An Australian house price index proxies for more than $3.3 trillion worth of assets but the index’s incredibly low volatility is a mirage for the individual home owner who assumes a far higher probability of loss and has about 60 per cent of their wealth invested in this asset. [click to continue...]
From the category archives:
Finance
Fixed-rate home loans get the flick
Hefty break fees for switching from an average fixed to a standard variable home loan rose sharply this week to $19,000 as debt futures markets and economists said official rates would fall to 1965 levels by February. [click to continue...]
Ken Henry gives an upbeat view of the Australian economy
He refuted any claim of manipulation by the government about the difference in forecast growth between Treasury’s 2% and the RBA 1.5%, noting the IMF forecast 1.8% economic growth for Australia.
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Commonwealth Bank Says It Loaned Allco A$170 Million
Commonwealth Bank of Australia, the nation’s biggest provider of mortgages, said it has outstanding loans worth about A$170 million ($115 million) with Allco Finance Group, which this week called in outside managers after warning it may default on debt. Allco, the Sydney-based asset manager that last year led a failed takeover attempt for the nation’s biggest carrier, appointed Tony McGrath and Joseph Hayes of McGrathNicol & Partners as voluntary administrators on Nov. 4.
ABC Learning Centres in voluntary administration
The move could put at risk up to 25 per cent of childcare places in Australia and thousands of jobs, with parents now in limbo over the fate of their childcare arrangements. Mr Tanner said today the federal Government would do all it could to ensure working parents had certainty around childcare arrangements. Mr Tanner told Sydney radio 2UE he could not rule out some centres closing but said the Government would do all it could to ensure working parents’ childcare arrangements were not disrupted.
Manufacturing activity hits 16-year low
Manufacturing activity slumped to its lowest level in 16 years during October as slower economic growth eroded confidence of business and consumers, a survey says. Reduced confidence of businesses and consumers from uncertainty caused by the global financial crisis, a weak housing sector, a slowdown in developed economies and falling local consumption were cited as harmful to activity.
Grim Australian figures point to rate cut
“As a leading indicator of economic conditions in Australia, the latest jobs advertisements data suggest the global financial crisis has had a substantial impact on the Australian economy,” said Warren Hogan, ANZ’s head of Australian economics. Michael Blythe, chief economist at Commonwealth Bank of Australia, added that the positive drivers to the Australian economy are often overlooked and he dismissed comments from rivals, notably those from foreign banks, warning that Australia is on the cusp of recession.
Stuart Park a hot spot
As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years.
Only a few months ago, American policy makers were worried about the reverse problem — rising prices, or inflation — as then-soaring costs for oil and food filtered through the economy.
The new worry is that in the worst case, the end of inflation may be the beginning of something malevolent: a long, slow retrenchment in which consumers and businesses worldwide lose the will to buy, sending prices down for many goods.
Westpac tips slide, but no recession
However, the bank’s latest financial year would be extremely challenging, the Westpac chief said, with rising bad debts, consumer spending falling away and lending to key markets likely to be no more than 8% after years of high double-digit growth.
Now comes the credit card crisis
Now comes the credit card crisis After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers.
Big lenders — like American Express, Bank of America, Citigroup and even the retailer Target — have begun tightening standards for applicants and are culling their portfolios of the riskiest customers.
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