Financial Services

Latest figures show Australia’s household debt and gearing keep on rising, with the ratio of household debt to disposable income now at record levels. The recent rise has been largely due to the loan book growth of smaller institutions and non-traditional lenders, often to higher-risk borrowers. This is a worrying development. continue…

by Stuart Jackson Posted in Financial Services.

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The structural decline in US ten-year bonds from 15.8 per cent in 1981 to 1.3 per cent in 2016 has seen both record lows and generational lows.  Others include 4.7 per cent in 1830, 2.8 per cent in 1900 1.7 per cent in 1945. continue…

by David Buckland Posted in Financial Services.

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Stuart Jackson, Portfolio Manager for The Montgomery [Private] Fund and Senior Analyst whipped up the following summary of the Big Four bank’s 2017 results for a TV interview during which the host decided to chat about something else.

So here’s are Stuart’s thoughts – now exclusive to the insights blog! continue…

by Roger Montgomery Posted in Financial Services.

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Three of Australia’s biggest banks – Westpac (ASX: WBC), ANZ (ASX: ANZ) and NAB (ASX: NAB)– are about to report, and we think there’s plenty of reasons to be optimistic. A turnaround in the trajectory of net interest margins, and good news on bad and doubtful debts, should leave investors happy in the run-up to Christmas. continue…

by Stuart Jackson Posted in Financial Services.

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The major banks recently announced they will no longer charge fees to customers using their ATMs, even if they are accessing an account with another bank. This is a pretty big change in policy, and carries some downside risks. So, why did they do it, and what does it mean for investors? continue…

by Stuart Jackson Posted in Financial Services.

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An interesting piece of research from Macquarie Equities came across my desk, illustrating the massive bubble we are living through.  Despite the chequered history of many Emerging Economies, the spread on the yield on their sovereign bonds relative to US Bonds has come down from seven per cent to three per cent over the past three years.

continue…

by David Buckland Posted in Financial Services.

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On Wednesday, APRA, announced moves to make Australian banks safer. The announcement was greeted warmly by the market. But what do the new capital requirements mean for the banks in the short to medium term? And should investors really be so sanguine about the prospects for the banks? continue…

by Stuart Jackson Posted in Financial Services.

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Central banks could soon end their bond buying activities, thereby unwinding quantitative easing. Should this occur, real interest rates would again be driven by the normal forces of supply and demand. And this could affect stock valuations. continue…

by Stuart Jackson Posted in Financial Services, Market commentary.

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For the first time since it began its quantitative easing in 2009, the US Federal Reserve (Fed) announced it would commence the gradual unwind of its US$4.5 trillion balance sheet sometime later in 2017.  Should this plan proceed, higher borrowing costs for corporations and households will be the likely result and this warrants a degree of caution. continue…

by David Buckland Posted in Editor's Pick, Financial Services, Global markets.

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We were interested by the overnight news that Australia’s four biggest banks have had their long-term credit rating downgraded. Downgraded rating = higher funding costs = higher mortgage rates = mortgage stress? continue…

by Roger Montgomery Posted in Financial Services.

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