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The Banks
Does It Get Any Better For The Big Four?
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post Posted: Nov 23 2020, 09:46 AM
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Banks were a big driver of the weeks gains after comments from Australian Prudential Regulation Authority chairman Wayne Byres at a banking summit gave investors hopes the dividend limit guidance would be eased. The rebound in the jobs market also lifted sentiment towards the sector.

Commonwealth Bank was the best performing bank over the week with a 9.4 per cent gain. The lender rallied 1.4 per cent on Friday after the prudential regulator returned $500million to Commonwealth Bank, reflecting the bank's work at improving its governance.

On Friday, Westpac added 0.1 per cent and advanced 8.6 per cent for the week. NAB rose 0.1 per cent on Friday for a weekly advance of 7.2 per cent, while ANZ notched up a 8.5 per cent rise for the week after falling 0.5 per cent on Friday

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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early birds
post Posted: Nov 19 2020, 08:56 AM
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Old favourites, bank shares returned to the fore on the ASX yesterday after the key regulator APRA revealed that its clamp-on dividends would be eased.

The ASX financial sector outperformed with a gain of 1.7% (the ASX 200 was up 0.5%) taking the sector to an eight-week high.

The surge by bank stocks helped the ASX 200 to the highest close in 9 months.

Australian Prudential Regulation Authority head, Wayne Byers told a Sydney finance conference that it was time to reconsider a cap on bank dividend payouts that currently prevents banks paying more than 50% of earnings to shareholders.

He said in his speech that the economic outlook had improved enough for the regulator to re-examine the cap on bank dividend payouts.

“We have deliberately never put in place guidance for a long period of time,” he said.

“Obviously we will be minded how the situation has evolved.

On the whole, I think the outlook has improved, bank capital has certainly increased, the economic situation looks more positive. I think it is time we look at the issue again.”

His comments saw bank shares rise strongly.

Shares in the Commonwealth Bank were up 2.9% to $77.55, the highest closing price since March 3. Westpac shares added 2.3% to $19.45, NAB shares added 2.1% to $22.29, and ANZ shares were up 1.3% at $22.01 at the close.

early birds
post Posted: Nov 16 2020, 01:50 PM
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In Reply To: Danville's post @ Nov 16 2020, 11:23 AM

you don't know how much i missed you and few others like wolverine eg....
you told me a lot of things , these good old days!!! i've got gray hair now a freaking useless old bug. time is flying!! sigh!!

i will post some US stocks rec [ from US broker] as your 4th 5th opinion soon as i got it ....


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post Posted: Nov 16 2020, 11:23 AM
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In Reply To: early birds's post @ Oct 20 2020, 10:10 AM

graduated.gif It never gets old, does it??
One of my favorite all time clips from those crazy days.

post Posted: Nov 16 2020, 08:58 AM
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From todays OZ

In over three decades of granular coverage of the big four banks, veteran bank analyst Brian Johnson has never pulled his punches.

Having just digested annual results for three of them and a first-quarter trading update for Commonwealth Bank, he is recommending a ‘‘more aggressive individual stock selection’’ because he believes the outlook for each bank to be very different: a hold for CBA, a buy for National Australia Bank, and Westpac and ANZ out of favour. Johnson also has a simple question for Reserve Bank governor Phil Lowe, who is on his feet tonight at a CEDA event: just what does the RBA mean by being prepared to do more after its Melbourne-driven cut rate cut and quantitative easing? Because the answer has very real implications for bank bottom lines.

Taken together, Jefferies’ top banking analyst says there are mixed messages for the big four in a climate of insipid credit growth.

“Based on where we are in the economic cycle, you’d be thinking that we won’t have as bad a loan loss cycle as we had thought, which is really good, but the flipside is that the plunging revenue and cost trends are probably long-lasting, which could be even worse.”

Johnson rolls his eyes when asked about the effort behind recent coverage. Before COVID struck, he had switched shops from brokerage CLSA to Jefferies and had to rebuild all his bank models from the ground up.

Then with the royal commission fallout and a huge monetary and fiscal response to the pandemic, he has almost had to do it again.His reputation for calling management to account over the years is legendary, most memorably with NAB.

“I said the real secret to making money was to get a job at NAB, get paid in the top quartile, take any shares they gave you and sell them, because NAB’s operational underperformance for 30 years was amazing and it’s hard not to put it down to very bad management,” Johnson says.

“In the Godfather film, they said ‘he sleeps with the fishes’, but at NAB it’s just that embedded culture — it just never improved for 30 years.”

Shortly after NAB’s forex scandal in 2004 he wrote a blistering dot point analysis of NAB’s failures. “Yeah, well, I also had that on ANZ at one point too,” he adds.Johnson’s view on NAB, now under new management, has changed. “We’ve got a great chairman, a great CEO. I just can’t help but think after decades of chronic underperformance there isn’t a fantastic opportunity to lift performance.”

Two interesting things I got out of this.
1. Why would the lead singer of AC/DC moonlight as a banking analyst?
2. The culture may or may not have improved at the NAB, but as a 40 year customer, the service has not.


sent from my Olivetti Typewriter.
post Posted: Oct 20 2020, 03:49 PM
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In Reply To: Mags's post @ Oct 20 2020, 10:47 AM

kicking the can down the road.

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

post Posted: Oct 20 2020, 10:47 AM
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In Reply To: early birds's post @ Oct 20 2020, 10:10 AM

Yes! One of my favourite videos...
But most favourite is this:
All I know is, the youth are stuffed: The relaxing of responsible lending will see house prices scream even higher. -ve geared investors who have 'capped out', will now be able to keep going deeper in the red, borrowing more and more... prices screaming upwards.
Just hold profit spewing stocks, regardless of your instincts: Banks etc should be a terrible hold at the moment, but I'm in. I'm riding them to nose bleed highs, then dumping I'm guessing in 2026-28.
Expect merry hell to be unleashed in the end of this decade.
I've spent years, and a fortune of time and money, studying markets, marketing, capitalism and human behaviour: It really is mostly the same thing. But the biggest change to come is going to be societal: When the welfare well begins to run dry (that's years away, we'll see gov debt to GDP around 300% for this I guess) you'll see the real problems begin: Most people will not know how to survive. What???
By that I mean, every transaction occurs because of a exchange of value: But as I walk/drive/look around, all I see are people with no skills, no abilities, nothing of value to exchange.
Ever tried moving around a westfield car park? Most people can't park a car. How the hell can they produce anything for exchange, with enough profit to sustain them???
80% of households in Australia pay -ve net tax.
They exist and function because the tax payer is subsidizing them. And then there's the personal/private debt they've racked up, 'merely to survive'.
Their whole world is going to be severely impacted when fiat dies. But by hell is there to be the most wild spending (borrowing) orgy in the mean time.

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early birds
post Posted: Oct 20 2020, 10:10 AM
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In Reply To: Mags's post @ Oct 20 2020, 09:34 AM

remember subprime?? GFC?? year of 2008!!
thought they gonna clamp down of these type of printing, but 12 years on they went opposite ...... even create something like
"after pay" really caught me by big surprise , as you said ---fiat system.
i reckon all CBs understand that deflation is created by lower rate for those " sombie production line" [ more competition ] and globalization [ more competition]
they just worried about their pay more than moral financial 101.......
can't beet them.....join them!!

a link that i saved from GFC [ thanks a poster name DANVILLE]

told most of young kids whom study finance----if they can have good laugh for this link then they can graduated from the course !!! lmaosmiley.gif

post Posted: Oct 20 2020, 09:34 AM
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In Reply To: early birds's post @ Oct 20 2020, 08:22 AM

I don't understand afterpay... I mean, the allure of it, and it's brothers, zipp pay etc... But that's a conservative old mind of mine.
The issue I have with afterpay, is it makes EVERYTHING more expensive: The shop is up for 6% or so, straight to APT... so lose 10% to GST, 6% to APT etc etc...
Where's the margin?? Most retail has a net margin of single digits, so afterpay is effectively taking all the margin, while doing none of the work: What a beautiful business.
But then when I go X retailer, and I pay cash, where's my discount??? I want it for 6% cheaper... but they wont do it....
So to me, it really is just an indicator of how far down the fiat currency collapse we are: When everyday items for purchase have a 'debt' surcharge built into the price, you can be guaranteed that the currency is accelerating towards collapse. This is the trend the world over.
We've just seen the most outrageous, and largest 'government' and central bank stimulus's in history: And they have to be big because as the currency begins to die, it takes more and more effort to get the same result.
This is how fiat always dies.
At some point it will take $1 of stimulus (borrowed into creation) to create $1 of real GDP effort.... then as you go past that point, you need $2 of fake new money to create $1 of GDP and on and on it goes, until the people wake up and/or the government taxes are unable to pay the interest due (ie bond payments on the 'created money').
That we need consumers to fund consumption with debt at point of sale is frightening. It confirms everything I've said, the end of fiat is on it's way.
But this will go on for years. You'll soon see the ability to pay for necessities and utilities via debt at point of payment. ie. imagine paying for your health insurance, water, power, gas with after pay: You probably can already, but if you can't, it's on it's way....
At that point, you're paying for what you've already lived, with money you haven't even earned...... That sounds sustainable yeah?
Head down, it's gonna be a grind the next decade, but the first 5 years of the 2020's are gonna be booming, for those willing to ignore their senses and just take the ride.
just make sure you exit before the biggest crash of the last 200 years.

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early birds
post Posted: Oct 20 2020, 08:22 AM
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Westpac has partnered with Afterpay on its new digital banking platform, which will allow Afterpay to provide Westpac's transaction, savings and cash tools to buy now pay later customers in second quarter 2021.

“We look forward to working with Afterpay to deliver new products and services,” Westpac CEO Peter King said.

“Afterpay is in a unique position to extend and deepen the relationship with our customers and help them to manage their money more seamlessly through savings and budgeting tools," Afterpay's Anthony Eisen said.


not sure it is a good move by WBC , but they have to do something to re--start growth , i guess!!
never thought after pay is a good idea but with lower rate for longer.....who knows!!


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