Labor in office, what will happened to property investment?

[TheBacon]

FFS!!!

For all of you that have been raving on about how dismal the election result is, just be thankful that the ALP won. If the Libs had won, and you were harping on like this, it may be considered 'un-Australian' and you'd all be in a detention centre awaiting deportation.

The collective property investing wisdom on this forum is astonishing. However there is more to life than property and money.

The people have spoken. Listen, you might learn something.

Kevin07, a good vintage I think.

TB

 

[Kennethkohsg]

Why is that such a surprise?

The government is in charge of the budget, and therefore fiscal policy. The PM not being in charge of fiscal policy would suggest the PM and Treasurer are at odds, and that can't be a good thing.

Alex

*****************

Dear Alex,

1. Who actually determine and run the Australiann Economy, in this case?

2. How does the Australian PM actually go about controlling Fiscal Policy and the Australian Economy at large, in conjunction with an independant RBA?

3. Who directly decide the amount of money to be circulated in the Australia Economy at anyt point in time? How does this agency/office-bearer controlling/managing the money in circulaton and the amount of liquidity required in the Australian Economy

4. Who actual decides on the optimal size and capacity for the Australian Economy to be maintained for each financial year? as well as the types and number of skilled labour force required to properly support the Australian Economy?

5. Who decides or/and is directly responsible for the economic planning for the Australian Economy, in terms of its present capacity and constraints, new requirements and types of infrastrcutural developments required to supported an expanding Economy?

6. Hopefully through the various answers to be provided, we can get a better understanding regarding how the Australian Government/PM actually runs the Economy in conjunction with RBA and the Treasurer and Finance Minister etc.

7. Thank you.

regards,
Kenneth KOH

 

[jingo]

pfff... a bunch of PCs that will be landfill in a years time.

Yes, I suspect that too! I am a teacher, and I am just waiting for the curriculum to be disected, carved, shaped, moulded and formed yet again, into something that is supposed to be the best thing since sliced bread!!!!!!

The problem with politicians is that they, on the whole, do not teach, but create fanciful policies aimed at creating a better Education system. The reporting fiascoe created by Brendan Nelson is just a joke, and I am sure that the next system initiated by Rudd and Gillard (Oh God help us all) will be just as bad if not worse!!!!

Did anyone notice that Gillard was kept right away from the spot light during the campaign? She has only recently resurfaced! Gillard was born and bred in the Western suburbs of Melbourne (Far outer West - not Williamstown), and it really shows!!! I was sitting one table away from her at a function recently. She is as rough as guts!!

Regards Jason.

 

[Ausprop]

However there is more to life than property and money.

this thought seems to be coming out quite a bit, as if a vote against the Libs was a vote for the good ol days and grandmas apple pie. Unfortunately banging your head against a brick wall won't add intangible value to your life - this is something that comes from within.

 

[Kennethkohsg]

.
I said the shock of labors (unexperienced economic managers) new win will cause market to fall sharply on first day trade. I know it has been falling around the world but the Australian market has also had several proportional drops last week. I just think the monday drop will show Australia how the educated shareholders feel about this new leadership.

***************
Dear TigerGT,

1. I have checked that the Dow Jones has closed up 1.82% last Friday.

2. Assuming all things being equal, the ASX is expected to open up above its last closing point at 6392.4 on Monday morning when the ASX re-opens for new trading day.

3. Any sudden move upwards or downwards by the ASX on its opening bell on Monday, are likely to be "attributable" to the investors'confidence /market sentiments over the outcome of the Federal Elections and the change in the Australian government leadership under Kevin Rudd.

4. So let us monitor and see how the ASX will actually open on its opening bell on Monday then and further discuss where neccessary, please.

5. Thank you.

Cheers,
Kenneth KOH

 

[Norwester]

Jingo,

Hey, that sounds pretty toffy for a guy from Altona Meadows.........

I was born and bred in the far Western suburbs of Melbourne as well -wanna punchup........

Seems like everyone else is getting into around here at the moment.

Interesting pick up on the grammar. I was sort of noticing the same thing myself. Just goes to show that money really is the universal language.

ciao

Nor

( and I voted Labor and below the line on the Senate paper 'cause their preferences sucked...........)

 

[Kennethkohsg]

*****************
Dear Natedog,

1. Go and tell the political leaders and the Australian Govt directly and collectively as a disaffected group, to stop all these "blaming games" and excuses for their lack of committment to provide better public services for the Australian public, then I am sure that Australia will see a better Future indeed!

2. Honestly speaking, with the last Liberal Coalition Federal Govt and the various ALP State Government "blaming" one another for their prevailing housing/land affordability issues, instead of committing themselves to find a real solution for the Australian public, the real losers are the Australian peoples who have been adversely affected in this area.

3. Australian peoples deserves something better than this kind of frivolous games and excuses from their elected leaders.

4. Do you not agree?

5. Thank you.

Cheers,
Kenneth KOH

 

[jingo]

Jingo,

Hey, that sounds pretty toffy for a guy from Altona Meadows.........

I was born and bred in the far Western suburbs of Melbourne as well -wanna punchup........

Seems like everyone else is getting into around here at the moment.

Interesting pick up on the grammar. I was sort of noticing the same thing myself. Just goes to show that money really is the universal language.

ciao

Nor

( and I voted Labor and below the line on the Senate paper 'cause their preferences sucked...........)

Sorry Nor,

No offence intended. Yes, I do live in the outer West, and shouldn't jump on my high horse!!

Gillard is an interesting choice for a leader though. Perhaps she will be good - who knows????

Punch up!! Where abouts!! Oh - What about???

Regards Jason.

 

[Norwester]

Jingo,

No need to apologise mate I'm only stirring.

Agreed in regard to Gillard though..........

I can personally verify that she has a mouth on her that would even make the toughest builders labourer / painter and docker blush. I really am hanging out to see her in action during question time.

However, I did notice that the whole makeover thing happening during the campaign with the hair, the look etc.

Did she ever wear a dress?.............

One thing for sure though is that the next couple of years will certainly be interesting.

ciao

Nor

 

[Kennethkohsg]

Maybe a better way to say it is that the spread between the overnight cash rate (the one the RBA sets) and other interest rates (e.g. homeloan rates) is market driven.

If the spread is 2% and the cash rate goes up by 0.25% then the homeloan rate must also go up by 0.25% to keep the spread constant. That is why people think the RBA sets homeloan rates - they don't really but it appears that way.

What is happening now is the spread is increasing. Once the market finds the correct new spread then things will fall back to normal and the RBA will appear to control homeloan rates again.

****************************
Dear Alex,

1. Thank you for your kind education.

2. Like you said before, since the lending banks are profit-oriented, they can set their own homeloan rates to maximise their profits, irrespective of the cash rate set by the RBA.

3. Then how does APRA comes in, in this case?

4. Is it APRA's responsibility to ensure the the consumers are charged fairly and not excessively on their mortgage loan rate by the lending banks?

5. How does APRA regulate the lending banks policies and market practices?

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

7. Thank you.

cheers,
Kenneth KOH

 

[Spectre]

Food for thought....

http://au.biz.yahoo.com/071122/19/1hx6w.html

This being the case, you might find that your lender is going to be increasing variables without the rba coming into the picture.

The reason I hyperlinked the CBA article is I was speaking with someone I know who works there and they heard along the grapevine that the increase they are going to pass along will be in the order of 50 points.

So IF this is true, and with this in mind, the RBA increase which might come in time for christmas will add another 25 plus the pending increase to petrol in watching Sky News (which is the most reputable news!)

 

[Kennethkohsg]

The official interest rate is controlled by the RBA. The banks and finance companies together affect (I won't use the term control, because the objective is not control of money supply but profit) money supply. This was the Greenspan conundrum: he kept raising interest rates, but the yield curve (the 'price' of money and hence an indication of money supply movements) just didn't move up. Essentially excess liquidity allowed banks and finance companies to ignore the Fed. Theoretically, the RBA can keep raising interest rates, and the banks can (if they followed Costello's suicidal advice) keep their rates steady and keep lending money out (increasing money supply).

The RBA certainly doesn't control the whole money supply. It controls official interest rates, but market participants can and sometimes do ignore its cues.

Alex

*****************
Dear Alex,

1. As a layman, how do we know that there are excess or insufficient liquidity in the local money market?

2. Who decides and tell the lending banks/institution to tighen or lossen on their lending policy and to increase/decrease the money supply presently circulating in the local markets?

3. Are there clear market indicators for an average layman to see or monitor when lending banks/instutions are told to tighten or loosen on their lending policy at different times of the year?

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

5. Thank you.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Food for thought....

http://au.biz.yahoo.com/071122/19/1hx6w.html

This being the case, you might find that your lender is going to be increasing variables without the rba coming into the picture.

The reason I hyperlinked the CBA article is I was speaking with someone I know who works there and they heard along the grapevine that the increase they are going to pass along will be in the order of 50 points.

So IF this is true, and with this in mind, the RBA increase which might come in time for christmas will add another 25 plus the pending increase to petrol in watching Sky News (which is the most reputable news!)

***************************
Dear Lukentel,

1. Thank you for yoiur update.

2. There goes the first shot being fired out after this Federal Elections, not neccessarily through the RBA or/and initiated by the new ALP Federal Government but it has the same effect and increasing mortgage stress for the average Australian households with an existing homeloan mortgage to be serviced.

3. What can the Australian public collectively do to manage such interest rate increase from being charged excessively in the near future, honestly speaking?

4. Any further comments and discussion on this issue from ÅlexLee, please?

5. Thank you.


Cheers,
Kenneth KOH

 

[Kennethkohsg]

***************
Dear TigerGT,

1. I have checked that the Dow Jones has closed up 1.82% last Friday.

2. Assuming all things being equal, the ASX is expected to open up above its last closing point at 6392.4 on Monday morning when the ASX re-opens for new trading day.

3. Any sudden move upwards or downwards by the ASX on its opening bell on Monday, are likely to be "attributable" to the investors'confidence /market sentiments over the outcome of the Federal Elections and the change in the Australian government leadership under Kevin Rudd.

4. So let us monitor and see how the ASX will actually open on its opening bell on Monday then and further discuss where neccessary, please.

5. However, it has now been officially reported
at http://au.biz.yahoo.com/071125/30/1i1av.html
that:

"Labor win will not impact market: expert"
Sunday November 25, 2007, 12:46 pm

"The election of a Labor government posed no immediate risk to Australia's economy and is expected to have little impact on local stock and currency markets, when trading resumes this week."

"Federal Labor has inherited an economy with low unemployment, solid growth and a strong budget surplus and promised to maintain a fiscally conservative approach."

"Financial market economists say the elevation of Kevin Rudd as prime minister poses little risk to markets, although business may be cautious until it sees the detail of Labor's industrial relations policy."

"I don't foresee any great changes in terms of the currency or the share market over the election." "It seems the Australian sharemarket and the Australian dollar basically ignored the election campaign," AMP Capital Investors chief economist Dr Shane Oliver said.

"The Australian stock market is expected to open stronger on Monday, in line with a positive performance by US markets on Friday."

"While there's still a chance of another rise in interest rates early in the new year, Labor was likely to avoid the blame for higher borrowing costs."

"It's just the sheer strength of our economy, the global economy, things like higher food, petrol and housing costs, so there's little anyone could have done about interest rate changes," Mr James said."

"However, the business community would remain cautious on Labor's promise to abolish Work Choices."

"There may be some small businesses that are a little bit more wary about taking on new staff until they determine what Labor's policies are going to be, particularly in terms of unfair dismissal."


Cheers,
Kenneth KOH

 

[redsquash]

Its very foolish indeedto think a change of government will affect property prices. do you even have a basis of fact for suggesting such a thing in todays economic and political climate?

we Tag along with the rest of the world economically.
If there is a stock market crash , then you can expect to see more funds put into property

What aspects of uncerttainty are people referring to ,when there was ample opportunity to assess the parties policies and platforms.
Was there something vague or shielded from the public in some aspect of policy.
I dont think so.

The writing was on the wall for JH, .......how close was Maxim Mcq from getting Bennnalong?And can anyone tell me why in the world Peter Costello world want to stay on a sinking ship . It will be at least 6 years before he could get another shot and he has put in too much hard work to hang around . I doubt many journos were actually surprised , though it was reported they were ! Makes a better story I suppose.

The economy progresses despite the governments , not because of the governments. They basically tinker around the edged in many instances,
In terms of affecting the economy.

I would think the reserve bank would have a greater or a very similar influence to that of the govt.

Either Govt would have to basically do pretty much the same, in many areas, so unless they are really stupid things will continue moving forward. People in governemt are not stupid and those in control have very bright minds.
Its very easy to criticise but once you get into the second tier of the public service and above you have very bright people controlling the ministers......whoops .did I say that ?

There is a difference between being personable and administratively superior
I didn't find JH a personable character , but he is a bright lad, organised and capable. KR will make mistakes and also do well , thats how things are in the real world.
Any uncertainty about the future is no more uncertain than any other time, apart from world war 1 and WW2.
Check this thread out 1 year from now and see how different property is . Will any differences be because of govt or external world forces or normal market cyclical forces............don't get results confused with causes

Rixter and Patosan probably put it better than I did.

 

[Kennethkohsg]

Dear All,

1. According to Ross Gittins, it was reported that "the chances of a recession occurring sometime during Kevin Rudd's ALP Government reign are high — almost guaranteed. Worse, the chances of a recession in the next three years are high."

2. "What's on our immediate horizon is not a recession but the opposite: a boom in which the Reserve Bank is struggling to slow the economy down and so ease inflation pressure."

3. "In our history, the mishandling of booms has often precipitated a recession. Should the Reserve overdo the rate rises, we may find it stops the economy rather than just slowing it."

4. "It has emerged from this election campaign with commitments to cut taxes and increase government spending that are quite inappropriate for a Government hoping to minimise the number of further rate rises."

http://business.theage.com.au/poisoned-chalice-for-economic-neophytes/20071125-1cpz.html?page=2

5. For your further comments and discussion,please.

6. Thank you.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

we Tag along with the rest of the world economically.
If there is a stock market crash , then you can expect to see more funds put into property

*******************
Dear Redsquash,

1. Interestingly, in both the US and UK contexts, it was their housing markets that reportedly slumped down first, before their stock markets start to correct themselves in the downwards trend, in tandem subsequently.

2. Do you not agree?

3. I wonder why this is indeed so and not the usual way that one would have expected its stock market to crash down first instead?

4. Having said this, I am not ruling out the possibility that the ASX may soon experience a market "crash"/correction some time between 2008-2009 period and that the attendant investors funds could then be re-channelled into the recovering Sydney Property Market then.

5. For your further comments and discussion, please.

6. Thank you.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Its very foolish indeedto think a change of government will affect property prices. do you even have a basis of fact for suggesting such a thing in todays economic and political climate?

**********************
Dear Redsquash,

1. Interestingly, can you please explain Hamish et al' research findings from their 1910-2006 longitudinal studies in Australia that

a. the median inflation rate under the ALP Government has been consistently found to be higher, averaging at 6.06% as compared to 3.03% averag reported under the Liberal Coalition Government?

b. that the correspoinding interest rate under the ALP Government was also consistently reported to be higher than those reported under the Liberal Coalition Government,


2. Remember, the Australian Economy situation during the 1989-1990 period where interest rate went up as high as 18% under the ALP Government, to be followed a few year subsequently by the Recession that Australia needs to have in 1991?


3. If ALP Federal Governments has a consistently bad track record of "mis-managing" the Australian Economy from time to time again, I think it would be your duty then, to convince us here as to why the new ALP Government under Kevin Rudd, is less likely not to repeat the same ALP pattern of economic mis-management this time round when previous ALP Federal Governments have repeatedly done so, under its various ALP leaders at different times in the past?

Cheers,
Kenneth KOH

 

[Kennethkohsg]

What aspects of uncerttainty are people referring to ,when there was ample opportunity to assess the parties policies and platforms.
Was there something vague or shielded from the public in some aspect of policy.

I dont think so.

************************
Dear Redsquash,

1. Certainly yes, as it was specifically reported today that

"However, the business community would remain cautious on Labor's promise to abolish Work Choices."

"There may be some small businesses that are a little bit more wary about taking on new staff until they determine what Labor's policies are going to be, particularly in terms of unfair dismissal."

http://au.biz.yahoo.com/071125/30/1i1av.html


2. It was also reported that, "... Business leaders argue that they will not know how to prepare their businesses and workforces for opportunities or hurdles they could encounter until the Government reveals how it plans to implement changes to all its portfolios."

"For example, retailers are keen to know if they stand to benefit from $1 billion in promised Government grants to update school computers. Labor was unable to give the plan in detail, or with certainty, when it was in opposition."

http://business.brisbanetimes.com.au/business-anxious-over-ir/20071125-1cq9.html


3. In the following article, entitled, "Re-Election Jitters Strike Australian Businesses", it was further reported that

"The Sensis study of 1,800 small and medium-sized businesses found that confidence had dropped 16 points in the three months to October to 43 per cent.

The decline is the biggest one-quarter fall in the survey's 14-year history.

"The main factors influencing that are a potential change of government, with the key issues small businesses are looking at being industrial relations and economic management.'"

http://www.businesstimes.com.sg/sub/...57851,00.html?


4. The various concerns for the small businesses in Australia are reported to be as follows:

" However the skills shortage and increasing wage costs are constraining business growth across all sectors of Australian business, with small business being most dramatically affected, Hendy said."

"Hendy said retraction of the WorkChoices legislation could make wage costs the number one impediment to business growth."

''Our view is that WorkChoices and industrial relations reform have enabled business to match wages costs with productivity but there are significant wage pressures in the system."

" That is why we are really worried about them rolling back on industrial relations reform,'' Hendy said."

''We genuinely think if we do roll back on WorkChoices, wage costs will become the number one issue of constraints on investments.''

"The Liberal Party industrial relations policy for small business is to maintain the current system, while Labor's ''Forward with Fairness'' policy would lift the current exemption of small businesses from unfair dismissal laws but proposes a 12 month period before a claim can be lodged."

"The skills shortage is also attributed to the survey's findings of record high overtime utilisation, which coincided with a slight decrease in employment growth."

5. For your update and further comments/discussion, please.

6. Thank you.

Cheers,
Kenneth KOH

 

[alexlee]

*****************

Dear Alex,

1. Who actually determine and run the Australiann Economy, in this case?

2. How does the Australian PM actually go about controlling Fiscal Policy and the Australian Economy at large, in conjunction with an independant RBA?

My understanding is that the govt sets the budget, tax rates, spending, etc. That would be fiscal policy.

Kenneth, Australia is not Singapore. Why does someone have to 'run' the government? Different groups (the PM, RBA, etc) make different decisions. A lot of it is left to the market. We're not a benevolent dictatorship like Singapore. There is such a thing as benign neglect.

Is this your concern here? You think we need a strong hand in government to 'control' things for the good of the people? That's never been the case. By projecting the Singapore experience to Australia I think you give the libs too much credit.
Alex