Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
From The New Daily. The Reserve Bank board will be facing record-high debt levels when it decides on Tuesday whether or not to follow other central banks by lifting the official cash rate. Ten years after the global financial crisis – which many trace to the collapse of two Bear Sterns hedge funds in July 2007 … Continue reading “Australian household debt breaks new records”
The latest RBA E2 – Households Finances – Selected Ratios – data has been released. The inexorable rise in debt continues. No wonder mortgage stress is rising. The ratio of household debt to annualised household disposable income , rose to 190.4, the ratio of housing debt to annualised household disposable income rose to 135, and … Continue reading “Household Debt Busts the 190”
From Moody’s. The leverage of the US nonfinancial sector has reached unprecedented heights according to the US’s never before seen ratio of nonfinancial-sector debt to GDP. Nonfinancial-sector debt includes the credit obligations of households, nonfinancial businesses, state and local governments, and the US government. Though the ratio of US nonfinancial-sector debt to GDP’s moving yearlong … Continue reading “Record US Ratio of Debt to GDP Contains Growth and Interest Rates”
From The New Daily. A widely-misreported warning of eight rate hikes in two years would in fact be good news for the economy, according to the man who made the prediction. Dr John Edwards, former economic advisor to Paul Keating, former RBA board member and former chief economist at HSBC, struck fear into the hearts of mortgage holders … Continue reading “Eight rate hikes in two years? Our economy should be so lucky!”
From Bloomberg. Australia’s central bank could increase interest rates eight times in the next two years, former board member John Edwards said. The Reserve Bank of Australia (RBA) is probably already considering a program of rate increases given its forecasts for inflation returning to target and economic growth to accelerate to 3% against a stronger … Continue reading “RBA may raise rates eight times over two years”
The Bank of England released their June 2017 Financial Stability Report. They announced a number of measures which together tighten controls on the banks, in response to growing risks in the system from strong lending momentum. They confirmed the need to act, ahead of any impending crisis, by thinking about “tail risks” in the system. … Continue reading “UK Tightens Banking Controls”
From The New Daily. The new census data released on Tuesday should infuriate young Australians because it shows definitively how the housing market is being rigged against them. It dispels for good the myth that a shortage of dwellings is what’s causing house prices to rocket beyond their reach. The key myth-busting statistic is the average … Continue reading “The census confirms Australia’s great housing swindle”
From The New Daily. Australian retirees will face a housing crisis within 15 years unless urgent action is taken, according to the Council on the Ageing. The lobby group for seniors hosted a policy summit in Canberra in recent days where it drew attention to the impact on older Australians of rising prices, rising rents, … Continue reading “Older Australians face housing crisis”
From The SMH. There is a hidden and worrying risk lurking for a particular set of mortgage borrowers, whose level of financial stress is about to get a whole lot worse. It’s those home owners with interest-only loans that are now increasingly under the pump – with National Australia Bank the latest of the big … Continue reading “Not in their interest: The home loan borrowers that have been left out to dry”
Unsustainable home prices and record high household leverage render the Toronto and Vancouver housing markets increasingly vulnerable to a steep price correction, though key structural features will safeguard Canada from repeating the U.S. housing crisis, according to Fitch Ratings in a new report. Home prices in Toronto and Vancouver are up 45% and 36%, respectively, … Continue reading “Risk Mounts for Canada Housing, but Don’t Expect U.S. Crisis Redux”