And the property permabull spuikers reckon our property market bares no resemblance to the US? Looks suspiciously like a carbon copy of US government sponsored enterprises going by the name of Freddie Mac & Fanny Mae?
Had a bit of wacky tobaccy tonight, TS?:
no ... just sick and tired of the bovine excreta that people call "intelligent" posts.
TRY SOME FACTS !!!!!!!!!!!!!!!!!!!!!!!!
When do you understand that these financiers are not available in Australia?? HUH???????????
Have a real look at the tripe you are spreading. Have you any clue of the substance of your post?? HUH?
Tell me where in the banking industry (in Australia) that we have this kind of finance available to the masses???
It is not possible for this kind of finance to be available????????
Go and get a navel and stare into it.
You do understand that whether a loan is securitised or unsecuritised, that is a seperate issue to credit quality right?Australian banks hold just under $3 trillion in on balance sheet assets. What sort of assets go on a balance sheet? Traditional loans.
Australian banks hold just under $13 trillion in off balance sheet assets. What sort of assets go off a balance sheet? Anything where the bank has passed the risk on and become a facilitator. i.e. securitised loans!
Australian banks have securitised Australia's housing market 13 years of GDP worth into the future sold to foreign debt markets!
These sort of financiers are available in Australia, they are called the big 4 banks, and just because their actions are sanctioned, doesn't make them smart/sustainable/sane.
You do understand that whether a loan is securitised or unsecuritised, that is a seperate issue to credit quality right?
In addition, in Australia securitised loans are almost entirely protected by LMI - yes even those with < 80% (generally done so on a bulk scale).
LMI charges are small on a per-loan basis below 80% and fully securitised lenders pay this on behalf of the lender as part of their costs of doing business. Secruitised lenders struggled during the GFC due to the cost of funds squeezing margins, not due to any rise in delinquencies (which in Australia are amazingly low compared to other countries aas well).
In any case, credit quality is infinately higher in Australia than the US (where I believe NINJA & ARMS constituted well over 20% of the market) and our loans don't have the "jingle mail" recourse danger the US and other countries have as well.
I guess thread-wise we're now back to not making the distinction between different markets, assuming all FHBs buy at the median price on a median household income, etc etc.
The sudden tightening of lending standards (from the previous standard of stupidly lax) was part of the double shock that precipitated the major decline in US house prices; Australia, even under conditons of a declining market, is unliekly to receive any such shock in changing lending conditions because teh standards are already reasonably good.Of course I realise this! Yet, credit quality has nothing to do with the Australian market like it did in the US (this is an issue of debt being rated AAA when it wasn't, but that isn't what I'm referring to!), so comparing credit quality is a useless metric.
It's not entirely foreign credit, and there are signs of the securitisation market regaining some of the past volumes - the volumes are, of course, rated towards countries that have a higher quality of credit standard and some measure of lending protection to the portfolio. We're in the box seat in this regard.The risk to Australian banks is rather in access to cheap, available foreign liquidity to keep the ball rolling. House prices can't go up if the bank can't loan money for Joe Public to bid higher than the last guy and the bank can't loan money domestically without foreign demand for that debt or much much much higher interest rates.
This huge securitisation process, to the tune of $13 trillion dollars, is simply a product of the fact that we rely on this foreign credit to keep the housing market propped. It is testament that if access to this credit stopped (say, through some sort of liquidity or credit crisis), housing credit would dry up overnight and momentum would be negative within a week.
I wasn't a fan of the guarantee in the first place - it exacerbated the redcution in lending competition in the marketplace as people flocked to the institutions protected by the guarantee. Short term protectionism has wrought longer-term pain in the form of reduced competition.All I have to say to the continued repetition of statements like this:
If it's true, then please remove the Australian taxpayer guarantee immediately and explain why we needed one in the first place!
I'm not convinced of any above-inflation growth in the short term or medium term (I'd tipping a fall in prices adjusted for CPI) but I certainbly don't think we have the conditions for a crash in Australia that many keep pointing to.IMHO we are beyond that sort of dicussion. It just doesn't matter anymore whether there are some smart buyers amongst the herd or not, because there have been more than enough dumb buyers to start the ball rolling on a bad slope for everyone else.
The sudden tightening of lending standards (from the previous standard of stupidly lax) was part of the double shock that precipitated the major decline in US house prices; Australia, even under conditons of a declining market, is unliekly to receive any such shock in changing lending conditions because teh standards are already reasonably good.
It's not entirely foreign credit, and there are signs of the securitisation market regaining some of the past volumes - the volumes are, of course, rated towards countries that have a higher quality of credit standard and some measure of lending protection to the portfolio. We're in the box seat in this regard.
Not all of the securitisation is foreign funds as I understand it, I don't have the exact figures although I would assume the lions' share is offshore.
I wasn't a fan of the guarantee in the first place - it exacerbated the redcution in lending competition in the marketplace as people flocked to the institutions protected by the guarantee. Short term protectionism has wrought longer-term pain in the form of reduced competition.
I'm not convinced of any above-inflation growth in the short term or medium term (I'd tipping a fall in prices adjusted for CPI) but I certainbly don't think we have the conditions for a crash in Australia that many keep pointing to.
hello,
oh gidday, sorry to bother everyone again
could someone please point me in the direction of a bank offering a NINJA loan as I want to get down there first thing in the morning to sign up, just a no frills one, lowest rate possible
preferably in the Prahran area but I dont mind travelling to the CBD, its gonna be a good day for tram riding
thankyou
professor robots
When do you understand that these financiers are not available in Australia?? HUH???????????
Have a real look at the tripe you are spreading. Have you any clue of the substance of your post?? HUH?
Tell me where in the banking industry (in Australia) that we have this kind of finance available to the masses???
It is not possible for this kind of finance to be available????????
Go and get a navel and stare into it.
REGIONAL banks and other small lenders have begun talks with the Gillard government seeking a third extension to the $16 billion residential mortgage-backed securitisation program, which forms a key funding source for the sector.
The smaller banks are hoping to capitalise on recent concerns raised by Treasurer Wayne Swan about the state of competition in the market, amid speculation that some of the bigger banks could push through an out-of-cycle interest rate rise.
The government has invested in $11.3 billion worth of low-risk mortgage securities and been a cornerstone investor in several major transactions in a bid to boost investor confidence after the securitisation market stalled in 2008.
Securitisations are loans - mostly in the form of mortgages - that have been bundled into bonds and then sold to investors. They represent an important source of funding for smaller lenders.
http://www.aofm.gov.au/content/rmbs.aspThe Australian Office of Financial Management (AOFM) has been directed by the Treasurer to invest temporarily in Australian Residential Mortgage-Backed Securities (RMBS) to support competition in mortgage lending from a diverse range of lenders.
hello,
oh gidday, sorry to bother everyone again
could someone please point me in the direction of a bank offering a NINJA loan as I want to get down there first thing in the morning to sign up, just a no frills one, lowest rate possible
preferably in the Prahran area but I dont mind travelling to the CBD, its gonna be a good day for tram riding
thankyou
professor robots
COMMONWEALTH Bank chief Ralph Norris signalled yesterday that the CBA could be one of the first to lift interest rates.
In a hard-hitting speech, Mr Norris detailed the increased funding pressure on the banking system and said rate rises were inevitable.
"There is no doubt, when we look at the current funding costs, rates are going to increase," he said after speaking at a lunch of the Committee for Economic Development of Australia.
"The additional cost of liquidity and the additional cost of capital is going to put upward pressure on interest rates going forward."
......
Mrs Kelly warned again earlier this week that interest rates in Australia would be under upward pressure for the next 18 months because of changes caused by the global financial crisis.
Australian banks hold just under $3 trillion in on balance sheet assets. What sort of assets go on a balance sheet? Traditional loans.
Australian banks hold just under $13 trillion in off balance sheet assets. What sort of assets go off a balance sheet? Anything where the bank has passed the risk on and become a facilitator. i.e. securitised loans!
Australian banks have securitised Australia's housing market 13 years of GDP worth into the future sold to foreign debt markets!
hello,
oh gidday, yeah everything going fine thanks
i enjoy the trams, trains and buses and lots of us on them, those living large
the train to Canberra the other week full of nomads as well, awesome
oh well
thankyou
professor robots
ahha brother robots.....good to see all is well in nirvana.
me....... i went for a ride this morning ........just rumbling around the suburbs, catching the breeze and makin a noise.....
VulturesRus seems like a great idea for an investment group ya reckon?
geez that nun fella shore picked that top to a tee...
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