I do wonder about the economists currently predicting a 'top out' level on interest rates. That will be what - a year or two away? So many things could happen at that point. What happens if at that point we're in for round 2 of the mother of all resource booms? Rates will continue to rise on, so whilst I like the sound of it, not sure how meaningful any top out predictions are?
3.25%
- Thread starter paisneil
- Start date
just as economists were all attempting to predict the bottom, now they're all trying to predict the top.
waste of existence really ... one 747 + building = another crash.
waste of existence really ... one 747 + building = another crash.
To deep for me! No offense
In reply, some economists are better than others. RG is one for me. He was not all gung ho a year back and less so now.
Would I fix 6.2% for 5 years now. YES! I was waiting for 5.99%. Was I greedy? Not really the indications were to expect 4% rates???Anyhow that horse has bolted.
In the end, is if we get the mother of all booms ( again) and repayments tight, my best strategy is sell at the new top and take the cream. It worked in 2003 in Sydney.
It just seems "too unrealistic" to believe that we have gone from Oct 08 Biggest Boom Ever to Arpil 09 Biggest Bust Ever to Oct 09 All is Good again.
If rates rise rapidly to say 7% by middle 2010 then clearly there was no recession or even down turn here!
Peter
PS I still can't help but feel the world economy is like the Titanic, after it just missed a small iceberg, everyone is looking back and saying "hey, that was close" and only a few are looking forward to see if any more (bigger) are coming.
PPS Have we fixed the fundamental flaws? Everyone says no. So how can we predict anything?
The big thing for me is, was this (April etc) the 'biggest bust ever?' Markets certainly priced it like it was, but perhaps they overshot and have corrected to a more reasonable level given the circumstances that eventuated?
Markets will always overshoot with human emotion. In hindsight perhaps the worst case scenario we've actually experienced/going to experience justified only X drop/repricing in the markets, but on the way down amongst the panic the market went to X-5, now it's just gone back to the X and from here.....
Many of the assumptions that we're not out of the woods yet, or we're in for another crash, or we're having a sucker rally etc are all that - assuming that the bottom we experienced was correct. What if it was an overshoot?
Exactly Steve.
And todays job says "we all well on the way back to boom"
http://www.smh.com.au/business/jobs-hit-alltime-high-20091008-go7e.html
Peter
And todays job says "we all well on the way back to boom"
http://www.smh.com.au/business/jobs-hit-alltime-high-20091008-go7e.html
Peter
Absolutely. No-one can be even vaguely sure. However, yesterday the bond market expected them to top out a little over 5%, today (after the unexpectedly good employment figures from ABS) it's closer to 5.25%.
Which adds up to a SVR of ~8% by late 2010.
I think the lesson I will take from this recession is "economists cannot predict the future. It all a guess."
Overall, we investors should be happy. House prices did not crash. Rates are still super low and under average. Tenants have jobs to pay rent. Suppy is still tight and prices can only rise.
Time for lunch, Peter
Overall, we investors should be happy. House prices did not crash. Rates are still super low and under average. Tenants have jobs to pay rent. Suppy is still tight and prices can only rise.
Time for lunch, Peter
