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Dangerous game shorting the aussie banks

True - and I'm not game enough - but when you look at their charts most, except ANZ, are down for the year, so some shorters must be winning

CBA shares fell to their lowest level since September 2016 following a Fairfax Media report that showed the bank's staff had fraudulently activated thousands of children's bank accounts to meet performance targets. Its shares fell 0.6 per cent to $70.09.


Westpac and NAB also fell on Monday as they prepared to face the royal commission again. Westpac fell 0.7 per cent to $28.66, while NAB closed the day at $27.26, down 0.6 per cent.


Short positions on the 4 as at 15 May 2018:

ANZ - 1.36%

CBA - 1.50%

NAB - 1.12%

WBC - 1.68%





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A reminder that you can follow all the events of the financial services royal commission at the AFR's live blog here.

The Hayne inquiry is looking into small business lending and on Thursday will examine bankers from BOQ, Commonwealth Bank and Westpac.





still going this thing??



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From the US

Big Banks to Get a Break From Limits on Risky Trading

By Emily Flitter and Alan Rappeport

May 30, 2018


Big banks are getting a big reprieve from a postcrisis rule aimed at curbing risky behavior on Wall Street.


Federal bank regulators on Wednesday unveiled a sweeping proposal to soften the Volcker Rule, a cornerstone of the 2010 law that was enacted after the financial crisis to rein in risky trading. The change would give Wall Street banks more freedom to make their own complex bets ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ activities that can be highly profitable but also leave them more vulnerable to losses

read more - https://www.nytimes.com/2018/05/30/business...mp;ref=headline

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It took the yanks five or six decades to roll back the prudential laws that were introduced after the Great Depression, this time around it has taken only one decade. The taxpayers bailed the big banks out and now they are being given free rein to run amok again. The banks weren't being stupid, they just didn't care.



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The banks weren't being stupid, they just didn't care.


The banks know by and large they'll get a slap on the wrist with a wet lettuce then it's business as usual.


ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“the biggest takeaway from all of this is that the yawning gap between the way big powerful corporations and banks are treated by the criminal justice system and the way individuals have been.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ



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How Macquarie Bank risked the retirement savings of its customers and got away with it


When Greg and Julie Lewis sold their farm in regional Victoria for $2.7 million, they wanted to hold onto that money for their children.


Their money ended up with Australia's fifth-largest financial institution, Macquarie Bank, where they dealt with various advisers.


But the couple was encouraged to make high-risk investments, including in a fledgling mining operation known as a "penny dreadful".


It advised the couple to invest in an aspiring resources company called Cleveland Mining.

Mrs Lewis says the company was sold to them as a sure thing, but after making an initial contribution, she became suspicious when their adviser repeatedly asked for more money.


"They said they had seen the mine, it's still in the early stages, won't be long and they will start drilling, this is going to go gangbusters, you need to get in on this," she said.


Through their adviser, the couple bought and sold shares in Cleveland Mining more than 30 times over a two-and-a-half-year period.


Nine of those trades were made using their super.


By September 2016, Cleveland Mining's share price had fallen 92 per cent from its peak, to just 7 cents.


"And those shares are obviously now in a trading halt, so you can't sell them anyway," Mrs Lewis said.


The company is now on the verge of collapse and operates out of a warehouse on the outskirts of Perth.



Background into the Cleveland saga



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The End of the Great Australian Bank Boom

Bad publicity and headline-grabbing fines arenÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t to blame.

June 4, 2018, 2:05 PM GMT+10

That, rather than bad publicity and headline-grabbing fines, is the real reason AustraliaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s great banking boom is over. The housing phenomenon thatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s sustained profits for a generation is sputtering out, and with interest rates on the countryÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s hefty household debt piles forecast to start rising toward the end of this year, the worst may be yet to come.


From Hedgeye's article back in July 2016


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ANZ, Citigroup and Deutsche Bank executives charged with criminal cartel offences


he Australian Competition and Consumer Commission (ACCC) has formally laid criminal cartel charges against the ANZ, Citigroup, Deutsche Bank and six senior executives.


Those charged include ANZ's global head of treasury, Rick Moscati, and Citigroup's former country head for Australia, Stephen Roberts.


The charges relate to the sale of $2.5 billion ANZ shares to institutional investors in August 2015.


The sale was organised and underwritten by Citigroup, Deutsche Bank and third big global bank JP Morgan to boost ANZ's balance sheet in accordance with demands from the bank regulator APRA.


JP Morgan has not been charged.


Apart from Mr Moscati and Mr Roberts, those charged include Citigroup's current managing director John McLean and global head of foreign exchange trading Itay Tuchman as well as Deutsche Bank's former Australian chief executive Michael Ormaechea and Michael Richardson, who has also left the bank.


The three banks all strenuously deny the allegations and say they will vigorously defend themselves and their employees.


In an earlier statement Citi said there was no precedent for the action and there had been no guidance notes issued by the ACCC to the banks over their underwriting activities.


Two year investigation

The ACCC and the Australian Securities and Investments' Commission have been investigating the disposal of about $790 million worth of shares the banks did not manage to sell in the initial auction to big institutional investors on August 6, 2016.


At the time, the market had not been informed about the overhang of unsold stock.


"This is a highly technical area and if the ACCC believes there are matters to address, these should be clarified by law or regulation or consultation," Citigroup said.


"Underwriting syndicates exist to provide the capacity to assume risk and to underwrite large capital raisings, and have operated successfully in Australia in this manner for decades."


ACCC chairman Rod Sims said: "These serious charges are the result of an ACCC investigation that has been running for more than two years.


"Charges have now been laid by the Commonwealth Director of Public Prosecutions and the matter will be determined by the court."


The matter is listed before the Downing Centre Local Court in Sydney on July 3, 2018.


Under the Competition and Consumer Act, individuals found guilty face up to 10 years in jail and/or fines of up to $420,000 per criminal cartel offence.


Institutions face fines of up to $10 million per offence.



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