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BFCSA: Mother of all Bailout Funds: Michael West SMH Banks thank Taxpayers

Posted by on in Reserve Bank of Australia
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Mother of all bailout funds

March 6, 2013 - 1:03PM  SMH

 

Michael West:           Business columnist  View more articles from Michael West

Only the big banks have access to the bailout fund.

Anybody keen for a loan of $380 billion at, let’s say, an interest rate of 3.4 per cent?

Sounds nice eh? Well, you the taxpayer are in the process of actually making such a loan. Or at least you will soon extend, most kindly if as yet unwittingly, such a credit facility to the big banks, to be used at any time, at their discretion.

Taxpayers already guarantee some 60 per cent of bank funding via the deposits guarantee for zero compensation. 

 

Yes, it is exceptionally generous, the so-called Committed Liquidity Facility, which is in effect a permanent bailout facility which comes into play in 2015.

 

In a story somewhat interred in the inside pages of the AFR this morning, Christopher Joye makes the point that this massive line of credit is unusual and generous by global banking standards and it has been established with “no public debate”.

 

 “Smaller building societies and credit unions are not subject to the liquidity tests and will not, therefore, have access to the bailout fund,” writes Joye.

To put this in perspective, bank loans to small businesses now average 8.45 per cent. Secured by the businessperson’s residential property they are priced at 7.6 per cent.

The average mortgage holder is forking out 5.65 per cent fully discounted.

Yet the biggest businesses in Australia – CBA, Westpac, National Australia and ANZ – will be able to trot down to the Reserve Bank, lodge a bunch of their own loans – car loans if they like – and march off with billions at the bargain-basement interest rate of 3.4 per cent for 12 months or more.

Not only do taxpayers already guarantee some 60 per cent of bank funding via the deposits guarantee for zero compensation, but the wholesale funding guarantee – with its prejudicial pricing in favour of the Big Four – is still in play until 2015, and now, we have the mother of all bailout funds.

If any other business in the country can’t meet its obligations it has to render itself insolvent. But the banks can just shimmy on down to the RBA, chuck a bit of collateral over the counter and romp off with a few lazy billion at the cash rate plus 25 basis points and another 15 basis points.

That is indeed nice work if you can get it. Nobody would disagree that Australia should have a strong banking system. Most agree, grudgingly, that the country has been well-served by its banks.

But where is the debate on this issue? Where is the debate about ‘moral hazard’? Why should the banks pay any heed to the disciplines of risk whatsoever if they have no chance of going bust but are nonetheless hardly paying for the privilege of community support?

Does this country have the most generous support mechanisms for banks in the world? The answer would appear to be ‘yes’.

Read more: http://www.smh.com.au/business/banking-and-finance/mother-of-all-bailout-funds-20130306-2fkfq.html#ixzz2MjuTQ4ok

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  • doyla66
    doyla66 Wednesday, 06 March 2013

    so much for banks fearing political and regulatory interference as per the PwC survey done last year.
    HOW CAN WE FORCE A PUBLIC DEBATE ON THIS?

  • doyla66
    doyla66 Wednesday, 06 March 2013

    It is a general consensus that the rich have the power to exploit the loopholes that allow them to pay less tax.

  • doyla66
    doyla66 Thursday, 07 March 2013

    To be clear, this is not a loan. It is a facility which the banks will be able to access in an emergency, and which they will be forced to pay a substantial amount whether they think they need it or not, and whether they use it or not. In fact it will make taxpayers a healthy return. In the event it is ever drawn on, the relevant bank will have to provide collateral for the loan which will be considerably more than the amount of the loan - think of it as a pawnbroking loan for the banks. If they bank falls over, the tax payer will still be repaid. In the meanwhile the taxpayer is making a healthy income from the banks. It sounds like a good deal to me - charge the banks for something they won't use and don't want, then if they ever use it, take their assets and get repaid even if the bank fall over.

    And this is a bad thing how?

  • doyla66
    doyla66 Thursday, 07 March 2013

    I don't get it. CH you say 'It is a facility which the banks will be able to access in an emergency'
    Define emergency? Will it be an emergency when THE PEOPLE finally say ENOUGH IS ENOUGH and withdraw all their cash (what little is left after the Banksters cut) in protest, to then go and deposit into a Building Society or a Government owned bank like New Zealand's Kiwibank?

    As I see it, the big 4 Australian Banks have no chance of going bust when you consider how they do business!

  • doyla66
    doyla66 Thursday, 07 March 2013

    Captain Haddock - A Little Transparency Please: NAB and Westpac’s Secret Bailout Revealed by Kris Sayce

    Emergency: CH says,"they [banksters] won't use & don't want", like $7.0b NAB & WBC Secret US Fed Reserve Bailouts Revealed [Dec,2010] --hitherto gagged from AUS public, real shareholders and real 'interested' global stakeholders.

    [Note facility set up to assist only 'solvent banks'] --" You’ll note that Westpac applied for the loan on the same day as Citibank (bailed out by US government), Lloyds TSB Bank (bailed out by UK government), Bayerische Landesbank (bailed out by Bavarian government), and Societe Generale [--RMBS Headed by our very own ASIC Chairman Mao Medcraft--] (which was bailed out by the US government courtesy of the AIG bailout against which SocGen had a massive CDS exposure)[in turn, courtesy of Chairman Medcraft."

    "In other words, we’re talking about a rag-tag bag of insolvent banks. And our own insolvent bank – Westpac [NAB] – was amongst the thick of it, begging for an emergency loan from the US Federal Reserve as soon as the doors were opened."

    "It’s something you’d think would be of interest to shareholders don’t you?"

    "But there wasn’t a word from them."

    [And kept] "All under a shroud of secrecy. All under the belief that no-one would ever find out about it because no-one could find out about it. [because] The [US] Fed at that time was under no obligation to reveal which [Insolvent Australian] banks were taking short term loans from the Fed, [that is]..until the [US Govt] Dodd-Frank Act was passed."

    "And furthermore, it must surely make you wonder what else it is the [AUS] government and central bankers are keeping secret. Most of which will probably never be revealed."

    Written on 03 December 2010 by Kris Sayce

    NAB and Westpac’s Secret Bailout Revealed

    It’s time for an apology. No, not from your editor. We’re always right, so there’s no need to apologise [wink].

    Instead the apology needs to come from the Australian mainstream financial press. The same financial press that told you Australia’s banks were strong.

    That Australia had the best prudential regulation in the world. That Australian banks were different to all those dirty foreign banks.

    But an apology also needs to come from the banks who themselves claimed things were different here. And that Australia’s banks didn’t have the same solvency problems as US and European banks.

    Why do they need to apologise? Well, two years after the global financial markets collapsed, a secret bailout of two of Australia’s biggest banks has been revealed.

    This is pretty big news. Or rather, you’d think it would be pretty big news. But as you can imagine there’s almost uniform silence from the banks and the mainstream press.

    Shortly after we sent you yesterday’s Money Morning we decided to do a bit of fishing around on the US Federal Reserve website. You see, earlier that morning the Fed had released some pretty hot material, and we wanted to see what it contained.

    What we found shocked us. Although it really shouldn’t have, because we knew the claims about the Australian banking system being strong and robust were complete lies anyway.

    In fact, so shocking is this revelation that we considered sending you a Money Morning special edition yesterday afternoon. But we didn’t. We’re fed up of giving the mainstream scoops which they then claim as their own.

    Instead we thought we’d wait to see if the Australian mainstream press picked up the story first.

    Surprisingly they have. But not with any enthusiasm. And hardly with what you’d call any effort. Probably because they’re a bit sheepish about the fact the banks and regulators have made fools of them. I’ll provide you with the link to the one story on it in a moment.
    So excited were we to see how the mainstream had handled this story we did something we normally never do – enthusiastically open the Australian Financial Review (AFR).
    The first thing we did was check the Companies Index on the back page. This was promising, the two banks in question were mentioned. We eagerly flicked through to the relevant pages… and drew a blank.

    Not a single mention of it. So we started from the front and worked our way quickly through the paper… page seven… here it is… “Rescues: RBA borrowed billions from Fed” was the headline… but no, this isn’t what we’re looking for.

    On we went, past the big centre-fold spread telling readers that the AFR contains, “Up-to-the-minute market information, news, commentary and expert analysis… All from just $44 per month”.
    We continued… through to the end. Not peep. Not a single mention.

    And the AFR is supposed to be Australia’s premium business newspaper. We wouldn’t have thought so.

    About all it’s good for is lining bird cages in our opinion.

    But then, we guess if the AFR exposed the banks’ duplicity it wouldn’t be able to get an interview with the likes of Commonwealth Bank of Australia [ASX: CBA] CEO Sir. Ralph Norris.
    Said person is the feature item in the Boss glossy mag insert in today’s AFR.

    We can’t be bothered reading it. It’s surely pap.

    But anyway, what the heck are we going on about? This…

    I’m talking about the near collapse of the Australian banking system in 2008. I’m talking about the likelihood of two Australian banks collapsing in 2008 if they hadn’t secured a secret loan from the US Federal Reserve.

    The fact that National Australia Bank [ASX: NAB] had to borrow USD$4.5 billion from the US Federal Reserve during 2008 and 2009.

    And Westpac Banking Corp [ASX: WBC] needed USD$1.09 billion in January of 2008 and 2009.

    What’s that, you don’t know anything about it?

    And you don’t remember reading about it?

    There’s a simple reason for that. It’s been top secret information until yesterday morning.
    That’s right, if it wasn’t for the passing of controversial legislation in the United States you’d never have found out about NAB and Westpac’s Federal Reserve bail outs.

    And based on the lack of interest from the mainstream press – including Australia’s so-called premium business newspaper, if it wasn’t for Money Morning you’d still be none the wiser.

    The one and only article we’ve found that mentions it is this one from The Age, headlined “NAB, Westpac tapped Fed”.

    It appears to be an adaptation of a New York Times article based on the reference at the end, with localised bits added by Eric Johnston. But this one pathetic effort shows just how clueless the Australian mainstream press is.

    Johnston makes this comment:
    “The Westpac borrowings are unusual, as it barely has a North American presence, operating only a US representative office.”

    Seriously, do I really need to explain it to a veteran journalist?

    Talk about not being able to see the wood for the trees. Talk about not getting it.
    Here’s a clue for Mr. Johnston, it wasn’t Westpac’s US office that needed the dosh, it was Westpac in Australia that needed it. It shows you that without the direct financial support of the US Federal Reserve Westpac and NAB would have been toast.

    Westpac and NAB needed the loans because they were on the verge of going belly up. It’s that simple. If they hadn’t gotten secret loans from the US Fed they would undoubtedly have needed secret loans from the RBA.

    Fortunately for the RBA, the Fed opened the door and this allowed Aussie central bankers and bankers to claim that the Aussie banks hadn’t received a bailout.

    But not only that, what’s most extraordinary is that Westpac was one of the first institutions to borrow money from the Fed when the lending facility became available!

    But more about that in a moment. Let me give you some of the background first…

    You may have read about something called the Dodd-Frank Act. The full name is the Wall Street Reform and Consumer Protection Act. It’s called Dodd-Frank after the bill’s sponsors, US Senator Chris Dodd, and Representative Barney Frank.

    The legislation mandates a number of things, but part of it is the requirement for the US Federal Reserve to reveal which institutions it loaned money to under the various bail out programmes.

    One of those programmes was titled the Term Auction Facility (TAF). According to the Fed’s website:

    “Under the program, the Federal Reserve auctioned 28-day loans, and, beginning in August 2008, 84-day loans, to depository institutions in generally sound financial condition…

    “…Of those institutions, primary credit, and thus also the TAF, is available only to institutions that are financially sound.”

    OK, so only “financially sound” institutions were eligible for TAF loans. That would be financially sound institutions such as LloydsTSB plc which got a USD$10.5 billion loan from the Fed and which later had to be partially nationalised by the UK government.

    It would also include ABN Amro Bank which grabbed USD$1.5 billion of loans from the Fed, and which would later cause such a financial strain on Royal Bank of Scotland (RBS) after RBS bought it that the UK government had to partially nationalise it too.

    Not to mention the USD$53.5 billion of loans RBS needed directly.

    Then there was Allied Irish Bank, who could forget it? The Irish certainly won’t.

    Between February 2009 and February 2010 Allied Irish Bank needed USD$34.7 billion of loans from the Fed. Allied Irish Bank also had all its obligations guaranteed by the Irish taxpayer and is the primary reason why Ireland now requires an International Monetary Fund and European Union bailout to the tune of $113 billion.

    And what about Bayerische Landesbank which needed a USD$13.4 billion bailout from the state of Bavaria? Well, apparently it was financially sound enough to borrow USD$108.19 billion between December 2007 and October 2009.

    So, we can take with a grain of salt the Fed’s claim that only “financially sound” institutions had access to the TAF programme. Financially unsound and insolvent banks were given loans too.
    And in the middle of all that wheeling and dealing, when a total of nearly USD$4 trillion was loaned to and repaid by “financially sound” institutions, Australia’s very own National Australia Bank and Westpac were in on the action too.

    Although it was only a relatively small amount compared to some of the other transactions, it was still USD$4.5 billion and USD$1.09 billion respectively. But it was still a lot more than the USD$1.5 billion needed by financially unsound ABN Amro.

    Also don’t forget that the NAB went to the Australian stock market in late 2008 to raise $3 billion. That was a sum it needed to bolster its capital.

    If $3 billion was a significant and important number for the market to know about then surely USD$4.5 billion (about AUD$7 billion at the time) was even more crucial for the market to be aware of.

    But there wasn’t a peep from them.

    Because as I say, you didn’t know anything about the NAB’s and Westpac’s Fed loans. It was all top secret.

    And it’s obvious that $3 billion capital raising still wasn’t enough because NAB had to go begging to the Fed twice after that for $1.5 billion a time.

    But as I say, you didn’t hear a word about this at the time. It was all top secret. But that didn’t stop the bankers and regulators and politicians from posturing about the stability and strength of Australian banks.

    In January 2008 Westpac denied there was a problem with its US exposure. That’s despite the fact just one month before, on December 20th 2007 Westpac had gotten a USD$90 million loan from the Federal Reserve under the TAF programme.

    Not only did it get the loan, but it was one of the first in the queue! As you can see from the screenshot below (click to enlarge):

    Source: US Federal Reserve

    You can check out the full details here by downloading the spreadsheet.

    You’ll note that Westpac applied for the loan on the same day as Citibank (bailed out by US government), Lloyds TSB Bank (bailed out by UK government), Bayerische Landesbank (bailed out by Bavarian government), and Societe Generale (which was bailed out by the US government courtesy of the AIG bailout against which SocGen had a massive CDS exposure).

    In other words, we’re talking about a rag-tag bag of insolvent banks. And our own insolvent bank – Westpac – was amongst the thick of it, begging for an emergency loan from the US Federal Reserve as soon as the doors were opened.

    It’s something you’d think would be of interest to shareholders don’t you? But there wasn’t a word from them.

    And it must now make the Reserve Bank of Australia (RBA) feel foolish, considering in September 2008, just before NAB sought the Fed’s help, the RBA wrote:

    “The Australian financial system has coped better with the recent turmoil than many other financial systems. The banking system is soundly capitalised, it has only limited exposure to sub-prime related assets, and it continues to record strong profitability and has low levels or problem loans. The large Australian banks all have high credit ratings and they have been able to continue to tap both domestic and offshore capital markets on a regular basis.”
    Tapping “offshore capital markets” obviously included the US Fed.

    So we wonder, how much did the Reserve Bank of Australia know about this? While it was talking up the strength of the Australian banking system did it know that two of the four Australian banking pillars were desperately seeking loans from the US Fed?

    Or, like you, was the RBA in the dark? And what about the Australian Prudential Regulation Authority (APRA)? We’ve been told they’ve done all manner of stress tests and the banks passed with flying colours.

    How can that be possible if Westpac and NAB need emergency loans from the US Fed? Was this included in the stress tests?

    Anyway, we’d like to know. So we’ve fired off emails to the RBA, APRA and the Australian Securities Exchange (ASX) asking them these simple questions.

    When did the RBA/APRA/ASX become aware of Westpac and NAB’s loans under the TAF programme?
    If RBA/APRA/ASX were not aware of the loans under the TAF programme please explain why.

    If RBA/APRA/ASX were aware of the loans please explain why this wasn’t considered to be important enough to inform the market?

    We’ll let you know if or when we get a reply.

    But it wasn’t just Westpac that kept quiet about it.

    NAB chairman Michael Chaney must surely have realised what he was saying when he made the following comment at the December 2008 annual general meeting:

    “Our traditional banking and wealth management operations are all profitable, strongly capitalised and conservatively funded. In addition, our banking businesses have sound asset quality and are well provisioned.”

    So sound was the asset quality that just six weeks earlier NAB’s New York branch had to arrange a USD$1.5 billion loan at an interest rate of 0.6% with the US Federal Reserve.

    All under a shroud of secrecy.

    All under the belief that no-one would ever find out about it because no-one could find out about it. The Fed at that time was under no obligation to reveal which banks were taking short term loans from the Fed…

    Until the Dodd-Frank Act was passed.

    Look, we’ll say we told you so. We’ve claimed all along that Australia’s banking system is no different to any other. It’s inherently insolvent – as are all modern day banks.

    Along the way we’ve been called a “lunatic” and a “nutter” for writing what we believed to be true. And would you believe it, once the secrecy of corrupt governments and bankers is revealed this “lunatic” and “nutter” has been proven correct.

    But I understand it may not seem like that at the time. Yesterday we received this email from a Money Morning reader:

    “Hello Kris

    “I don’t normally send comments to publications nor do I sit there and read others comments, however, yesterday I came across a sticker on a car bumper. When I read it, I immediately thought of you and I think you will like it too.

    “‘Do not steal. The government does not like competition.’

    “I enjoy reading your daily newsletter. Even though some of your theories sound crazy at the beginning, it’s funny how they do in the end sound believable. We do live in a world where some people do not put other peoples’ interest first.

    “Lisa”

    It’s true. Government is above the law. It can legally steal private property – it’s called taxation. Nice trick huh!

    But Lisa hits the nail on the head. What you read here may sound crazy, but it only sounds crazy because it’s outside the norm. It’s different to what you read anywhere else.

    And that’s simply because we don’t have to worry about what our advertisers think – because we only advertise our own services. And we don’t have to worry about turning readers off with our seemingly radical ideas, because most of our readers come here because of those radical ideas.

    My guess is you’re fed up with being told the same rubbish day-in and day-out by the mainstream press. A mainstream press that reports from press releases, and trusts whatever it is the guys in government or on Wall Street say.

    In contrast we’ve learned to doubt everything they say.

    We take the view that anything a mainstream economist or analyst says is wrong. It’s up to them to convince us they’re right. Very few of them succeed because ultimately… I hope this doesn’t sound arrogant, they are wrong.

    The state of Australia’s banks is a perfect example. For the past two years you’ve had to put up with a constant drone of commentary from the mainstream telling you that Australia is different.

    As I say, this bombshell from the Federal Reserve proves otherwise. And it proves we’ve been right to call the Aussie banks for what they are.

    Maybe our claim about NAB’s system shutdown last week being caused by a solvency problem rather than a computer glitch still seems crazy to you. But we wonder, after reading today’s Money Morning, perhaps it now sounds just slightly less crazy than you first thought…

    And furthermore, it must surely make you wonder what else it is the government and central bankers are keeping secret. Most of which will probably never be revealed.

    All you and I can do is use our scepticism and questioning brain to figure out what’s really happening. Because more often than not, the story the mainstream peddles is as far from the truth as you can get.

    Yesterday’s revelation from the US Federal Reserve about NAB’s and Westpac’s secret loans is a perfect example. We look forward to getting a reply from the RBA, ASX and APRA about how much they knew and when…

    But we won’t hold our breath.

    Cheers.

    Kris Sayce
    For Money Morning Australia

    http://www.moneymorning.com.au/20101203/nab-and-westpacs-secret-bailout-revealed.html

  • doyla66
    doyla66 Thursday, 07 March 2013

    Kris Sayce, you are right.. We are 'fed up with being told the same rubbish day-in and day-out by the mainstream press. A mainstream press that reports from press releases, and trusts whatever it is the guys in government or on Wall Street say.'

  • doyla66
    doyla66 Friday, 08 March 2013

    Andy, maybe you are correct (and pretty much the rest of the known world is wrong) and the major banks nearly did fall over. By the way, do you know anyone who wants to buy a bridge? I have a great deal on one.

  • doyla66
    doyla66 Friday, 08 March 2013

    AOFM: [knowingly?] obtaining an unjust enrichment thru $15b RMBS

    Perhaps I am wrong Captain, but you seem to be implying that we believe the Govt is making a LOSS. Quite the opposite.

    We are saying, --as affirmed by Denise to the Senate Enquiry into Post GFC Banking[2012], that the “Government cannot and ought not to PROFIT from a fraud”.

    It is irrelevant as to whether AOFM has incurred an actual LOSS or a PROFIT under those specific circumstances of deception. Would you not agree?

    We know the Government are PROFITING from a FRAUD, hence Denise's evidence tabled in Parliament on 8th August. Why would she say that if she did not have documentation from 1000 people to back her up? If every loan so far discovered by Members of BFCSA, is TOXIC, then that is surely a key indicator that a Royal Commission is justifiable.

  • doyla66
    doyla66 Friday, 08 March 2013

    Andy, you are indeed incorrect. You seem to be replying to a comment I have not made. I was just responding to the allegation in the article you referenced that Westpac and NAB were close to insolvency and their use of the US Fed funding window was an indicator of this. I have not mentioned the AOFM. The facility Michael West inaccurately describes in the original post is nothing to do with the AOFM. It is nothing to do with housing loans.

  • doyla66
    doyla66 Friday, 08 March 2013

    Should the Aust. Govt. [knowingly?] profit from a giant FRAUD is the real Q?

    The best predictor of future is past behaviour. WBC/NAB required $7.0b of 'secret emergency funding' in the past & you Captain clearly believe a designate RBA $380 billion emergency funding facility is something you assert "they won't use and don't want". Whether WBC and/or NAB were that close to the wind that it warrants the term "insolvent" can only be answered by the privileged participants at the time --- maybe you can shed some light on this issue? If so, please don't hold back on my account --this forum would be most suitable.

    In any event, we at BFCSA,(amongst others) know AOFM are profiting from a FRAUD, --something that should not and ought not to be happening, clearly. This is the real issue at hand, don't you think Captain?

  • doyla66
    doyla66 Saturday, 09 March 2013

    OK you don't KNOW the AOFM is profiting from a fraud. You THINK they are profiting from a fraud. For this to occur, there are two conditions required. (a) a fraud to have occurred with a nexus to the AOFM and (b) for them to have profited from it. Neither have occurred. Claiming that the AOFM is involved is like claiming that the guy who bought a sandwich from a shop made with tomatoes that the shop bought at Woolworths and that Woolworths bought from a farmer is complicit in a fraud because the guy who sold the farmer the manure for the tomatoes was bribed by one of his chemical suppliers to push that type of fertilizer. It is absolute fantasy disco stuff. Second of all the AOFM would have to be profiting from the fraud. They are not. They bought investments at below market prices to help competition.

    Also, can you get your numbers consistent? One minute it is $5.5b, the next it is $7b - what it is? Also, if the guy who wrote the article can't understand why a bank doing a $3b equity raising is different from a bank taking a $1.5b loan, then he is seriously a danger to himself and others.

    It is absolute rubbish to say that only privileged insiders will know whether NAB and Westpac were close to collapse. Speak to anyone with an ounce of credibility in the sector and they will immediately tell you this is complete horse manure. If you would ever trouble yourself to actually look, you will see that bank's reporting at quarter and year end is mind numbingly detailed. Anyone can see what the position is quite easily.

    And on a closing note, you may be interested to know that in fact, when it comes to market behaviour, past behaviour is no indicator of future behaviour at all. If that were the case, everyone would know what the stock market was going to do. But you are probably one of those people that if they are at the roulette table and they see that the last 10 times the outcome has been red, thinks that it is more likely to be black next time.

  • Denise
    Denise Saturday, 09 March 2013

    Dear Captain Haddock. You lose again but its a little entertaining. My evidence in Parliament never said AOFM was profiting from a fraud. Best to read the Transcript 8th August 2pm. WE asked if audits had been carried out and later on AOFM stated audits were carried out on the securities (people's homes in asset lend) and NOT THE Loan documentation. Had that occurred as a spot check - just a minor ad hock look, the auditors would have seen magnificent discrepancies leaping out from each page - as BFCSA Members have done. The loans were arranged on rubbery figures! And you now wish to trust our major banks annual figures? OK, lets stay on track. So we know the rubbery figures led to masses of imprudent lending, without the consumer's knowledge or consent as the banks altered the figures AFTER the copies of the original was sent to the banks by FAX. 10% were FULL DOCS by Bank Managers - more rubber. This means we have a toxic loan problem. Treasury is therefore the beneficiary of the PROFIT and we have consistently stated the word PROFIT. As taxpayers, we have actually purchased the INCOME STREAMS from those securities. So if our surveys amongst members are correct "NOT ONE CLEAN LOAN," a host of other legitimate questions naturally emerge. We have discovered the Loan Apps which were deliberately hidden for 5 years or more. I told parliament: " Not one clean loan in sample of 1000 people AND The Australian GOVERNMENT cannot or ought not to PROFIT FROM A FRAUD. What is missing from the "mind numbingly detailed reports..." (your words) and yes we do read them.......is WHAT % of the Bank Profit comes from the selling of LOW DOCS? Did you ever ask yourselves why that is? I had that question raised in TV interview a few years back on this very subject and the answer from med size Bank was 62%. So ask the four Majors what their % is?
    At least you are now thinking about this chaotic system of reporting. My forte is OMMISSION which is a crime. Look for whats NOT there. I also advised Parliament the fact that we have people in default still in their homes in Mexican standoff due to the fraud, and those people are not reported as being in default, we do presume AND there is refinancing of billions of dollars worth of loans in what is known as BUFFER LOANS to hide the stench of those RUBBERY FIGURES. As a result of that material to Parliament, two weeks later APRA wrote to all the banks regarding....yes of course......correct reporting of defaulting loans and refinance (cover-ups) reported as "good loans" "good lending policies" etc etc. Payments "all up to date" because banks have been feeding billions into the loan accounts of victims to show the appearance of their being able to "afford" to pay mortgage payments with the bank's own money. Good solid loans? I would suggest straw loans? Now the refinancing has been a little curtailed....oops....and just watch the fallout......same is America.
    All will be revealed. It appears our BFCSA Members are more informed..... Isn't this fun? Our Members are guiding Treasury in "how to look for a fraud that's right under your noses." Our Government should be after the Bank Barons and not the Broker Pushers....... Why do they not see? Hmmmmm we know. [email protected]

  • Denise
    Denise Saturday, 09 March 2013

    Dear Captain Haddock. You lose again but its a little entertaining. My evidence in Parliament never said AOFM was profiting from a fraud. Best to read the Transcript 8th August 2pm. WE asked if audits had been carried out and later on AOFM stated audits were carried out on the securities (people's homes in asset lend) and NOT THE Loan documentation. Had that occurred as a spot check - just a minor ad hock look, the auditors would have seen magnificent discrepancies leaping out from each page - as BFCSA Members have done. The loans were arranged on rubbery figures! And you now wish to trust our major banks annual figures? OK, lets stay on track. So we know the rubbery figures led to masses of imprudent lending, without the consumer's knowledge or consent as the banks altered the figures AFTER the copies of the original was sent to the banks by FAX. 10% were FULL DOCS by Bank Managers - more rubber. This means we have a toxic loan problem. Treasury is therefore the beneficiary of the PROFIT and we have consistently stated the word PROFIT. As taxpayers, we have actually purchased the INCOME STREAMS from those securities. So if our surveys amongst members are correct "NOT ONE CLEAN LOAN," a host of other legitimate questions naturally emerge. We have discovered the Loan Apps which were deliberately hidden for 5 years or more. I told parliament: " Not one clean loan in sample of 1000 people AND The Australian GOVERNMENT cannot or ought not to PROFIT FROM A FRAUD. What is missing from the "mind numbingly detailed reports..." (your words) and yes we do read them.......is WHAT % of the Bank Profit comes from the selling of LOW DOCS? Did you ever ask yourselves why that is? I had that question raised in TV interview a few years back on this very subject and the answer from med size Bank was 62%. So ask the four Majors what their % is?
    At least you are now thinking about this chaotic system of reporting. My forte is OMMISSION which is a crime. Look for whats NOT there. I also advised Parliament the fact that we have people in default still in their homes in Mexican standoff due to the fraud, and those people are not reported as being in default, we do presume AND there is refinancing of billions of dollars worth of loans in what is known as BUFFER LOANS to hide the stench of those RUBBERY FIGURES. As a result of that material to Parliament, two weeks later APRA wrote to all the banks regarding....yes of course......correct reporting of defaulting loans and refinance (cover-ups) reported as "good loans" "good lending policies" etc etc. Payments "all up to date" because banks have been feeding billions into the loan accounts of victims to show the appearance of their being able to "afford" to pay mortgage payments with the bank's own money. Good solid loans? I would suggest straw loans? Now the refinancing has been a little curtailed....oops....and just watch the fallout......same is America.
    All will be revealed. It appears our BFCSA Members are more informed..... Isn't this fun? Our Members are guiding Treasury in "how to look for a fraud that's right under your noses." Our Government should be after the Bank Barons and not the Broker Pushers....... Why do they not see? Hmmmmm we know. [email protected]

  • doyla66
    doyla66 Saturday, 09 March 2013

    Andy, you are a gem. This info is great, especially; "I’m talking about the NEAR COLLAPSE of the Australian banking system in 2008. I’m talking about the likelihood of two Australian banks collapsing in 2008 if they hadn’t secured a SECRET LOAN from the US Federal Reserve."

    WOW. Incredible information. Kept secret by the government, obviously.

    Oh, by the way, you can't win an argument with a blinkered idiot, i.e. Captain Haddock.
    A fish out of water, by the sound of it.

  • doyla66
    doyla66 Saturday, 09 March 2013

    Denise, you keep on saying all will be revealed but it never is. Where I come from, there is a saying: "Sh1t or get off the pot."

    Here's another one for you - talk is cheap. Ante up or stop whinging. You have presented to a Senate committee and what has come of it? Bone diddley. You don't have actual evidence. All you have is a limited number of examples of bad lending perpetrated mostly by brokers. I didn't say Denise that you claimed the AOFM had profited from fraud (although I bet I could find where you said it elsewhere) I was responding to a clear statement to this effect from Andy. Do try and keep up.

    P.S. "Ad hock" is actually spelled "ad hoc".

    Wayne, ad hominem comments do not make an argument. Nor, Andy, does repeating ill informed tripe from whackos and then pointing to it saying see, it says it here, it must be true.

    Talking to you guys about this is like playing chess against a pigeon. It doesn't matter what you do, your opponent will still knock over all the pieces, sh1t on the board and then strut around triumphantly.

  • doyla66
    doyla66 Sunday, 10 March 2013

    NOT ONE INDIVIDUAL AOFM LOAN -- TESTED FOR FRAUD / ASSET LEND -- OSTRICH IN SAND IS AOFM

    Capitano Titanic: Must be,BIG2 WBC/NAB enlisted Intercontinental-Courier-Pigeons, covertly 'fly' $7b US-FED "bailout" parcels of cash ---to keep the Titanic Banking System afloat here in the Land of Oz, 2008.

    PS: [that's pss not s/'t --that's $7.0 billion Aussie dollars at the time of US stealth flyover...(US$3.0b + US$1.09b respectively)

    All kept hush hush by RBA, APRA et al --- ???? until the Dodd-Frank Act lifted the lid on that 'little' uninteresting Non Disclosure.

  • doyla66
    doyla66 Sunday, 10 March 2013

    My dear Captain Haddock. At BFCSA we have no secrets but here is a small one for you: I had a very informative meeting with ASIC hieracrhy and lawyer in early February. Prior to that meeting, I spent three months going through a massive amount of emails (hard copy) at my expense and time, to highlight the most diabolical instructions from bank business managers to brokers. I then had to copy and PDF the documents and sanitise them to protect the brokers from being the scapegoats. BDM's from over 20 lenders, including the major banks regularly communicated by either blanket emails to 20,000 broker channel members, or they actually chatted in conversations to their broker teams. In reading these documents and observing the nature of the marketing and the instrcutions given, one can only be advised that a who9lsesale looting was taking place with Brokers simply asking innocent questions directly to BDMs for individual cases and being coerced and taught how to use "ZIPPY." Brokers did not realise the higher income figures generated by the banks' computers, and which they were taught to write on the Loan Application Form after they came back to the office and to do the math, were in fact an elaborate scheme to have the brokers take the blame for exaggerated income figures. Brokers have said they did not know this was illegal as it was the bank's system. More on that another day. The point to you is this. I do not believe I am as you said whinging. I thought I was trying to report a massive and obvious fraud to Parliament. At least the Senators appreciated my efforts and so do the victims. Of course I have the evidence including copies of 1000 people's files! How many truck loads do you require? Do you really think i would have lied to Parliament: a jailable offence?
    The emails prove it was not the brokers. The banks in a cartel model created a monstrous and wonderfully engineered Low Doc Sub Prime scam that even ASIC failed to detect. I do not read Andy's blogs. I have asked him by email to keep comments short and informative.
    If you believe I have not delivered the evidence, then you Sir, were in the room when I met with ASIC, meaning you work for ASIC. You would therefore know I delivered the goods. Perhaps ASIC is gearing up to say we have been through the 200 plus bundle and there is nothing there. Yes we are waiting for that one and will be realising all documents publicly for everyone to be the judge. If you were not there, then you have once again no idea what you are talking about. Perhaps one day you will thank me for exposing the scandal, as you may have freinds and rellies who have been quietly caught and suffering. If you are truly an insider you would have warned your family, as I did, do not have a bar of LOW DOC LOANS - THEY ARE A MASSIVE BANKING RORT.
    I presume you are the guy who wants to nominate our members for Order of Australia? [email protected]

  • doyla66
    doyla66 Monday, 18 March 2013

    A Committed Liquidity Facility sounds rather like the equivalent of the USA's TARP to me. A bailout fund is still a bailout fund no matter what moniker you give it. That's just word play or jousting with words to me. A whole lot of chest puffing wank!
    Michael West is absolutely correct in one thing though -- there has been absolutely no public debate on this whatsoever. So, my questions are: why have the political parties [of all persuasions] been silent on this issue? Have they just rolled over & had their tummies tickled? This requires public debate, especially as this entails the use of public monies.

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