National Australia Bank, Westpac, bailed out by USA reserve.

Originally posted by iceblue20-12
reply to post by Colbomoose

 

I bet theres more to this,those figures just dont work do they,or maybe they work out fine if your an award winning treasurer!
How do Americans feel about bailing out Aussie banks when our country has its own wealth?we are supposedly in a good position,we send heaps of money off shore in aid,corrupt payments etc etc.
Certainly all that i have told about this drop the jaw for a moment.

How do I as an American feel? Unimportant really.. the question is how do YOU feel that banks were bailed for COLLATERAL. Hmm.... what is this " collateral"?? Hmm? "Bail out" is another word for "purchasing cheap" to the fed. Never let a good crisis go to waste, you know.

reply to post by zvezdar


After thinking about this last night, I have to say I agree that obtaining a loan at those rates would be very a clever strategy. At the time the RBA's cash rate was 7.25%, so the NAB and Westpac could loan (what was borrowed at .6%) at up to 8% possibly? That is a massive profit, and I'm not surprised they offered so much collateral... Marking up by 1200% is pretty darn good in anyone's books, I think

reply to post by 17sok


thanks, i'm glad someone understood what i was getting at! For people who havent dealt with bank capital and banking execs, it would look like a rush for capital because of solvency concerns. But there are always a whole lot of reasons that capital is raised: sometimes its just to stock up for something like takeover opportunities, or it may have been that they needed more USD denominated instruments as well, and tapping the Fed lines was more effective than the corporate markets that had frozen.

Its not as simple as "grabbed capital, therefore insolvent".

The incredibly over inflated Australian housing market and associated loans and securities are worth about 3 trillion.

When that bubble pops. There is nothing left on earth that will be able to bail out the big 4. It will be like Greece x 10. A bottomless pit of what the hell just happened as things like Centrelink, PBS, Medicare, Public health and all other government services go the way of of the dodo.

Not even the mining and carbon tax and gst combined will put a dent in the colossal ticking time bomb that is Australia's housing market.