Category: Wealth Tips

I came to Sydney 30 years ago in November. I opened a bank account with the Advance Bank who were later taken over by St George. Later again St George were taken over by Westpac.
Last week I authorised a training provider to debit my credit card for some training. The bank foreign currency fees of 3% added up to nearly $900!
When you can do a Telegraphic Transfer for $25 I consider it outrageously unconscionable to charge $900.
Of course I contacted St George but they refused to so anything about it saying it is in the terms and conditions of the credit card.
Goodbye St George/Westpac. Hello Bendigo!
Takeaway to you, before doing large transactions, check the bank fees.

Every place you can invest your money has risks and reqrds, Usually, the higher the reward, the higher the risk.
Banks deposits have traditionally been low risk, low reward.
Banks shares have a higher risk and a higher reward.
A bail in reverses this natural economic law by transfering the shareholder risk to the depositors. This makes the depositors liable for what would otherwise be shareholder losses with no offsetting reward to the depositors.
The conclusion I have come to is that the politicians are serving their campaign donors more than their electorate (a system that desperately needs to change). Therefore they are proposing to prop up the banks at the expense of the depositors, as has been done in Cyprus where bank depositors lost a percentage of their deposits. Cronyism at its unconscionable worst!

The US stock market has underscored the urgency of the government acting to protect the public from a financial crash by enacting a Glass-Steagall banking separation and scrapping its “bail-in” bill. The Down Jones Index plunged 1,177 points on Monday, the largest single one-day points drop ever, following its 666-point drop on Friday. The Australian Securities Exchange fell sharply upon opening today, after losing $30 billion on Monday.
As the CEC and numerous experts have long warned, the meteoric rise of the US stock market has been one of the insane speculative bubbles in the global economy. Others include the property bubbles in Australia and some other countries, the US corporate debt bubble, the Bitcoin bubble and the big one—the US$1.2 quadrillion global derivatives bubble. All of these bubbles effectively constitute one great big “everything bubble” that has been fed by the US$14 trillion of so-called quantitative easing (QE) money that central banks have “printed” since the global financial crash in 2008.
The everything bubble has depended entirely on the ultra-low QE interest rates. For instance, the rise of the US stock market has never reflected an economic recovery, but has come from banks and corporations borrowing at very low rates to buy back their own shares; consequently, US corporate debt increased from US$8 trillion in 2008, to US$13.5 trillion in 2017. Likewise Australia’s property bubble, and similar bubbles in Canada, New Zealand and Sweden, expanded under record low rates—the only way borrowers have been able to afford to buy houses that are 10-12 times income, compared with the historical average of 3-4 times.
Rising rates will prick the bubble
The biggest worry about the global financial system right now is that the people in charge in megabanks, central banks, regulators and governments believe their own propaganda. They act as if 2008 never happened, and deny that these bubbles exist. Pretending that there is a recovery, the US Federal Reserve has started to slightly reduce the US$4.5 trillion of QE assets on its balance sheet, the amount of the securities it purchased from the banks since 2009 with newly printed money. This is pushing interest rates higher—effectively a pin in the bubble.
There have been countless warnings that this would happen. In May 2017, the CEC’s Australian Alert Service reported the International Monetary Fund’s warning in its “Global Financial Stability Report, 2017” that if US interest rates rose sharply, defaults on the US$13.5 trillion in corporate debt could reach 20 per cent—far higher than the mortgage default rate in 2007 that triggered the 2008 crash.
William White, the former chief economist at the Bank for International Settlements (BIS) who was one of the few experts to forewarn about the 2008 crash, said in a 22 January interview with London’s Telegraph that “Central banks have been pouring more fuel on the fire”—referring to the expansion of QE. “Should regulators really be congratulating themselves that the system is now safer?” he asked. “Nobody knows what is going to happen when they unwind QE. The markets had better be very careful because there are a lot of fracture points out there.”
White warned that surging global debt levels could be detonated by just a 1 per cent US rate rise, setting off massive losses throughout stock, bond, mortgage and derivatives markets and triggering a liquidity crunch. “All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten”, he said.
Australia heading off a cliff
QE has also fed Australia’s mortgage bubble, through the 30-40 per cent of their funding that Australia’s banks have been borrowing at cheap interest rates from overseas. As Robert Gottliebsen noted in the 30 January Australian, this dependence on foreign borrowing exposes Australia’s banks to US rate rises. Australian borrowers cannot afford rate rises. ME Bank’s latest Household Financial Comfort Report reveals rising mortgage stress, with 46 per cent of homeowners paying 30 per cent or more of household income on their mortgage, 26 per cent of households paying more than 40 per cent, and 14 per cent of households paying more than half of their income on their mortgage. According to a finder.com.au survey from November 2017, 54 per cent of households reported that just a $100 per month increase in mortgage payments would push them over the edge.
The impending disaster for Australia’s banks has been noticed in London. Today’s Australian Financial Review reports that London investment consultancy Absolute Strategy Research (ASR) has warned its clients that Australia’s banks, like the banks in Canada and Sweden—the other countries with huge housing bubbles—may become a global systemic threat, due to their disproportionate size in their domestic economies and in the global financial system. ASR notes that no major economy has been able to sustain a banking sector that is 20 per cent of its stock market capitalisation, but Australia’s Big Four banks account for more than 25 per cent of the ASX!
Glass-Steagall now!
Financial authorities will be scrambling to arrest the stock market fall, but at best they might be able to buy a bit of time. The reality is the next crash is inevitable, because all bubbles burst. This means the Australian government’s bill giving the bank regulator APRA sweeping powers to prop up failing banks by confiscating the public’s savings is not an academic exercise—APRA and the banks need such powers now.
It is urgent that Australians force the government to change its policies, by forcing changes on the banks that protect the people, and not the other way around. This means scrapping the APRA bill, and implementing a full separation of commercial banks with deposits from all other financial services, modelled on the USA’s successful Glass-Steagall Act of 1933.
Don’t wait until it’s too late—join the CEC’s fight today!
https://www.cecaust.com.au/shopping/shopexd.asp?id=66

Pretty sure I don’t like the idea of a programmer’s bug wiping out my cash deposits…
https://www.theguardian.com/technology/2017/nov/08/cryptocurrency-300m-dollars-stolen-bug-ether?CMP=share_btn_gp

From a newsletter by Scott Bywater.
I’m a big fan of testing and measuring. I don’t like anything that’s wishy-washy.
I like it to be proven, measurable, factual.
That’s one of the things that attracted me to direct response marketing.
And yet, I’m a big believer in the unseen, in intuition.
But only because I do this…
Whenever I get an intuition, I write it down in a book.
It doesn’t whisper.
It’s in the background.
And often, you have to take time out of the beta brainwave and move into the alpha brain wave (i.e. go and grab a coffee, go for a swim, or for a walk in the botanic gardens) for that intuition to kick in.
Anyway, you’re probably skeptical.
But here’s what I suggest you do.
Write down your intuitions in a 3 column sheet.
First column = intuition.
Second column = actioned, yes or no?
Third column = end result.
Do this and I bet you’ll find you’ve been ignoring one of the biggest goldmines accessible to you.
There’s a reason why everyone from Oprah to Donald Trump to Jim Carrey believes in it.
Got an intuition we should have a chat about growing your business?
Then go here:
http://meetme.so/meetwithScottBywater
All for now,
Scott Bywater

One month to stop APRA bank bail-in law
APRA crisis resolution bill has been introduced into Parliament; earliest chance for the government to push it through is the last week of November.
The bill is the long-planned “bail-in” legislation that the CEC first warned of in 2013, which aligns Australia with the Basel, Switzerland-based Financial Stability Board’s “Key Attributes of Effective Resolution Regimes”.
Bail-in is the bankers’ scam developed after the 2008 crash, to enable banks to continue the wild speculation that caused the financial crisis, but cover their gambling losses by seizing the savings of unsuspecting “mum and dad” investors and even depositors. Everywhere it has been applied it has ruined savers and destroyed confidence in banks.
Help to stop this bill! Contact your MP and Senators to: 1) tell them this bill has been introduced—most of them probably have little or no idea; 2) ask if they support the bail-in principle that banks should be allowed to gamble and cover their losses from the savings of their innocent customers and bondholders, or do they support the Glass-Steagall principle that savings should be protected by separating deposit-taking banks from speculation?
What is the bill?
The Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017. It gives bank regulator APRA sweeping powers to “resolve” a banking crisis. These align APRA’s powers with the Basel, Switzerland-based Financial Stability Board’s (FSB) “Key Attributes of Effective Resolution Regimes”, which include “bail-in”.
What is bail-in?
Bail-in is a scam. After the 2008 crisis, instead of returning to the Glass-Steagall principle of keeping banks and their deposits safe by separating them from risky speculation, the FSB schemed a way to allow banks to continue their reckless gambling, while claiming that taxpayers wouldn’t have to bail them out if they went bust. The result is bail-in, which “resolves” a failing bank by writing off, i.e. cancelling, what it owes to its unsecured creditors, which includes mum and dad investors and sometimes even depositors, to make the bank solvent on paper (liabilities less than assets). In other words, the bank’s innocent customers would be made to pay its gambling losses from their savings.
In Australia, due to an intense mobilisation by the CEC starting in 2013, APRA has so far shied away from “statutory” bail-in such as New Zealand has, known as the Open Bank Resolution system, which explicitly includes deposits. However, APRA has laid the foundation for “contractual” bail-in by allowing Australia’s banks to sell tens of billions of dollars’ worth of complex “bail-in” bonds to unsuspecting mum and dad investors. In a crisis, bail-in bonds convert into worthless shares in the failing bank, which will backfire by destroying confidence in the banks, as it has everywhere bail-in has been applied.
Why is the government in a hurry to get this bill through?
Because a new financial crisis is looming. When he introduced the bill, Morrison acknowledged the danger of a financial crisis, for which Australia’s banks are unprepared. “There are few greater threats to the economic wellbeing of the Australian people than a financial crisis”, he said. He emphasised that this bill must pass before the next crisis, saying: “The prudent time to strengthen crisis resolution powers is when the financial system is healthy”. A few minutes later Morrison hinted at the government’s fears of a collapse of the housing bubble—a truly nightmare scenario.
Since then, Robert Gottliebsen warned in the 26 October Australian that the Sydney apartment market has “cracked”, and on 27 October analyst David Lloyd of investment bank Citi foreshadowed house price declines of 20 per cent and an 80 per cent collapse in residential property sales. These reports coincide with rising alarm about the dangers of global debt, especially corporate and household debt, the massive bubble in the US stock market, and emerging threats in the $1,200 trillion global derivatives bubble.
What can I do?
Don’t let the government conspire with Labor to sneak this through. Morrison in his speech downplayed the bail-in aspect of this bill as “technical amendments … for the conversion of capital instruments”, clearly hoping to sneak it under the radar. The financial media is helping by not reporting it. Yet this is major legislation that has been years in the planning, going back to when the Treasury under the Gillard government issued a September 2012 consultation paper, “Strengthening APRA’s Crisis Management Powers”. In April 2013 the FSB noted of this legislation that “bail-in … legislation is in train in some jurisdictions (including Australia…)”.
To ensure they can’t sneak it through, contact your federal MP and at least the non-Liberal Party Senators in your state to make sure they know about it. You’ll be shocked at how many won’t!
Ask them:
Do you know about the APRA crisis management bill—the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017?
APRA is allowing and even encouraging the reckless banking practices, such as speculation on mortgages and derivatives gambling, that are leading Australia into a new financial crisis—do you support giving the same APRA sweeping new powers to manage the crisis it has caused?
Do you support the bail-in principle of forcing a bank’s innocent investors and customers to pay for its gambling losses, or would you support a Glass-Steagall separation of Australia’s banks, to protect the savings of innocent investors and depositors by stopping banks from engaging in risky speculation?
If you can, try to meet your federal MP and Senators; otherwise, phone and email them—when you call their staff will ask you to put it in writing, so do both. If enough people do this, it will force MPs to pay attention and the government will not be able to sneak the bill through.
Click here for your federal MP’s contact details.
https://www.aph.gov.au/Senators_and_Members/Members
One month to stop APRA bank bail-in law
Click here for the list of Senators in your state.
http://cecaust.com.au/bail-in/Contact_Info_Senate_Mobilisation.pdf
Click here to sign the CEC’s new petition: Global crash coming—Australia needs Glass-Steagall and a national bank.
http://cecaust.com.au/glass-steagall/