Hey Nicksta
Its got nothing to do with competition, there is no confidence in that model, therefore no one, including banks will be willing to invest money in it. Apart from Australia's domestic banks, in banks ALL AROUND THE WORLD that are collapsing. Any that have an investment bank arm anyway. Almost all the banks throughout Europe are in trouble and merging with deposit taking banks to firm up balance sheets with deposits just to survive. The only reason our big four banks havent suffered the same fate is because they dont have investment bank divisions.
I think the more common human emotion that you seem to be suffering from is....
CONFIRMATION BIAS ie. a tendency to search for or interpret new information in a way that confirms one's preconceptions and avoids information and interpretations which contradict prior beliefs.
How can you say credit will become incredibly cheap soon?? What a ridiculous comment. Every single sign out there says the complete opposite. Do you think after this crisis, banks will just go back to lending money to everyone at ridiculously cheap rates?? Hmmm, this strategy has just caused the biggest financial crisis since the Great Depression, but lets just do it again anyway. C'mon!!!
The landscape in which these investment banks has changed for ever and credit will NEVER be as cheap. At least in our life times.
As for MQG... the jury is still out on that one. Although I cant see how they can be the only one to survive and continue to perform well. It doesnt make sense. Therefore I expect, unless the business model is changed, they will eventually follow a similar fate. Unless they merge with a retail bank or something like that.
BNB
babcock & brown limited
