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A bunch of Big Short wannabes

Marcus Padley

Marcus Today

The issue of the day is a rash of scaremongering about the Australian property market, causing the banks to have a terrible day yesterday. The CBA was down 2.8%, Westpac down 3.9%, NAB down 3.8%, ANZ down 3.5%. Here are the numbers after the falls yesterday and this morning - note that the yields on NAB and ANZ and BEN are higher than their PEs (image). The problem we have is not a housing bubble but a “Big Short wannabes” bubble, a proliferation of headline seeking film watchers who are disappointingly sensationalised by our own Australian media. The bottom line is that there are always some extremes of the property market that correct themselves naturally but to extrapolate those into a systemic collapse of the residential mortgage loans on bank balance sheets is an exaggeration. I go to an expression that one of my colleagues is famous for…”Come on, you’re smarter than that”. This is not a Hollywood movie. (VIEW LINK)

Marcus Padley
Marcus Today

Marcus Padley founded Marcus Today in 1998 and leads the team of analysts and market commentators that publishes a daily stock market newsletter, presents four podcasts and runs an $80m Australian equity fund. He is passionate about educating and...

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