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$32.41 westpac banking corporation

Housing Crash 2019??, page-194

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cevatt

3,625 Posts.

112

02/10/18

17:03

Post #: 35967057
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Originally posted by danhoff ↑

well I have bought in a little; a few reasons

1) the house price increases (Syd and Mel) were 12-13% a year for a couple years up to 18 months ago; so a 15-20% dive will just get the prices back to where they were a couple of years ago; so loan holders really just get back to square one... but no huge individual losses - bankruptcies

2) I like WBC is trying to get rid of the investor, high leveraged loans; a preemptive move

3) I like WBC ear marked the $235 mill of 'oops, we will need to pay back to consumers'

4) I think a slow, slow multi year crash (to 20%) is actually good

5) I think (my opinion) the most likely worst case is priced in; no one can price in a huge crash

6) govt will not let banks crash; if property becomes a problem, they just drop interest rates; I believe the next rate move will be DOWN; this will allow the 'walking dead' scenario I envisage; in a low rate scenario, a bank with a price that does not grow for 3 or 5 years, but pays the franked dividend will be a good place to park some of your money

7) the Royal Commission report did show the govt does not want to spank the banks too badly

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just remember that if you are relying on franked credits to help you with tax, then Labor has threatened to abolish these when they are elected. You need to put this in your considerations

WBC Price at posting: $27.24 Sentiment: Buy Disclosure: Held
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