Now we are told that the banks were on the brink of Collapse!!

[josko]

Excellent post Jo. Care to take a stab at how 'big' is big? (i.e. in $m of funds borrowed)

To be honest I hahve no idea. Knowing the areas that he has his sites at and roughly how many lots....+ houses..he would have to be over 5mil. I also estimate (badly) that on the fact that they clawed back 500k immediately on his LOC, before they did the vals.

Sash,

Do you think a mil is alot with the banks these days? I have house worth over a mil....well until I sell...but I have thankfully never fallen for the Pro Packs of St George etc, with the rest of the IP's.. Small mercies.....

Regards JO

 

[sash]

A $1m with one bank for IPs is a lot as you are not protected by the UCC (Universal Credit Code). But if it is against a PPOR...you are considered less a risk as people in OZ tend to hang on to their homes....repossessions rates in OZ are very...very low for PPORs.

Would not worry for the moment....just try to get your cash flow in order. But do it quickly. Also remember, IR are coming down...I expect we will get another 0.5%.

I am conservative by nature....but by reading what others on SS are doing....now is the time to get your house in order!

Yes....Pro Packs are what they use to get you hooked....never have fallen for that....as once they get you they get you under the "all monies clause"...and even if they don't they set their contracts where they can do things without your consent. Only protection is to limit their control via other banks!

The guys I am most worried are the ones holding Commercial Property portfolios of say $10-30m with debts of 50% plus.

Cheers
Sash

Sash,

Do you think a mil is alot with the banks these days? It is difficult for me to diversify that amount as I have house worth over a mil....well until I sell...but I have thankfully never fallen for the Pro Packs of St George etc, with the rest of the IP's.. Small mercies.....

Regards JO

 

[josko]

Thanks Sash,

Yes it's my PPOR, so if what you say is correct, I'm okay! Phew! One less thing to worry about.

Yes glad for IR's...just not in time and not on some loans for me. But thankful none the less.

Regards JO

 

[sash]

No worries! Someone else on this forum who is a broker is saying similar things...people might have thought I have converted to the "dark side of GHPC"!

http://www.somersoft.com/forums/showthread.php?t=46898&page=2

I can't wait for interest rates to hit 6% or less!!

Cheers
Sash

Thanks Sash,

Yes it's my PPOR, so if what you say is correct, I'm okay! Phew! One less thing to worry about.

Yes glad for IR's...just not in time and not on some loans for me. But thankful none the less.

Regards JO

 

[DavidMc]

$600k? I would have thought $1m is OK per lender (especially for our largest bank). It's only 2.x median priced houses at 90% LVRs. 4/5 Big banks, 2-3 IPs each, nice.

 

[sash]

$1m loan is still substantial....not a lot of people have loans for this amount.

Most people would have loans of less than 600K.

Cheers
sash

$600k? I would have thought $1m is OK per lender (especially for our largest bank). It's only 2.x median priced houses at 90% LVRs. 4/5 Big banks, 2-3 IPs each, nice.

 

[redsquash]

Did Mr Rudd mislead the Australian people 2 weeks ago when he said that the Banking System In Australia is Fine", "Best Regulated", "Best Funded", "Rock Solid", no problems and now he wants us to believe that they were under threat, so which is the truth?, and why has the man who said he would level with the Australian people done a back flip.

The best boxer in the world can be under threat when in a fight.
The threat exists , but how it is managed is whats important.
Having a weak banking system or having a strong banking system will result in very different outcomes. Thats the point being made.


1 % of Oz loans are sub prime, compared to 15%-18 % in the USA ,with a housing supply over stock, which is the reason for this turmoil. We have a shortage of housing.
So I guess the answer is NO

 

[Token Funder]

Find me a single quote where anyone from the govt says "banks are/were on the brink of collapse".

Then we shall see who is in the truth bending caper.

*sound of crickets*

 

[Token Funder]

hi token
no it does not effect the euro/ german markets but what it did do was drive the capital out of the non secure funds and into the euro bond markets.now if you understand the bond market and banks leveraging this is exactly what was required.
so it did what the bank backers wanted
the trouble is that in doing that it also dragged out the capital out of the funds that needed it to fund the markets here
and you can't have your cash and use it as well.
what mr rudd did not understand or did but didn't wish to tell us is that those same cash is what the banks here leverage off.
and thats the reason for the freeze.
as long as the return against risk was a equilibrium its was fine but if you throw the risk reduction on one side bank deposits that throw the risk out on the other side.
so the money flows to the items that have lower risk bonds that are bank bonds that are use to leverage so banks can lend out more.
if this makes sense.
its not an easy thing to understand unless you put it on a white board.
now the deposits and the bonds have nothing to do with aust banks issues at the moment.
the big issue is they are holding lots of product with a value that is not close to being true value and as such they will fall over as they come to roost.
and I think that we need to know who has lent to who and who is pasted there use by date.

I can tell you from personal observation that the funds that starting moving out of the mortgage-backed funds were moving straight in to domestic banks (in many cases, they are related parties).

In any case and as fascinating as global capital flows are, it's not relevant to the topic at hand which is Daz's assertion that "banks were on the brink of collapse". Said assertion is, with respect, ********.

 

[redsquash]

heres the article ... author Malcolm Farr (from the truth?)


http://www.news.com.au/dailytelegraph/money/story/0,26860,24568263-5015795,00.html

From the article
PRIME Minister Kevin Rudd, vowing to "level with the Australian people", last night indicated the Australian banking system was on the brink of collapse two weeks ago.

How does fading, translate into collapse?Thats sick logic
From the article.
Mr Rudd said confidence in local banks was fading as institutions in other countries were given government guarantees.

To whom , where and when was the banking system collapse information presented?Which Banks in particular was he referring to. Were all Banks going to collapse?Why am I just hearing about this collapse now and what were the state governments intending to do during this collapse ,apart from just watch.

 

[letiha]

We have 1 mil + from the NAB for 3 houses, they just revalued our places and approved a LOC without so much as of look sideways. We have only had these places for around 1 year.

 

[GoAnna!]

Sash smaller investors might be able to keeps debts under $600K with a single bank but as the porfolio grows your options are fewer and with larger projects you often have to leverage off one bank for a single project. That is just the reality. $1 million is really not much for a developer.

 

[Pushka]

For a developer I would have thought $1million was pocket money!