When a stock in a rock-solid sector like banking drops over 8% in a day, you gotta ask yourself what's going on in that sector? Did they go rogue? Banks have lending models honed over decades. It's doubtful they just threw all that to the wind and started lending like a drunken sailor. Much more likely is that the lemons have all been squeezed and the models they all use with minuscule differences between them no longer carry. The lending express train has already roared through the stations of government handouts to FHB and the Bank of Mum 'n' Dad and now is heading to the last stop: Expense slashing. Families will pull their kids out of private school and eat Weetbix 4 times a day before they fail their precious mortgage because to lose that sends them roaring to the bottom of the ladder. But it won't need a big % margin of failures to crack the banksters' models like an egg. All priced for perfection as they are.
CBA Price at posting:
$158.94 Sentiment: Sell Disclosure: Not Held
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