As a mortgage broker, I can assure everyone from speaking to most of my panel lenders that lending activity has come to a screetching crawl, if not a full stop.
When you have got CBA offering to refinance within ten days without even obtaining the title from the current lender (this is a new initiative with criteria involved) & Suncorp offering up soft commission to first home buyers when they settle, you can safely say.. "Houston, we may have a problem".
What does this mean to ASF members?
Firstly, one can assume that bank stocks have topped out and that maybe a short position in such stocks may in future prove rewarding.
Secondly, if this leads to future profit forecast adjustments then this will definitely lead IMHO to a permanent downward correction in the local market, which is probably not a bad thing.
Thirdly, it will almost inevitably lead to a rationalisation of the entire sector which now appears overbanked. This will potentially include takeovers of some of the smaller players and may finally result in the collapse of the four pillar policy as bank strive to maintain shareholder satisfaction.
The only possible mitigant to these bear trends may come with the long awaited floating of the broking arms of CBA, WBC & NAB all of which are a certainity and may if announced assist in sustaining current shareholders values.
I for one have recently cashed out some of my portfolio based upon the realisation that IMHO a more permanent market correction is now on the horizon.
I am interested in any opinions for and against.