$27 billion wiped off banks

http://www.smh.com.au/business/banking-and-finance/27-billion-wiped-off-banks-20150807-giu7sz.html

The Australian sharemarket suffered its worst day in three years on Friday as the spectre of rising bad loans and capital raisings to satisfy nervous regulators saw investors wipe $27 billion off the value of the big four banks over the past two days.

Shares in ANZ Bank slumped the most, plunging by as much as 8.5 per cent in early trade on Friday as the bank emerged from a trading halt after raising $2.5 billion from institutions on Thursday.

The sell-off in bank stocks drove a broader dive in the ASX 200, which tumbled 2.4 per cent, and came as investors fretted about ANZ's trading update on Thursday which revealed higher provisions for bad debts on loans to the resources and agriculture sectors.

Read more here ....
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It seems with the rise in unemployment and revision downwards of GDP growth and banks raising capital for their books, the ASX is taking a beating. Will this start to have downstream effects on the property market over next few months?

 

Interesting to see that the herd is pulling out of (safe) banks beat the stampede and invest against the tide.

Overstretched investors have mortgage insurance. What's the bank's exposure?

I'm more concerned about the insurer's share price tanking

 

In a credit crunch & property crash banks are the last things you want to own, it wouldn't take much of a downturn to knock 50%+ off Australian bank share prices.
e.g. in the UK, banking index went down 80%. Still down 60% from 10 years ago, many banks went under completely.
http://www.google.co.uk/finance?chd...EXFTSE:NMX8350&ntsp=0&ei=F5vFVcmsE4fCUaf8gLgC

 

@Kangabanga:
There is a possibility for ASX going down to 5000 in a few months, but might rebound first before this happens. IMHO, once ASX is down to 4500, it attracts a lot of buyers. If downtrend is confirmed (affected by US market), some money may flow from ASX into housing market.

 

Not just APRA - also Yellen and the Feds posturing re US interest rates.

Happened last time too. If the US raise rates, Aussie Banks will lose 25-30% in a week.

might be good pickings.

 

which bank/s?

 

I am quite surprised the recent stock rout in the Chinese markets have not had much impact on the stock market here.

with CBA's upcoming capital raising and possibly more capital raisings from banks and miners, coupled with slowing aus economy, once the big guys start showing shrinking earnings, ASX at 5000 is surely a possibility. Of course the other big risk is USA really raising rates next month and subsequent sell off in stocks as some capital gets reallocated back there.

 

probably because the market fundamentals had nothing to do with the reality of the actual state of the Chinese or global economy.

 

Are you answering your own question?

 

Foreign investment in Chinese share market is very tiny.....
Chinese domestic market may be affected by the drop of shares: individual purchase power is reduced more or less, and some companies have less revenue to play, which might have some effect globally.

 

That's actually a good sign mate.
Because when the majority of the investors is moving out / away from the stock market due to fear, then they are buying out investment property like you guys can see here in Sydney and Melbourne market.

So therefore, applying warren buffet principle, we should be investing in the stock market now while it is still low.

Tips:
Invest in Uranium ore, because it is the future for the modern power plant. Remember that in the future there will be more nuclear power plant that is build to supply the electricity demand.

Invest in Gold,Silver and Nickel mining company when the economy condition is getting worst, people will run to buy gold and their precious metals as safe asset.

Hence those are the suggested way to safely invest in the long term while waiting for the Sydney and Melbourne property price to bounce back up.

You can't go wrong with those strategy since it is what Warren Buffet and Jim Rickard would do now in this economic climate.

Hope that helps.

Note: this is based on the true investment advice that I get from premium subscription advisory (Port Phillips publishing).

 

The drama has not started yet. Just need a trigger IMO.
It seems that the rate rise in US is not the one to trigger ...
Maybe be something else.......

 

Yes @acorn123 it is called fear and greed...

 

Definitely, it is greed.
Now, I see some friends prepared to jump in once WBC down to 18.
Some others with one million fund ready for a house in Sydney since 2011, but still waiting for best bargains

 

I would expect CBA to settle around $59-$65 if the US raise rates off zero. They are SO exposed with the mortgage backed securities they are selling (against aussie properties). NAB exposed too, but less so and ANZ / WBC just part of the mix.

It's the random links you want to be worried about - like the way Bankwest is linked to CBA with the same MBS stuff - they may be more or less exposed than CBA itself - indeed I believe WA and Vic properties were a large portion of those securities which would explain such a strategic takeover at the time they were selling MBS internationally.

 

with the downturn in perth property market this year, surely that must have some sort of impact on the big banks in terms of loans starting to go bad?

 

there's not blood on the streets, if that's what is being spouted over East?

most people don't give a flying cahoots about a median price falling.

and if most people don't care.....it's like a tree, falling in the forest.....

 

I am still waiting for the inflation/gold to the moon and ya that war he predicted,
Was it Vegemite war?

 

I think the best bargains may have been in 2011.

 

Stock rout continues. This time seems like a consistent sell off by the ETFs as investors pull funds from them. A repeat of late 2011 perhaps..