- Apr 20, 2006
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They don’t make “huge” profits because they don’t need to, it’s a not for profit organisation.and what is collateral?
It's something the bank can take and sell to make good their money.
If they don't think they can make that much money off it, it wont be accepted.
The property market hasn't crashed YET.
It tends to be slow to move, so that's understandable...but the share market, which reacts much more quickly, has fallen by about 1/3 in the past month...Do you really think that wont flow through into other forms of investment?
As for the AFL making huge profits...they're not THAT big, and they'll almost certainly drop too....the effects of this will echo for years.
yes the Share market has dropped about 28% and could drop further but land/real estate is one of the safest assets.
Its pretty bloody good collateral and they would be able to factor in close to a 50% fall in prices. Add to that money in the bank the AFL have they would have absolutely zero problems. It would be about the safest debt they would be holding.