Category Archives: The Emergency File

And now the CBA has woken up and started to fear a GFC 2

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Ralph Norris of the CBA has now finally caught up to what I’ve been saying for months: GFC 2 is on it’s way and it’s coming fast.

Yesterday a very peculiar thing happened in the debt stricken EU, one of the key economies Germany failed to sell its long term bonds shocking debt markets and sparking fears of a national scale Lehman brothers collapse.

Up until now Germany and France have been holding the plug in place in the currency bathtub, keeping the many weaker European states afloat despite the spreading fears of contagion.

Now France’s AAA rating is being questioned and Germany is suffering as investors are steering clear of the Euro only augmenting fears of the region breaking up in disarray.

Now all of this sounds absolutely atrocious, but at the same time I can’t help but to smell a rat. To quote Gail Kelly of Westpac “The various authorities in Europe actually have the capacity to deal with these issues – I certainly wish they’d get on with it and do it”.

At the end of the day Europe has the assets and power to burst out of this. So where is all this ‘recession’ coming from?

This begs the question – will the GFC 2 be rooted in real economic problems or will it be determined by the fund managers and nervous investors.

Regardless I’ve got a sneaky feeling this time Australia won’t be spared!

Your thoughts?

Little bites are causing a big decay

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A perfect storm is brewing inside Australia with the gap between the strongest and weakest industries being greater than ever before.

From a business confidence study conducted by NAB it shows that there are several factors underlying the deterioration of weaker sectors. The biggest concern was that the gap between two speed economy was actually getting wider. Scarily so it was not due to the larger sectors getting stronger but by smaller industries getting even weaker. Small business is hurting and hurting bad. Who cares you say? You should, as the small business community are a massive employer of Australians and the more that sector shrinks the more people that will be put out of a job.

It seems that in a nutshell simply don’t understand how what’s happening around their own day to day world. Sure they may read the news headlines and take in a few micro seconds of what’s happening in countries like Greece and the US but they unfortunately have no mechanism to aggregate all the news stories together to form one big picture.

Unfortunately that big picture is looking bleaker than the politicians would have us believe. We all seem to so well deluded by our ‘mining boom’ and the rhetoric from the government. The little bits of information you are receiving is hiding the massive decay.

This has been a concern for mine for quite some time now. As I said in a post back in September, we’re all just a bunch of lemmings. But as evidenced by the NAB falling business confidence report I fear that the ‘boom times we are bathing in are short numbered.

Every financial event adds up. The bite sized chunks of news in this country are contributing to the decay which is going to surprise many people and unfortunately cost them dearly. Just think about the last time you went to the dentist and they discovered a tooth that needed some work and cost you fair bit.

Your thoughts?

It pays to speak out

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I received a telephone call last week from a reader who was in a state of panic as the bank was coming later that morning to repossess their home. This person had recently lost their job back and not told the bank.

Being single and having no one to assist in the repayments they repeatedly ignored any letters or phone calls from the bank hoping that they would just give up and go away. Unfortunately the Bank never does and unfortunately it all spiralled out of control and the bank took possession of ther home.

Now, had this person been in contact with their bank earlier, ie soon after they lost their job they may have been able to work out alternative arrangements and avoided this situation. Sure, going to the bank and telling them you have lost your job may be embarrassing but believe me if you don’t you may lose your home and ruin your credit rating. Many Banks have special teams set up to handle this and they will work with you to find out a better way to pay off the loan. In major job loss situations Banks have even come to the party and offered the suspension of repayments for three months without penalty. 

The moral to this story is plain and simple if you lose your job and have a mortgage do not be afraid of going to the bank and telling them. Better go to them first before they come looking for you.

Your thoughts?