George W. Bush's Radioactive Second Term

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President George W. Bush keeps paying for his second term.The exit polls in this year's presidential election found that American voters, by 53 percent to 38 percent, thought Bush deserved greater responsibility for the current economic difficulties than President Barack Obama.Enlarge imageBush was a pariah on the campaign trail this year. He didn't appear at the Republicans' Tampa convention and wasn't even mentioned there in speeches by the nominee, Mitt Romney, the vice-presidential candidate, Paul Ryan, or the keynote speaker, New Jersey Governor Chris Christie. About the only convention attention he received was from the Democrats, when his predecessor, Bill Clinton, offered mild praise for his support for AIDS funding in Africa.During the campaign, Romney went out of his way to stress how different he was from George W. Bush, though their policies on tax cuts and deregulation seemed almost identical.The former Republican president's problems date back to the first year after his 2004 re-election. Miscalculating, the White House decided to focus on an overhaul of Social Security, without gathering any Democratic support. The proposal went nowhere and the political damage was considerable.He then rushed to sign legislation allowing the federal government to prevent a Florida man from removing the feeding tubes keeping alive his wife, who was in a persistent vegetative state. Ultimately, that too was thwarted and an autopsy showed she was severely brain damaged.Finally, when Hurricane Katrina devastated New Orleans, Bush was AWOL.http://www.bloomberg.com/news/2012-11-11/george-w-bush-s-radioactive-second-term.html

Macquarie Joins Bouris to Crack Oz Oligopoly: Mortgages

Macquarie Group Ltd. (MQG) and the local host of the “The Apprentice” are teaming up to crack into Australia’s A$1.1 trillion ($1.14 trillion) mortgage lending oligopoly.Starting next year, the country’s biggest investment bank will fund loans via Yellow Brick Road Holdings Ltd. (YBR), whose chairman Mark Bouris hosts the television show made famous in the U.S. by Donald Trump. YBR will offer a 1.15 percentage point discount off its base rate for the first 12 months, undercutting the average 0.75 reduction offered by banks. The four biggest banks control more than three of every four home loans.“Money is not a designer commodity, money’s money, and you want it for the cheapest possible price,” said Bouris, who in 2004 sold his Wizard Mortgage Corp. to General Electric Co. in a deal worth about $300 million. “The moment someone’s come in with a new price it’s upset the oligopoly, and people are coming to us in hordes to refinance.”Macquarie is aiming to revive its return on equity, which has slumped to 6.6 percent from 23.7 percent in its 2008 financial year, and is seeking more stable sources of cash flow from leasing aircraft, managing funds and providing loans. YBR will bid to lure new borrowers even as annual home-loan growth slows to the weakest pace since records began in 1977, and snatch some of the A$960 billion in loans already extended by the nation’s four main banks.YBR’s loan rate is about 30 basis points below the average discounted rates available atAustralia & New Zealand Banking Group Ltd. (ANZ), Commonwealth Bank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. (WBC), a big enough discount to entice borrowers to switch, Bouris said.Bouris is seeking another success in the industry that made his fortune. He built Wizard into the nation’s biggest non-bank home lender, with 200 branches and A$18.5 billion of mortgages, when GE bought its parent company Australian Financial Investments Group in 2004. Australian Financial was equally owned by Bouris, Kerry Packer’s Publishing & Broadcasting Ltd., ABN Amro Holding NV and Deutsche Asset Management Australia.GE sold Wizard’s mortgage book to Commonwealth Bank of Australia (CBA) and its branch network to Aussie Home Loans in 2008 as the global credit freeze roiled markets.Bouris in 2007 started YBR, which offers financial services including pension planning and tax advice. He holds a 27 percent stake in YBR, while Nine Entertainment Co., whose Nine Network broadcasts “The Celebrity Apprentice” in Australia, owns 20 percent, according to data compiled by Bloomberg.YBR made an A$6.8 million loss on revenue of A$14.8 million in the 12 months ended June 30, according to a regulatory filing. It signed its 100th branch agreement in January.While Bouris is aiming to get a 5 percent market share of new loans and refinancings, he accepts it’s going to be tough, as the four banks have shored up their dominance by buying smaller rivals, and benefit from government guarantees on deposits, Bouris said.“It’s harder now, much harder,” Bouris said. “But when you crack it, you crack it big time.”

Pillar Profits

The so-called four pillar banks posted combined net income of A$22.8 billion for their most recent financial years, according to a report this month from PricewaterhouseCoopers LLP. The lenders share 77.3 percent of the home loan market and 76.6 percent of business lending, the report states. They have a combined market value of A$294 billion, according to data compiled by Bloomberg, versus A$58.6 million for YBR.“I wouldn’t call it a fifth pillar,” said TS Lim, a Sydney-based banks analyst at Bell Potter Securities Ltd., who said YBR’s move into mortgage lending is unlikely to hurt the major lenders. “If anything, it may put a dent into the other smaller players.”

Spare Billions

http://www.bloomberg.com/news/2012-11-11/macquarie-joins-wizard-to-crack-oz-oligopoly-mortgages.html