Turk, fair go..... TF was highlighting the relative contribution of consumer demand and credit availability/cost.
A well connected mate today said three of the Big 4 senior lending executives talked candidly this week in Brisbane about deliberately throttling the approval of home loans, in cooperation with the Fed Govt, to reduce the risk of a higher volume of defaults during a recovery, and to govern the volume of grant bonuses issued by the Fed Govt.
They are also controlling supply, via more restrictive loan criteria to developers. Go ask your local commercial banker what % presales you need now.
Maybe you could clarify why, if demand is the more important criteria, banks aren't hiring more loan app processing staff.....more loans mean more profits right? Or how about an explanation for why non bank lenders are losing market share if demand is the primary driver.
Hi Winnie
TF used the analogy in answer to a post supporting demand as the main driver, I thought it was poor analogy a bit like if my auntie had b#@#@ she would be my uncle(which is actually more likely to happen than every Australian bank stopping lending).
TF is capable of much better than this.
As to your questions- Maybe you could clarify why, if demand is the more important criteria, banks aren't hiring more loan app processing staff?
I have never said I support the view that demand is the primary driver, my view as I posted is-I tend to think that when there is an imbalance (excess or lack of) of any driver it becomes a key to what the market is doing, but the other drivers don,t become irrelevent.
and
Or how about an explanation for why non bank lenders are losing market share?
Not being an expert on this I would think that perhaps the problems they had
in accessing funds when the GFC began and then the increased costs of funds above the banks costs would not have aided them in keeping their market share and perhaps the fact that a number of non bank lenders were taken over by banks would also impact on market share or perhaps consumers became wary of borrowing from these lenders may also have had an impact.
However Winnie you're obviously much wider read than I so please feel free
to correct me if these events did not affect non bank lenders market share.
Always happy to learn.
Although a little confused about what your mate told you, with the banks
throttling the approval of home loans, in cooperation with the Fed Govt, to reduce the risk of a higher volume of defaults during a recovery, and to govern the volume of grant bonuses issued by the Fed Govt.
and you posted,
more loans mean more profits right?
Cheers
Pete