Share Price Catalysts, page-30

A couple of interesting articles in the AFR this week regarding the housing market and loan quality.

CBA CEO Matt Comyn noted the following from his recenttrip to the US:

“There were far fewer people fromhedge funds at the joint investor lunches, which generally means less shortpositions on Australia,”

“Often when you go to the US, theclassic trade is that the housing market is going to come under enormouspressure, but there’s probably not as much interest in that particular trade.”

“I think housing itself is clearly late cycle at themoment [and], as rates go up, there’s going to be downward pressure on prices,”he says.

“I don’t think it’s going to be a problem – clearly labour markets are still extremely strong. But I think consistent with a number of indicators we’re seeing, it’s probably a time to be slightly more cautious.”

Comforting words for Genworth shareholders. Given the growth in CBA’s loan book, I suspect they have been more conservative than peers in underwriting new loans. I understand they have lower Debt-to-income limits than peers. But welcome any thoughts of those better informed!