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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: UBS: “Calling the end of the household super leverage cycle” Macrobusiness

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UBS: “Calling the end of the household super leverage cycle”

MacroBusiness 12:19 am on March 29, 2019

George Theranou (UBS research note) Households are still leveraging. Even though household liabilities growth dropped to a >5-year low of 4.2% y/y, because nominal income growth collapsed even more to just 2.0% y/y, the household debt-to-liabilities ratio lifted to a record high of 199% in Q4- 18. However, mainly due to falling house prices, household wealth dropped 2.1% q/q, the largest fall since 2011, to be down 1.3% y/y. While this followed a surge to a record high level of $10.4tn, critically, the ‘household wealth effect’ is due to a change in the savings ratio driven by changes (not the level) of wealth. This is consistent with an ongoing drag on consumption ahead as spending slows to weak income growth.

Overall the lead indicators of the labour market are clearly weakening. Even ABS job vacancies (the strongest lead indicator) today slowed to a 2-year low. Furthermore, the impact of peaking construction activity is just starting to be seen. After construction employment spiked to a ~100-year high 10% share of total jobs, it’s just starting to fall now, & will likely continue ahead given house prices slumped the most on ~record. With a per-capita recession already, unemployment is likely to rise. We continue to expect the RBA to shift to an easing bias by May & cut 25bps in July & August. We are also ‘calling the end’ of the household super leverage cycle, after ~tripling since 1994.

 

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