50 bp cut at april RBA meeting
- Thread starter boz
- Start date
Looks like it's started.
I'll go in with a 75bp cut, at least 50bp of which should be passed on by the banks.
I was totally wrong last month, but it doesn't stop me putting it out there again. Like many great property commentators, I've got to get it right sometime, after which I can point to that one correct prediction and use it to support the accuracy of my predictions for the next 5 years or so
I'll go in with a 75bp cut, at least 50bp of which should be passed on by the banks.
I was totally wrong last month, but it doesn't stop me putting it out there again. Like many great property commentators, I've got to get it right sometime, after which I can point to that one correct prediction and use it to support the accuracy of my predictions for the next 5 years or so
Looks like it's started.
I'll go in with a 75bp cut, at least 50bp of which should be passed on by the banks.
I was totally wrong last month, but it doesn't stop me putting it out there again. Like many great property commentators, I've got to get it right sometime, after which I can point to that one correct prediction and use it to support the accuracy of my predictions for the next 5 years or so
That is really funny, I give you kudos for that, you are also right about it. It could be that those great property commentator are not that great and have no clue about economy, finance and markets...It could also be that to be a great commentator you don't need to be good in anything of above, either because they are not important factors or because don't effect other people perception of a great commentator.
My conclusion is that you are better off being a commentator then someone listening to commentators
To answer ffc1883_1996, one thing I learned in investing is to have a great risk management, pretty much if you get always the risk less then 50% (and you don't risk everything at once) you'll make money in the long term
.50% to the punters, .25% to the vulture banks who are doing it so hard...its a done deal!
then no further cuts until after the budget and stimulus package benefits show up in figures, if it does at all....
.......and by xmas the rudd govt will have to consider removing all non aboriginals from the country and sending back to england all decedents of convicts and let the aborigines fend for themselves with the economy!
not a bad idea actually the way things are going...bringing back the aboriginal bata system into the aussie economy....no more banks, credit cards or money hastles! just free trade between tribes with the occasional drama over land rights of who owns what area............. you see not much has changed in 60000 years! ......literally..
good luck
then no further cuts until after the budget and stimulus package benefits show up in figures, if it does at all....
.......and by xmas the rudd govt will have to consider removing all non aboriginals from the country and sending back to england all decedents of convicts and let the aborigines fend for themselves with the economy!
not a bad idea actually the way things are going...bringing back the aboriginal bata system into the aussie economy....no more banks, credit cards or money hastles! just free trade between tribes with the occasional drama over land rights of who owns what area............. you see not much has changed in 60000 years! ......literally..
good luck
i call a 25bp cut, wil NIL passed on.
or nothing cut and nothing passed on.
or nothing cut and nothing passed on.
To early to say with much confidence as a lot can happen in a month (especially during these turbulent times).
But baring any major calamities in the US over the next several weeks (such as the govt refusing to provide further funding support to AIG),
I think there is a reasonable chance of NO CHANGE.
But this is only a guess and without much conviction, especially as i emphasise there are still several weeks to go.
But baring any major calamities in the US over the next several weeks (such as the govt refusing to provide further funding support to AIG),
I think there is a reasonable chance of NO CHANGE.
But this is only a guess and without much conviction, especially as i emphasise there are still several weeks to go.
Looks like it's started.
I'll go in with a 75bp cut, at least 50bp of which should be passed on by the banks.
I was totally wrong last month, but it doesn't stop me putting it out there again. Like many great property commentators, I've got to get it right sometime, after which I can point to that one correct prediction and use it to support the accuracy of my predictions for the next 5 years or so
Problem is Rob,
to be a truly expert property commentator, you have to have NO property or experience, and give your opinions from behind the desk in your knitted cardigan as you look at your excel spreadsheet.
Based on this, you DON'T qualify.
Sell all those properties, change your wardrobe and get a rug on the head, mate!
You also need to buy a Volvo and grow a beard.
Thanks Marc. I feel like such a wannabe, now.
I'll just have to keep doing what I've been doing and forget about being a property commentator.
As for the rug .. thanks, but no thanks. I've met a gorgeous lady who loves me just as I am
I'll just have to keep doing what I've been doing and forget about being a property commentator.
As for the rug .. thanks, but no thanks. I've met a gorgeous lady who loves me just as I am
Will be interesting to see the fixed rate movements...as we are nearing the bottom of the interest rate cycle....maybe another 75 basis points in it!
I am pretty sure that the RBA cash rate would have no impact on 3+ year term mortgage rate or bond rate. For example today markets are pricing a 50 point cut and the 10 year bond is still at 4.35% yield.
It is quite interesting what is happening in UK where CB start the quantitative easing and I believe the purchase of long term bond from the CB in UK is driving the bond rate down, even below the german Tbond in the last few days. this would have definetly an impact on fix rate mortgage rate in UK
you know when the light bulb goes on in your head and suddenly the "clunk" of your brain mechanisms cause you to sigh out loud....?
well, i just had one of those moments.
so, typically, are bond yields tied to long term fixed mortgage rates? not directly of course, but generally fixed rates follow bond yields up or down?
and so with the oz bond market still offering decent yields, that means the long term fixed rate mortgage loans are unlikely to fall along with the cash rate pace....?
gee that light bulb is bright.
well, i just had one of those moments.
so, typically, are bond yields tied to long term fixed mortgage rates? not directly of course, but generally fixed rates follow bond yields up or down?
and so with the oz bond market still offering decent yields, that means the long term fixed rate mortgage loans are unlikely to fall along with the cash rate pace....?
gee that light bulb is bright.
hi all
0 for me change
I think they wil kep the powder dry for after all the funds have reported so may for me is the first movement and that will be 25 at most.
the first round of reports will be the major for me and dropping rates is not on the list
they need to see if any of the measures so far have done anything
and if not they have to see what to do
and to do that they need all the reports in and alot of those are not finalised till may.
there are alot that have been asked but there is not alot comming forth.
so for me rates will not move until they know what problems are in those balance sheets
and there are alot of problems in those balance sheets.
I think you will see a hold to this one and even a hold on the next one and then june july they will try to kick again
but in my opinion ( and this is just my opinion) they are waisting their time.
rates is no point if the banks won't lend
a rate of 4% but lvr of 25%
or a rate of 8% but a lvr of 95%
I know which one I would take.
the problem is that the lvr is getting to levels that you can't borrow.
and yes the rates cheap but at the 50% and 60% you just can't buy
so the rate doesn't matter
now alot will say it matters to me.
not really as value is driven by supply and demand
and if people can't borrow that reduces demand.
reduction in people having the ability to borrow reduces demand and what does that do.
reduces value
because if you have to sell the price drops as there are less buyers.(because they can't get funding)
and hense you have drop in value and the spiral starts again.
drop in rates is ok for owner or investors that own property and they were negative gear and become positive but on the flip side they also lose value as the market corrects in that area.
so if you put it up on a white board you will find thats it neutral or near as.
so why bother
because it gives mr rudd a warm fuzzy feeling
but so does a dog peeing on your leg.
and they both end up being the same
when the fuzzy feeling is gone you both look very sad one runs to get changed the other trys to find something else that everyone will have a warm fuzzy feeling about.
also one learns not to stand next to dogs
the other learns nothing
dropping rates does not make people spend money.
unless the thing they want to buy is easier to buy using the spare cash.
and thats not going to happen
why because most of the people with a mortgage( and thats what rate movement effects most) are worried not about rates but will they have a job tomorrow.
and the spenders are the renters
and they are not effected by rate changes.
or are they going to not only ask banks to pass on rate drops but also ask landlord or landladies to drop rents for the drop in interest costs
now thats a very interesting idea
and no won't effect me as min are majority comm so the lease does not allow that.
what do you think here
say a 50 point drop
the rent drops by say 30 dollars across the board to help the country
excluding commercial as the commercial guys are doing it tough
who would push for a 50 point drop rba and they across the board drop of $30 in rent return
0 for me change
I think they wil kep the powder dry for after all the funds have reported so may for me is the first movement and that will be 25 at most.
the first round of reports will be the major for me and dropping rates is not on the list
they need to see if any of the measures so far have done anything
and if not they have to see what to do
and to do that they need all the reports in and alot of those are not finalised till may.
there are alot that have been asked but there is not alot comming forth.
so for me rates will not move until they know what problems are in those balance sheets
and there are alot of problems in those balance sheets.
I think you will see a hold to this one and even a hold on the next one and then june july they will try to kick again
but in my opinion ( and this is just my opinion) they are waisting their time.
rates is no point if the banks won't lend
a rate of 4% but lvr of 25%
or a rate of 8% but a lvr of 95%
I know which one I would take.
the problem is that the lvr is getting to levels that you can't borrow.
and yes the rates cheap but at the 50% and 60% you just can't buy
so the rate doesn't matter
now alot will say it matters to me.
not really as value is driven by supply and demand
and if people can't borrow that reduces demand.
reduction in people having the ability to borrow reduces demand and what does that do.
reduces value
because if you have to sell the price drops as there are less buyers.(because they can't get funding)
and hense you have drop in value and the spiral starts again.
drop in rates is ok for owner or investors that own property and they were negative gear and become positive but on the flip side they also lose value as the market corrects in that area.
so if you put it up on a white board you will find thats it neutral or near as.
so why bother
because it gives mr rudd a warm fuzzy feeling
but so does a dog peeing on your leg.
and they both end up being the same
when the fuzzy feeling is gone you both look very sad one runs to get changed the other trys to find something else that everyone will have a warm fuzzy feeling about.
also one learns not to stand next to dogs
the other learns nothing
dropping rates does not make people spend money.
unless the thing they want to buy is easier to buy using the spare cash.
and thats not going to happen
why because most of the people with a mortgage( and thats what rate movement effects most) are worried not about rates but will they have a job tomorrow.
and the spenders are the renters
and they are not effected by rate changes.
or are they going to not only ask banks to pass on rate drops but also ask landlord or landladies to drop rents for the drop in interest costs
now thats a very interesting idea
and no won't effect me as min are majority comm so the lease does not allow that.
what do you think here
say a 50 point drop
the rent drops by say 30 dollars across the board to help the country
excluding commercial as the commercial guys are doing it tough
who would push for a 50 point drop rba and they across the board drop of $30 in rent return
GR,
I see your point but the Ir's have just dropped several % and yet the rents have not fallen but actually gone up in a lot of areas. Saying this I am seeing an easing in the 400/wk + market in my area.
Similar threads
