Politics – Page 38 – Digital Finance Analytics (DFA) Blog

Savings Turned Into “Investment Products” As Property Collapse Widens

Social unrest is on the rise in China, triggered by a range of financial services related issues, across deposits and mortgages, with ordinary Chinese people are publicly revolting, with rapidly escalating boycotts on mortgage payments spread across at least 301 projects in about 91 cities.

In addition there were large-scale protests in the Henan province by bank depositors over the release of their frozen funds over what may be the nation’s biggest-ever bank scam. The incident comes in the light of the Henan branch of the Bank of China declaring that people’s savings in their branch are ‘investment products’ and can’t be withdrawn.

Authorities say they started repaying some victims last week even as a police investigation is still ongoing. But Chinese state media has not posted anything about the repayments.

The Henan bank scandal, in which 40 billion yuan (US$6 billion) in deposits have disappeared, is more than a Chinese banking crisis – it is a political crisis that could undermine people’s confidence in local governance and also other local banks, according to analysts.

The blow to public confidence in financial stability and the government’s ability to protect their legitimate interests could be a long-term issue, unless the central government can find ways to promptly repay the depositors, they say.

Police in central China’s Henan province have arrested a number of suspects allegedly involved in a “complicated” cash crisis involving rural banks, while investigators continue to search for the whereabouts of customers’ missing deposits.

The arrests come after months of protests from anguished savers, who have been unable to withdraw cash from their accounts at small rural banks in Henan and Anhui provinces.

The case has highlighted the vulnerability of lenders in China’s less-developed regions as the risk of recession grows in the world’s second largest economy.

The Chinese Communist Party’s tanks on Wednesday rolled on the streets to scare Henan bank protestors amid large-scale protests in the province by bank depositors over the release of frozen funds.

Go to the Walk The World Universe at https://walktheworld.com.au/

How Independent Is The RBA Really?

We know rates are going up, even the RBA confirms this, and now our new Prime Minister has stepped in saying the Central Bank needs to be careful. So what’s going on?

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Making Banking Work… For People!

I discuss the creation of Kiwi Bank, a National Bank In New Zealand with one of its architects Hon Matt Robson.

Matt Robson’s commercial experience began in the Netherlands thirty years ago, working in the oil industry. This introduced him to the rigours of international commerce, budgets, deadlines, understanding complex commercial operations and structures, it also gave him management experience and familiarity of working with a multicultural, multilingual workforce, where reading and writing in foreign languages was a necessity. As a result he is fluent in speaking reading and writing Dutch, speaking and writing French and German and competent in reading Spanish.

In the 1970’s Matt qualified with a Diploma in Teaching and taught through the 1980’s in a number of secondary schools in New Zealand the majority in the South Auckland area.

In the 1980’s-1990’s Matt became engaged in party politics. As deputy leader of both the Alliance and Progressive Parties he acted as spokesperson and policy developer across a wide spectrum of policy issues in areas as diverse as economic development, social matters and international affairs.

Matt was a Cabinet Minister in the Labour-Alliance Coalition Government (1999-2002) and was allocated the following portfolios: Minister of Corrections , Minister for Land Information, Associate-Minister of Foreign Affairs (responsible for official Overseas Development Aid [ODA]), Minister for Disarmament and Arms Control.

He was also a significant driver in achieving justice for Algerian asylum seeker Ahmed Zaoui, both while as a Member of Parliament and as an independent barrister/solicitor.

He continues to practice law in Auckland and specialises in immigration law and migrant advocacy. Matt remains active in advocating global peace and justice and is a regular speaker at disarmament and anti-nuclear conferences around the world.

Go to the Walk The World Universe at https://walktheworld.com.au/

The Mystery Of The Disappearing Buffers…

You may well remember the previous Treasurer trumpeting on about the $250 billion dollars of household savings which we have over 2020 and 21. And Phil Lowe recently quoted a similar figure in one speech, though on the ABC 7:30 seemed to lower it to 200bn. Those buffers came from multiple sources, including JobKeeper, other Government benefits, sanctions withdrawal from super, and of course direct household savings. We also know these same buffers are now being spent.

The Buffers question in an important one, especially given the forecast for continued rising rate, and the impact on the overall economy. In a recent RBA FOI, they discussed beefing up wording in a recent RBA Outlook, to “however, consumption growth could also be weaker than expected, for instance if asset prices were to decline or if the effects of higher inflation and interest rates weighed on discretionary spending by more than anticipated. This risk is most pronounced for households with relatively low savings buffers and high debt relative to income”.

Phil Lowe replied “When talking about uncertainties, I was a bit surprised there wasn’t more about how households/businesses/asset markets might respond to higher interest rates”.

We agree, this becomes the critical. ANZ Bank yesterday dramatically lifted its forecast for Australia’s official cash rate (OCR) to 3.35% by November 2022

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Australia at Risk of Sri Lankan Chaos & Revolution!

This past weekend, the world witnessed Chaos and Revolution in Sri Lanka with the storming of Sri Lanka’s Presidential Palace. The Sri Lankan economy has collapse and this has resulted in societial chaos and a political revolution with the Sri Lankan president fleeing the country. Why did it happen? How is this relevant for Australia?

The lessons for Australia are very real and Adams and North will come back to Australia’s foreign debt problems in the coming months.

Go to the Walk The World Universe at https://walktheworld.com.au/

The Big Lie About First Homeowner Grants…

In recent years we have seen a swathe of “initiatives” from state and federal governments with the aim to encouraging and helping more first-time buyers into the housing market. The previous Government claimed they had helped “hundreds of thousands” into the property market.

The latest ABS statistics shows that the number of First Time Buyers is falling again – and the part peaks map directly onto Government “stimulus” measures.

The latest is the Albanese Government release of 40,000 new places under the Federal Government’s Home Guarantee Scheme, which will enable eligible first home buyers to purchase a property with a deposit of as little as 2% or 5%.

This as a time when the Reserve Bank of Australia is aggressively increasing rates and house prices are expected to plunge by between 10% and 20%, depending on the forecast. What could possibly go wrong?

In fact, the evidence suggest that these schemes are ineffective. Indeed, the long-term trends in terms of home ownership shows that across Australia, a smaller proportion of people own their own home, and those that do have bigger mortgages for longer. The latest Census data, which is still in the process of being released continues to confirm this trend.

Home ownership rates in Australia have declined over several decades, and the likelihood of attaining home ownership by age 30 has fallen substantially. Go back two decades and the average age of a first time buyer was 27 year, today its 34 years and rising based on my surveys. In addition, especially in Sydney, Melbourne and Perth, first home buyers (FHBs) are now buying fewer houses and more units, and evidence shows that more are receiving parental assistance.

Also while mortgage repayment affordability stress has been cushioned by falling interest rates until 2022, mortgage deposit requirements have risen with prices and become an increasingly serious constraint—far more so in Sydney and Melbourne than elsewhere.

I have long argued that this First Home Owner grants are bribes which distort the market, lift prices and are more designed to assist the construction sector. In other words, First Time Buyer Grants are a con.

Go to the Walk The World Universe at https://walktheworld.com.au/