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Hedge funds rush for exits as housing holds up
David Symons
September 15, 2010
THE decade-old debate over Australian house prices has intensified this year, but hedge funds punting that a bursting bubble would take the banking sector with it are losing patience. They're rushing for the exits before they lose their shirts.
David Symons
September 15, 2010
THE decade-old debate over Australian house prices has intensified this year, but hedge funds punting that a bursting bubble would take the banking sector with it are losing patience. They're rushing for the exits before they lose their shirts.
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Westpac and National Australia Bank have attracted most interest from the funds.
But to date there's been little joy for the doomsayers, and it's costing them dearly. While bank funding costs have crept a little higher, that's attributable mostly to local competition for deposits rather than rising wholesale funding costs. Similarly, there's no sign of house prices moving rapidly into reverse.
But to date there's been little joy for the doomsayers, and it's costing them dearly. While bank funding costs have crept a little higher, that's attributable mostly to local competition for deposits rather than rising wholesale funding costs. Similarly, there's no sign of house prices moving rapidly into reverse.
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Goldman Sachs yesterday told clients that US hedge funds closing out their short positions would underpin the performance of the Aussie banks for the rest of the year.
I'm still planning to buy some 2011 and 2012 puts. And if the bubble stays intact I'll be buying some even longer dated ones.
