Property prices will collapse and the banks are scared stiff of the consequences. In a last ditch effort to stave off collapse they have increased interest rates.

Too little, too late.


Perceptions_now.....a question. If your bank goes into insolvency, are you still liable for your debt?....assuming of course that there's no govt. bailout.

Mortgage rate rises are too little, too late to save Australia's bloated banking sector

Australian households owe creditors an unconsolidated $1.97tn as of the second quarter of 2015, comprised primarily of mortgages with a remainder of personal loans. Relative to GDP, this amounts to 121.5%, and the proportion increased by 150 basis points every quarter over the past year. Given this historically and internationally large stock of household debt, the banks are earning mega dollars via net interest rate margins.


........the RBA should have never cut the cash rate to record lows to stimulate the already vastly overvalued and overleveraged housing sector at the cost of screwing depositors.



Unfortunately the Basel algorithm to assess a banks internal risk profile is not specifically designed for a banking system so heavily leveraged towards a housing market like Australia’s. Hence the methodology more than likely underestimates the true risks that lie within our banks’ balance sheet while they continue to allow property speculators to increase leverage. A clear example is that buyers can still unlock newly found (but illiquid) equity of properties in their portfolios to be pledged as 20% collateral against a new mortgage for another purchase.

This is a pyramid or Ponzi scheme, that puts the speculator at risk of owing more to a bank than their property portfolio is worth (negative equity).

This presents a clear and present danger to the banking and financial system, depositors, taxpayers and welfare of millions of Australians who have borrowed on a large scale as residential land prices escalate. The horse well and truly bolted from the stable a long time ago, and Apra is conducting 11th hour operations to save face.


http://www.theguardian.com/business/2015/oct/24/mortgage-rate-rises-are-too-litt...

For many Australians, it may sound reassuring that Apra is seeking to make the banks fundamentally stronger – but there is bad news. With the implementation of macroprudential regulations, our banks will now go from being as fundamentally weak as the failed Anglo Irish Bank in 2007 to now holding enough capital to rival the risk profile of what was a much safer and famed global financial institution – Lehman Brothers.

John Smith wrote on Oct 26^th, 2015 at 8:56pm:


It's a different coat of paint heh smithy Dulux wash and wear vs Wattyl. Just ask wally for advice about banks LOL

https://i.ytimg.com/vi/NhDJL4YECNk/hqdefault.jpg

John Smith wrote on Oct 26^th, 2015 at 10:47pm:


Nah mate that's your bank manager reassuring you that everything is OK LOL

thumbs.dreamstime.com/t/emoticon-happy-making-silence-sign-illus
tration-white-background-60517980.jpg