you say "The logic is unavoidable. AGO needs margin- Margin will Never return".
i say ; you forgot about 1 thing ..
the Most Important SWING FACTOR for AGO MARGINS...the AUD falling to 75c in 2015.. that's why we have a floating AUD to combat the commodities cycles ..
this time the FED ..with its lower Rates to RBA .. has disrupted that mechanism ..
but it will return as the RBA indicates a rate cut may be necessary soon to prop up consumer confidence ..
1 more rate cut = AUD falls to 75c in a FLASH crash.
I expect to see the AUD near 50c in a few years time (3y) maybe sooner ..as Investor and consumer sentiment is demolished by falling Housing prices in Australia
(its happened before ) and falling commodities ..IO ,,gold ,,coal,,copper ..oil...gas..
= increased miners + builders unemployment = wages deflation = lower RBA rates = lower AUD = higher margins for IO producers .
