RBA to cut rates by 100bp in December
- Thread starter MichaelW
- Start date
yes - contingency plan...
what's that? sell everything? pull all the LOCs you can and disappear to Majorca? mate if you haven't already secured the hatches you're on a wing and a prayer - like about 80% of the population at present.
the world will implode.
banks will be paying you to borrow their money.
kevin rudd wakes up one morning and says "stuff the battlers - lazy good-for-nothings. they should just get a job".
*insert another wildy random event here.*
Yup thats negative real IRs.
I know it is early for a bet on the RBA move the 3rd of december, anyway bloomberg think the 100bp (or 1%) is the most likely from their very reliable survey:
But I like to remind that AUS banks are far from having loads of money since they are not getting anything from overseas investor, I am far from thinking long term mortgage rate will come down as much as the short term and variable rate. In my opinion who is keen to lock in will still have to pay a big premium for that.
seems the NAB business confidence number that came up yesterday where far worst then forecast and had a lot more impact then usually (-29 against -8 from early october).
But I like to remind that AUS banks are far from having loads of money since they are not getting anything from overseas investor, I am far from thinking long term mortgage rate will come down as much as the short term and variable rate. In my opinion who is keen to lock in will still have to pay a big premium for that.
All "this" makes you wonder whether "a few % inflation" was such a total all-out disaster for our economy as our expert pollies and RBA would have had us believe. Indeed, as this all unfolds (unravels maybe a better word...)it sure seems to me that there are now MUCH worse "conditions" for this now sick patient of ours. So much for the bleedin' experts.
LL
LL
Agree. The RBA interest rate increases in late 2007 and early 2008 were made without clear idea of the impact of the sub prime crisis offshore. The additional independent increases by lenders should have alerted the RBA that the economy needed more credit and that the economy was being overtightened. This monetary management episode will make academic case material in economic studies in domestic unis for years to come. There is already finger pointing whether it is the Labor govt or the RBA about the decision for the monetary tightening and technically it was the RBA's call.
All the more reason for both Labor govt and RBA to pull all stops and prevent a recession. If the ending is sweet all is forgiven, otherwise they contributed to the situation we are in.
Sparky, that's awful, how stressful!Are you up to telling us what's happened?
.... otherwise they contributed to the situation we are in.
Francesco, as far as I'm concerned, THEY definitely contributed to the current situation with their IR rises PLUS their CONTINUED EMPHASIS on how the "killer" of us all was inflation !! How many times did Rudd and Swan lecture us on the evil inflation. What a load of crap !! They were totally 100% wrong. If there was any honour Steven's should resign. The RBA board should also resign. They are just a total economic joke.
LL
Wasn't the whole world wrong about this. Nobody saw it coming. Hindsight is a great thing!!!.
Yes, your correct allblack. The RBA was just doing what was right at the time.
I'm over passing on any blame. Kevin 747 is not to blame, Johnnie H is not to blame, the RBA is not to blame, George Dub is not to blame, Arab oil men are not to blame, China's not to blame.
It took the poor decisions of millions of people, over many years to get us into this, so it's the human race that caused it. Too much debt and greed by everyone.
See ya's.
Gees.. NO !! ... a heap of info. on the sub-prime crisis was in the public domain waaaay back in 2007 !! If the RBA can't forecast better than You-tube ....like what are we paying them for ??
Also ... MANY countries were reducing IRs in response to the forthcoming crisis back in 2007 .... our idiots kept increasing rates well into 2008.
Our last IR rise was in Mar 08 (see link to RBA)
http://www.rba.gov.au/statistics/cashrate_target.html
and that was maybe , should be 0.5% as the "inflation" genie was still out of the bottle.
Go see what was on You-tube by March 08 ... it's all recorded.
LL
Rates were still being increased into 2008 because our economy was still booming because commodities were still booming.
Our economy was booming in 2008, when the US, Europe, Japan etc were struggling, as their economies were being hammered from high commodity prices, where ours was benefiting. BHP, RIO, and Woodside all hit highs in April or so. Now that commodities have crashed, everyone is in the same boat, and it's sinking.
It's also why our house prices have held up so well. They were even increasing when everywhere else were dropping, but it's all crashing down now. We were just 12 months behind.
See ya's.
Crap. Crap. Crap. The RBA had no trouble "at the time" forecasting AHEAD that inflation was going to peak la.la.la .. and then correct in 2010 (sometime) ..They are PAID to look ahead. But they're also paid to be AWAKE to the world !!
The stupid RBA was SO focussed on demon inflation they didn't see the "dive bomber with the atom bomb at 2 o'clock high". That's the problem !!
Oh well.. Sounds like nobody's to blame. Perhaps it really was the little elves ???
Crap. Crap. Crap. It took a few scheming Wall St. bankers, many dishonest mortgage brokers, some stupid home buyers etc etc ...but in this country we had very little of any of those ...BUT what we've got "in bulk" is incompetent econocrats, ineffective regulators and whole "heap of people" ( inc. the RBA ) who were asleep at the wheel and taking their salaries under false pretences.
LL
This is hilarious.
OK, if all these problems were all so obvious, what did you do about it then?
This whole debarcle only happened because hardly anyone saw it coming, otherwise it wouldn't have happened.
You should have started a thread about these problems, like nonrecourse did, so we all could have averted this disaster.
See ya's.
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Today (13/11/08) interest rate futures are showing an implied yield by May 2009 of 3.06%
Have a look at
http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf
More % interets rate cuts up till May 2009 than previously indicated by the futures over recent days.
Am pretty sure I'll be cashflow positive with an RBA rate approaching 3% by middle of 2009 (assuming tenants can still pay the rent).
Have a look at
http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf
More % interets rate cuts up till May 2009 than previously indicated by the futures over recent days.
Am pretty sure I'll be cashflow positive with an RBA rate approaching 3% by middle of 2009 (assuming tenants can still pay the rent).
If you are a flipper or short term property holder i dont see what CG has to do with it, im much more interested in my net holding yld. The lower interest rates go the less of a forced seller i will be.
Unfortunately this is not being reflected in fixed interest rates yet (except on short durations). Suggests things are not as cool as they may seem.
