Interest Rates and Experts

Interesting again in The Age
http://www.theage.com.au/business/consumer-confidence-dented-by-rba-20091111-i8bo.html

''Today's results do,
however, signal that the extent of rate hikes in 2010 envisaged by current market pricing is unlikely to transpire'', (Westpac) said.

and this one.

http://www.theage.com.au/business/fall-in-housing-starts-to-impact-prices-20091110-i7qk.html

Off in the distance I see a tiny tax reform flag being tested.

The reality is that higher taxes would leave less site-rent to be pledged to banks - thereby reducing the financial cost of property ownership - while also enabling the government to shift the tax burden back off labour on to property, as used to be the case in Australia before the mid-1970s.​

This would certainly appeal to a government watching foreign ownership land banking at a furious pace.

Any thoughts people?
 
Any thoughts people?

Yes. It is all media noise designed to keep your eye off the main goal.

Interest rates rise and fall. Tax reforms come and go. Heck, governments come and go. Good times and bad come and go. But you need to come through it all and out the other side still a winner.

Have a plan and a strategy to mitigate any risk you can foresee for sure but then just get down to it and work your strategy. My 2c.
 
i don't think SVRs will get to 8%, but they're going up nonetheless.

i still call ploy by banks to make folk shift into fixed IRs to avoid passing on saving when they come back down again in a few year's time.
 
i don't think SVRs will get to 8%, but they're going up nonetheless.

i still call ploy by banks to make folk shift into fixed IRs to avoid passing on saving when they come back down again in a few year's time.

Not so much.

Fixed rates are priced off interbank fixed rate swaps which are, in turn, set by the market based on its expectation of where rates will likely be.

Given current fixed rate flows in comparison to historical %, if there is a consipiracy it isn't working very well.
 
Interesting again in The Age
http://www.theage.com.au/business/consumer-confidence-dented-by-rba-20091111-i8bo.html

''Today's results do,
however, signal that the extent of rate hikes in 2010 envisaged by current market pricing is unlikely to transpire'', (Westpac) said.

and this one.

http://www.theage.com.au/business/fall-in-housing-starts-to-impact-prices-20091110-i7qk.html

Off in the distance I see a tiny tax reform flag being tested.

The reality is that higher taxes would leave less site-rent to be pledged to banks - thereby reducing the financial cost of property ownership - while also enabling the government to shift the tax burden back off labour on to property, as used to be the case in Australia before the mid-1970s.​

This would certainly appeal to a government watching foreign ownership land banking at a furious pace.

Any thoughts people?

where to start with this.....

he explains a fall in construction by forward looking investors blah blah...what the?

how about a mammoth financial crisis in case he missed it?

is this guy still living in the US? he seems completely oblivious to the resources boom shaping up here and how it will change this country forever. and oblivious to population changes, albeit a symptom not a cause.

and FWIW peak oil - and energy demand - hasn't gone away
 
i am starting to think THE AGE is a bit like ACA/CURRENT AFFAIR, show just seem to stir the pot!

one thing i would like to see, is the councils charging stamp duty, once on a home , and have it last say 10 years , like rego, on a car. so it can be transfered to the next buyer, and be disclosed in the purchase documents.;)
 
Fixed rates are priced off interbank fixed rate swaps which are, in turn, set by the market based on its expectation of where rates will likely be.

and who is said market?

i don't see too many independant second and third tier lenders left .... the big4 have bought half of them out, further expanding the oligopoly.
 
Now that's a good idea CraigB. Although I doubt it would reduce Rates, it might at least improve some roads and footpaths (pet hate: smiley face council projects and cracking footpaths - visit St Kilda!)

I used to work in local government in the 'good old days' when it was rates, roads and rubbish, and before local government started picking up family, state and commonwealth government responsibilities and building empires. The States love their Stamp Duty coffers when in fact it's the local council's that should be the ones spending that money on the neighbourhood's amenity. Where do I sign the petition?
 
and who is said market?

i don't see too many independant second and third tier lenders left .... the big4 have bought half of them out, further expanding the oligopoly.

What on earth have our big 4 got to do with the LIBOR rate? That's like throwing a goldfish into a tuna farm and saying 'kill them all', it just doesn't make sense. It's a little bigger than our big 4 and the sooner people start understanding this the better positioned they will be.

Mike
 
Now that's a good idea CraigB. Although I doubt it would reduce Rates, it might at least improve some roads and footpaths (pet hate: smiley face council projects and cracking footpaths - visit St Kilda!)

I used to work in local government in the 'good old days' when it was rates, roads and rubbish, and before local government started picking up family, state and commonwealth government responsibilities and building empires. The States love their Stamp Duty coffers when in fact it's the local council's that should be the ones spending that money on the neighbourhood's amenity. Where do I sign the petition?

was watching some completely frivolous tv show the other night when the WALGA (wa local gov assoc... sort of a council for councils, train the trainer mentality) bloke proudly announced that - along with a whole bunch of other cr@p - they also brought us the show I was watching. Pretty much sums up everything that is wrong with councils
 
I find the three levels of government means at least one extra level of cost and corruptability. Looking at the size of local government areas and the activities they cover 'in partnership' with commonwealth and state, how about removing the State level and tipping some of that dead bureaucratic expense into real services.

A society that barely murmurs at 10 million a year for the head of ANZ yet relies on volunteers and lowly paid women to bring palliative care to the sick and dying elderly who built the country is disgraceful.

At the Council I served, a new CEO cracked a deal for a 10 percent pay increase based on covering it by cost saving (the 10 percent was easily more than the annual salary for our Home Care Supervisor). When after 12 months the ignorant council unanimously approved the increase, I pointed out to them that a large part of the cost savings that had 'enabled' the increase was gained by making the Home Care Supervisor casual, robbing her of continuity of employment for superannuation and so on. I resigned of course and later the CEO dared to ring me at my new job saying he was 'disappointed' at my lack of support.

There is nothing I've seen in local council activities that give me hope that they'd be more efficient or less corrupt than State services, but sitting in a meeting of 30 people, all discussing levels of contributions to the same project, with 20 government cars sitting in the carpark, and these people each earning about 80k pa, and talking about 'services for the disadvantaged' convinces me that we need a major shakeup of 'public service' in Oz.
 
At the Council I served, a new CEO cracked a deal for a 10 percent pay increase based on covering it by cost saving (the 10 percent was easily more than the annual salary for our Home Care Supervisor). When after 12 months the ignorant council unanimously approved the increase, I pointed out to them that a large part of the cost savings that had 'enabled' the increase was gained by making the Home Care Supervisor casual, robbing her of continuity of employment for superannuation and so on. I resigned of course and later the CEO dared to ring me at my new job saying he was 'disappointed' at my lack of support.

i hope you gave him a grass roots analysis of his misguided sense of gratification....;)
 
i don't think SVRs will get to 8%, but they're going up nonetheless.

i still call ploy by banks to make folk shift into fixed IRs to avoid passing on saving when they come back down again in a few year's time.

banks making you fix? no one forces you to fix or stay variable.
 
I would not get hung up on china folks and the demand. They have lent huge sums of ninja type money within their economy. THE WORLD cannot grow without America consuming, China is crapping itself at what is happening in the good old USA. If USA goes bad (or should I say badder ha ha) then China is going to experience many problems. That will then flow onto us.

One day someone important will get to look under the hood of the chinese economy and instead of seeing flash technology they are going to see lots of rubber bands at limit just waiting to go twang.

but never the less whilst sun is shineing it is good to make hay.
 
how about removing the State level and tipping some of that dead bureaucratic expense into real services.
Oh yes, you're singing my song there!
JulieW said:
A society that ... relies on volunteers and lowly paid women to bring palliative care to the sick and dying elderly who built the country is disgraceful.
I totally agree with this sentiment, but don't agree that it has anything to do with what the head of ANZ is paid. If the head of ANZ was a public servant, there might be a nexus, but anyway, back to the point... I totally agree that funding of palliative care - along with care for the profoundly disabled (respite and full-time), and care of the mentally ill - is one of the few things about which I'm ashamed of my country.

De-institutionalisation of the profoundly disabled (mentally and physically) was motivated by a sense that we shouldn't shut these people away "out of sight", but IMHO, it went way too far. The first generation of parents of the de-institutionalised profoundly disabled are now in their 70s, caring for 45yo sons/daughters, and are exhausted from 45 years of providing around-the-clock care, and terrified about what will happen to their son/daughter after they're too old to go on (or dead). :( Organisations like Youngcare are a great start, but it's only a drop in the ocean, and should receive a lot more government support. Yes, it'll be expensive, but I'm positive there are much lower priority items that could be cut to fund it. (Welfare for working couples via FTB would be a good start.)
 
What on earth have our big 4 got to do with the LIBOR rate? That's like throwing a goldfish into a tuna farm and saying 'kill them all', it just doesn't make sense. It's a little bigger than our big 4 and the sooner people start understanding this the better positioned they will be.

Mike
Mike,

Sure, but the big 4 are also a bit bigger than they used to be too...

http://www.swivel.com/graphs/image/31800827

http://www.stocklendingtoday.com/.a/6a00e5540aaa048834010536f0603d970b-800wi

WBC number 12, CBA number 15, NAB number 25, ANZ number 33...

Even ANZ has 17.9Bn in Market Cap.

WBC and CBA both bigger than UBS and Credit Suisse now. Only ANZ smaller than Morgan Stanley now. You get the idea... ;)

Cheers,
Michael
 
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