There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.
Each Saturday morning I like to share some of the ones I’ve read during the week.
Monday will be here before you know it, so enjoy some weekend reading…and please forward to your friends by clicking the social link buttons.
Australian banks understated the value of investor loans by $50 billion: RBA
Bank lending standards are under fire according to this article published by ABC.
A senior Reserve Bank official has taken a swipe at Australian banks for their lending standards, amid big errors in bank loan data that saw them understate the value of loans to investors by $50 billion.
RBA deputy governor Philip Lowe told a financial conference in Sydney that the central bank was concerned by reviews of loans to investors by the banks over the past six months that found “very large upward revisions to the value of investor loans outstanding”.
Mr Lowe said more than 10 financial institutions, including two of the biggest lenders, found their outstanding investor loans were $50 billion, or 10 per cent more, than they previously thought.
“As lenders have looked more closely, what they have found has surprised and, to some extent, concerned us,” he said.
The new figures mean that the total value of investor loans stands at more than $500 billion.
Mr Lowe said the new data showed that 40 per cent of all housing loans were taken out by investors, not the 35 per cent reported earlier in the year.
Read the full article here.
How do you measure oversupply in the market and what does it mean to investors?
Another great Real Estate Talk show produced by Kevin Turner.
In this show:
- Michael Yardney tells us which real estate markets have been hit by the downturn in the resources sector.
- Fairfax Economist Dr Andrew Wilson explains how we can tell when a market goes into oversupply.
- Commentator Chris Gray speaks about how he has recession proofed his portfolio.
- Valuer and Chairman of Herron Todd White, Gavin Hulcombe, tells us where he sees investors go wrong with research.
- Nhan Nguyen tells us how he ensures he gets it right at the purchase stage through negotiation.
- Mark Armstrong explains why the Australian property market has been reasonably solid compared to some other countries.
If you don’t already subscribe to this excellent weekly Internet based radio show do so now by clicking here.
3 Beloved Traditions Invented to Make You Buy Stuff
This list published on MentalFloss looks at the true origins of many of our favourite traditions:
1. RUDOLPH THE RED-NOSED REINDEER
Robert May, a copywriter for Chicago’s Montgomery Ward department store, wrote and illustrated the poem (that later became the song) for the store’s holiday coloring book in 1939.
A whopping 2.4 million copies of Rudolph the Red-Nosed Reindeer were given out at the store that Christmas.
2. DIAMOND ENGAGEMENT RINGS
Prior to the 20th century, engagement rings were strictly luxury items, and they rarely contained diamonds.
But in 1939, the De Beers diamond company changed all of that when it hired ad agency N.W. Ayer & Son.
The rings didn’t become de rigueur for marriage proposals until 1948, when the company launched the crafty “A Diamond is Forever” campaign.
By sentimentalizing the gems, De Beers ensured that people wouldn’t resell them, allowing the company to retain control of the market.
3. WEDDING REGISTRIES
In the 1900s, it was customary for only close family members to give wedding presents. But gradually, newlyweds came to expect gifts from friends, as well. In 1924, the Marshall Field & Company department store in Chicago created the first wedding registry, and the “tradition” took off. Today, up to 96 percent of American couples register their weddings.
See the full list here.
Don’t drink, don’t smoke…
Pete Wargent delves into the latest Cost of Living figures in a recent blog.
Well, some good news if you’re part of the temperance movement, I suppose, with the cost of living for employee households rising by just +0.2 per cent over the third quarter…and less still if you don’t drink or smoke.
The ABS Selected Cost of Living Indexes revealed only moderate increases for the year to September for employee households (+0.7 per cent), self-funded retirees (+1.2 per cent) and age pensioners (+0.9 per cent).
The cost of living indexes were created by the Australian Bureau of Statistics (ABS) in order to answer the following key question:
“By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?”
The main contributors to the increase in living costs for employee households this quarter were increases in alcohol and tobacco costs (+1.2 per cent), or more specifically, tobacco and beer.
Smokes in particular were the target of a federal excise tax rate increase, which became effective from September 1.
The cost of living index increase for employee households this quarter was lower than the result for the Consumer Price Index (CPI) or official inflation due to a decline in mortgage interest charges, which are not included in the CPI figures.
In the meantime, go easy on the beer and smokes.
A Spanish billionaire just overthrew Bill Gates to become the richest man in the world
There’s a new richest man in the world according to an article published on Business Insider.
It’s Spanish clothes magnate Amancio Ortega, who has overtaken Microsoft founder Bill Gates for the first time ever.
According to Forbes’ real-time tracker, the elusive multi-billionaire founder of European clothes retailer Zara just smashed past Bill Gates to become the wealthiest person on the planet, with a fortune of $US79.8 billion (€71.83 billion or £51.84 billion).
Unlike many of the richest people in the world, Ortega has a fascinating rags-to-riches story.
Ortega’s biographer described his memories of a childhood during which his family could not always afford enough food. He left school in his early teens, working his way up from the absolute bottom rung as a messenger boy in a shop.
It wasn’t until he was 40 years old that Ortega got around to setting up Zara, the fast-fashion retailer that has gone from strength to strength — first growing in Spain, then neighbouring Portugal and France, then London. Now it’s all over the globe.
Read the full article here.
Weekend video: How Long Does It Take To Change An Idea?
Blogs you may have missed this week:
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.