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/biz/ - Business & Finance

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9185302 No.9185302 [Reply] [Original]

Ausfags, is this a good time to pick up some CBA stocks?
Tbh I kinda hope they get raped lmao

>> No.9185312

>>9185302
No but it's great time to buy AMP or blue sky.

>> No.9185321

AMP definitely. They got rid of their board.

>> No.9185381

60% of aus bank loans are residential mortages, well over anywhere in the world, and over 40% of those are fixed rate

prepare to get 2008'ed

>> No.9185398

could this be one of the first signs of the coming recession?

>> No.9185400

>>9185381
I really hope more people fix their interest rates. i'm locked in for 5 years at 4% thankyou very much. Good luck people about to get just'd

>> No.9185417

>>9185381
got that wrong soz, here it is

>Today 42% of all mortgages in Australia are interest only, because since the average person can’t afford to actually pay for the average house- they only pay off the interest. They’re hoping that value of their house will continue to rise and the only way they can profit is if they find some other mug to buy it at a higher price. In the case of Westpac, 50% of their entire residential mortgage book is interest only loans.

>> No.9185441

>>9185381
Look into the lending standards of Australian banks and you'll understand why this absolutely is not the case. Also why do you think the high % of fixed rate loans is a cause for concern?

I work in securitisation/structured finance so I'm genuinely interested to hear your thoughts.

>> No.9185449

>>9185417
hah, the interest-only loans. This is such a scam. But it's nothing new: banks doing what they can to take money from stupid people.

>> No.9185450

>>9185441
*interest only loans
i made a mistake.>>9185417

>> No.9185457

>>9185417
okay thats pretty fucked. Really?? 42% is I/O? so many people are gonna get so pajeet'd. You would HOPE these people have offset accounts that have at least 2 years of repayments in it.

>> No.9185483

>>9185417
When you apply for an interest only loan you'll need to prove to the lender that you'd have the capacity to comfortably service the loan once the interest only period expires. Also consider that a significant portion of IO lending is to investors taking advantage of the cash flow benefits.

>> No.9185520

>>9185417
haven't they stopped the interest only now

>> No.9185575

>>9185520
No, they will never stop interest only because it keeps losers hooked for life.

There was a govenment crackdown on 100% ltvs though. This is why you get asked for $50k deposits now.

>> No.9185577

>>9185417
>Interest only loans

This is why I'm never going to get a loan. This entire system of usury can go fuck itself.

>> No.9185617

>>9185577
>but spending money is good and helps the whole economy, also you need a house when you are already 25 so you can give your new gf and her 2 children a roof

>> No.9185627

>>9185575
>>9185577

Do you gus realise that IO loans have an expiry date at which the repayments convert to principal and interest?

>> No.9185653

>>9185302
Id wait on cba. If it goes under 70 then go for it. It fucking went up today.
Its worth targeting most AU bank stocks as they get dragged through the royal commission, they will always recover

>> No.9185671

>>9185577
Don't be scared about interest only loans. They can work in your favour. Take a $400,000 loan, add interest only, lump sum and additional repayment into the mix; you're looking at $625/FN during interest only period. Now, if you have no other debts and a $70,000 job per year you could easily afford double the repayments. By adding an extra $625/fn (into the offset account over 4 years) you'll have 60k sitting in that account. (Your 'repayments' would be $2500/month). Therefore you'll be paying back the loan, minus the 60,000k you're offsetting. When a crisis hits, you can be your own bank and withdraw these funds. If you leave it, you'll be paying the same interest on a far less amount. You could easily have $100k in the offset account if you made more contributions per year and had a dual income over 4-5 years. Now if we're talking about stupid property of 1.5million each, well you'd wanna be wealthy. Start small.

>> No.9185695

>>9185627
of course they have to pay off the principal at some point.
But IO loans are letting people, who aren't financially quite ready for it, to buy houses. Peoples financial situations can change fast. Thus its much better to have only those people buy houses, who are already at a position to start paying off the principal from the start. This is a lot less risky.

How long does the interest only period last normally? do you have any info on that?

>> No.9185699

>>9185417
friendly reminder that the banks have considered most if not all of their loan portfolio as "risk free", so their actual capital ratio (the basel III capital requirement shit) is much lower than stated, way lower than the required 8-10%

cant wait for the JUSTening of a lifetime t b h. boomers are gonna get btfo so hard holy shit, unless the liberal party jews bail them out

>> No.9185740

Bankfag here, hold fire and wait for the royal commission to run its course. Plenty of shit to come out, prices will do lower.

>> No.9185778

>>9185417
>>9185441
>>9185449
>>9185457

Wait until the interest only loans start rolling off the interest only period. It’s going to start later this year and the bank I work for is honestly in a lot of shit.

t. consumer credit risk fag

>> No.9185807
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9185807

who remembers this shit? probably not many people, unless you lot are aus/pol/ regulars. literally passed the bail in laws during that barnaby rooting some staffer shitstorm

>> No.9185808

>>9185778
spill some more beans. My dick gets hard of people getting just'd for being greedy.

>> No.9185825

I have 35k AUD in my savings account. I've never bought ASX shit in my life.

As the meme goes, how do I profit off of this?

>> No.9185870

>>9185807

WHAT THE FUCK? So that means they can use our savings to save the banks asses? WHATTTTTTTTT THE FUCKKKKKKKKKK

>> No.9185893

>>9185825
Buy then hold, re invest dividends untill you retire. They are safe stocks IF you hold them for a long time.

>> No.9185903

>>9185870
literally all my money is in crypto and cash anyway kek. i want this to happen so no one trusts fiat anymore

>> No.9185907

Well in other news house prices seem to be slightly going down and stagnating in my surrounding areas. I think cause since china has inacted a law to stop its people to spend a maximum of 50000 usd per year for outside investments (out of china), heres hoping to another global finical crises with a crypto moon so i can hopefully own a fucking house before 30 years old.(Its like 500,000 AUD to even buy a somewhat average home in an average area in Australia).

>> No.9185964

>>9185808
My bank is super leveraged on IO loans, in fact APRA almost dropped the hammer on us for being over the allowable percentage of the mortgage book (30% of outstandings). We managed to get it down to 29.8% by the cut off.

>> No.9185979

>>9185778
If the bank you work for has been writing loans in accordance with responsible lending obligations then you really shouldn't be sweating.

>>9185699
>friendly reminder that the banks have considered most if not all of their loan portfolio as "risk free"
You could work out on the back of an envelope that if this was actually true then major banks would be holding far more capital than they need be.

>> No.9185995

>>9185979
It’s more from a stress testing percentage. We don’t have enough good loans to absorb the hit to delinquency rates when IO mortgagees start defaulting
It won’t be Armageddon, but relatively more ex-IO loans default than non-IO loans, and this will hit the capital provisions hard
We will be getting just’d within 6 months,
I’ve modeled it out a dozen times

>> No.9186004

>>9185995
Stress testing perspective***

>> No.9186067

>>9185995
If you're referring to the APRA stress test from last year then yep I'd agree with you. I did a bit of work in that in a rotation through our credit risk team.

Tbh though if the modelled assumptions from that stress test came true then we'd all be thoroughly fucked... IO or not.

>> No.9186098

>>9185964
which bank?

>> No.9186117

>>9185807
woah hang on, if they rejected that line we're so fucked. So who loses here? People holding cash? Lets say Ive got 800,000k in superannuation. 60% of that is in cash and the rest in conservative growth. Can they touch the cash %?? or just money in the bank??

>> No.9186143

>>9186117
haha

gov only backs 250K in cash account or some such

so no your other 550K can just evaporate.

>> No.9186296
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9186296

>>9185995
>getting JUSTed

Cant wait

>> No.9186320

>>9186296
How do I short this?

>> No.9186328

>>9185441
>>9185483
>>9185627
>>9185979
>>9186067
>t-theres nothing wrong with the system i swear goy

>> No.9186351

>>9186328
Nice - you sound like a Very Smart Person with carefully thought out arguments.

>> No.9186353

>>9186143
well shit. time to get serious about all this. I/O loans expiring, banks are in shit, bail in laws secretly passed. Yeh this is gonna end well.

>> No.9186395

Its an easy investment choice in Australia right now.
>Ride the upcoming crypto bullrull
>US financial crisis. Pull 50% out of crypto and load up on bluechip stock at the bottom.
>New GFC has flow on effect to our job market which has already been weakened by our focus on old industries. Exchange rate hopefully tanks.
>Weakened job market causes mass dip in property. Pull some more out of crypto and buy some cheap property.

Am only an accountant (auditor) so not same level of fin knowledge as the bank cuckters in this thread.

>> No.9186421
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9186421

>>9185417
fug

>> No.9186433

>>9185441
You package MBS and sell credit derivatives? Who buys most of the shit you guys sell?

>> No.9186437

>be me and the misso
>130k/ year combined
>get 300k home put 10% down
>only 4% after fees and shit
>2 years later 270k remaining
>misso up the duff now and I need a new car
>same bank won't pre approve us for a 17k personal loan because our income will be reduced while missus is on mat leave for 6 months

Like fuck I'm going to use the equity on my house when I've still got so much left to pay

Cunts

>> No.9186447
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9186447

>>9185302

>buying shares in aus banks

lmao CBA will probably be re-nationalised when the property downturn completely fucks our banks.

Put your money literally anywhere else.

>> No.9186464

>>9186395
I have exactly the same plan. I trade bond futures for a prop firm, some of what has been happening to the short end of the market suggests credit concerns, also the amount of people missing mortgage repayments had a decent bump since Q3 2017.

>> No.9186469

>>9185417

All backed by YOUR tax dollars!

https://www.guaranteescheme.gov.au/

>> No.9186474

>>9186098
:^)

>> No.9186494

>>9186447
>CBA will probably be re-nationalised
is this not a good thing for Australia in general?

>> No.9186499

>>9185695
Same as a regular mortgage, only you pay less in the hope your house gains value and helps cover any outstanding amount at the end. It does not always end after 1-5 years like a fixed rate will.

if you don't reinvest the monthly savings to cover the end balance there's a high chance to get scewed over and will need to re-mortgage

Millions of people fell into this trap in the UK. The best way to buy is as big of a deposit as you can get. no exceptions. You get rated lower risk and enjoy long terms of low rates.

You can switch mortgage so why screw yourself over with interest only when you can get low rate deals every few years?

>> No.9186662

>>9186464
Nice fren. Good to see I'm not a complete loon. The warning for me was seeing 2 people i work with who are fresh graduates on 45k buying property in Brisbane.

>> No.9186797

My main strategy is hodling index funds and hoping I can maintain cashflow long enough to ride straight through any economic crises.

Am I fucked? Will my ASX300 recover after the crash?

>> No.9186951

>>9186797
I think its just about recovered since the last crash. Would suggest diversifying into other markets (US pretty good although timing not so great right now).
I try to picture the Australian job market in 10 years and all i see is someone getting raped.

>> No.9187053

>>9185312

Fuck yeah.....I was yelling "crash you cunts!" At the tv last night when they had the AMP story on. I really want all the banks to crash - I'm gonna use my crypto gains to buy their stock nice & cheap on the dip. It seems both a good hold AND it's amusing to think that just when the banksters want to get into crypto, crypto gains are going to start flowing back the other direction and buying up the other markets.

>> No.9187074

>>9186951
68% of our economy is services. only 65% of australian gdp is manufacturing. luxembourg manufactures more than australia now

>> No.9187085

>>9187074
*only 6% is manufacturing

>> No.9187098

>>9186395

My plan to a T. I'm really looking forward to GFC 2.0, the sheer cope of real estate fags panic selling was hilarious in the last one, gonna be even more tasty tears this time around.

>> No.9187257

>>9186951
I've actually got quite a bit in the S&P500 already (as much as the ASX300), but thanks

>> No.9187262
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9187262

How much Link for a qt like this?

>> No.9187301

>>9187257
Oh yeah, and my background's in engineering so I'm hoping I'll be able to keep some cashflow through pretty much anything. I've got fuck all cash float though, so it won't take a huge amount to wreck me if shit does go south.

>> No.9187310

>>9187074
I work in that service industry too. We're a country who specialises in agriculture/mining whos people work service jobs.
What is our competitive advantage? The world is only getting smaller with outsourcing and our costs are not cheap.
We are definitely not funneling any significant money towards blossoming industries like tech.
Wages are stagnating, its already started we just need a financial event to kick off a recession.

>> No.9187371

Dumped my 750K into this https://www.vanguardinvestments.com.au/adviser/adv/investments/product.html#/fundDetail/wholesale/portId=8155/assetCode=balanced/?overview

Using generated cash-flow to buy crypto now and stocks later, once equity-world starts crashing.

>> No.9187408

>>9187310
your being very generous if you think we are not already in a recession and have been for many years. dont let the complacent media fool you

https://medium.com/@matt_11659/matt-barrie-australias-economy-is-a-house-of-cards-6877adb3fb2f

>> No.9187443

>>9187371
Not really relevant for us. We can't self invest our Super into crypto as easily ;).

>> No.9187482

>>9187408
The extent of my economics comes from a single unit at uni i did years ago so take below with a grain of salt.
Doesn't a recession have a hard definition? Something like like x number of negative gdp growth periods?
I do agree it feels like we've been on a downtrend for years.

>> No.9187696

>>9187262
Wayne's world?

>> No.9187847

>>9187408
This is actually a good read, about half way through. Thanks.