It is a big Unknown and luckily not many people will read this and also ask how much our big 4 banks or Super Funds have lent money on 650,000 apartments built over last 20 years which now have serious faults as suggested in the recent Four Corners Program on 19/8/19. How many of the 650,000 depressed owners & consumers will declare bankruptcy as their stress levels rise when they realise they are trapped owning worthless apartments they can't live in and can't sell and must still pay for and stump up more money for repairs? Let's discount the number to 10% or less and ask how would mortgage insurers cope ? I recommend all bank shareholders should do their own due diligence and ask their banks to clarify their respective provisions and loans outstanding on all the units the States have already identified as having inflammable cladding and ask them how much those mortgage securities and apartments might now be worth ? Have they sold any affected securities and are the originating banks liable to guarantee those securities? I can ask 10 other questions or more but I'll let the few readers who read this post to ponder the impossible. Is this question on RBA's mind and real reason they dropping cash rate during a period of relative prosperity ?
A question arises on our super funds as we don't know if they exposed to apartment scandal too and the lower cash rate might be covering up some losses even as some are claiming to be delivering great results. Until this matter cleared up I would not be a happy holder of any super funds even with ASIC & ACCC lambasting the poorer performers. We need more information and a statement from all banks and Super funds they not EXPOSED to the apartment scandal as lenders or security holders of securitized securities surely?
Open for discussion
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