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Australia's Bailout

 
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Author Australia's Bailout
HenryTo
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PostPosted: Sun Sep 28, 2008 7:12 pm    Post subject: Australia's Bailout Reply with quote
Australian government to purchase A$4 billion worth of mortgage-backed securities to try to revive the funding market for mortgages in Australia:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHLKB1nhsd.I&refer=home
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HenryTo
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PostPosted: Mon Feb 02, 2009 11:54 pm    Post subject: Reply with quote
Reserve Bank of Australia cuts its cash rate by 100 bps:

http://www.rba.gov.au/statistics/cashrate_target.html

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUEE9Lnha4og&refer=home

I like the name - "Platypus Asset Management":

Quote:
“The government must be congratulated for getting on the front foot,” said Prasad Patkar, who helps manage $800 million at Platypus Asset Management in Sydney. “Such a proactive approach from governments and central banks is the only hope we have of avoiding Armageddon.”
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HenryTo
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PostPosted: Mon Feb 02, 2009 10:00 pm    Post subject: Reply with quote
Australian government doubles the size of its stimulus package:

http://www.bloomberg.com/apps/news?pid=20601068&sid=aUK1i6pdMuq4&refer=home

Quote:
Australia’s government will spend A$42 billion ($26.5 billion) on grants and infrastructure, doubling its rescue package as the global financial crisis drags the economy to the brink of recession.

Treasurer Wayne Swan announced a four-year plan to distribute A$12.7 billion to families and low-income earners and spend A$28.8 billion on schools, roads, hospitals, and energy efficiency. The stimulus will help sustain economic growth this year and in 2010, Swann said.

“The weight of the global recession is now bearing down on the Australian economy,” Swan said in a statement released in Canberra. “It would be irresponsible not to act swiftly.”
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HenryTo
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PostPosted: Wed Dec 17, 2008 12:35 am    Post subject: Reply with quote
Commonwealth Bank of Australia raises AU$2 billion - sending their Tier 1 capital ratio to 8.5% - but not without some difficulties:

http://online.wsj.com/article/SB122949144536513533.html?mod=googlenews_wsj
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HenryTo
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PostPosted: Tue Nov 04, 2008 4:55 pm    Post subject: Reply with quote
Hi Diesel,

If I was a Japanese citizen, I would definitely look hard at buying AUD again. An interest rate of 5.25% is nothing to sneeze at, especially given the recent run-up in the Yen. The AUD would have to crash like the Zimbabwe currency for the Japanese to lose money on this trade at this level, especially given a holding period of more than five years.

I also see a bounce here into Christmastime both against the Yen and the US Dollar.

Best,

Henry
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diesel
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PostPosted: Tue Nov 04, 2008 12:26 am    Post subject: Reply with quote
Henry, do you have an opinion on the $AUD and $NZD down at these levels? Buy, neutral or sell. Your thoughts are appreciated as always..
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HenryTo
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PostPosted: Tue Nov 04, 2008 12:15 am    Post subject: Reply with quote
Reserve Bank of Australia again cuts by more than expected:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqFJ.sHtwu8c&refer=home
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HenryTo
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PostPosted: Sun Oct 12, 2008 11:43 am    Post subject: Reply with quote
Both Australia and New Zealand takes it one step further:

http://www.ft.com/cms/s/0/00594a6e-9858-11dd-ace3-000077b07658.html

Quote:
The two governments, which were previously unique among developed states in not providing any explicit deposit guarantee, pledged on Sunday to guarantee all bank deposits. Canberra went further, guaranteeing all term wholesale funding by Australian banks in international markets and doubling its pledge to purchase residential mortgage-backed securities to A$8bn.

”Australian banks, despite the fact that their balance sheets are in excellent shape, now have to compete with these foreign banks for funding on global financial markets, foreign banks which despite their weaker balance sheets, now have the advantage of a government guarantee,” said Kevin Rudd, Australia’s prime minister. “As prime minister of Australia, I will not stand idly by while Australian banks are disadvantaged... because of the actions of foreign governments.”

Although Australia’s four largest banks are among less than two dozen in global banking to retain AA credit ratings, they remain vulnerable to developments in international markets because of their heavy reliance on international wholesale markets for funding.
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HenryTo
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PostPosted: Mon Oct 06, 2008 9:56 pm    Post subject: Reply with quote
Reserve Bank of Australia cuts by much more than expected - 100 bps vs. an estimated 50 bps. The Australian stock market is up more than 1% as I am typing this:

http://www.bloomberg.com/apps/news?pid=20601087&sid=alFAfyO1cljY&refer=home

This also sets the stage for a deeper-than-expected cut by the Bank of England this Thursday (perhaps 75 bps or higher).
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rffrydr
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PostPosted: Sun Sep 28, 2008 9:01 pm    Post subject: Reply with quote
After New Zealand has formally entered recession this is the kind of global response we need.

Look for more investment from Japan....and maybe a Chinese surprise.
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