plastic Posted January 13, 2009 Author Share Posted January 13, 2009 Chinese whispers are saying that Citi and some Australian banks are about to take huge, like colossal losses this half. Citi is looking at up to $600m write offs with more to come in the second half. Westpac may have to merge or be bought out. This is going to get really ugly and the day the music stops will be in early March I am told. I don't know what the catalyst will be though. Therefore, it is time to start looking at bank debt as a investment instrument. Because short of a bank going under which it probably won't but it might, their debt will always be there and need to be serviced. What better time to buy their debt than when they are distressed? Citi isn't good for much but I guess their ineptitude as bankers allows others to seize the day with their debt because it is clear these people aren't going under. They will merge, downsize, sell off, lay off, write off, but they won't go under and their debt will still be there ticking away being serviced to the bond holder who picked it up on the cheap when nobody gave them a chance. So maybe as useless as they are they are good for something. Does anyone know much about their debt instruments available on the market? The green back has a long way to fall yet so now is not the time to buy but a good time to start the discussion I feel. Link to comment Share on other sites More sharing options...
macduffy Posted January 13, 2009 Share Posted January 13, 2009 In reply to: plastic on Tuesday 13/01/09 12:26pm Citi is looking at up to $600m write offs with more to come in the second half. QUOTE Hardly a company-threatening amount! ANZ, a much smaller bank ( still!) made a NPAT last year of AUD3.319b after Provisions of AUD1.9b Oh, and ANZ assets were AUD471b at last balance. I really don't think we should be spreading "Chinese whispers" about Westpac, either, without some hard facts to back them up. Link to comment Share on other sites More sharing options...
plastic Posted January 13, 2009 Author Share Posted January 13, 2009 What do you think of their debt as an investment instrument? I am sure he said $600m but he could've said $6bn. Will have to wait and see. http://www.sharescene.com/html/emoticons/king.gif But one thing is for sure, this is going to get ugly. Link to comment Share on other sites More sharing options...
plastic Posted January 13, 2009 Author Share Posted January 13, 2009 Hey Macduffy, headline figures don't show the real story right? It's all about ratios. Those figures can be reduced by God knows how much with some shorting or forced selling by mortgage holders then the ratios and covenants and law etc have to be complied with which forces more selling and then before you know it, its Armageddon. So watch this space. The whispers are right. Early March the music stops. The Big C, ANZ, Westpac and whoever else are down the swanny. Link to comment Share on other sites More sharing options...
plastic Posted January 15, 2009 Author Share Posted January 15, 2009 In reply to: plastic on Wednesday 14/01/09 12:15pm ...I forgot to mention Maccas. Apparently its Australias Bear Sterns/Lehmans. Link to comment Share on other sites More sharing options...
macduffy Posted January 15, 2009 Share Posted January 15, 2009 In reply to: plastic on Thursday 15/01/09 01:52pm There's no argument that Citi are in a heap of trouble. I just don't see any evidence that it has flowed on to the Aussie banks. Link to comment Share on other sites More sharing options...
plastic Posted January 16, 2009 Author Share Posted January 16, 2009 If there was proof they wouldn't be Chinese whispers. The four pillars are about to crumble. Link to comment Share on other sites More sharing options...
rossw Posted January 16, 2009 Share Posted January 16, 2009 very doubtful, krudd would step in before he'd allow the big 4 to go down citi on the other hand, that's been walking dead for ages Link to comment Share on other sites More sharing options...
wolverine Posted January 16, 2009 Share Posted January 16, 2009 In reply to: plastic on Friday 16/01/09 02:13pm should i start to stockpile canned foods? Link to comment Share on other sites More sharing options...
plastic Posted January 16, 2009 Author Share Posted January 16, 2009 You make your own decisions. But ignore it at your own peril or to your detriment. http://www.sharescene.com/html/emoticons/king.gif Link to comment Share on other sites More sharing options...
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