokered a "fire sale" deal whereby LTSB took them over very quickly, and without having the time to do the usual due diligence. If they had the time, would they have backed out? Who can say. Greed plays a large part of course, the deal catapulted LTSB into the big league (or so they thought) and that is always going to be tempting to executives. Again, though, it's unquestionable that LTSB would have been a lot better off if they *hadn't* taken over HBOS

 

Also for the sake of 'clarity' or 'pedantism' 'Northern Rock' is not and never was a 'bank'. It was certainly reckless and irresponsible but calling a tiger a leopard is not cricket.. (;¬P)

 

Sure it was a bank. It wasn't a building society any more. Like many (most?) of the demutualised BSs, it became a commercial bank that targetted a specific type of loans for the bulk of its profits. NR (and B&B) in particular went after the domestic mortgage market, financing this long term loan book by means of raising short term capital on the wholesale markets. This enabled them to issue more loans (and therefore make more money) than relying on the "old fashioned" way of using a higher proportion of savers' capital to make the loans. When this wholesale market had a high level of liquidity, this worked OK, but there was no safety net and they were badly exposed in the event of the wholesale markets freezing up......which is exactly what happened when the world realised a bunch of rubbish loans had been made - principally in the US - and nobody knew the size or distribution of the liabilities because the loans had been broken up, packaged up and sold on, insurances against those loans had been sold on likewise, and no one knew who was holding most of the dud cards when the music stopped

 

 

One of the things that is odd about the fallout of the crisis is the direction of public/press ire and mooted possible legislation, in particular the proposal to reinstate Glass/Seagall and insist that banks should either be retail or investment banks but not both. Lots of people seem to think this will be a panacea for all ills, but it doesn't stack up against the history of the GFC

 

The root cause of the rot was bad loans made, mostly in the US, in an overheated housing market, and principally made by banks that were almost entirely retail banks

 

These bad loans were then securitised and sold on, and insurances against them securitised and sold on, by banks that were mostly investment banks and insurers (AIG)

 

The risk inherent in these securities was poorly marked by the Ratings Agencies, so they were widely traded around global markets

 

Then when some of the loans started going bad, people realised what was going on and the credit markets froze up, the institutions that went pop were those that had made the bad loans in the first place (retail banks), or those whose business was reliant on the credit markets (again retail banks, like NR), or those who had a lot of dodgy paper and not enough diversification in other activities to ride it out (investment banks, like Lehmann's and Bear Stearns)

 

Most of the "big" combined retail/investment operations suffered from collateral damage, the survival of which depended on their level of exposure to dodgy paper and their strength in reserves. And yet, the "cure" that is most often quoted as being a way to prevent a recurrence is to enforce the breakup of these big operations into either strictly retail or strictly investment outfits. Which seems perverse, given that, by and large, they weren't the main architects of the issues in the first place but generally the victims.....and the victims of actions by banks that were either wholly retail or wholly investment, the actiosn of insurers, and the (in)actions of ratings agencies

 

The other thing I find odd is the continual desire to punish, when those responsible have been punished; the directors of the risky players have generally been sacked, and their shareholders have lost money. In the case of the riskieest outfits like NR, the shareholders have lost all their money, and all the directors have been fired. Is that not punishment?

[flag of convenience]

It is HSBC which is the UK bank in the latest top 18 "safest" banks.

And I'm not a cheer squad leader for Aussie banks - just unable to let pass a factual error in the first post in this thread.

UK bank? Last year the HSBC was considering moving their UK operations offshore.

[Skani]

UK bank? Last year the HSBC was considering moving their UK operations offshore.

 

I think this ranking was done very recently and it classified HSBC as a UK bank.

And the time between "considering" and doing is often considerable.

[Paul1Perth]

Housing market is coming down and there are bargains to be had but I think we are at the bottom. Today bought a decent size block (527m) 500m from beach for $180k with views. It might come down a bit more, but happy to live there. My work is secure fore long term as gold price only needs to stay over $800 for what I do

 

That can't be right can it??? You would be lucky to get a banana for that (judging by some posts):laugh:

[VERYSTORMY]

Mind sharing which area that is in mate?

 

Cheers

 

Southport, Mandurah. Funny as traditionally it has been the most expensive area of Mandurah.

[Paul1Perth]

Australia has a very poor government just now. They seem to stuff up everything they touch. This tme next yeare should be heading towards a slightly better one, hopefully

 

I'm no fan of Julia Gillard and her government but if you blame the government for everything when times are bad surely you have to give them a little praise for when times are good? In Aus we have low inflation, low unemployment, economies doing pretty well, GFC mostly passed us by.

 

On the other hand if we are doing that well with a crap government how good will things be when we get a decent one???:laugh: Can't wait.

 

I can't really trust Tony Abbott. I've not heard one policy come from him yet.....just negatives about whatever the present government does.

[Guest sidster]

Cant believe this thread is still going, come on people time to chill out ,weekend is nearly here ,weather is good and surely we should be more concerned with more important issues like trying to find a decent pork sausage,or why i can only find fray bentos pies in steak and kidney flavour

[jennlx]

Just in response to the comments about the rip-off Australian banks and their high, high, high fees: we're renting property for our upcoming holiday in Oz. The owner wants to repay the bond into my Australian bank account to avoid the $8 charge she would incur transferring it to my UK bank account.

 

HSBC charged me £25 to transfer money from my UK bank account into her Australian account to begin with. I was not very sympathetic!

[Slean Wolfhead]

I think this ranking was done very recently and it classified HSBC as a UK bank.

And the time between "considering" and doing is often considerable.

 

The CEO's office is still in Hong Kong, and the headquarters was only moved to the UK 20 years ago when we returned Hong Kong to China.

It wouldn't be totally surprising if they moved it again to Singapore, there's been a huge brain drain from London to there over the last 4 years.

[Slean Wolfhead]

I can't really trust Tony Abbott. I've not heard one policy come from him yet.....just negatives about whatever the present government does.

 

He does seem like a slimeball...especially trying to blame this Peter Slipper business on Gillard because she gave him the job.. I didn't realise that Slipper was in Abbott's party for 15 years, and they endorsed him 9 times for jobs?

They made the bloke, now they're trying to say he's nothing to do with them and want to score points from it...that's the sort of snidey UK crap I hoped i wouldn't see here too often.

[VERYSTORMY]

Just in response to the comments about the rip-off Australian banks and their high, high, high fees: we're renting property for our upcoming holiday in Oz. The owner wants to repay the bond into my Australian bank account to avoid the $8 charge she would incur transferring it to my UK bank account.

 

HSBC charged me £25 to transfer money from my UK bank account into her Australian account to begin with. I was not very sympathetic!

 

Yes, but in Australia most of the banks charge you for just having an account. Every month. Then if you use a ATM that isn't your own banks it's another fee, then pretty much anything you want or do will be a fee

[jennlx]

Yes, but in Australia most of the banks charge you for just having an account. Every month. Then if you use a ATM that isn't your own banks it's another fee, then pretty much anything you want or do will be a fee

 

True...I was just pointing out that when UK banks do charge fees, boy do they charge fees! Did you hear about the kerfuffle about unfair bank charges in the UK? It went to court and surprise, surprise, at the time of the sub prime banking losses, the court ruled that it was up to banks to deem what is a reasonable charge. I travelled to Oz and went £2 overdrawn accidentally on my Nationwide account (underestimated the delay in payments appearing) and got a £20 fee. I paid it when I received their letter, but by the time it arrived, another £20 had been charged. This happened twice more. £80 in charges, when I was standing in their bank after a week of going overdrawn trying to sort it out and pay in full.

 

How many months of holding an account open in Australia is £80?

 

Anyway, sorry, completely off track. Back to the OP:

[Skani]

Yes, but in Australia most of the banks charge you for just having an account. Every month. Then if you use a ATM that isn't your own banks it's another fee, then pretty much anything you want or do will be a fee

 

There are bank products which don't charge monthly account keeping fees, or ATM withdrawal fees, or EFTPOS fees or branch withdrawal fees - it is just a matter of doing your research.

Canstar is a good place to compare:

http://www.canstar.com.au/

[Johndoe]

When I had a mortgage with suncorp, they dropped all bank charges...................other than the interest of course.

[flag of convenience]

I think this ranking was done very recently and it classified HSBC as a UK bank.

And the time between "considering" and doing is often considerable.

I suspect the threat to move was an attempt to put pressure on the British Govt's plan to bring in new rules with regards to the banking industry. As far as I am concerned the govt should have called their bluff and let them relocate to HK or Singapore. A bank in the end will go where ever they consider their best interests to be anywhere. Anyhow the govt has appeared to have backed down to financial interests who appear to have way too much influence ......

[supa]

I worry about the "ordinary" citizen in Oz who isn't invovled in mining. I've watched the headlines in Oz for a long time now, and you didn't used to get headlines like these:

http://www.theaustralian.com.au/news/nation/trucking-firm-goes-into-administration-1000-jobs-at-risk/story-e6frg6nf-1226339127185

 

http://video.theaustralian.com.au/2227283685/Ford-to-close-plants

 

They have to sort the strength of their dollar (please!) out as it's just too high.

[Quinkla]

Just in response to the comments about the rip-off Australian banks and their high, high, high fees: we're renting property for our upcoming holiday in Oz. The owner wants to repay the bond into my Australian bank account to avoid the $8 charge she would incur transferring it to my UK bank account.

 

HSBC charged me £25 to transfer money from my UK bank account into her Australian account to begin with. I was not very sympathetic!

To be fair, if you purchase services in Australia, priced in AUD, then the vendor should not have to pay your fees for foreign exchange. But having said that, $8 looks very cheap for transfers to foreign banks.

[Skani]

I worry about the "ordinary" citizen in Oz who isn't invovled in mining.

....................They have to sort the strength of their dollar (please!) out as it's just too high.

 

But one of the major reasons for the dollar being so high is the strength of the mining boom. :rolleyes:

[Dan Collins]

Flipping heck, I'd change papers...

 

Let's hope this one is wrong.

[Skani]

Flipping heck, I'd change papers...

 

 

Here you are - read this one instead!

 

http://www.heraldsun.com.au/ipad/rio-tinto-push-to-hire-6000-workers/story-fn6bfkm6-1226339276254