Banking CET1 ratio

 The CET1 ratio (Common Equity Tier 1 ratio) measures a bank's core liquid capital against its total risk-weighted assets. It serves as a key indicator of a bank's financial strength and solvency, showing how well it can handle sudden financial losses. [1, 2]

Formula and Definition

Numerator (CET1 Capital): The highest quality of regulatory capital, mainly common stock and kept earnings.
Denominator (Risk-Weighted Assets): Total assets adjusted for risk levels (like cash at 0% risk versus risky loans).
The Formula: \(\text{CET1 Ratio} = \frac{\text{CET1 Capital}}{\text{Risk-Weighted Assets}}\) [1, 2]

Requirements and Standards

Global Minimum: The international Basel III rules set a baseline minimum standard of 4.5% for the CET1 ratio.
Local Standards (Australia): The Australian Prudential Regulation Authority (APRA) requires domestic major banks to maintain a higher benchmark of 10.25% to ensure they remain unquestionably strong.
Safety Meaning: A higher percentage means the bank has more safety cushion and a lower chance of failing during a financial crisis. [1, 2, 3]


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2026
Australia’s major banks maintain strong Common Equity Tier 1 (CET1) capital ratios, averaging 12.1% to 12.2% across the sector. All four major institutions operate comfortably above the Australian Prudential Regulation Authority's (APRA) baseline regulatory minimum requirement of 10.25%. [1, 2, 3]
Bank-by-Bank CET1 Ratios
Westpac (WBC): Reports the highest ratio among the big four at 12.4%, tracking well above its normal operating target of 11.25%. [1]
ANZ: Recorded a strong increase to 12.39% following positive capital generation through the early part of the year. [1]
National Australia Bank (NAB): Stands at 11.65%, which increases to a pro forma 12.05% after accounting for dividend reinvestment plan (DRP) capital actions. [1]
Commonwealth Bank of Australia (CBA): Reports a Level 2 CET1 ratio of 11.6%, balancing solid internal earnings generation against risk-weighted asset movements and dividend payments. [1, 2]
Sector Context & Regulatory Requirements
APRA Minimums: The regulatory minimum CET1 requirement sits at 10.25% for major domestic systemically important banks (D-SIBs). [1, 2]
Capital Buffer: Sector performance highlights strong individual buffers, with collective holdings providing robust protection against credit quality shifts or economic uncertainty. [1]
Framework Evolution: Total capital rules continue to tighten under loss-absorbing capacity mandates, pushing banks to favor efficient Tier 2 capital structures alongside core CET1 stability


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At 30 June 2026, Macquarie Bank Group's APRA Basel III Common Equity Tier 1 (CET1) capital ratio was 13.8 per cent (Harmonised: 18.9 per cent), increasing from 12.8 per cent (Harmonised: 17.5 per cent) reported at the end of the financial year on 31 March 2026. These levels comfortably exceed the Australian Prudential Regulation Authority (APRA) regulatory minimum requirement of 9.0 per cent

Yield Curves

 A yield curve is a line graph that plots the interest rates (yields) of bonds with the same credit quality but different maturity dates (e.g., 1-month, 2-year, 10-year). It visually demonstrates how much return investors demand for lending money over varying time periods. 

How It Works

• The Graph: The horizontal axis X shows time until maturity (from short-term to long-term). The vertical axis Y shows the corresponding yield (interest rate).
• The Benchmark: Yield curves—most commonly created using government bonds like U.S. Treasuries—are widely used as benchmarks to determine mortgage rates, savings account yields, and corporate borrowing costs. 

https://business.nab.com.au/tag/investments/understanding-the-yield-curve

The Three Main Shapes

The shape of the yield curve changes based on economic conditions, inflation, and central bank monetary policy: 

• Normal (Upward-Sloping): Short-term yields are lower than long-term yields. Investors demand a higher return for the added risk and uncertainty of locking their money away for a longer period. This is the most common shape and typically points to an expanding economy. 

• Inverted (Downward-Sloping): Short-term yields are higher than long-term yields. This rare shape occurs when investors anticipate an economic slowdown or recession, prompting them to lock in long-term rates now before central banks cut interest rates in the future. 

• 
  Flat: Yields are nearly identical across all maturities. This typically represents a transition period in the economy where the curve is shifting from normal to inverted (or vice versa).

The importance of yield curves is that they are a tool for forecasting economic strength and recessions

Steeper yield curves mean that the difference (spread) between short term bonds and long term bonds are greater. 

That's a sign that the market expects interest rates to rise.

This often happens when inflationary pressures are persistent and traders think the Fed will raise rates to combat that inflation.

=======================================================

August 2026.

 The U.S. Department of the Treasury announced it is doubling the size of its long-term bond buyback operations—from $2 billion to at least $4 billion per operation—to stabilize surging long-term yields. These repurchases of 10- to 30-year debt are financed by issuing more short-dated Treasury bills.

Why is it doing this?

Thirty-year bond yields recently hit multi-decade highs, increasing federal borrowing costs and stressing broader financial markets.

Unlike Federal Reserve interventions (such as quantitative easing), the U.S. Department of the Treasury does not create money. It funds the long-bond repurchases entirely by selling additional short-term bills, effectively swapping long-term obligations for short-term ones.

This has the effect of steepening the yield curve

Debt Swap: Executed by the federal executive branch (the Treasury) as a fiscal and debt-management tool to smooth market liquidity and handle cash flows

steepening the yield curve directly reflects a changing relationship between short-term and long-term interest rates. A steepener means the gap (spread) between long-term and short-term interest rates is widening, which happens when long-term rates rise faster than short-term rates, or when short-term rates fall faster than long-term rates.

The govt is essentially buying time ... trying to keep short term rates low at the expense of long term rates.

 Operational Timeline: The expanded buyback window is scheduled to run from September 9 through November 4.

Call me a cynic... but the mid-term elections just happen to be on Nov 3.

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Basilisk - wirehead - build notes - part 2

Part 2 of my Wirehead Basilisk build.

This is a bass line synth from Western Australia.

part 1 on my build is here:

https://djjondent.blogspot.com/2025/05/basilisk-wirehead-build-notes.html

I saw a cool video by Mylar the other day on this synth.

back to the build.

I like to align the faceplate with the pcb using the spacers provided.

Audio sockets and power socket next.

This is the rear of the display

align it with the front panel ... I'm keeping the plastic cover n it for now. ... it sits on top of the face plate.

switch & some pots ... just to check the panel alignment

The caps need to sit flat to allow enough room for the LED display.

Almost there.

insert the adruino

final 4 pots

don't insert any IC till after you have tested for shorts ... see the build manual.

Once this is all done plug it in . The synth runs on either USB power or DC 9V 

ACO - Theremin and beyond - Carolina Eyck

 I saw this concert last week and was blown away. 

The Australian Chamber Orchestra is my favourite orchestra

It got me thinking all about the technology which is over100 years old.

It was invented by Léon Theremin (born Lev Sergeyevich Termen), a Russian physicist and inventor in 1920.

It was never meant to be a musical instrument.

Leon was working on proximity sensors for the Soviet government.

The theremin is unique in that it is played without physical contact. It has two metal antennas:

One controls pitch (vertical antenna – right hand).

The other controls volume (horizontal loop – left hand).

The musician moves their hands in the electromagnetic fields surrounding these antennas to control sound.

The human body is acting like a big capacitor sucking energy literally through the air to ground.

It today's world the transmission of energy wirelessly is a obvious application.

You may have wondered how a phone can be charged wirelessly.

Both technologies are based on electromagnetic fields and inductive or capacitive coupling, and both involve the transmission of energy or information without physical contact.

The theremin works by creating electromagnetic fields around its two antennas.

When a player moves their hands near the antennas, it changes the capacitance in the circuit.

This alters the frequency of an oscillator, which is converted into an audible sound.

Wireless charging (like Qi chargers or inductive pads) uses electromagnetic induction to transfer energy between two coils:

A transmitting coil in the charger creates a magnetic field.

A receiving coil in the device picks up that field and converts it into electricity.

Carolina Eyck used a D-Lev theremin at the performance I attended in Wollongong.

She began the performance using a Moog Etherwave Pro theremin but mid way technical issues forced

her to swap to the D-lev.

I had never heard about this model.

It turns out that it's bespoke and the schematics are on the net.

https://d-lev.com/

The D-lev was designed by Eric Wallin

Choosing the right coffee Charge temp (& turning point).

Choosing the right coffee charge temperature involves balancing batch size, bean density, and roast level to hit a turning point around 45–90 seconds. 

It's the stored energy in the roaster that kicks things off.

A higher charge (>200C) suits denser beans, 

while lower charges (roughly 160C-180C) prevent scorching of low-altitude beans.

Decaf would call for a noticably larger batch size or lower charge temp.

The average charge temperature for a Hottop roaster typically ranges from 300°F to 375°F (149-190c) as measured by the Bean Temperature (BT) probe. While the manufacturer's automatic default is low (around 167°F or 75°C), experienced users often charge higher for better energy management, often around 350°F

Key Factors for Setting Charge Temperature:

+Bean Density: 

  High-density/high-altitude beans generally require a higher charge temperature

  to penetrate the bean core. 

   Lower density beans are prone to more roast defects (you need to be more gentle with the heat).

+Bean size & shape

   bigger beans take longer to roast.

   round or small beans move differently in the roaster - roasting more evenly and quickly.

+ moisture content

    Beans with a higher moisture content take longer to dry.

+Type of bean processing.

   Natural or honey processed usually have more sugars on the outside, so roast faster or scorch 

   if you are not careful.

   Washed coffees tend to roast more evenly.

 +Batch Size: Larger batches necessitate a higher charge temperature to provide 

  enough energy to the larger mass.

+Roast Level: Light roasts, which need a faster, shorter development time, often benefit 

  from a higher charge. 

  Espresso or darker roasts can start at a slightly lower charge to manage the heat needed

  for a longer roast.

+Roaster Environment: Ensure the machine is properly heat-soaked, usually with

  the environment temperature significantly higher than the drum temperature.

+Turning Point Indicator: The Turning Point (TP) is when the bean temperature 

   rises after being cooled by the charge

TP too fast (<45s): Charge temperature is too high.

TP too slow (>90s): Charge temperature is too low.

TP just right = 60 s (general rule of thumb)

Fine-Tuning Tips:

If your coffee tastes like it has "roastiness" or you observe scorching/tipping, decrease your charge temperature.

If your roast takes too long to dry (before the yellowing stage), increase the charge.

Naturals often perform better at a slightly lower charge to avoid over-roasting the exterior, while washed coffees can handle more heat.

Exhaust temperature

This is very impt as it indicates how much energy you have in the roaster & can be used to soak the beans. It will tell you if you have enough momentium in the roaster.

The Exhaust temp should be higher than the bean temp.

If the exhaust temp if aways higher than the bean temp then you will always have a positive ROR.

Towards the end of the roast, the two temps will meet .

The Exhaust temp is influenced by the drum speed and energy changes.

------------------------------------------------------------------------------------------------

HotTop roaster settings

+Optimal Range: 300°F–350°F (149°C–177°C) is commonly cited for a good balance,

   avoiding scorching while ensuring enough energy for the roast.

+Higher Density Beans: Use higher charge temperatures (approx. 375°F or 190°C) to 

  ensure enough energy enters the bean.

+Lower Density/Softer Beans: Use lower charge temperatures (approx. 325°F or 163°C) 

  to avoid scorching.

+Batch Size: For a 250g charge, 350°F is a common starting point. If reducing batch size 

  to 175g, some users increase charge temperatures to 390°F–410°F to maintain heat.

+Roast Style: Espresso roasts often use higher charge temperatures for more heat, 

  while lighter filter roasts might use slightly lower, faster-acting profiles

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FE-AR - La Pepina

The FE-AR lever coffee machine is a Italian espresso machine also known as the La Peppina.

It's an open boiler design so can't froth milk.

It was designed by Felice Arosio (the "FE-AR" name comes from his initials) and was produced in Milan between the late 1950s till the mid-1980s. It uses a spring-piston lever mechanism to generate brewing pressure.

What I love about this machine is it's minimalist engineering.

It has remarkably few parts and is relatively easy to disassemble and maintain compared with many vintage machines.

It's iconic design has increased it's collector appeal.

Original examples, especially the red and cream enamel versions, are highly sought after by lever-machine enthusiasts.

Among lever enthusiasts, the La Peppina has a reputation for producing sweet, smooth espresso with a distinctive spring-lever extraction profile. Because the pressure naturally declines during the shot, it can be quite forgiving and produce rich body and crema when paired with a good grinder. Community discussions often compare it with other classic Italian lever machines such as the Faemina and Arrarex Caravel.

If you enjoy restoring classic equipment and appreciate the history of espresso machines, it's one of the most iconic domestic lever machines ever made.

Over the decades it's design evolved.

Changes were made to the boiler and base shape, the lever assembly & the heating element. 

A Rounded more bulbous boiler can usually be found on one of the earlier 1960–1965 variants.

More angular boiler and redesigned base/grid → generally the later v3.x machines from the 1970s onward.

700 W heating element → often 1970s v3.0 models.

950–1100 W rating → typically later 1970s versions.