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bazz61 said..
What if they find a cure for t h e virus ...back to normal,..?

They will release another virus

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japie said..

bazz61 said..
What if they find a cure for t h e virus ...back to normal,..?

They will release another virus

Or they will activate the mind control function of this one, and we will become slaves to the system.....Oh wait

Maybe it's a pretext for the introduction of microchips into people.

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Gboots said..

Paddles B'mere said..
The government guarantee up to $250k with eligible institutions.

Bank shareholders were always going to get punished after the banking inquiry anyway, now they may be exposed to a little more risk of bad debt but I reckon the banks will help people trade through, they don't want houses to sell or to kill their cash cows. Our bank has already emailed to let us know that financial relief is available if we need it.

Will the government honour the $250K? Have they actually got the capital ?

I wonder if they insist that any assets of the bank get used for this before the govt step in. I suspect so.

As with lots of things its intended to produce stability and avoid a run on the banks, so its never really expected to be used.

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FormulaNova said..

Gboots said..

Paddles B'mere said..
The government guarantee up to $250k with eligible institutions.

Bank shareholders were always going to get punished after the banking inquiry anyway, now they may be exposed to a little more risk of bad debt but I reckon the banks will help people trade through, they don't want houses to sell or to kill their cash cows. Our bank has already emailed to let us know that financial relief is available if we need it.

Will the government honour the $250K? Have they actually got the capital ?

I wonder if they insist that any assets of the bank get used for this before the govt step in. I suspect so.

As with lots of things its intended to produce stability and avoid a run on the banks, so its never really expected to be used.

FN - the banks sold all their assets years ago - like their huge property portfolios, their development pipelines, their retained profits and other financial investments and paid it all out in dividends. Their only asset is their loan books. a 5% default on loan books and they are illiquid. Then the govt will step in eg Italy.
When people are unable to pay their mortgages and businesses are unable to pay their loans the banks will have a serious cashflow problem and remember - they have no retained earnings to carry them through and their wholesale funding lines from the US have been pulled.

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bazz61 said..
What if they find a cure for t h e virus ...back to normal,..?

They need a cure for the extreme levels of debt being carried by the corporates, private business, governments and now an inability to pay for it thanks to a cashflow problem.
We aint seen anything yet but the nuclear explosion on the horizon - wait for the shockwave when it hits...!

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Main said..

FN - the banks sold all their assets years ago - like their huge property portfolios, their development pipelines, their retained profits and other financial investments and paid it all out in dividends. Their only asset is their loan books. a 5% default on loan books and they are illiquid. Then the govt will step in eg Italy.
When people are unable to pay their mortgages and businesses are unable to pay their loans the banks will have a serious cashflow problem and remember - they have no retained earnings to carry them through and their wholesale funding lines from the US have been pulled.

Not true - our banks have CAR or reserves of high teens. Defaults would have to be double your 5% to become a real concern. Before then our govt will crank up the printing presses like we have never seen. First salvo will come on thursday apparently.

I met a bloke sailing in Greece a few years back. At the height of the GFC he bought shares in his local bank at 1/10th the pre GFC price using a loan that same bank gave him for basically free.

The profit from that one trade paid for the 60 foot catamaran he was sailing around europe on. Nice guy too.

Hope i have the sack he had when the time comes. Once in a lifetime opportunity IMHO. Defo not time to panic

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Bara said..

Main said..

FN - the banks sold all their assets years ago - like their huge property portfolios, their development pipelines, their retained profits and other financial investments and paid it all out in dividends. Their only asset is their loan books. a 5% default on loan books and they are illiquid. Then the govt will step in eg Italy.
When people are unable to pay their mortgages and businesses are unable to pay their loans the banks will have a serious cashflow problem and remember - they have no retained earnings to carry them through and their wholesale funding lines from the US have been pulled.

Not true - our banks have CAR or reserves of high teens. Defaults would have to be double your 5% to become a real concern. Before then our govt will crank up the printing presses like we have never seen. First salvo will come on thursday apparently.

I met a bloke sailing in Greece a few years back. At the height of the GFC he bought shares in his local bank at 1/10th the pre GFC price using a loan that same bank gave him for basically free.

The profit from that one trade paid for the 60 foot catamaran he was sailing around europe on. Nice guy too.

Hope i have the sack he had when the time comes. Once in a lifetime opportunity IMHO. Defo not time to panic

We will see !
Dont mistake bank share-price fluctuations as anything more than portfolio mandate balancing/weighting by insto's at this stage.

Debt is the underlying time bomb. Agreed main. That's what's driving the real fear. Debt that can't be serviced due to economic downturn.

I suspect this is going to make the GFC look like the entree because the world didn't just shut down - it was only a temporary crisis of financial liquidity.

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Main said..


We will see !
Dont mistake bank share-price fluctuations as anything more than portfolio mandate balancing/weighting by insto's at this stage.

Ill shout you a beer from the saloon of my cat if im right.

if not can i pitch my tent at your rental place when i do my QLD trip?

Yep share prices can get discombobulated in times of panic which is what we are seeing. THE VIX fear index has NEVER been higher.

The volatility has more to do with algo high frequency trading than any other single factor. The funds and ETFs etc are then rabbits in the spotlights when people panic and hit the cash option on their super - triggering selling of anything at any price by the funds - right into the arms of the HF traders. Who then reload and go again on a 24 hour cycle.

One super fund has fought back (uni super) and stopped stock lending to short sellers. Expect others to follow.

Other markets with stronger regulators will just outright ban them (eg S Korea)

While i agree with you about the debt time bomb what you are missing with all respect is the various official and unofficial reactions in a crisis - banning short selling, QE, govt handouts etc. etc We will do these things and more till we go bankrupt as a nation and a virus crisis simply doesnt last anywhere near long enough for that to happen.

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holy guacamole said..
Debt is the underlying time bomb. Agreed main. That's what's driving the real fear. Debt that can't be serviced due to economic downturn.

I suspect this is going to make the GFC look like the entree because the world didn't just shut down - it was only a temporary crisis of financial liquidity.

Which can be fixed by printing $$$ .. the Lieberals
will do anything to protect their own butts , most if all have big property portfolios, so housing will fall but not as much as it should .

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holy guacamole said..
Debt is the underlying time bomb. Agreed main. That's what's driving the real fear. Debt that can't be serviced due to economic downturn.

I suspect this is going to make the GFC look like the entree because the world didn't just shut down - it was only a temporary crisis of financial liquidity.

Which can be fixed by printing $$$ .. the Lieberals
will do anything to protect their own butts , most if all have big property portfolios, so housing will fall but not as much as it should .

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Bara said..

Main said..


We will see !
Dont mistake bank share-price fluctuations as anything more than portfolio mandate balancing/weighting by insto's at this stage.

Ill shout you a beer from the saloon of my cat if im right.

if not can i pitch my tent at your rental place when i do my QLD trip?

Yep share prices can get discombobulated in times of panic which is what we are seeing. THE VIX fear index has NEVER been higher.

The volatility has more to do with algo high frequency trading than any other single factor. The funds and ETFs etc are then rabbits in the spotlights when people panic and hit the cash option on their super - triggering selling of anything at any price by the funds - right into the arms of the HF traders. Who then reload and go again on a 24 hour cycle.

One super fund has fought back (uni super) and stopped stock lending to short sellers. Expect others to follow.

Other markets with stronger regulators will just outright ban them (eg S Korea)

While i agree with you about the debt time bomb what you are missing with all respect is the various official and unofficial reactions in a crisis - banning short selling, QE, govt handouts etc. etc We will do these things and more till we go bankrupt as a nation and a virus crisis simply doesnt last anywhere near long enough for that to happen.

Done !

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bazz61 said..

holy guacamole said..
Debt is the underlying time bomb. Agreed main. That's what's driving the real fear. Debt that can't be serviced due to economic downturn.

I suspect this is going to make the GFC look like the entree because the world didn't just shut down - it was only a temporary crisis of financial liquidity.

Which can be fixed by printing $$$ .. the Lieberals
will do anything to protect their own butts , most if all have big property portfolios, so housing will fall but not as much as it should .

Because it will devalue the dollar and cause more problems.
Governments often resort to printing money when they cannot finance their borrowing by selling bonds - which is what is happening right now.
For the record - the Lieberals All political parties will do anything to protect their own butts , most if all have big property portfolios, so housing will fall but not as much as it should .

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holy guacamole said..
Debt is the underlying time bomb. Agreed main. That's what's driving the real fear. Debt that can't be serviced due to economic downturn.

I suspect this is going to make the GFC look like the entree because the world didn't just shut down - it was only a temporary crisis of financial liquidity.

This is going to be the pain we should have taken last GFC. The worst part is the Wall Street criminals will not be held to account again and will have their true wealth well protected....

Look on the bright side. Now is the time to buy those shares you've been thinking about. No good leaving the money in the bank ,get it working .

Absolutely BB, I've just had a similar post windsurf carpark conversation with Imax. The ASX looks like it is being manipulated to the bottom with big money and every afternoon there's a flurry of buying before close and today it looks like it may have turned a little more than previously.

Won't printing dollars lead to inflation ?

Won't printing dollars lead to devaluation of the currency ?

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Gboots said..
Won't printing dollars lead to devaluation of the currency ?

yes, and yes, unless the economy needs the money. If it needs the money, inflation will not increase. Yes, the AUD would fall, unless other currencies are doing the same and almost certainly they will be.

Its a funny thing to think about, if everyone does it, it should be better for each economy, but have no nett effect between countries... I think!

Wouldn't that be interesting, everyone pumping up their currency and having no disadvantage... until the economy comes good again, at which point they will have excess money circulating and inflation should rise. Unless it gets stored under matresses.

They'll buy back bonds first, people will be keen to turn bonds into cash at some point.

They'll buy back bonds first, people will be keen to turn bonds into cash at some point.

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Paddles B'mere said..
They'll buy back bonds first, people will be keen to turn bonds into cash at some point.

You think so? What happened last year when the US Fed tried it?

is this the end of Neo Liberalism and the rise of socialism .... seems like it , also those that pay no tax in Australia should not receive tax payer support .

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bazz61 said..
is this the end of Neo Liberalism and the rise of socialism .... seems like it , also those that pay no tax in Australia should not receive tax payer support .

Now wouldn't be a good time to turn off Newstart, disability pensions or aged pensions !

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Paddles B'mere said..
Absolutely BB, I've just had a similar post windsurf carpark conversation with Imax. The ASX looks like it is being manipulated to the bottom with big money and every afternoon there's a flurry of buying before close and today it looks like it may have turned a little more than previously.

They've done it twice now to stop free-falls it seems.

My wife is a former Goldmans derivatives dealer - she reckons it was sheer panic when a market goes into free-fall and you lose track of all your positions. Thats why they close markets at 10% falls now.

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Main said..
This will be worse than the GFC.

Like the GFC it will be a long recovery 4+ years.

Dont worry about picking the sharemarket it will be down for a long time - wait till companies start issuing profit warnings. Thats when the carnage will really start. Especially the banks who are houses of cards anyway. I wont be surprised if the banks get nationalised - their wholesale funding is getting cut and they will be paying more for money so they will either cut dividends to pay for it or put up interest rates. Remember the banks have a provision of less than 5% for bad mortgages.
Unemployment is about to spike. Increased unemployment = increase in mortgage defaults...
The best deals will be in the property markets. Downsizers who have contracts on luxury owner occupier apartments currently under construction have been holding their equity in the sharemarket - lawyers are already getting calls from purchasers worried they wont have enough equity to settle - its the GFC all over again !!!
We've seen the nuclear explosion on the horizon but have yet to feel the shockwave.

As I was saying......

www.theguardian.com/business/grogonomics/2020/mar/19/the-only-thing-we-can-say-with-certainty-is-that-the-fallout-from-coronavirus-is-going-to-be-brutal

Drip feed purchases . You can't pick the bottom or top

One may think that there is alway a bottom.If 50c is that bottom for Aussie dollar or the trend is going to puncture it?

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Macroscien said..
One may think that there is alway a bottom.If 50c is that bottom for Aussie dollar or the trend is going to puncture it?

I already put my pick in as $0.30. ASX200... 3500.