Up, up and away.......!!
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he wrote quite an interesting reply to Rudd's essay
We are the bottom of a rate cycle and they pretty much only have one way to go. Its the old boom bust cycle repeating itself over and over.
What makes You think they will Evan?
I'm in agreement with you on the rates rising from here. On the other hand, I don't think people will be running to fix. I'd say vast majority won't as usual and we'll start to see all the great stories come out in the media of how mum's and dad's are being sent to the wall by increasing rates. Perhaps I'm being too cynical, maybe this time it'll be different.
What are the fundamentals?
That we (and the rest of the world) have brought forward spending for the next 12 months into the last six with stimulus and low rates. Thereby saving today from doom but risking tomorrows recovery and providing W recession.
Early evidence??? Alan Kohler writes....
http://www.businessspectator.com.au...timulus-pd20090727-UBTBH?OpenDocument&src=kgb
It is clear that the government's bonus tax depreciation on cars created a demand that simply did not continue. Demand was simply brought forward. My car dealer friend is hoping to get another sales spurt in December when the 50 per cent bonus depreciation for small enterprises comes to an end. After that it may be all down hill.
As for property, many commentators forget "Supply and Demand" people need to live somewhere. I know two areas I have IPs have rents going up strongly due to lack of supply.
Peter 14.7
That we (and the rest of the world) have brought forward spending for the next 12 months into the last six with stimulus and low rates. Thereby saving today from doom but risking tomorrows recovery and providing W recession.
Early evidence??? Alan Kohler writes....
http://www.businessspectator.com.au...timulus-pd20090727-UBTBH?OpenDocument&src=kgb
It is clear that the government's bonus tax depreciation on cars created a demand that simply did not continue. Demand was simply brought forward. My car dealer friend is hoping to get another sales spurt in December when the 50 per cent bonus depreciation for small enterprises comes to an end. After that it may be all down hill.
As for property, many commentators forget "Supply and Demand" people need to live somewhere. I know two areas I have IPs have rents going up strongly due to lack of supply.
Peter 14.7
Agree they will go up but when? 3 months, 6 months, 12months, etc...
And Rents are rising in some areas to offset the rise.
Laslty, the last 5 years in the east states has been no boom in my opinion. Prices are mostly flat.
Peter
What makes You think they will Evan?
"Nah, they can't go up much more, no point in fixing now!" - and I'm assuming they even put that much thought into it. History will repeat irself as usual.
Why would you want to fix rates if you are continually accessing equity?
Why should they rise?
Our economy is not looking good and even if it did
it's not like we are a 3rd world country to justify high interest rates.
Why should we have the highest interest rates in the western world?
Our $ is now going up, I think it's time for the RBA to lower our cash rate.
Because when the RBA dropped them to 3% the financial world looked like ending. Today it doesn't look like it's going to end, so 3% is no longer justified.
Because we've got one of the strongest economies in the western world.
Our dollar is going up because commod prices are going up (think global recovery), and because our IRs are higher than the most others.
Have a read of the RBA governors speech today. He thinks the economy is looking stronger than it was 3 months ago.
The bond market interpreted his speech as more IR hikes sooner - they've brought forward the first rise to before xmas... maybe as soon as October.
Attachments
It's easy to have both fixed & var rate loans against a property. These loans can be set up at different times. EG Fix today for 4 yrs at 80% LVR..... wait for for increased equity, then get a 2nd loan (from same lender) secured against the same IP. The 2nd can be fixed or var, the 1st loan doesn't affect anything (except it must be the same lender).
I have 4 loans (fixed & var) secured against the same property as I've continually accessed more equity.
I know he does but the economy has not tanked because of all the massive gov spending and the FHBG. Wait till that comes to an end....
They better hurry up with those infrastructure projects because I get the feeling many more people could be looking for work soon...
And if people don't work they can't spend and the gov won't collect taxes so the budged deficit will be even bigger
Barnett wants Chinese workers to address the looming skills shortage in WA. The mid-west is going to be a hot spot of activity.
this is interesting too for those follwoign LNG...
http://www.thewest.com.au/default.aspx?MenuID=32&ContentID=158641
this is interesting too for those follwoign LNG...
http://www.thewest.com.au/default.aspx?MenuID=32&ContentID=158641
Personally I find it mind boggling . I mean here they all are trying to avoid a recession , US and UK sh't hitting our fan , spending billions , only 6 mths ago warning of financial cyclones , unemployment reaching wherever and still yet 12 -18 mths away from reaching it's peak according to our great leaders and now - 6 mths in , they're talking interest rate rises .
I mean WTF !!!!!!!!!!!!!!
Just imagine , we all rely on these clowns in trying to work out what to do and expect next . Amazing !
I mean WTF !!!!!!!!!!!!!!
Just imagine , we all rely on these clowns in trying to work out what to do and expect next . Amazing !
Depends on your view point I guess.
If you believe as they seem to that the worst is behind us and the world - whilst having some difficulties ahead - will not collapse like they were worried about earlier (and acted accordingly with sharp rate drops). Now that they feel that possibility has passed and we'll pull through, they need to look further ahead as to what is likely to happen with the new perceived scenario ie. no depression, high inflation on the way etc. Better to prepare and plan their strategy now than only start thinking about it when we're in the midst of 9% inflation.
If on the other hand you believe the world is still yet to collapse, then yes - you'd have to disagree with them looking to increase rates as their next move.
If you believe as they seem to that the worst is behind us and the world - whilst having some difficulties ahead - will not collapse like they were worried about earlier (and acted accordingly with sharp rate drops). Now that they feel that possibility has passed and we'll pull through, they need to look further ahead as to what is likely to happen with the new perceived scenario ie. no depression, high inflation on the way etc. Better to prepare and plan their strategy now than only start thinking about it when we're in the midst of 9% inflation.
If on the other hand you believe the world is still yet to collapse, then yes - you'd have to disagree with them looking to increase rates as their next move.
And that is the crux of the matter. Like Blaster said only 3 months ago the world was "going an end" and we were all going to be living in cardboard boxes. Yet a little over 12 months ago, the economy was "unbreakable".
I find it amazing these expert, fulltime, $$$ paid economists all seem (like the RBA gov) to have seen the problem/s (high rates, share crash, insert issue here#) coming years ago...but only felt the need to enlighten us with their wisdom in hindsight
So if i seem sceptical that we are back to good times, you can understand why. I rely on simple things like "supply and demand" and when people are losing jobs you have less of both.
Mr Rudd may tell that unemployed car salesman "dont worry" because in 2015 you will have a national broadband (for your cardboard box) and I dont think he is going to give Mr Rudd a hug!
Jobs matter, it is all about jobs.
And this world cost of money arguement makes me think....if the rest of the world buys money from the same sources why does the US reserve have rates at 0.25% and UK at 0.5% and then us at 3%?
Our problem re rates is not world factors but the lack of competition when 92% of all loans is from 4 suppliers. The banks can screw us and there is almost nothing we can do.
Peter
I know he does but the economy has not tanked because of all the massive gov spending and the FHBG. Wait till that comes to an end....
They better hurry up with those infrastructure projects because I get the feeling many more people could be looking for work soon...
And if people don't work they can't spend and the gov won't collect taxes so the budged deficit will be even bigger
Agree totally, the six months are the most dangerous.
Peter
Except buy bank shares!
I have no idea what is going on with IRs and global recovery. Mr Market seems to think it is all hunky dory right now anyway! But we know he has been wrong before...
Jack be nimble....Jack be quick
Might be time to catch the Mr. Market ferry boat and let the tide rise all ships.
Global markets have definitely been on the move and heading north with gusto. With fundamentals still equivocal, this is probably to be a sheeple led sentiment based rally with most sectors moving in unison. So, we're probably going to see all ships float on the rising tide.
Probably wise to be nimble footed as global fundamentals aren't necessarily out of the woods just yet.
While it's sunny and we are in the eye of the storm, maybe it's time to make some hay
Except buy bank shares!
I have no idea what is going on with IRs and global recovery. Mr Market seems to think it is all hunky dory right now anyway! But we know he has been wrong before...
Might be time to catch the Mr. Market ferry boat and let the tide rise all ships.
Global markets have definitely been on the move and heading north with gusto. With fundamentals still equivocal, this is probably to be a sheeple led sentiment based rally with most sectors moving in unison. So, we're probably going to see all ships float on the rising tide.
Probably wise to be nimble footed as global fundamentals aren't necessarily out of the woods just yet.
While it's sunny and we are in the eye of the storm, maybe it's time to make some hay
Ok I've done my part then, just got off the phone with the paper placing a classified ad.
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