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AKA The Dragon
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Discussion Starter · #1 ·
On the news this morning on the Ch 7 text crawler.

"Australian financial regulators to discuss and draw up crise plans for bank crises on home soil."

Thats all the info I have at this stage, no commentary on it.
Is it a rear guard plan or is it a sign of things to come shortly?
 

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AKA The Dragon
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2,818 Posts
Discussion Starter · #3 ·
Could be, seems to have coincided with PM Rudds' visit ot New York.
Heard last night, that government is in the process of loaning funds to our banks because of the credit crunch.
I think this was to give them cash flow for housing and commercial loans.
Only caught the tail end of it, not sure on the exact details yet.
 

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Bratach Bhan Chlann Aoidh
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1,366 Posts
It always amazes me how we, in the UK and over here, watch and critisize the USA and their policies as we see them do something wrong/dumb and then do exactly the same ourselves like it suddenly became OK to do it because the US did it.
Duuuhh.
 

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Semper non compos mentis
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1,578 Posts
Much of the reported Rudd talk appears to be rhetoric to me (I am apolitical BTW), however I did see a mention in The Australian Business - September 27, 2008:

http://www.theaustralian.news.com.au/story/0,24897,24408484-643,00.html

"..........Wayne Swan moved again yesterday to reassure Australians about the strength of local banking sector. Announcing a $4billion cash injection to boost liquidity in the frozen market for mortgage debt securities, the Treasurer said the funds were "about making a strong banking system even stronger".

The money will be used to buy AAA-rated residential mortgage backed securities (RMBS), which are housing loans packaged and sold to investors by institutions. Around the world, central banks, including the US Federal Reserve, are pouring hundreds of billions of dollars into credit markets in an effort to provide liquidity.

Mr Swan and Mr Rudd have assured Australians repeatedly that while not immune from fallout from the US credit crunch, which has cost global banks more than $US600 billion in losses and write-downs, the country's financial system was well equipped to cope. On Thursday, the Reserve Bank agreed, saying the banking system was "soundly capitalised, it has only limited exposure to sub-prime related assets, and it continues to record strong profitability and has low levels of problem loans".

In Australia, 0.57 per cent of secured home loans are 90 days in arrears, although the figure balloons to 8.5 per cent for the tiny minority of households on non-conforming, or sub-prime, loans made to borrowers with poor credit histories.

By comparison, 6.4 per cent of all US mortgages are 30 days in arrears, including more than 20 per cent, or one in five, sub-prime loans. In Britain, 2.9 per cent of loans are 30 days in arrears....... "
 

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Pisticus Veritas
Very Prepared!!
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60,842 Posts
Much of the reported Rudd talk appears to be rhetoric to me (I am apolitical BTW), however I did see a mention in The Australian Business - September 27, 2008:

http://www.theaustralian.news.com.au/story/0,24897,24408484-643,00.html

"..........Wayne Swan moved again yesterday to reassure Australians about the strength of local banking sector. Announcing a $4billion cash injection to boost liquidity in the frozen market for mortgage debt securities, the Treasurer said the funds were "about making a strong banking system even stronger".

The money will be used to buy AAA-rated residential mortgage backed securities (RMBS), which are housing loans packaged and sold to investors by institutions. Around the world, central banks, including the US Federal Reserve, are pouring hundreds of billions of dollars into credit markets in an effort to provide liquidity.

Mr Swan and Mr Rudd have assured Australians repeatedly that while not immune from fallout from the US credit crunch, which has cost global banks more than billion in losses and write-downs, the country's financial system was well equipped to cope. On Thursday, the Reserve Bank agreed, saying the banking system was "soundly capitalised, it has only limited exposure to sub-prime related assets, and it continues to record strong profitability and has low levels of problem loans".

In Australia, 0.57 per cent of secured home loans are 90 days in arrears, although the figure balloons to 8.5 per cent for the tiny minority of households on non-conforming, or sub-prime, loans made to borrowers with poor credit histories.

By comparison, 6.4 per cent of all US mortgages are 30 days in arrears, including more than 20 per cent, or one in five, sub-prime loans. In Britain, 2.9 per cent of loans are 30 days in arrears....... "
Wow...I had no idea that so many other countries were facing a financial meltdown similar to the one we're facing here. Europe and the UK are in similar straits last I heard.
 

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AKA The Dragon
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2,818 Posts
Discussion Starter · #7 ·
News report this morning.
US congress has rejected Wall street bail out plan.
US stock markets down by about 7% or nearly 800 points (the highest in history) with an expected 1 million homes in the US to be repocessed and high job losses.
Expecting carnage on the ASX today.
Oil down by approx $17 a barrel to about $90.
 

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AKA The Dragon
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2,818 Posts
Discussion Starter · #11 ·
ooh yer,
Got plenty of tea and coffee.
My better half gets real mean when there isn't any coffee, so stocked up pretty well on that.

Have any of the ANZAC members noticed any unusual public activity such as bank and supermarket ques yet?
 

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AKA The Dragon
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2,818 Posts
Discussion Starter · #12 ·
The ASX has been hit hard with millions wiped off, not the end of trading yet.
Interesting to see how the Asian and Euro markets have reacted.
 

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Dragon i've noticed that aldis has gotten a bit more busier. I find it funny that i alway see BMW's and Mercedes' in the carpark. At my Aldi's that have basically no rice, only a tiny little section. Safeway and coles i haven't notcied lately that it is busier. But looking back over the past year or two i have notcied that those two supermarkets are constantly busy all day, as before there were times when there wern't a heap of people at certain times during the day or evening.

As for the banks i haven't noticed any real change with people lining up at the ATM or inside.
On the news a couple of weeks ago it said the NAB had 5 billion dollars in debt in the overseas market and that they are trying to get out of that debt (i can't remember exactly how). I suppose in the long run that could be a good thing that they are cutting back in some areas, i suppose they trying to be conservative by trying to stop any future bankrupties.

As for the Macqaurie, they have split up their company into several smaller companies or sections to stop any future bankruptcies. As they are 25 billion in debt,
With what is happening in America at the moment, it seems our banks/companies are trying their best to get out of the overseas (American) market, and avoid the same happening over here as well.
 

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AKA The Dragon
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2,818 Posts
Discussion Starter · #14 ·
Noticed Aldi has been very busy here too. Rice and pasta prices in most of the other supermarkets have increased by about 100% campared to earlier this year.
Saw one customer will a trolley overloaded with rice, cleaned the shelf out.
Even with the price of oil reducing, fuel prices have not decreased proportionally despite the fall of the AUD.
Watched the PM and Opp leader media release tonight.
Watched their body language, conflicted with what they were saying about the condition and exposure of our financial system.
If it as safe as they say it is, why plan a multi million dollar assistance package to the smaller banks. Sounds like a liquidity problem to me.
There is a possibility of gagging the media and political comments to reduce panic rushes on the banks, and the ASX. At one point today, the ASX had 50 billion wiped off the board.
European banks in a bad way too including Iceland.
I reckon our banks are more exposed than we are being told.
When they start to restrict the amount in cash withdrawals, then the public will know we are in serious trouble.
The bigger banks , some of which you have mentioned have been investing in high risk ventures overseas.
We might have different fiscal and financial regulations in place, as did the Euro banks banks compared to the US system, but the big dog got them too.
 
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AKA The Dragon
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2,818 Posts
Discussion Starter · #16 ·
You betcha,
Better in your pocket than there's. They can't snatch what doesn't exist.
Heard a story yesterday, don't know the full details.
One of the locals had a huge sum of money in a term deposit with one of the major banks here.
It matured in the last week or so, he went to withdraw it to build a house and the bank couldn't or wouldn't give him his money.
But as I said, don't know the full story
 

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AKA The Dragon
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2,818 Posts
Discussion Starter · #17 · (Edited)
The 7.30 report on the ABC last night interviewed PM Rudd.
Australian bank saving and investments are NOT government backed or garrantied at this point in time.
Currently looking at legistration to garranty up to 20 thousand dollars only.
25 Major global banks have folded so far according to the PM.

Late last night on ABC Lateline, former PM and treasurer Paul Keating explained the current financial crises in simpler terms and, it is a different type, and a far deeper/longer recession than the one in the 80's if the bail out is rejected again by U.S. congress.
The major Aus. banks require around 1 billion dollars credit a day to stay in business mostly from foriegn banks according to Keating.
 

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Ah for a bit of light humour, amongst the growing tribulation, I had forgotten your good sense of humour 8passes wind.
Personally, I think the buckets cant handle the leaks, you are going to swim with the sharks if you havent got a life boat.
 
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