Sunday, September 14, 2008

Bad Business Models in OZ

Reality hits property funders

A LITTLE over a year ago, stung by criticism following the collapse of Fincorp, Australian Capital Reserve and Bridgecorp, the corporate regulator issued a list of other risky, unrated mortgage schemes.Today, that list is a who's who of who's gone bust.

Posted by alan @ 09:49 PM (648 views)
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6 thoughts on “Bad Business Models in OZ

  • planning4acrash says:

    The amazing thing has been to see that the Aussie Dollar has fared worse even than Sterling, which of course, has fared much worse than the Dollar. Aussie trading close to $2 to 1 pound recently. It was recently at 2.5 – Crazy when one remembers the resources in Australia, maybe goes to show that demand has dropped for commodities and all price rises have been due to inflation and currency devaluation. Australia may have leveraged its commodity futures and now be in trouble as global demand for them drops.

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  • It is also a country with serious debt issues…if UK craziness > US housing craziness, then Australian housing craziness >>>> UK housing craziness. Lots of personal unsecured debt too. A real mess…and my home 🙁 I suspect in the long run Australia will fair better than the UK, but in the short/medium term there will be a reckoning.

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  • planning4acrash says:

    d’oh, the thing to remember, is that this crisis has nothing to do with market fundamentals. It is entirely about debt. Problem is, that, Aussies may end up having to mortgage/fire sale their lucrative mining installations and farm ranches to the Chinese and Russians, etc, to deal with the debt crisis. How well you do in this storm has nothing to do with your economic reality, it is only about how much debt you have and how much you will be taxed/suffer from inflation to bail out idiots in your own country who took on too much debt. That is why fiat money is rubbish and you need a gold standard!

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  • I’ve a flat in London (let) and flat in Sydney (living in). Fortunately no mortgage on Sydney and almost none on London. Checked out the Sydney property market over the past few weeks as want to buy a family home one day. I am STUNNED by the fact that so many property owners are in TOTAL DENIAL about what is to come. And PLANNING4ACRASH you are SO right that it’s all about debt – these Aussies have a much bigger affordability stretch than there ever was in London and they are, in general, totally in denial about what is to come! I thank my lucky stars every night that my husband and I have scrimped and saved to avoid being bank slaves….the property market will crash here due to debt then forced sales – and only those who can ride it out will keep their capital in the medium-long term (3 years at least I reckon). It will OVERSHADOW the UK situation by the affordability / debt differential in my humble opinion.

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  • mark wadsworth says:

    What about the fundamentals? The Aussies have a strong economy and a shortgage of building land … oh, hang on …

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  • planning4acrash says:

    Reality Check, yup, you can watch it happen with how poorly behaving your currency is, but, that’s by design, because a Pacific Rim Union involves you linking and becoming homogenised with country’s like Vietnam. This is the globalists trying to get rid of differences between country’s they want to bring together. 3rd world country’s won’t be brought up, 1st world will be bought down. Oh, you never heard of a Pacific union? Check out the free trade agreements, which are curiously similar to those that led to the EU. Note that crazy EU leaders recently celebrated 50yrs of it!!! People were like, oh, are you crazy? And they were like, oh, it started with the Treaty of Rome. These guys are sneaky and plan for generations. That is why its hard for us to get our heads round it. For more on this kind of stuff, there are many kernels of truth in Allan Watt’s podcasts

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