Today I review research that shows if Labor eliminates negative gearing and increases capital gains tax by 50%, national house prices could fall 9-12% on top of the current declines; parse new analysis from CoreLogic highlighting a spike in the share of apartment owners realising losses when they sell their... Show More
Today I argue that the Hayne royal commission's interim report is flawed in several respects that will force lenders to hike mortgage rates and reduce access to credit (click on that link to read the column): Show More
Today I explain how ScoMo (and Turnbull) saved Australia's AAA rating, and in the process also saved borrowers from a certain 10bps per annum rate hike worth over $10,400 over the life of a typical home loan. Last week S&P shocked the market, but not us, by upgrading Australia's AAA... Show More
This week I interview Tim Lawless, the head of research at Australia's largest real estate data company, CoreLogic, who says fears of a future Labor government eliminating negative gearing and doubling capital gains tax on housing (and equities) are one reason why house prices are falling as investors run for... Show More
In some ways the regulatory response that followed in the years after the collapse of Lehman Brothers has been a success. The days of racy balance sheets chasing outsized profits on wafer thin capital are largely over; replaced by a mantra of prudence and bread-and-butter lending to the real economy. Show More
Volatility and wild swings in company share prices were a feature of the August 2018 reporting period. For example, Bellamy’s shares immediately fell 8% on the result only to rally and end the day 6% higher. According to Charlie Aitken, it’s a symptom of large amounts of short-term money sloshing... Show More
Moody's believes APRA's new proposals for the reporting of capital ratios could end up being credit positive for the Aussie banks, arguing that "both options would be credit positive because each would improve the comparability of Australian banks' capitalisation to global peers". I wrote about this in the AFR on... Show More
In the AFR I assault the notion that the big banks are going to be threatened with irrelevance, nay disintermediated, by the various threats posed by fin-techs, blockchain, bitcoin, and/or the FANGs (click on that link to read for free or AFR subs can click here). Excerpt: Show More
Mortgage interest rates in Australia have increased in recent months, despite a steady cash rate. Domestic mortgage rates are heavily influenced by a combination of factors in addition to the official cash rate, and two we’re going to focus on in this paper are the banks’ exposure to domestic and... Show More
In the AFR today I reveal that the regulator's latest stress-tests of Australia's 13 largest banks show a vast improvement over the results of the 2014 stress-test when some banks' common equity tier one (CET1) capital ratios fell below 5%, triggering the conversion of their hybrid securities into equity. In... Show More
Around 12 months ago, I shared my 10 predictions for FY18. These included a peak for the housing market, struggling retail stocks, and global macroeconomic strength. It was great to see that a lot of these predictions proved true. With FY18 now over, Livewire have asked for my predictions for... Show More
In the AFR today I argue that nobody seems to have noticed that the royal commission's mandate is biased in favour of the imprudent over the parsimonious. It has spent most of its time agonising over the tiny number of "bad" borrowers who defaulted on their interest and/or principal repayments... Show More
I have a friend who is mildly wealthy but not gainfully employed. He has been a customer of the same bank for the past 40 years. Like me, he doesn’t own a house. Unlike me, he has been thinking about it. Show More
It is now passé to say the Australian equity market is becoming fully valued, led by the TIHCs — Technology, Infrastructure, Healthcare and China-facing consumer stocks — where multiples are at record levels. The bigger question is whether this is, in fact, just a natural state of affairs. Shouldn’t investors... Show More
In the AFR I write today that one of the most enduring legacies left by the royal commissionwill be more conservative and risk-averse banks. This process was already underway after the Australian Prudential Regulation Authority (APRA) embraced the 2014 financial system inquiry recommendation that the banks deleverage. (direct AFR link... Show More
This week it's the Fed's bank loan officer survey and the S&P500. The US Federal Reserves's loan officer survey provides insight into bank lending standards, and can give an important cross check against the markets. So much so, that you could easily call this chart the bear market warning indicator.... Show More
In my AFR column I open-up with both barrels on vertically-integrated institutions (click on that link to read for free or AFR subs can click here for direct access). Excerpt enclosed: Show More
The rhythm of life is no different to the rhythm of economic and corporate cycles. The optimism of birth, the excitement of growing up, the cynicism arising from the compromises that come with maturity, the tumult of unfair turns and the joys of victory, all in turn impacting upon performance.... Show More
Dividend lovers: we’re witnessing a bit of a changing of the guard when it comes to the performance of ASX listed companies. Financials and in particular banks – where investors have traditionally looked for their sustainable dividend growth – are beginning to be threatened for the mantle of sustainable dividend... Show More
CommSec Advisory’s Justin Wynne speaks with Tom Piotrowski about the upcoming February reporting season, including the factors to focus on in the results of the banks & miners. Show More