Australian Banks Go Wild on Credit

Friday, August 06, 2010 , , 0 Comments

Is it really any different from Ben Bernanke pimping it to the banks? In the end, someone is getting paid for making "money" out of nothing.

ABC (no, sorry, not ours, theirs):

The Australia Institute surveyed more than a thousand people and says that the banking sector is going to great lengths to offer customers more debt.

It says the big four lenders alone are spending a billion dollars a year on advertising.

The Institute's deputy director Josh Fear says 66 per cent of those surveyed had recently been offered a new credit card.

"We found that two out of every three survey respondents we spoke to reported receiving [an] unsolicited offer for a new credit card in the past 12 months, and that one in two had received an unsolicited offer to increase their credit card limit," he said.

Gee, where could the money be coming from?

The heavy reliance of the large Australian banks on overseas borrowings to fund their lending leaves them exposed to shocks in global credit markets, says a senior executive at HSBC, one of the world's biggest banks.

HSBC's global chairman of personal and commercial banking and insurance, Sandy Flockhart, said tough new capital rules would also penalise Australian banks' large holdings of overseas borrowings when the rules came into force in several years.

Joseph Stiglitz (yeah, the one who called the Fed corrupt to their faces) seems to believe there might be something abrew over there on the other side of the Earth. Not like we'd notice here.
High Australian house prices are a “cause of concern” as a resource boom helps fuel disparity between the mining industry and the rest of the economy, Nobel Prize-winning economist Joseph Stiglitz said.

“There is the beginning of a cause of concern, and it would probably be prudent to take some actions,” Stiglitz said of the nation’s housing market at a briefing in Sydney today. Wealth from natural resources can “cause expansion of the non- trading sector, in particular real estate, and real estate bubbles.”

No shit: you're telling me if you start getting sick on a bunch of easy money then you get real estate bubbles? You don't say.

I'm overjoyed to hear that the global economy has completely learned its lesson from the last 2+ years.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.