Labor is very quiet

[mystery]

I was pondering over the latest round of big four banks money grabbing exercise by yet again increasing rates well above the RBA .25 basis point rise.

It's okay for Wayne Swan to say ... vote with your feet and move to another bank, .... where does it get you if they are all increasing above the RBA figure.

Wayne Swan is conspicuous by his silence on this subject and the Labour party is quickly becoming a toothless tiger in the mortgage rates area. Even the media is leaving labor alone on this one, ..... it's like they are made of teflon at present ... nothing sticks. Before the election they bagged Liberal for any rate increase ... but labor ... nothing.

You can bet that if Costello was still treasurer he would have least been giving the banks and hard time on TV and in the papers and making the banks accountable .... at the moment the banks are just putting up rates at will and just trot out the same line to justify it and Wayne Swan comes out again and say's .... "vote with your feet" ..... good one Wayne!! ... How about actually trying to do something.

Any thoughts ?

Martin

PS ... Maybe its because it's 4am and we are using CBA for the latest IP purchase that I'm so grumpy ..... lol

 

[Pablo]

Mystery,

Rates will continue to increase until inflation goes down so does it really matter if the banks increase them today or if the RBA increase them tomorrow? At least the bank shareholders will get some benefit.

 

[mystery]

Mystery,

Rates will continue to increase until inflation goes down so does it really matter if the banks increase them today or if the RBA increase them tomorrow?

Probably not Pablo, but at 4am this morning logic didn't come into it .....

Martin

 

[steveadl]

It does seem to have gone quieter as far as the blame game for interest rates go. Perhaps because last year we were leading into an election and it was good point scoring for Labor. I never got the big deal personally - they kept reiterating how under Liberal interest rates had risen 9 (?) times since 2000. OK well that's 2.25% - not a huge deal over 7yrs in my opinion considering economic growth in that time, especially considering we've had about 1% increase in the last 4 months!

Not blaming Labor for the recent hikes, I'm aware we were going to have them regardless of who won - but as you said Mystery - interesting to see that it's no longer someone's fault.

 

[THEHEATH]

Mystery, your whole post seems to be *** about. I mean you'd rather see Costello up there bleating and blowing hot air than have someone offer some practical advice? The media crucified the Liberals for the interest rate rises because the idiots tried to swindle the public with their claims about interest rates not rising under a Liberal government. Thought it would have been a pretty simple thing to understand.

 

[mystery]

Mystery, your whole post seems to be *** about. I mean you'd rather see Costello up there bleating and blowing hot air than have someone offer some practical advice? The media crucified the Liberals for the interest rate rises because the idiots tried to swindle the public with their claims about interest rates not rising under a Liberal government. Thought it would have been a pretty simple thing to understand.

I'm obviously not as intelligent as you TheHeath, ...... I'm just a simple man who happens to have done very well out of property, ..... no matter, .... I'll sit back and ponder your views while I look at the ocean from our front deck .....

Good luck to you

Martin ....

 

[kamchatsky]

Maybe have a read at these articles to understand why banks have to lift rates above RBA rates:

http://www.businessspectator.com.au/bs.nsf/Article/Devastation-looms-CLQWQ?OpenDocument

http://www.businessspectator.com.au/bs.nsf/Article/Crunching-into-reverse-CLRHM?OpenDocument

And yes, I have a home loan with a big bank which is partially fixed and partially variable, so I am "suffering" as everyone else.

 

[jaycee]

It's no longer anyone's fault cause by the looks of it, the Libs are to busy infighting amongst themselves and don't have enough time to blame Labor publicly

 

[Beef_Hooked]

Wayne Swan is conspicuous by his silence on this subject and the Labour party is quickly becoming a toothless tiger in the mortgage rates area.

.... at the moment the banks are just putting up rates at will and just trot out the same line to justify it and Wayne Swan comes out again and say's .... "vote with your feet" ..... good one Wayne!! ... How about actually trying to do something.

Any thoughts ?

G'day Mystery,

I guess it depends on what you want to hear.

Robert Gottliebsen seems to have the exact opposite view. He thinks that Rudd and Swan should shut up and let the banks cover their costs in order to prevent a credit squeeze.

Quote from the Business Spectator article "The banks are reluctant to increase rates to cover costs because of pressure from Kevin Rudd and Wayne Swan."

and "The right thing for Rudd and Swan to have done was to allow banks to recover their costs. While it would be politically painful, at least there would be money available and house prices would not fall as rapidly as is now likely under the twin blows of higher interest rates and the Rudd credit curbs."

Interesting article but warning!! NSFP (Not Safe for Pollyannas)

Cheers,
Beef.

 

[evand]

Now there's s a sensible, informed post on the topic.

By the way Beef, i loved that Joe Walsh album years ago. Great guitarist.

Pretty Bizarre post there mystery.

G'day Mystery,

I guess it depends on what you want to hear.

Robert Gottliebsen seems to have the exact opposite view. He thinks that Rudd and Swan should shut up and let the banks cover their costs in order to prevent a credit squeeze.

Quote from the Business Spectator article "The banks are reluctant to increase rates to cover costs because of pressure from Kevin Rudd and Wayne Swan."

and "The right thing for Rudd and Swan to have done was to allow banks to recover their costs. While it would be politically painful, at least there would be money available and house prices would not fall as rapidly as is now likely under the twin blows of higher interest rates and the Rudd credit curbs."

Interesting article but warning!! NSFP (Not Safe for Pollyannas)

Cheers,
Beef.

 

[mystery]

Look I'm not a stupid person as some have alluded to, .... I just thought I'd make an observation about pre and post election reporting and start a new thread, ... but it seems like some forumites have taken what I thought would be a very light discussion and gone over the top.

In truth I couldn't care less what the RBA or Rudd does, .... I will invest according to my guidelines ... I can handle the current situation as I've been investing in property since the mid to late 1980's, so I'm not stressing about it.

I've seen property cycles come and go and I've been through recessions before, .... I just believe that the Banks are using the sub-prime situation to their advantage and not a great deal is being said about it, that was all I was saying ... maybe it was poorly worded, but it was 4am in the morning.

Chill out guy's ..... what will be will be.

Martin

 

[THEHEATH]

I'm obviously not as intelligent as you TheHeath, ...... I'm just a simple man who happens to have done very well out of property, ..... no matter, .... I'll sit back and ponder your views while I look at the ocean from our front deck .....

Good luck to you

Martin ....

Wow, how unique around these parts

 

[Token Funder]

Look I'm not a stupid person as some have alluded to, .... I just thought I'd make an observation about pre and post election reporting and start a new thread, ... but it seems like some forumites have taken what I thought would be a very light discussion and gone over the top.

In truth I couldn't care less what the RBA or Rudd does, .... I will invest according to my guidelines ... I can handle the current situation as I've been investing in property since the mid to late 1980's, so I'm not stressing about it.

I've seen property cycles come and go and I've been through recessions before, .... I just believe that the Banks are using the sub-prime situation to their advantage and not a great deal is being said about it, that was all I was saying ... maybe it was poorly worded, but it was 4am in the morning.

Chill out guy's ..... what will be will be.

Martin

Martin,

• Bank's costs of funds are going through the roof
• If they can't pass on those costs because they fear political fallout or simply because they don't believe the market will bear same, they will cut their lending (see Macquarie).
• A credit squeeze is developing that has the potential to do more to pull back CG in residential RE that interest rate increases. If you think strong CG is a good idea, better higher rates than fewer buyers with less buying power

If Swan or Costello could influence the global capital marets by having a dummy spit, they would be fixed by now

 

[Noeyedear]

Hey Mystery,
Politics is always good for a laugh especially when supporters of political parties take the high moral ground for whatever reason. I listen to parliament sometimes on my way between jobs. At the moment it is funnier than monty python somedays.

The country is in a much better financial position because the GST was introduced. But Kevin07 is not going to say that. The Kyoto protocol should have been signed years ago but Brendon is not going to say that.

Hopefully Kevin07 will follow through and deliver some infrastructure bought by the GST that labour didn't think we needed. Hopefully the libs will get their act together and find climate change is not just the opinion polls.

Anyway we should get some more laughs and I for one did not take your post too seriously.

 

[Jayro]

And Martin IF its Mystery Bay near Narooma where you happen to be looking out at the ocean then im very jealous. Bermagui has to be my favourite of all ports. I love it up here on Lake Macquarie but if I could earn the same dollars we would be living down there. That lovely Montague island you get to look out at is a treat indeed.

Jayro

 

[Beef_Hooked]

Chill out guy's ..... what will be will be.

Martin

No worries Martin, It's all looks a bit beyond the canberra clowns now anyway so if you can afford not to, why worry indeed. It sounds like you have your priorities v. nicely in place.

Me bank share holder Grrrr but still ahead and enjoying the view also.
-------------------------------------

Cheers evand, hey, classic line:
"It's hard to leave when you can't find the door" haha

Cheers,
Beef

 

[Ausprop]

dont stress too much. it is looking more and more likely that australia will be pushed into recession. as the lone ranger in the western world that currently has interest rates on the rise, when recession bites you can be sure rates will come tumbling down pretty quickly.

so we will be out of a job but gee those interest rates are low. funny thing the psychology of interest rates. at the last election people couldn't quite get their heads around the fact that rates were going up because the economy was powering

 

[mystery]

And Martin IF its Mystery Bay near Narooma where you happen to be looking out at the ocean then im very jealous. Bermagui has to be my favourite of all ports. I love it up here on Lake Macquarie but if I could earn the same dollars we would be living down there. That lovely Montague island you get to look out at is a treat indeed.

Jayro

Jayro,

Yep, .... that's the place, ..... it is pretty special living in this part of the world. Bermagui is great as well.... actually I'm fortunate that part of my job is to drive along the coast from Narooma to Eden visiting most of the coastal spots.

Martin

PS Thanks to everyone for their views in this thread .... made interesting reading.

 

[Mike F]

I reckon it’s almost time KRudd said to the reserve that our inflation is ok – it is mainly being caused by Rents (which will only get worse with higher rates), and petrol (interest rates won’t solve that). The govt are the ones that give the bank the target range of 2-3% over the cycle. If it is 'over the cycle', then what is wrong with 4% or so for a couple of years if it moderates after that?

Labor still has much momentum and the Libs have no direction, especially with the current leadership. Momentum will continue at least until the budget (when they will still try to blame Howard for the cuts they have to make).

Cheers
Mike

 

[seank]

its funny that the very people who voted Labour in, are now the ones complaining.

What frustrates me the most is when every time Swan "the goose" is asked about interest rates he has the same quotes-
" we are left with an inflation legacy"
" departing present from the liberals"
" we are implementing a 5 point plan for infaltion"

At the moment there is alot of symbolism and talk but little action, I will take a "wait and see" approach