us banks in big trouble?, page-37

Rowingboat

I am not about to start substituting CDS prices for fundamental credit analysis. “Efficient Market” is the grandfather of all oxymorons.

Compared with banks in Europe and America, the Australian banks are doing brilliantly! They currently have strong capital positions and unless our housing market goes into free fall, this will remain so.

The challenge of offshore borrowing costs is receding. The Australian banks have raised so much domestic TD money (from equity market escapees) that they are now in a position to retire offshore wholesale issues (see Gayle Kelly’s comment last month).

I think that the CDSs on the banks are over bought, and someone is about to make a lot of money selling them.