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Banks, behaving badly
blacksheep
post Posted: Jan 30 2019, 02:02 PM
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The final report from the Hayne's Royal Commission into banking being presented to the Gvt on Friday - won't be made available to the market until after ASX close Monday next week. All SP's of the major players have been declining, whilst short positions rising.
Total short positions of the big 4 banks, as at 23/1/2019, shown in this graph - https://www.shortman.com.au/market
ANZ = 1.35% https://www.shortman.com.au/stock?q=anz
CBA = 2.11% https://www.shortman.com.au/stock?q=cba
NAB = 0.69% https://www.shortman.com.au/stock?q=nab
WBC = 2.03% https://www.shortman.com.au/stock?q=wbc

Attached File(s)
Attached File  anz.png ( 92.38K ) Number of downloads: 2
Attached File  cba.png ( 98.28K ) Number of downloads: 2
Attached File  nab.png ( 89.29K ) Number of downloads: 2
Attached File  wbc.png ( 91.29K ) Number of downloads: 2

 




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: triage  
 
blacksheep
post Posted: Jan 21 2019, 01:57 PM
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extract from - 2018 was a bad year for bank shares. 2019 is likely to be even worse, says Victor Hill. - https://masterinvestor.co.uk/equities/bad-news-for-banks/

QUOTE
Even Australian banks were culpable – as I reported during a visit to Australia in April last year. All the major Australian banks were involved in a rate-rigging scandal in 2010, focused on the Bank Bill Swap Rate (BBSW) – the Ozzie equivalent of LIBOR. Australia and New Zealand Banking Group (ASX:ANZ), National Australia Bank (ASX:NAB) and Commonwealth Bank of Australia (ASX:CBA) paid penalties, while Westpac (ASZ:WBC) was let off on the dubious grounds that its attempts to manipulate the rate had been unsuccessful. Macquarie Bank (ASX:MQG) was found to have engaged in fraudulent foreign exchange trading. CBA was found to have been involved in large scale money laundering. In fact, Citigroup (NYSE:C) and Deutsche Bank are currently facing charges in Australia around insider trading in ANZ shares.


QUOTE
I think it was John Maynard Keynes who said that a banker is a man (again) who will never lend you an umbrella if it is raining. Bankers have the mentality of unambitious civil servants who believe, thanks to their inflated salaries, that they are entrepreneurs. They are not entrepreneurs – and very few of them even understand entrepreneurship. The billionaire buccaneer capitalist Jimmy Goldsmith (1933-97) – who was prophetic about the nefarious nature of the European Union, by the way – hated bankers even more than he hated politicians.

These scummy banks will not recover in 2019. Their time is past. Avoid them.




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: early birds  
 
blacksheep
post Posted: Jan 14 2019, 10:09 PM
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Good article by Johnny Shpiro, who provides a list of "players" who - After Hayne royal commission, who can restore faith in our financial system?
Apart from the obvious ones - regulators, auditors, politicians, etc - he's given mention to a number of others, including

the proliferation of pay-for-play trade press and social media promoters pushing questionable stocks onto retail investors.

The "credibility renters" who join an advisory board and/or give public endorsements

https://www.afr.com/opinion/after-hayne-roy...20190112-h1a081





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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Jan 12 2019, 12:01 PM
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In Reply To: blacksheep's post @ Dec 18 2018, 09:48 AM

Good to see some of those involved in the Mozambique loans scandal are being held to account - 3 former Credit Suisse employees have been indicted for their role, however Credit Suisse has distanced itself from the scandal claiming the employees acted on their own.

QUOTE
The analysts cited by Bloomberg Intelligence believe the US authorities could pursue Credit Suisse for "violation of the rules of investment in financial markets", and for its failure to stop the fraudulent scheme of Pearse, Singh and Subeva, which went on for about four years.


https://allafrica.com/stories/201901100033.html

QUOTE
Emerging markets were a boon for bankers after the 2008 crisis, when resource-rich Africa and Asia seemed to have definitively decoupled from the debt-laden economies of the U.S. and Europe. Yet as lawsuits over alleged corruption and bribery pile up, an uglier side of those glory days is emerging — and taxpayers and investors will be left to pick up the tab.

Credit Suisse Group AG’s dealings in Mozambique, where about half the population lives in poverty, are the latest to be thrust in the spotlight by U.S. prosecutors. Three former employees were charged in New York this week with defrauding investors over $2 billion of state-backed loans that prosecutors say generated at least $200 million in bribes and kickbacks. Mozambique’s former finance minister has also been charged and faces extradition — something he has said he will fight. (Lawyers for the three bankers couldn’t immediately be reached for comment, according to Bloomberg News.)


The case has eerie parallels with Malaysia’s 1MDB scandal, in which two former Goldman Sachs Group Inc. bankers were last year charged for allegedly covering up bribes and kickbacks from a state development fund.

Both Goldman and Credit Suisse say they were deceived by rogue bankers who circumvented internal risk controls to complete the deals. (The Swiss bank itself hasn’t been accused of wrongdoing.) The charge sheets in the two cases set out the lengths to which information was hidden internally: In Credit Suisse’s case, prosecutors argue that much due diligence — from company directors to competitive tender processes — was faked.

But the common thread is also one of boom-time activity, when red flags might be more likely to be missed. The backdrop to these alleged frauds was a time, around 2012 and 2013, when banks were desperate for new sources of profit after the financial crisis. Between 2008 and 2012, annual emerging-market bond issuance rose from $487.3 billion to $1.6 trillion. Amid that boom, risk controls appeared to take a back seat.

The lucrative fees added an incentive. The $600 million Goldman netted from 1MDB’s fundraising amounted to a stunning 10 percent of the $6.5 billion raised. A report by Kroll, disputed by Credit Suisse, alleges the Swiss bank received about $160 million in fees for arranging $2 billion of loans in Mozambique. This included $141 million of “contractor fees,” which were, however, passed on to other banks
.



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
plastic
post Posted: Dec 24 2018, 06:44 AM
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ANZ(NZ Ltd) came out the other day and said the Reserve Bank will cut rates even more next year. Yet at the same time we have the Federal Reserve raising rates. Bit of an oxymoron if all those banks making loans in NZ like the ANZ are getting their borrowing costs jacked up by the Fed. but can't get a decent rate off the Reserve Bank. Seems like their will be a snap point reached at some stage. Especially since the Reserve Bank came out and said most of the NZ banks are undercapitalized.

It has been an expected norm for decades that the banks shift their interest rates the same way the Reserve Bank shifts theirs. But it is my guess this norm will be departed from and banks will raise mortgage rates in accordance with their borrowing costs and capital requirements rather than acting as a trailer to the Reserve Banks truck.

I also suspect to see some pretty big "bail in" events from the likes of the ANZ and ASB. They are the ones who have the most exposure to the residential housing sector and are most under capitalized as a result. It also leaves them most vulnerable to a housing downturn.






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What did Uncle Mel do to us?
 
blacksheep
post Posted: Dec 18 2018, 09:48 AM
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Malaysia files criminal charges against Goldman Sachs and two former executives
QUOTE
Malaysia has filed criminal charges against Goldman Sachs and two former executives for their role in the alleged multi-billion-dollar ransacking of state investment fund 1MDB.

Attorney General Tommy Thomas said the Government is seeking several billion dollars in fines from Goldman Sachs for breaches of securities laws that involved it making false and misleading statements to investors.

He said his office will seek prison sentences of up to 10 years for the former Goldman executives, Roger Ng Chong Hwa and Tim Leissner.

Malaysian and US prosecutors allege that bond sales organised by Goldman Sachs for 1MDB provided one of the means for associates of former Malaysian prime minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia's economic development.

The scandal, first reported by Sarawak Report and the Wall Street Journal, resulted in Mr Najib and his ruling coalition losing power in a historic election defeat earlier this year.

Mr Najib himself is facing corruption charges. He has said that more than $700 million that moved through his bank account was a political donation from the Saudi royal family, but US prosecutors say it came from 1MDB, of which Mr Najib was the top official.

US legal filings that are part of a Justice Department civil case to recover assets bought with 1MDB funds allege the money was used to finance Hollywood films and spent on luxuries such as diamond jewellery for Mr Najib's wife, a yacht, artworks and high-end properties.

Goldman Sachs denied any wrongdoing in response to Malaysia's criminal charges.

"The firm continues to cooperate with all authorities investigating these matters."

Mr Thomas said $2.7 billion was stolen from three bond sales organised by subsidiaries of Goldman Sachs.

The investment bank, he said, received $600 million in fees for organizing the bond deals, which was several times higher than industry norms.

Mr Leissner and Mr Ng conspired with Mr Najib's associate Low Taek Jho — a key architect of the entire 1MDB fraud — to bribe Malaysian government officials to use Goldman Sachs as the arranger of the bond deals, according to Mr Thomas.

They and Goldman Sachs knew that the money would be stolen, he said.

"Having held themselves out as the pre-eminent global adviser/arranger for bonds, the highest standards are expected of Goldman Sachs," the Attorney General's statement said.

Prosecutors plan to seek fines "well in excess" of the amount allegedly stolen because of the severity of the violations of Malaysia's laws, Mr Thomas said.

Mr Leissner, who headed Goldman's operations in South-East Asia, last month pleaded guilty in the US to money laundering conspiracy and conspiring to violate foreign bribery laws after the Justice Department charged him, Mr Ng and Mr Low in relation to the 1MDB scanda

Mr Ng was arrested in Malaysia in early November and Mr Low, also known as Jho Low, remains at large. He has previously maintained his innocence in statements via a lawyer.

Before facing criminal charges, Mr Low became well known in the New York City and Los Angeles club scenes.

In 2012, he threw a lavish 31st birthday bash attended by Leonardo DiCaprio, Kim Kardashian and other celebrities.

APl
.



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 


blacksheep
post Posted: Dec 14 2018, 12:50 PM
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PR from the Reserve Bank of New Zealand - some way off but assume this will apply if/when implemented to Australian banks operating in NZ - https://www.rbnz.govt.nz/news/2018/12/reser...al-systems-risk

Reserve Bank proposes that bank owners bear greater share of financial system's risks
Release date14 December 2018
QUOTE
The Reserve Bank is consulting on a proposal to raise the amount of capital that banks must hold.

"Insisting that bank shareholders have a meaningful stake in their bank provides a greater incentive to ensure it is well managed. Having shareholders able to absorb a greater share of losses if the company fails also provides stronger protection for depositors,” Deputy Governor and General Manager of Financial Stability Geoff Bascand said today.

The Reserve Bank has been reviewing bank capital rules since early 2017.

“Bank crises happen more often than many people care to remember, and the economic and social costs of bank failures can be very high and persistent. These proposals are designed to make bank failures less frequent. With these changes we estimate the banking system will be resilient to shocks that might occur only once every two hundred years,” Mr Bascand said.

The proposal would see banks’ capital levels increase materially. We are proposing to almost double the required amount of high quality capital that banks will have to hold. In practice, actual changes to the amount that they hold will be less than double and will vary. The increase will depend on their current levels of capital, how much extra they choose to hold above the required minimum, and whether they are a large or small bank. Generally, it will be an increase of between 20 and 60 percent. This represents about 70 percent of the banking sector’s expected profits over the transition period. We expect only a minor impact on borrowing rates for customers.

“While borrowing costs may increase a little, and bank shareholders may earn a lower return on their investment, we believe these impacts will be more than offset by having a safer banking system for all New Zealanders,” Mr Bascand said.

We are consulting on a five year transition period for banks to meet the new requirements. We welcome feedback on our proposals. The deadline for feedback is 29 March 2019.

https://www.rbnz.govt.nz/news/2018/12/reser...al-systems-risk



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 12 2018, 03:15 PM
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QUOTE
Shaw and Partners' bank analyst Brett Le Mesurier recently calculated bad behaviour by the "Big Four" banks and AMP had so far cost them close to $3.8 billion, but this was likely to almost double to $7.4 billion by 2020

The cost of bad behaviour
Company Prior costs H2 2018 costs (est) H1 2019 costs (est) Total (est)
AMP $517m $83m $570m $1,170m
ANZ $340m $573m $470m $1,383m
CBA $2,257m * $320m $2,577m
NAB $300m $450m $350m $1,100
WBC $384m $376m $410m $1,150m
Total $3,779m $1,480 $2,100m $7,379m


https://www.abc.net.au/news/2018-12-12/cba-...ection=business



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
triage
post Posted: Dec 11 2018, 10:12 AM
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Not sure where exactly that ACCC has been during these years of bankers running amok but the good news is that once the ACCC get onto a case they go in boots and all (unlike the dandies at ASIC and APRA). So they reckon that once again the bankers didn't let a good crisis go to waste. When APRA insisted that bankers restrict interest only loans to 30% of the home loans they issued going forward the banks took the opportunity to act in concert and increase the interest rates on existing interest only home loans. By so doing the banks pocketed in excess of one billion bucks of windfall profit in just the last year.

Hopefully the ACCC takes 'em to the cleaners.

https://www.abc.net.au/news/2018-12-11/exis...s-accc/10604314



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
blacksheep
post Posted: Dec 10 2018, 08:27 PM
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Aussie banks on the BBQ today
ANZ down -4.16%
CBA down -2.98%
NAB down -2.54%
WBC down-3.38%

THE BIG FOUR BANKS (ANZ, CBA, NAB, WBC)
https://www.shortman.com.au/market
Attached File(s)
Attached File  anz.png ( 96.24K ) Number of downloads: 2
Attached File  cba.png ( 98.11K ) Number of downloads: 3
Attached File  nab.png ( 91.95K ) Number of downloads: 2
Attached File  wbc.png ( 95.76K ) Number of downloads: 2

 




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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