Is the Sub-Prime Crisis in US going to affect IPs in Australia ?

[Kennethkohsg]

Dear All,

1. With the latest 2 x 0.25%p.a successive month interest rate increases in Australia announced in Feb and March 2008 period and the major 4 banks increasing their housing loan mortgage rate by more than the 0.25% cash rate increase, as announced by the RBA each time, there is no doubt that the global Credit Crunch Crises has indirectly affected the various Australian residential housing markets, in the forms of higher loan financing costs and a tightening of the local credit liquidity and negative market sentiments, thereby causing the various housing markets to probably slow down in the near future.

2. Already, many market commentators are now expecting the booming Melbourne, Brisbane and Adelaide housing markets to eventually slow down in 2008, together with the recent levelling off in the Perth housing market.

3. While unemployment figures have started to increase in the US, it is likely that similar trend is likely to follow soon in Australia, following the recent slowing down of the Australian Economy, as a result of the recent 2 successive interest rate increases and the continued adverse global financial developments.

4. Do what extent do you think that the various Australian housing markets are likley to slow down or/and be further adversely affected in the near future?

5. For your further comments and discussion, please.

6. Thank you.


Cheers,
Kenneth KOH

 

[warlobo]

US slowdown will impact on China's exports, which in turn will slow down our exports to China, who will slow down signifigantly after the olympics, at which point with high interest rates our slowing economy will likely follow the US into recession (who might be starting to see light at the end of their tunnel by then?) and we'll likely see property and sharemarket loses or at best we're in for a cpl of years of nil - minimal gains.

I'm no expert but the writing is on the wall and markets are so driven by speculation and media that often the true state of affairs can seemingly be brushed aside to make way for a little sensationionalism.

I believe Sydney cant fall too much further, 5-10%? although default rates especially in the western suburbs will ensure some falls, Melb might just flatten off in the stronger suburbs with the outer perhaps retreating a little more. Qld seems to follow trends in the big 2, usually 6-12mths approx after the others show a clear trend although I've little experience in Bne, I'm referring to nth and regional.

 

[warlobo]

It might just be a time lag, you realise. Any effect on Australia is likely to pass through China first. So by the time US (and European) demand falls enough to affect China, which will then affect Chinese demand for our resources... it may well take months. In my opinion, we're nowhere near the endgame in the US yet. Wait until you see cracks in different debt products: credit cards, auto loans, commercial, and derivatives such as CDS's.
Alex

I agree, the effect will begin to flow through after the olympics, and could be 12mths off here yet. Economists stated we were not very vulnerable to the US Sub Prime drama, yet our stockmarket has dropped 15% since, and their's about one 3rd that. Seems to me this might be but the tip of the iceberg? Add that to some unfavorable climatic conditions during the next few years and who knows where we'll be. Hopefully I'm way wrong but....

 

[Kennethkohsg]

I agree, the effect will begin to flow through after the olympics, and could be 12mths off here yet. Economists stated we were not very vulnerable to the US Sub Prime drama, yet our stockmarket has dropped 15% since, and their's about one 3rd that. Seems to me this might be but the tip of the iceberg? Add that to some unfavorable climatic conditions during the next few years and who knows where we'll be. Hopefully I'm way wrong but....

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Dear Warlobo,

1. Personally, I am not so concerned about the ASX's cumulative 15% drop, to date, as it seems to be "mirroring" that of the DJIA Index movements in the US, much unlike the heavier cumulative falls in the Shanghai Composite Index (>40%) and the Mumbai Stockmarket Exchange (>25%).

2. Despite having suffered a few corporate casualties, like RAMS Homeloans , Centro Properties Group, Allco Finance etc, the ASX seems quite resilient in the face of the global Credit Crunch Crisis as well as the present slowing down of the global Economy, including a US Recession.

3. Now that the RBA has tentatively stopped increasing the interest rate in Australia during April 2008 in its present on-going anti-inflation fighting campaign, and with the resource boom continuing and international immigration figures for Australia continues to remain high, let us remain optimistic and "hopeful" that the RBA under Glenn Stevens' new Chairmanship is able to safely and effectively steer the Australian Economy out of this present ongoing financial crises relatively unscathed to ensure the continued economic prosperity in Australia is being further prolonged, just as it has been able to do so for the last 17 years, not withstanding some present ongoing slowing down in the Australian Economy.

4. For your further comments and discussion, please.

5. Thank you.

Cheers,
Kenneth KOH

 

[alexlee]

I honestly don't understand why people want so badly to believe that markets won't fall. What's the big deal? Falling markets bring markets back towards (or below) the long term growth rate and are GREAT opportunities to buy. Markets DO stagnate or fall. We know that from history. I'd rather be prepared for what usually happens after a period of excess than wish it's different.
Alex

 

[Kennethkohsg]

I honestly don't understand why people want so badly to believe that markets won't fall. What's the big deal? Falling markets bring markets back towards (or below) the long term growth rate and are GREAT opportunities to buy. Markets DO stagnate or fall. We know that from history. I'd rather be prepared for what usually happens after a period of excess than wish it's different.
Alex

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Dear AlexLee,

1. Your post is centred on this underlying assumption is that the Australian Economy and the housing markets have to fall first before it can rise further.

2. Must this neccesarily be so in our present real life situation? Are the Classical Economics Theory so "perfect"?... I do not personally think so.

3. If so, can you please explain where the Australian Economy is able to enjoy its prolonged economic prosperity for the last 17 years, while most of the other countries have risen, fallen down and risen further again, during the same time period?

4. To me, the situation in Australia is "unique", though I honestly may not fully understand how the Australian Economy truly and actually function on the ground in our real life situation, at this point in time.

5. Why can't Australia continues to have a expanding Economy with decreasing social employment and 3% plus inflation rate , as previously in the past, during the previous John Howard's Federal Govt's office-term period?

6. The basic argument would be that the Australian Economy is already running at its full capacity. Is this indeed so? How do we increase this capacity and allow the Economy to further grow without having to neccesarily to slow down or/and to "stall" the Australian Economy?

7. Why does the RBA has to continually increase the interest rates till March 2008, in order to slow down the Australian Economy when its present inflation is still running at 3% plus as previously during the Liberal Federal Govt's time?

8. Why can't the RBA allow the Australia Economy slow down "naturally" by itself midst the unfolding of the global Credit Crunch Crises and slowing down of the global economy including with the US falling into a Recession, without having to pro-actively " engineer" for its own slow down in the Australian Economy through the various past interest rate increases, domestically speaking ?

9. Looking forward to learning further from you, please.

10. Thank you.

Cheers,
Kenneth KOH

 

[alexlee]

1. Your post is centred on this underlying assumption is that the Australian Economy and the housing markets have to fall first before it can rise further.

2. Must this be so? Are the Classical Economics Theory so "perfect"? I do not think so.

It’s my belief (reinforced by observation) that the economy and housing markets move in cycles. Must it be so? No. But you’re basically saying ‘why must we have booms and busts? Why not booms then levelling, then more booms?’ For that to happen, you would need people to NOT get too euphoric when the market is good, and not too depressed when the market is bad. How likely is that? We KNOW people are manic depressive.

I’d rather plan for the worst than think ‘this time it’s different’. Australia has had booms and busts in the past too.

3. If so, can you please explain where the Australian Economy is able to enjoy its prolonged economic prosperity for the last 17 years, while most of the other countries have risen and fallen at the same time period?

Honestly? Australia has been lucky. We’ve dodged a few bullets. I can’t predict how LONG the cycle will be. I just believe there IS a cycle. How long a cycle did we have in the 80s before it all went to crap in the early 90s? In any case, were you there during the mid 90s? Sure the stats tell you we've had growth for 17 years. It sure didn't look like it until about 10years ago. I have friends who graduated around 93, 94 (supposedly in this happy period of prosperity you keep quoting) who couldn't find graduate jobs in Oz. Ask people how the economy was in the first half of the 90s and tell me how many people tell you it was great.

4. To me, the situation in Australia is "unique", though I honestly may not fully understand how the Australin Economy truly and actually function on the ground in our real life situation, at this point in time.

You’re basically saying ‘this time is different’ and that ‘this is a new paradigm’? I don’t buy it. Every time a market starts to look frothy, people trot out all these ‘new paradigm’ ideas to justify why it’ll go on forever. It is NOT different. We have NOT broken the business cycle. It’s still there. It looks slightly different every time, but it’s there. Food prices, higher interest rates, petrol prices, etc ARE starting to bite. It's depressingly predictable, though I can't predict the timing.

7. Why does the RBA has to continually increase the interest rates till March 2008, in order to slow down the Australian Economy when its present inflation is still running at 3% plus as previously during the Liberal Federal Govt's time?

8. Why can't the RBA allow the Australia Economy slow down "naturally" by itself midst the unfolding of the global Credit Crunch Crises and slowing down of the global economy including with the US falling into a Recession, without having to pro-actively " engineer" for its own slow down in the Australian Economy through the various past interest rate increases, domestically speaking ?

Because the RBA thinks it’s doing the right thing to control inflation in the medium and long terms. Are they? Should they let the US recession slow down the Australian market ‘naturally’? Who knows. Do you honestly think we’ve decoupled to the point where a US recession won’t affect Australia?

Aren’t you contradicting yourself? If Australia is unique, we won’t be hit by the US slowdown. In which case inflation will continue to climb and more rate rises are necessary.

Bottom line: I believe in economic cycles. The long term trend will be up, but we’ll have booms and busts. Because that reflects human behaviour. You don’t believe it, don’t. I’ll plan for it.
Alex

 

[Kennethkohsg]

I honestly don't understand why people want so badly to believe that markets won't fall. What's the big deal? Falling markets bring markets back towards (or below) the long term growth rate and are GREAT opportunities to buy. Markets DO stagnate or fall. We know that from history. I'd rather be prepared for what usually happens after a period of excess than wish it's different.
Alex

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Dear AlexLee,

1. I do believe that markets can fall and they do fall and have further fallen in the past, as history has clearly shown us.

2. "What's the big deal?" ... No " big " deal at all, as far as I am personally concerned. It is just another market situation which we will have to learn to adapt to in order to invest safely and profitably.

3. However, I also do personally believe that more people are likely to suffer from the various economic pains and "forced" to make painful adjustment for themselves and for the families during a Recession when they lose their jobs, rather than during an on-going economic Boom time.

4. While the various housing markets are presently "slowing" down and are further quite likely to fall in price to a certain extent, eventually speaking, however, I will want to remain "positive" and "optimistic" amidst a slowing down Australian Economy and amidst a slowing down housing market situation.

Cheers,
Kenneth KOH

 

[alexlee]

1. I do believe that markets can fall and they do fall and have further falen in the past, as history has clearly shown us.

2. "What's the big deal?" ... No " big " deal at all, as far as I am personally concerned. It is just another market situation which we will have to learn to adapt to in order to invest safely and profitably.

I think it’s more likely we have booms and busts than perpetual booms.

3. However, I also do personally believe that more people are likely to suffer from the various economic pains and "forced" to make painful adjustment for themselves and for the families during a Recession, rather than during an on-going economic Boom time.

So what? So people make painful adjustments. That happens in every recession. Just because a recession is going to hurt people isn’t a reason to believe it won’t happen.

4. While the various housing markets are "slowing" down presently and are quite likely to further fall in prices to a certain extent eventually, however, I will want to remain "positive" and "optimistic" amidst a slowing down Australian Economy and housing market situation.

I’m positive and optimistic about the long term and my own ability to survive a recession. I just don’t see what your point is, Kenneth. Do you want to remain optimistic because you think it’s bad karma to be pessimistic because a recession will hurt people? I don’t believe what you or I believe will change the economy.
Alex

 

[Kennethkohsg]

Dear Alexlee,

1, My various comments are as per posted below.

2. Thank you.

Cheers,
Kenneth KOH
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It’s my belief (reinforced by observation) that the economy and housing markets move in cycles. Must it be so? No.

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Comments:
This is what I am sayng too.

But you’re basically saying ‘why must we have booms and busts? Why not booms then levelling, then more booms?’

Comments:
1. Depending on our own perspective, perception and personal experiences, we often "see"/"perceive"/process the (same) things/issues differently, as we all different unique individuals, so to speak.

2. To me and collectively as a whole, many of the housing markets (and its sub-markets) in Australia appears to be doing just that i.e. "booms-levelling out-booms" phenomenon since the 1980s till now as far as I am personally concerned, as compared to the more obvious "booms and busts" cycles typically found in many other Asian economies in the past, like Singapore, HK, Malaysia, Japan etc.

For that to happen, you would need people to NOT get too euphoric when the market is good, and not too depressed when the market is bad.
How likely is that? We KNOW people are manic depressive.

Comments:

1. Agreed.

2. For these same reasons, you will agree with me that actually, our human nature is far more complex than what the Classical Economics Theory can accurately, reliably or/and adequately explain all our own social-economic behvaviours.

3. Consequently, for these same reasons, you must agree with me that the Classical Economic Theory is not so "perfect" . Neither is it precise nor an "exact" a Science, as what many of us will want to personally believe.

I’d rather plan for the worst than think ‘this time it’s different’. Australia has had booms and busts in the past too.

Comments:

Agreed though my version differs slightly as yours, as follows:
"Always Plan and be Prepared for the Worst and then Hope for the best to happen when the time comes"




QUOTE=alexlee;403415
I can’t predict how LONG the cycle will be. I just believe there IS a cycle. How long a cycle did we have in the 80s before it all went to crap in the early 90s?[/QUOTE]

Comments:

This is exactly the same basic point I am making in the post. That is it.



QUOTE=alexlee;403415
You’re basically saying ‘this time is different’ and that ‘this is a new paradigm’? I don’t buy it[/QUOTE]

Comments:

1. No. I am not saying this.

2. I am simply saying that the Australian Economy was "unique". That's it.

3. Whether there is indeed a new paradigm for the Australian Economy, which is presently in existing and/or evolving out or not, personally I do not know, at this point in time.


QUOTE=alexlee;403415
Every time a market starts to look frothy, people trot out all these ‘new paradigm’ ideas to justify why it’ll go on forever. It is NOT different. We have NOT broken the business cycle. It’s still there. It looks slightly different every time, but it’s there. Food prices, higher interest rates, petrol prices, etc ARE starting to bite. It's depressingly predictable, though I can't predict the timing.[/QUOTE]

Comments:


1. Agreed.

2. Thus, you appear to be "projecting" other people's generalisations onto my post.


QUOTE=alexlee;403415
Because the RBA thinks it’s doing the right thing to control inflation in the medium and long terms. Are they? Should they let the US recession slow down the Australian market ‘naturally’? Who knows. [/QUOTE]


Comments:

1. It's an issue of judgement call made the RBA. Whether the RBA is right is making this call, only time will tell in due course.

2. Recently, RBA has been openly criticised for increasing "an interest rate too many" in March 2008, by the Myers Group Chairman, Bill Wavish, as well as other promenient business community leaders and economists.

http://www.theaustralian.news.com.au/story/0,25197,23495905-601,00.html
http://www.theaustralian.news.com.au/story/0,25197,23494251-7583,00.html

3. Mark Westfield in his article, "Comment: time to sack the RBA governor?"
has also openly called for Glenn Stevens to be "sacked" as the RBA Chairman.
See the Ninemsn Money link, at http://money.ninemsn.com.au/article.aspx?id=389820, .


QUOTE=alexlee;403415
Do you honestly think we’ve decoupled to the point where a US recession won’t affect Australia?[/QUOTE]

Comments:

No, this is not my views.


QUOTE=alexlee;403415
Aren’t you contradicting yourself? If Australia is unique, we won’t be hit by the US slowdown. In which case inflation will continue to climb and more rate rises are necessary.[/QUOTE]

1. The underlying logic in your argument, "If Australia is unique, we won’t be hit by the US slowdown." is faulty as there is no neccessary logical connection between "Australia's uniqueness" and "its ability to be adversely affected by the US Economy slow down ".

2. Since 2000, the inflation figures has consistently remained below 4% in Australia so far, whether, it was before or after all the recent interest rate increases by the RBA.

3. Beside the usual interest rate increase used by the RBA, I personally think that a much better way of managing inflation in Australia, is to channel and divert the budget surpluses as well as the underlying "excess" monies flow presently available and in circulaton within the Australian Economy at large, into some long term productive water supplies production/new roads and transport infrastructural projects developments and its skilled labour capacity development so as to further increase its economic productive capacity for the Australian Economy or/and to tighen on its present credit expansion into CFDs/CDOs markets etc

 

[alexlee]

3. Beside the usual interest rate increase used by the RBA, I personally think that a much better way of managing inflation in Australia, is to channel and divert the budget surpluses as well as the underlying "excess" monies flow presently available/circulating in the Australian Economy into long term infrastructural projects developments and its skilled labour capacity development so as to further increase its economic productive capacity for the Australian Economy or/and to tighen on its present credit expansion into CFDs markets etc

Maybe, but that's irrelevant, because you're not Glenn Stevens. Stevens has been pretty clear about why he moves interest rates. Whether you or I think that's the right way to go about it or whether there is a 'better' way is irrelevant. I'd rather plan according to what Stevens will actually do.
Alex

 

[Kennethkohsg]

I’m positive and optimistic about the long term and my own ability to survive a recession.

I just don’t see what your point is, Kenneth. Do you want to remain optimistic because you think it’s bad karma to be pessimistic because a recession will hurt people? I don’t believe what you or I believe will change the economy.
Alex

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Hiya AlexLee,

1. Let us live and just co-live peacefully, as different "unique" individuals which we were all made to be.

2. Bottomline: I personally believe that there is enough D&G being said and circulated presently in this forum.

3. However, do we need to be always "pessimistic" amidst these D&G news? I personally believe that there is always some "positive" aspects/outcomes to a "negative" event.

4. Do you not agree that there are more investing opportunities during an actual "slow-down" time than during an economic boom time?

5. Does it truly help us to achieve better investment outcomes by remaining "pessimistic" or "optimistic" midst the present D&G situation, as far as our present property investing performance are concerned?

6. Is there something "new" about the D&G that we do not truly know or/and has still not been said/discussed so far?

7. Thank you.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Maybe, but that's irrelevant, because you're not Glenn Stevens. Stevens has been pretty clear about why he moves interest rates. Whether you or I think that's the right way to go about it or whether there is a 'better' way is irrelevant.
I'd rather plan according to what Stevens will actually do.
Alex

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Dear Alex,

1. I agree with you that it may be "irrelevant" to me for the time being, as an individual or as a property investor in Australia until such time which I am able to fully understand how exactly or/and "un-cover"/"establish" the usual patterns which Glenn Stevens and his RBA will actually and pro-actively and "typically" think and "respond" with an emerging economic situation in Australia or/and to other external global event.

2. Like you, I will plan and review my own investing strategies on the basis on what the actual actions taken by the RBA and how/what the general public will collectively and "instinctively" respond to the RBA's policy-making outcomes, in the mean time until I personally deem it neccessary to always think and act counter-cyclically to the mass "herd" instincts towards the RBA's actions, in order to remain safe, prudent and profitable in my own property investing

3. Collectively speaking, however, such alternative views and discussions may still be constructive though they are contrary to the existing RBA's policy actions/outcomes, as it will mean a lot to the overall Australian Economy and to the Australian peoples as a whole in particular, who have to actually bear the consequences as a result of the RBA' decision made by Glenn Stevens and his RBA Board of Governors, subsequently.

4. As an Australian, do you not want to provide the relevant feedback and views to your own Govt or/and to this social discussion, in order to help improve their policy making outcomes and our own investing success?

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Maybe, but that's irrelevant, because you're not Glenn Stevens. Stevens has been pretty clear about why he moves interest rates. Whether you or I think that's the right way to go about it or whether there is a 'better' way is irrelevant. I'd rather plan according to what Stevens will actually do.
Alex

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It seems to me that Glenn Stevens and his RBA took the feedback from Bill Wavish, Myers Chairman, quite seriously and "prefering" instead, for the first time (since the global Credit Crunch Crisis first started to unfold itself in the US in June-July 2007 period) to allow some TIME for the external slowing down global economy and global developments to "cool"/slow down its own domestic demand ( and the inflatoinary pressures)in Australia, internally by itself.

Cheers,
Kenneth KOH

 

[alexlee]

4. As an Australian, do you not want to provide the relevant feedback and views to your own Govt or/and to this social discussion, in order to help improve their policy making outcomes and our own investing success?

Honestly? No. I'm way too cynical to get involved in the political process. If I want to affect policy, I'll go buy some pollies.
Alex

 

[alexlee]

2. Bottomline: I personally believe that there is enough D&G being said and circulated presently in this forum.

That doesn't make it not true, though. Besides, I believe there's a difference between my 'we're going to have a recession, then another boom' and the standard D&G line of 'the market is going to hell and investors are all going to burn'.

3. However, do we need to be always "pessimistic" amidst these D&G news? I personally believe that there is always some "positive" aspects/outcomes to a "negative" event.

Yeah, prepared investors get rich. Would it make you feel better if I start harping on how prepared investors are going to get rich off the back of idiots who over-leveraged and can't pay their mortgages? My 'positive' aspects and outcomes are going to involve a lot of human suffering. You care about that, I don't.

4. Do you not agree that there are more investing opportunities during an actual "slow-down" time than during an economic boom time?

Yes, but you're the one who's feeling bad about people who will suffer in a recession. I plan to profit from this. That's why I'm discussing it. I want to learn from this. Avoiding the topic isn't a way to learn.

5. Does it truly help us to achieve better investment outcomes by remaining "pessimistic" or "optimistic" midst the present D&G situation, as far as our present property investing performance are concerned?

Damn right there is. The mood is bearish, not just on this forum but I think in the economy as a whole. Being too optimistic in a bearish environment and you can get steamrolled. My first priority is financial survival: and animals that aren't alert get torn apart by wolves.

6. Is there something "new" about the D&G that we do not truly know or/and has still not been said/discussed so far?

And what optimistic view have we NOT discussed? Should we forget about optimistic views as well? At least I'm citing actual news and information in this. This is unfolding LIVE in front of your eyes, Kenneth. This is a GREAT time to learn about how markets turn. Because you know what, this is going to happen again and again. This is not the last bear market (or bull market) that you and I will see. I'd rather look at it in the harsh light of day than through rose-coloured glasses.
Alex

 

[alexlee]

It seems to me that Glenn Stevens and his RBA took the feedback from Bill Wavish, Myers Chairman, quite seriously and "prefering" instead, for the first time (since the global Credit Crunch Crisis first started to unfold itself in the US in June-July 2007 period) to allow some TIME for the external slowing down global economy and global developments to "cool"/slow down its own domestic demand ( and the inflatoinary pressures)in Australia, internally by itself.

You might want to wait until Stevens comes out with his comments after the May RBA meeting. He may well keep rates flat. I really doubt he's going to cut them. In any case, the banks are going to keep moving rates up anyway, which decreases the value of the RBA keeping rates steady.
Alex

 

[dave99]

With inflation coming through for the March quarter at 4.2%, I very much doubt we'll see downward movement in rates this year or even early next year. Clearly the Australian economy was still booming Jan-March, despite all the D&G. There has been no decrease in demand so far.

In fact, if inflation does not fall next quarter, there may even be another 0.25% hike. 4.2% is VERY high, well outside Steven's comfort zone. He must be very confident that inflation is on the way down to hold rates steady. He won't cut them unless inflation falls to 2% or lower I reckon.

Kenneth, you can see that even with 3 quick rate increases, inflation is still very high. What might it have been if Stevens had followed your "natural" approach to constraining demand? 6%?

Remember that while US mortgage defaults are very high at 3% of prime loans and over 10% of sub-prime, Australia's default rate on prime is 0.3%. It's higher than last year, but still very low overall. There's not been much pain here yet, and that's reflected in continuing robust demand.

 

[Kennethkohsg]

In fact, if inflation does not fall next quarter, there may even be another 0.25% hike. 4.2% is VERY high, well outside Steven's comfort zone. He must be very confident that inflation is on the way down to hold rates steady. He won't cut them unless inflation falls to 2% or lower I reckon.

Kenneth, you can see that even with 3 quick rate increases, inflation is still very high. What might it have been if Stevens had followed your "natural" approach to constraining demand? 6%?

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Hiya Dave,

1. I have some " different" perceptions and perspective again as far as the local inflation rate in Australia and in other countries are concerned.

2. You said, " 4.2% inflation is very high, well outside Glenn Stevens's comfort zone, and probably for the RBA". If you are indeed correct, then we can all expect the RBA to raise its interest rate again in May 2008, al things beng equal.

3. I also wonder what would be your own reactions when you were to read that the local inflation were to increase from 0.6% in 2007 and suddenly shoot up to 6.5% in the first quarter of 2008 as in the case of Singapore?


Cheers,
Kenneth KOH

 

[Kennethkohsg]

I really doubt he's going to cut them.
Alex

Dear Alex,

1. I am wondering who you have in mind, who is saying that the RBA is going to cut interest rate as early as May 2008, as your post seems to be "implying" indirectly?

2. I do not recall having made this particular claim, to date.

Cheers,
Kenneth KOH