Are credit conditions easing?

[Piston Broke]

I cant see any easing for a while either.
Proof?
There's many posts in the forum over the past few months.

since Jesus played full forward for Jerusalem.

I seen the pics, Not sure which one of the two thou is him

 

[Shadow]

I said and continue to say that credit restrictions aren't good for house prices.

That's obvious. I said and continue to say that house prices would probably rise despite the current credit restrictions. I don't believe those restrictions are as onerous as you thought they would be.

money became harder to get in 2008 and we saw the largest national fall in median prices since Jesus played full forward for Jerusalem. In 2009 Ruddy fills the deposit gap, we have the cheapest money in a couple of lifetimes and prices go up.

House prices were rising throughout 2007 despite the high interest rates. Then in 2008 prices fell slightly, mainly due to weak consumer sentiment brought on by gloomer scaremongering about the forthcoming 'worst recession since 1930' and supposedly imminent double digit unemployment. When those and all the other gloomer predictions failed, sentiment quickly improved, and house prices returned to their original upward trajectory.

If you can't get the answer you want to the question you asked, man up and start a new thread.

No need to be rude... I don't want any particular answer.

 

[Intrinsic_Value]

Fear not IV, it doesn't mean jack squat. We got shunted through there 7 years ago and all it means is that you've outgrown one fishpond and they've dumped you out of the normal "relationship manager" who has about 500 to 600 clients to look after, and you've been upgraded to a "private banker" fishpond who has between 80 and 90 to look after. Admittedly, slightly more personal service, but nothing extraordinary. You will be bombarded with all of their 'special deals'.

If you keep your head down, bum up, in a couple of more years time they'll scoop you out of that pond and chuck you into "institutional banking" where you will be one of about 15 or 20. That's when you get upgraded from Granita or Milk Arrowroots with your cuppa, to perhaps a Kingston Cream. Fear not, the Tim Tam's are still off limits.

But what does it all mean IV ?? It means absolutely nothing IV. They've still all got absolutely no decision making powers at all. They still all package your paperwork off into a nice neat bundle for the credit squirrels in their dark silent room to pour over. You still won't be able to negotiate with them, and a rejection from your Private Banker on a nice thick custom paper with the silver livery is just the same as one received on the bog standard A4 black and white version.

I honestly dont know havent been here before, so lets just see.
But you forget one thing, it depends on the type of assets you are talking about.
Right now, commercial property is a 'no go' area, but there are other investment type assets.

I also have contacts in the private banking division of the investment banking community, and trust me, your tim tams are no issue here, full buttler, sliver cutlery etc etc at these intitutions. I attended a lunch last week, and boy do they show up the 'top' restaurants in melbourne.

I cant comment to much on a public forum, but basically how do i put it, you have to present yourself in a certain way, drop the hints about future 'contacts' from business associates etc etc.

Play the game, but play it to your advantage.

 

[Intrinsic_Value]

\]
But what does it all mean IV ?? It means absolutely nothing IV. They've still all got absolutely no decision making powers at all. They still all package your paperwork off into a nice neat bundle for the credit squirrels in their dark silent room to pour over. You still won't be able to negotiate with them, and a rejection from your Private Banker on a nice thick custom paper with the silver livery is just the same as one received on the bog standard A4 black and white version.

in regards to this point specifically, the 'credit squirrels' as you refer to them are all over commercial property (again read the annual reports, read the institutional banking reports (yes i get them)).

credit squirrels might have the final say over commercial property, but if your assets dont relate to commercial property, then the relationship managers 'power' increases significantly. Right now, the credit squirrels have their eyes glued to commercial property, if i am not htere, then the squirrels have no interest in me.

 

[HiEquity]

credit squirrels might have the final say over commercial property, but if your assets dont relate to commercial property, then the relationship managers 'power' increases significantly. Right now, the credit squirrels have their eyes glued to commercial property, if i am not htere, then the squirrels have no interest in me.

Hi IV

I have been relationship managed for some time now with a fully RIP'ed portfolio. I can categorically state it has made no difference. Actually, I lie - the refusal is much more polite and comes with a "but we can offer you life insurance..." attached.

I try as much as possible to avoid being relationship managed - all it means is that the banks have noticed their exposure to you is worthy of some more attention, when the advantages of flying under the radar of any particular bank are numerous and varied.

My advice is avoid it as much as possible. These people can only "oil the wheels" - they can't actually make any decisions. Whatever the credit calculator says is what you would get anyway and if anything they worry more. My RM let the cat out of the bag last time I asked for a "stretch" loan with the comment "hmmmm, that would take your loans with us to $Xm", before saying that a slightly lower LVR might be more appropriate this time...

As to investment bank lunches - they had better be good considering how much their clients pay for them!

 

[Intrinsic_Value]

Credit rules are not going back to the pre-2007 environment any time soon.

yes and no token funder. For residential, there is a transitioning back towards some form of normalicy. For commercial, its better than the bleak days during the GFC, but the banks want margin expansion with conservative LVR's.




(

b) Read the forum, it's all there if you're prepared to let reality intrude.
(c) In 2008 I said credit would tighten and bank's cost of funding marings would need to increase. Are you disputing the accuracy of either of those assertions? I note that Rolf (obviously his knowledge is inferior to your own, what with your closeness to the market) answered your question fairly succintly already:

the residential investor still has it 'good'. try operating in the commercial sector. residential margin expansion has been minimul compared to other forms of credit.



You may also wish to give them some reassurances around both the impact of the forthcoming NCCP Act and the liquidity rules under Basel that the ABA are nervous about.[/QUOTE]


i dont know the changes under any new Basel, but the old Basel rules were a joke. Things change, yet remain the same, when the sh**t hits the fan, we all jump to new regulations, the problem as i understand it with the old basil rules (which were changed from the yet older rules) was that it relied to much on near term data basis.

We keep going round and round and round in circles.

 

[boz]

House prices were rising throughout 2007 despite the high interest rates. Then in 2008 prices fell slightly, mainly due to weak consumer sentiment brought on by gloomer scaremongering about the forthcoming 'worst recession since 1930' and supposedly imminent double digit unemployment. When those and all the other gloomer predictions failed, sentiment quickly improved, and house prices returned to their original upward trajectory.

It is freaking scary that the reality corrispond to consumer sentiment.

 

[Dazz]

I honestly dont know havent been here before, so lets just see.

If that's the case, probably best to just quietly observe for a wee while. You certainly do have wonderful opinions about a subject you admit you know nothing about...

you forget one thing, it depends on the type of assets you are talking about. Right now, commercial property is a 'no go' area

Hmmmmm.....you haven't been in this arena before and yet you're already stating that I've forgotten something ?? Is that right ?? Maybe for you it's a no-go area, but let's not get carried away with your own abilities.

trust me, your tim tams are no issue here, full buttler [sic], sliver [sic] cutlery etc etc at these intitutions [sic].

I never trust a person who says "trust me", let alone someone capable of writing that sentence....

 

[Intrinsic_Value]

I can only speak from personal experience.

For me its been wonderful to have a personal relationship manager.
It cuts through all the bureaucracy of banking institutions.

Now maybe the relationship is facilitated by the fact that i never try to push things to the edge. Maybe its because i operate in a cash flow positive nature BEFORE any tax effect.

So far i have consistently got what i want and with competitive rates.

When i said i dont know, i am talking about the 'end game'. I can only know for sure once i have been participating for a while.

Dazz you can shoot off all you like about how it hasnt made a difference to you.
For me it has.

 

[Intrinsic_Value]

Hmmmmm.....you haven't been in this arena before and yet you're already stating that I've forgotten something ?? Is that right ?? Maybe for you it's a no-go area, but let's not get carried away with your own abilities.



I never trust a person who says "trust me", let alone someone capable of writing that sentence....

Dazz you are the one complaining about the credit squirels, not me, i'm getting what i want.

In regards to your trust, i dont give a hoot about whether you trust me or not, receiving your trust has no bearing on my financial success or otherwise.

 

[Token Funder]

That's obvious. I said and continue to say that house prices would probably rise despite the current credit restrictions. I don't believe those restrictions are as onerous as you thought they would be.

Nope. There about as onerous as I thought they'd be which isn't surprising given it's my peers and me who actually make the decisions. Where I under-estimated was the extent to which the tap would be essentially turned off in the commercial sector. I thought most banks would have more brains than that.

House prices were rising throughout 2007 despite the high interest rates. Then in 2008 prices fell slightly, mainly due to weak consumer sentiment brought on by gloomer scaremongering about the forthcoming 'worst recession since 1930' and supposedly imminent double digit unemployment. When those and all the other gloomer predictions failed, sentiment quickly improved, and house prices returned to their original upward trajectory.

Correction : Interest rates were lowerin 07 than 08 and by "fell slightly", you mean the largest reduction in median house prices in decades.

The recovery was clearly a function of a 40% reduction in interest rates leading to the lowest cost of borrwing in 40 years, the largest Government stimulus since the war and the FHOB.

Put it all down to "sentiment" if you like, though it makes an argument for the strength of underlying fundamentals look a bit wobbly.

No need to be rude... I don't want any particular answer.

Not rude...just pointing out the obvious.

 

[Shadow]

Nope. There about as onerous as I thought they'd be

So you thought credit would tighten a little bit, but not enough to cause house prices to fall? That's what I always said.

Correction : Interest rates were lowerin 07 than 08 and by "fell slightly", you mean the largest reduction in median house prices in decades.

Not much lower - they were pretty high in 2007. Yes, the largest reduction in median house prices in decades was a very minor fall. Just goes to show what a great investment property is.

The recovery was clearly a function of a 40% reduction in interest rates leading to the lowest cost of borrwing in 40 years, the largest Government stimulus since the war and the FHOB.

I think the FHOGB impact has been overstated. FHBs were still a relatively small part of the market, and most of them would have bought anyway, simply because interest rates were no longer at excessively high levels.

Not rude...just pointing out the obvious.

There was no need to point it out in a rude manner though, even if you thought it was obvious...

 

[Shadow]

Lending continues to loosen...

Looks like ANZ are removing some of the temporary lending restrictions.

How long before the other banks follow?

http://formula1finance.com.au/news/finance/anz-increase-home-loan-to-value-ratio-to-97/

ANZ increases Home Loan to Value Ratio to 97%

Effective Monday 6 September 2010 the maximum Loan to Value Ratio accepted by ANZ for Home and Residential Investment Loans will change to reflect the following:

* For eligible existing lending customers, the maximum Loan to Value Ratio is 95%, with the option to finance the LMI premium up to a maximum of 97%
* For all other customers, the maximum Loan to Value Ratio is 90%, with the option to finance the LMI premium up to a maximum of 92%

Also, it looks like the RBA might be cutting rates before long. Certainly the market expectation is for no more rises in the foreseeable future...

http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf

 

[Token Funder]

Looks like ANZ are removing some of the temporary lending restrictions.

How long before the other banks follow?

http://formula1finance.com.au/news/finance/anz-increase-home-loan-to-value-ratio-to-97/



Also, it looks like the RBA might be cutting rates before long. Certainly the market expectation is for no more rises in the foreseeable future...

http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf

Still way short of where they were 2 years ago and NCCP yet to dance with the ADIs.

Banks will be putting their rates up relative to the cash rate, probably before Xmas.

 

[Shadow]

Still way short of where they were 2 years ago and NCCP yet to dance with the ADIs.

But easing nonetheless. A good sign for people wanting to get into the property market.

Banks will be putting their rates up relative to the cash rate, probably before Xmas.

The RBA will decide where it wants mortgage rates to be. If the RBA wants mortgage rates to drop by 25 points, and they think the banks will only pass on half, then they will cut by 50 points.

I expect the RBA will soon cut by 25 points, and the banks will pass on some but not all. Which still means lower variable rates for borrowers. And of course we all know that fixed rates have already been falling.

 

[WinstonWolfe]

I expect the RBA will soon cut by 25 points, and the banks will pass on some but not all. Which still means lower variable rates for borrowers. And of course we all know that fixed rates have already been falling.

How I see it:

About 12-1am tonight, Bernanke is expected to clarify the US Fed's intentions on QE2. If he doesn't, expect a significant decline in global markets and tightening of credit flows to follow over the next week.

If they do clarify a larger QE2 is on, stocks, bond yields, and the AUD will move up, and the USD will drop......global credit should loosen, and aussie interest rates would be unlikely to drop for some time unless unemployment increases.

 

[boz]

The RBA will decide where it wants mortgage rates to be.

Good luck with that!
If things are all good and business as usual RBA will keep control. If things turn around and things are not rosy RBA and Australia with its borrowers will have to pay a premium to keep economy stable and money keep coming into the country, RBA will have little control on lending and mortgage rates

 

[Aaron Sice]

How I see it:

About 12-1am tonight, Bernanke is expected to clarify the US Fed's intentions on QE2. If he doesn't, expect a significant decline in global markets and tightening of credit flows to follow over the next week.

DJI broke and closed below 10000 last night - i smell a new run.

just want my put to hold out - got till Oct to realise.

 

[WinstonWolfe]

DJI broke and closed below 10000 last night - i smell a new run.

just want my put to hold out - got till Oct to realise.

The US Fed has been vacillating for months now, and the pressure is on for them to come clean on what they intend to do to stop the US economy diving further. They did announce they'd buy 2T of treasuris but that isn't stopping the slide in the US. But Trichet reckons the EUro is on the up, and is talking about a Euro stimulus exit.

They're supposed to nut it out in Jackson Hole over the weekend. If the US stimulates and Europe doesn't, uncertainty may still plague global markets, and any lift to the US economy may be short. So your put might work still.

Personally, I think Trichet is an idiot. The only part of EU doing well is Germany.

 

[willair]

I think there is some clear differences shaping up over the next few months,the "RBA" can do what ever they want but the "Banks" can also do what they want,and they don't always give time to let it be judged by the public who borrow from them..willair..