Australian

Bubble News

 Cracks Are Appearing in Australia's Trillion-Dollar Debt Pile

Homeowners, consumers and property investors around Australia are making more calls to financial helplines as three warning signs back up the spike in demand: mortgage arrears are creeping up, lenders’ bad debt provisions have increased and personal insolvencies are near an all-time high.

The concerns are understandable. Australians’ private debt has soared to 187 percent of their income, from around 70 percent in the early 1990s, encouraged by low interest rates. In a November speech, Lowe said that while most households are managing these levels of debt, many feel they are closer to their borrowing capacity than they once were.

It’s not time to panic. Banks’ losses still remain small by historical standards and are largely confined to mining areas, according to PwC. Some 77 percent of customers at Commonwealth Bank were ahead on their mortgage payments as at June; the lender is likely to update those figures next week. The RBA also noted in November that borrowers have set aside funds tied to their mortgages equivalent to 17 percent of outstanding balances.

DYI:  It’s not time to panic??  When bankers tell you it’s not time to panic what they are really saying “start panicking NOW!”  The time to sell was 2 to 3 years ago having plenty of greater fools to sell their massively overvalued house or commercial property to.  Real estate holders now need to do is mark down their selling price for a quick sale.  If they don’t once the slide in prices gains momentum selling at the cost of the mortgage could very easily be ruled out.  As the chart shows Australian’s household debt to income is significantly higher than the U.S. at its peak!  A long way down – as single family homes in the major cities could very easily be cut by 50%.  Don’t be surprised if their stock market takes a tumble as well.

In the next couple of years or so bargains in the Australian market  will present themselves for the alert bargain hunter value player.

DYI

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Russian

NATO

Cold War

HEATS UP

War In Europe? Germany Sends NATO Troops To Russia's Baltic Borders As Military Dispute With Moscow Escalates

The mission, to which NATO agreed last year, would see the mass mobilization of 200 vehicles, including 30 tanks, and 450 soldiers to the Baltic State, which is flanked on both sides by Russian borders. By spring, Germany was expected to head an international battalion of some 1,200 soldiers from NATO members such as Belgium, France and the Netherlands. They were all dedicated to keeping an eye on what they say is Russian aggression amid one of the tensest periods of relations between Russia and NATO. Lithuanian President Dalia Grybauskaite called Russia's behavior "an ongoing military buildup around our borders and aggressive actions in our region," according to European news outlet The Local.

Moscow has rejected NATO's narrative, which originated from Russia's annexing of the former Ukrainian territory of Crimea in 2014 and has been further influenced by Russia's support for separatist rebels in eastern Ukraine. Russia has maintained that NATO, of which U.S. is by far the largest financial sponsor, threatened Russian sovereignty by organizing Russia's neighbors against it. Both NATO and Russia have undergone the largest parallel military escalations since the Cold War, including the deployment of nuclear-capable missiles and multiple violations of airspace.

DYI:  The aggressor beyond a shadow of doubt has been the Alliance [U.S. U.K. NATO EU] has expanded their military bases almost surrounding Russia.  This is a natural resource grab by the Alliance attempting to bankrupt Russia into losing control of their political subdivision east of the Ural Mountains forming new countries favorable to global natural resource corporations especially oil and gas.  Hopefully this aggressive behavior will be check by the Trump administration.  Any miscalculations this cold war could go hot with border clashes or the loss of the Baltic States as Russia tires of having a military knife at the throat of one of their principal cities St. Petersburg. 

 

  DYI