The big four banks in NZ are all subsidiaries of the big aussie banks, so I'm interested to know whether you think they would survive another major banking crisis, perhaps bigger than 2008? My investments are 50% cash and 50% precious metals. I figure that if the shit really hits the fan, I can kiss what's in the bank goodbye and I've got more than enough insurance in the form of precious metals. I also figure that if the big banks collapse then the government guarantee on deposits won't be worth the paper it's written on. Where am I going with this? Well, some of the banks here are offering cash investment options (Portfolio Investment Entity (PIE) funds) that offer higher interest rates and tax advantages over conventional bank deposits. They're guaranteed by the bank, but not covered by the government guarantee. I've just put one third of my cash into one of these funds on a three month fixed term and am considering doing the same with another bank. Part of me thinks it's a little risky. The other part of me says I should chase as high returns as possible, as you'd be lucky to even keep up with inflation once you pay tax on the interest in a conventional bank account anyway. Thoughts?
They're much better regulated than the banks in the USA, specifically the ammount of leverage they can create and where they can use it. I am guessing that there would need to be a housing price crash + people not paying their loans like in the USA. I imagine either single event could occur and they would survive, with both, and the ammount of property they all have (i believe) on the balance sheet they'd be stuffed, still I think they could take a bit more of a hammering than the USA banks due to their lower leverage rates. (wild speculation, please fill in the blanks more knowledgeable people)
Well, Westpac got a US$1.09 billion dollar bail-out from the US Fed in January 2008, and the NAB had to borrow US$4.5 billion during 2008-2009. This was hushed up by the financial press in Australia. Hardly something that "strong, financially sound" banks would do.... How will the NAB pay back four and a half billion dollars? That's $225.00 for every man, woman and child in the country before interest. Now the Labour Party, the "protector of workers" from evil corporations, wants to open the nation's superannuation funds for the banks to feed on. This is clearly a bailout in a very thin disguise. For the Australian Labour party to want to throw the retirement savings of every citizen of Australia under the bus to feed the bankers they must know that the banking system here is on very thin ice, and they see the super funds as the only source of funds to bail out the banks after Mr Rudd pissed the nations wealth up against the wall with the "Economic Vandalism Package". They are trying to make us like Ireland and give our super to the Banksters. Of course the cynic in me also thinks that members of the Gillard "government" want to give the bankers access to the nations super so that when they leave politics they will have a nice cozy position on lots of boards of grateful companies, but that would surely never happen in Australia, that sort of behaviour only happens in other countries.
That was the final straw that motivated me to start a SMSF. I signed and sent off all the paperwork last week now I just have to wait and hope 'all hell doesnt brake loose' in the stockmarket before my account is up and running and I can transfer my super the hell out of there!
You would have preferred the Liberal Party to have done this? You think they wouldn't have? Howard brought us to this by giving the country away to the rich.
fortunately i haven't stacked much in a super account (er, unfortunately?) and i don't know precisely what my obligations are if i work as an independent contractor doing my tax reconciliation annually but it seems to me that if anyone wants to hassle i'll just take my books and tote up the mandatory super contribution and hand over the equivalent value out of my stack otherwise it stays in the stack, in a nice safe bolted securely to the floor. oh, already looked into SMSF, can't do it because i'm a bankrupt. well hell, sounds like my bank is gonna get that money anyway. lol. wish i'd heard about austrian economic theory sooner, i wouldn't be in such a crappy position.
It isn't the Liberals calling for this, it is Labour. To me it is extreme hypocracy - The Liberal party does not base it's existence on the premise of protecting the working class from big business. Every election Labour thumps it's chest and calls itself the party for the common worker. The Libs don't pretend to be the enemy of business in order to get the blue collar vote. Labour does, yet Labour sells out to big business every time. Look at NSW Electricity. Why is the Labour party calling for the surrender of Australia's super to the banks that caused the GFC while the liberal party is not? I would respect Labour if they were authentic and lived by the ideals that they preach, buy as a citizen of NSW, I have every right to deride Labour, I watched Bob Carr give all of the state's money away to Big Business in the form of "consultancy" fees, watched him give Sydney Showground to Rupert Murdoch along with a huge low interest loan from the public purse, watched business and industry abandon the state, watched all of the scandals with bribes from developers, and now watching what is clearly a criminal act from the current government that needs parliament dismissed months early and public servants intimidated to cover up something that people in the party probably should be going to jail for.
Hang on. Back up a bit. Our banks were bailed out by the Fed? Labor wants to take our Super? Ummm, when was this made public? If I start a SMSF, then Jooooooliya can't get it, right?
http://forums.silverstackers.com/topic-4624-australian-banks-tapped-fed-for-funds.html http://forums.silverstackers.com/topic-4828-aust-banks-to-tap-super.html
The real aspect to note is that the banks here are severely exposed if / when we have a real estate collapse. There would be severe difficulties if there way say a drop in real estate values of 30% or so over the coming years. If you think that sort of drop is unlikely, look what happened elsewhere around the world last time. I'm actually not particularly worried about the loans from overseas during the GFC - that just provided funds for lending here.
Anyone who seriously buys into the idea that there is some difference between the Labour and Liberal parties isn't paying attention. When all the main parties can dish up is empty rhetoric about refugees on boats or who'll provide the lowest interest rates to people buying into the housing bubble one knows there is something wrong. I've yet to hear a single Australian politician utter the phrase "peak oil" or "fractional reserve banking" or "false flag terrorism". Although Mark Latham at least alluded to the latter when he described the USA as the "most dangerous country" in the world. (By the way his "conga line of suckholes" line is still my all time favourite Parliamentary quote-which today equally applies to the Labour Party.) Even the Greens are woefully inadequate (even if Bob Brown shows occasional evidence of the possession of a set of gonads). We are on the path to fascism-lite in this country and can only hope the shit really does hit the fan before we go the full US version. >rant off< Mark.
It's been amazing to do foreclosure tours here in the US and see what were 5BR 4BA $1m+ waterfront properties with private docks in Florida selling for $200,000-$300,000. 75% price drops from the last sale price aren't at all uncommon. You literally cannot build a house for less than the asking price that 2000-2008 properties are available on the market for. <10yo homes with three bedrooms regularly selling for $60,000 or less - that's 2000oz of silver for a house. Saw one waterfront house yesterday with 3 levels, 6 bedrooms, TWO kitchens, fully furnished with brand new furniture to help it sell - you just needed to buy some food and you could move in - for under $500,000 in a neighbourhood where three years ago vacant blocks were $700,000 and people spent another $700,000+ building a house. These are saltwater canal houses literally with sailboat access - there's private docks at the back door - the neighbours to this house had something like a 40' flybridge cruiser on one side, and a 40' yacht the other. $500,000. Think about the hovell that sort of money would buy in Melbourne or Sydney. Had half a mind to buy one via SMSF and just let my super contributions pay it off, but you couldn't borrow two cents to rub together from a bank here at the moment, and I'm buggered if I'm borrowing AUD to buy USD property.
Wrong. All it would take is an act of parliament, mandating that a certain % of a SMSF be allocated to government works/programs etc.
If your not all-in PM's already do so the first time you hear the phrase "too big to fail" uttered by an Aussie politician(/banker/pundit) in reference to the "big" four. Latest Keiser Report features Steve Keen- a must watch as usual. Mark.
I told a friend about the WBC/NAB 'loans/bailouts' His reply is as follows: I think that it is a bit of a non-story, insofar as it is already widely understood that the interbank funding stopped almost overnight and that the banks accessed government supported funds. It is already well known that the banks liquidity dried up and that they had to access the federal government guarantee to borrow money. This much is not new news. As for borrowing from the US Fed - if they offered me free money I'd borrow as much of it as i could, too. It is a no-brainer. If someone offers me a 0% credit card with no fixed repayment terms, I am going to max it out and repay the debt that is costing me money. This doesn't mean I have a liquidity crisis. What it means is that the banks again took the governments of the world for a ride. Privatising profits and socialising losses. Macquarie has made a fortune borrowing Australian Government Guaranteed money at low rates and on-loaning it. Anyone got any further thoughts? This IS serious, isn't it? I bank with these guys, amongst others. And I have a significant amount in an industry superfund. I'm 36 and getting more and more concerned, and more and more p1553d off....
Brad, ironically enough I was talking to a friend of mine who works in "wealth management" yesterday and told him about the bailouts you mention. His response was virtually the same. He went on to inform me that the US was in a recovery! When I brought up PM's he all but scoffed at me. Yet some are saying there is a PM bubble. Not likely. Anyway, if it weren't for chaps like him we'd all be paying a lot more for our PM's right now, so I should be thanking him. By the way, he didn't know the Fed is a private organisation owned by the banking oligarchs. Long way to go for the PM bull me thinks. Mark.
I just lost almost 3000oz Ag in a horrible tractor accident. Lost it down a well. But my super and bank deposits are ok...until Jooliyaaaa takes them...
