What Effects Will The U.S Market Downturn Have On Australia?
- Thread starter Young_Investing
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thx Michael, a meaty article, esp the bits about lmi insurers and impact on lo doc.
Seems a correct view ( a bit surprising to see that it is coming from a property website
)He didn't mention the risk of deflation that is collecting all the cash around the world and converting into US where it is burned to cover losses, and repaying debt. This will reduce even further the investment into Australia and his resources (which by the way dropped in price around 5% overnight). Also you have to remember that the Australian bank when they get offshore funding they get it in US$, so they repay those in US$ and interest in US$. The funny thing is that you would think you can do that in AU$ but can't really flog that many AU$ around the world, funny that everyone want US$ even if things in US are as worst as ever. The prove of this is that when RBA flog the markets with more AU$ these are not taken that much and actually the rate on the AU$ is quite low, even lower then the RBA target of 7% (the libor on AU$ got down to 6.25% for few days last week and even the bank bills are not that high. It could even happen that banks in Australia will pass in even more then 0.25% of the 0.5%.
Kind of funny if in US mortgages rate get higer then in Australia, may be we should suggest Australian banks to start selling mortgages to US home owner in AU$. US home owner would get a great deal as also their loan would decrease by 5-10% a month if the AU$ keep falling at present rate.
Hang on! how about Zimbabwe? anyone keen to get a loan in Zimbabwen $?
If only we could be so lucky to have the AUD drop another 20 percent.
Our commodities export contracts are generally denominated in USD so a drop in the AUD would be a massive windfall for the Rios of this world - we just get that much more competitive against Brazil and Chinese domestic production.
Of course new Hemis from the US get more expensive but I'm not in the market for a new car anyway.
Our commodities export contracts are generally denominated in USD so a drop in the AUD would be a massive windfall for the Rios of this world - we just get that much more competitive against Brazil and Chinese domestic production.
Of course new Hemis from the US get more expensive but I'm not in the market for a new car anyway.
It'll be good for me either as aus home prices and rent would drop 20%.
i am sure it will happen once resource prices drop 20%
Retail investors should not have been investing in hedge funds by law. Such funds are only available to sophisticated investors. The law says any fund investing pooled money is not allowed to use techniques which the investor could not reasonably be expected to understand. This means that such a fund can buy calls, but not sell them. In fact retail mutual funds are severely limited in the amount of hedging they can do, and hedging, in it's purest form, is simply taking out a bit of insurance to protect your position.
Investors don't have to sit an exam to be allowed to get involved so an arbitrary measure such as having a couple of mil to invest is used. And we all know some very unsophisticated people who have that sort of money to invest.
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Hi Boomtown,
1. Vis-a-vis Singapore Dollar Currency, the Australian Dollar Currency has more or less dropped by some 20% over the last 2 months from A$1:S$1.32 to A$1:S$1.12 this morning.
2. This is working in my favour as my own overall DSR has now improved quite a bit as a result of the continuing Australian Dollar Currency weakening.
3. Like you, I am also looking forward to the continued weakening of the Australian Dollar Currency in the near future.
4. Thank you.
Cheers,
Kenneth KOH
Retail investors should not have been investing in hedge funds by law. Such funds are only available to sophisticated investors. The law says any fund investing pooled money is not allowed to use techniques which the investor could not reasonably be expected to understand. This means that such a fund can buy calls, but not sell them. In fact retail mutual funds are severely limited in the amount of hedging they can do, and hedging, in it's purest form, is simply taking out a bit of insurance to protect your position.
Investors don't have to sit an exam to be allowed to get involved so an arbitrary measure such as having a couple of mil to invest is used. And we all know some very unsophisticated people who have that sort of money to invest.
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Dear Sunfish,
1. You are right about the Australian Investing Regulations in this respect.
2. However, it still does not prevent the Australian Superannuation Funds/Pension Funds from suffering a heavy loss on the ASX on Tuesday morning when some of the Australian Superannuation Funds/Pension Funds have reportedly started to sell themselves out of the falling ASX, in order to meet their own respective market redemption calls requirements by many of the end retail investors when the DJIA last lost 777.8 points on Monday evening.
3. As usual, if these Superannuation Funds/Pension Funds in Australia did not sell anything off the ASX on Tuesday trading day itself, then there is actually no nett loss suffered by any of these Funds despite the local newspapers headlines screaming aloud boldly that some A$55 Billion were being wiped out off the ASX on Tuesday.
4. However, I do not believe that this was indeed the case as the RBA was reportedly injecting some US$10 Billion cashflow frantically into the the local money markets to boost its liquidity.
5. For your further comments and discussion, please.
6. Thank you.
Cheers,
Kenneth KOH
&&&&&&&&&&&&&&&&&&Seems a correct view ( a bit surprising to see that it is coming from a property website
He didn't mention the risk of deflation that is collecting all the cash around the world and converting into US where it is burned to cover losses, and repaying debt. This will reduce even further the investment into Australia and his resources (which by the way dropped in price around 5% overnight).
Also you have to remember that the Australian bank when they get offshore funding they get it in US$, so they repay those in US$ and interest in US$.
The funny thing is that you would think you can do that in AU$ but can't really flog that many AU$ around the world, funny that everyone want US$ even if things in US are as worst as ever.
The prove of this is that when RBA flog the markets with more AU$ these are not taken that much and actually the rate on the AU$ is quite low, even lower then the RBA target of 7% (the libor on AU$ got down to 6.25% for few days last week and even the bank bills are not that high.
It could even happen that banks in Australia will pass in even more then 0.25% of the 0.5%.
Dear Boz and Michael,
1. I am not sure if I can fully agree with Jenna Ford's article or/and what is being said here as this is not what I am actually seeing regarding the latest property market development in Singapore.
2. This morning, the Straits Times Newspapers in Singapore has a front page headline screaming aloud, "Private Homes Prices:First Fall in 4 1/2 years", thereby marking an end to the property boom that last started in 2004.
3. Housing market analysts in Singapore are now projecting a 25% price fall for the high-end private condo unit apartment market segment, a 15% price fall for the mid-end private condo unit apartment market segment and some 5%-10% price fall for the mass market private condo unit apartment market segment.
4. Apparently, one of key reasons for this recent fall in property prices in Singapore, has to do with higher interest costs and recent non-availability of cheap credit as a result of the present global Credit Crunch Crisis, which is presently beginning to further deepen and spreading afar wildly throughout the US, Europe and other OECD countries.
5. Previously, the inter-bank market - comprising loans between the local banks in Singapore- was aflush with cash, with one-month Singapore Interbank Offered Rate (SIBOR) charging its loans as low as 0.75% in August 2008.
6. However, this cosy scenario has changed dramatically recently after the collapse of the US Investment Bank, Lehman Brothers some 2 weeks ago, to be followed-up by the near collapse of the American Insurance Group, and the present proposed US$770 Billion Bail-out for Wall Street by the US Treasury.
7. 10 days after the collapse of the US Investment Bank Lehman Brothers, the global credit markets have begun to freeze up completely and banks refused to lend to one another, with the Singapore one-month SIBOR rate shooting up suddenly, as high as hitting 2.275% last Friday before easing to 1.8125% yesterday.
8. Despite its recent easing, the present Singapore SIBOR rate at 1.8125% level, is still some 2.42 times higher than what it used to be in August 2008 period.
9. Consequently, all of a sudden, many local banks in Singapore have started to turn cagey about extending their loans to new home buyers, together with the increasing number of homes being reportedly put on "distressed sales" recently.
10. The Singapore property market was reportedly the second best performing housing market in the world during 2007, having achieved an annual growth rate of 31.7%.
11. Thus, will what I am presently witinessing as happening real time in the Singapore property market, soon also apply to the various housing markets in Australia in the near future too, for the same reason i.e drying up of cheap credit both in the local and/or overseas money markets?
12. For your further comments and discussion, please.
13. Thank you.
regards,
Kenneth KOH
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Glad to see so much discussion in this post, i have learnt a great deal! keep up the great input..............
Greatly appreciated
James
Greatly appreciated
James
for anyone interested, Palin and Biden are nutting it out until 1230pm on ABC tv
well did'nt watch the whole thing but palin well' lets say she is scary! to know that she could be VP, if she got their any one could.
another topic,it is now close to 2pm and the asx should traditionly slide, but today is the last trading day our week, and the bill gets voted on tonight, so do you leave your $$ in or out, and then their is monday trade day, does ya head in ?
another topic,it is now close to 2pm and the asx should traditionly slide, but today is the last trading day our week, and the bill gets voted on tonight, so do you leave your $$ in or out, and then their is monday trade day, does ya head in ?
caught the last 30 odd mins.
No embarassing guffs or pauses by Sarah. She was complimentary towards Biden throughout for his patriotism. She played the folksy Mom card a bit, handled foreign affairs and other questions better than the guffs replayed by left media recently. Talked about having to FIGHT for security of economy and borders etc.....an extreme slant imho.
(note the same media didn't drive as much mileage out of dems who invented the internet, were shot at in Bosnia, when bumped into Sir Edmund Hilary at the airport, told him she was named after him, plagiarised a speech by British MP Neil Kinnock, etc)
Biden was stiff and more formal...heavier on facts re foreign policy...constantly bagging the incumbents, rather than elaborating detail of his plans and whether he'd be a big spender.
From the bits I saw, the questions were loaded towards foreign policy, which you'd expect from a DC centric progressive media. They (media) don't seem to have woken up that the country needs to rein in its expenditure on matters foreign and focus on securing their own economic future.....(go Ron Paul)
In most polls I've seen out of the US, Joe 6pk is more concerned about his job and home than Iraq or Afghanistan.....and righly so.
Anyway, hopefully the left will keep paying out on Palin ad infinitum. The gooses don't realize that in doing so, they are paying out on Joe 6pk.....and they'll drive sympathy and sentiment towards Palin.
Craig, I'll disagree with you on Palin. The Republicans have good advisors and are more likely to favour free market solutions to the US's problems, rather than blowing out public debt moreso. This whole angle about politicians having to know everything about everything to impress the media is flawed. If you consider all past presidents of the USA, the majority were poorly schooled and from the backwoods. It was their love of country, sense of humanity, and general common sense that determined their time in office. Abraham Lincoln, arguably the most respected President, had only 18 months of formal schooling.
A lawyer once tried to ridicule Henry Ford for something or other, asking him what he knew about a certain complex topic. Henry Ford admitted he didn't know, but said he had 20 experts on his payroll he could ring right there and then, who could give him the most informed answer in America.
No embarassing guffs or pauses by Sarah. She was complimentary towards Biden throughout for his patriotism. She played the folksy Mom card a bit, handled foreign affairs and other questions better than the guffs replayed by left media recently. Talked about having to FIGHT for security of economy and borders etc.....an extreme slant imho.
(note the same media didn't drive as much mileage out of dems who invented the internet, were shot at in Bosnia, when bumped into Sir Edmund Hilary at the airport, told him she was named after him, plagiarised a speech by British MP Neil Kinnock, etc)
Biden was stiff and more formal...heavier on facts re foreign policy...constantly bagging the incumbents, rather than elaborating detail of his plans and whether he'd be a big spender.
From the bits I saw, the questions were loaded towards foreign policy, which you'd expect from a DC centric progressive media. They (media) don't seem to have woken up that the country needs to rein in its expenditure on matters foreign and focus on securing their own economic future.....(go Ron Paul)
In most polls I've seen out of the US, Joe 6pk is more concerned about his job and home than Iraq or Afghanistan.....and righly so.
Anyway, hopefully the left will keep paying out on Palin ad infinitum. The gooses don't realize that in doing so, they are paying out on Joe 6pk.....and they'll drive sympathy and sentiment towards Palin.
Craig, I'll disagree with you on Palin. The Republicans have good advisors and are more likely to favour free market solutions to the US's problems, rather than blowing out public debt moreso. This whole angle about politicians having to know everything about everything to impress the media is flawed. If you consider all past presidents of the USA, the majority were poorly schooled and from the backwoods. It was their love of country, sense of humanity, and general common sense that determined their time in office. Abraham Lincoln, arguably the most respected President, had only 18 months of formal schooling.
A lawyer once tried to ridicule Henry Ford for something or other, asking him what he knew about a certain complex topic. Henry Ford admitted he didn't know, but said he had 20 experts on his payroll he could ring right there and then, who could give him the most informed answer in America.
Seems she did much better the expected, it probably was an even match, she wasn't as professional as Biden but she gave the look to be "one of us".
You better check som US paper website like NY TIMES
Well i saw about 20 minutes of it and I thought Palin came across well enough but it was like listening to a hockey marm trying to explain quantum physics. She didn't convince me she really knew her subject.
Biden was sharper and succinct; perhaps in some danger of appearing to be a smart a*s. He seemed more comfy with his subject.
He seemed a bit more savvy and smarter.
Hang on, maybe he is!
Woops no votes in being smarter though. Joe 6pak likes pollies to be just a LITTLE bit smarter than he is. Not too much though.
Biden was sharper and succinct; perhaps in some danger of appearing to be a smart a*s. He seemed more comfy with his subject.
He seemed a bit more savvy and smarter.
Hang on, maybe he is!
Woops no votes in being smarter though. Joe 6pak likes pollies to be just a LITTLE bit smarter than he is. Not too much though.
Thanks, Winston, boz and Giddo!
Have to agree with you, Winston, about the left paying out on Palin and the Republicans being more likely to favour free-market solutions. From what I've seen of Obama, I have to say I'm considerably less-than-impressed - he says a lot, but it doesn't seem to offer much in the way of solutions. Is that really the best the Americans can come up with in the way of candidates?? Am glad I'm not voting - neither side engenders much confidence.
Cheers
LynnH
Cheers
LynnH
Have to agree with you, Winston, about the left paying out on Palin and the Republicans being more likely to favour free-market solutions. From what I've seen of Obama, I have to say I'm considerably less-than-impressed - he says a lot, but it doesn't seem to offer much in the way of solutions. Is that really the best the Americans can come up with in the way of candidates?? Am glad I'm not voting - neither side engenders much confidence.
Cheers
LynnH
Cheers
LynnH
I thought Tom Switzer did a good job of keeping the debate "fair and balanced". The self congratulation with Costello was rather embarrassing really. IMO he reduced his credibility somewhat by just spouting Liberal election lines. He must be angling for pre-selection I guess...
And that's coming from a traditional Liberal voter!
Very lucky they've done it last week, have a look at THIS:
Commodities Head for Biggest Weekly Decline in Over 50 Years
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