Hi Everyone,
i hope you all have read this
http://www.news.com.au/heraldsun/story/0,21985,24109946-661,00.html
What will you think after this news?
What impact it will bring in?
Is it too early?Few things i am wondering about.
Thanks in advance.
Interest rates won't fall…
It's a hoax, just like all the spruiker stuff the real estate agents post.Even *IF* RBA lowers interest, the banks will keep rising them anyway, so the situation will only get worse if the RBA drops interest rates. Have a look in USA. 2% interest rates.. lol.. and we all know how much THAT helped them ? ( hint : They are a third world country now… )
there have been a few reports now that the RBA may start to consider the downside, each lobby group raises the prospect as their area suffers…housing starts, retail sales etc. It will probably happen but the reaction of the banks will be interesting when it does.
Scamp wrote:Interest rates won't fall…
It's a hoax, just like all the spruiker stuff the real estate agents post.Even *IF* RBA lowers interest, the banks will keep rising them anyway, so the situation will only get worse if the RBA drops interest rates. Have a look in USA. 2% interest rates.. lol.. and we all know how much THAT helped them ? ( hint : They are a third world country now… )
how on earth does an extreme case in the US have anything to do with an intrest rate adjustment in a much better managed economy? taking .25 / .5 of a high interest rate somehow plunges us into US style chaos? give me a break……you had to much caffeine or something?
US is a third world country now? have you ever lived in a 3rd world country? they have issues that may take a decade or more to work through but they are not a 3rd world country. They are becoming less of a force to be sure.
For what it's worth, I think they'll drop the rates. Whether the banks pass them on is another story! The RBA underestimated consumers and how quickly they would adjust ie – stop spending their cash. I think the last rise was just that last step too far and now we've ground to a halt, which wasn't the intention. Slow – Yes. Stop – NO!. Given the banks propensity not to pass on decreases I also heard something that seems to make sense. The RBA will have to drop rates twice in order for consumers to be given 1 decrease. Nifty, eh? We get every single interest rate rise, but only every second decrease.
wait and see, I think.
RBA may drop rates in 2009 but unlikely this yr, but the banks probably will take there time to drop, if at all. We may still see further rate increases from the big lenders without RBA lifting them as has already been evident.
Still keep an eye on the fixed rates, if they start to fall thats an indication the banks are hedging their bets on lower variables coming on line.
Scamp wrote:Interest rates won't fall…
It's a hoax, just like all the spruiker stuff the real estate agents post.Even *IF* RBA lowers interest, the banks will keep rising them anyway, so the situation will only get worse if the RBA drops interest rates. Have a look in USA. 2% interest rates.. lol.. and we all know how much THAT helped them ? ( hint : They are a third world country now… )
Scamp! What are you smoking over there?? I'm in fits of laughter that you think the Us is a third world country. Not by even the wildest stretch of the imagination could it be classed as that.
Just so that you know – and so that you don't bandy the term around – the term is given to countries who have not developed/ evolved in terms of finance and infrastructure etc in the 20th century. And in no way can the US be regarded on those terms.
Really Scamp…I expected more…ha ha ha ha ha. You're a funny one.
Scamp… I actually live in a third world country, have been for the last 6 years and the US most certainly isn't one whatever we might think of their financial mess. Making statements like that undermines your credibility hugely which is a shame as I was enjoying your bearish posts – I don't always agree with them, but they challenge my thinking and that is always good.
As for interest rates … the RBA just like every other central bank is in a dilemma in that they face inflation rates higher than their targets which would drive them normally to increase rates, but the various economies incl. Australia are weakening and would normally need the lift from reduced interest rates. According to some the inflation in energy and food prices will not be halted by increasing interest rates and would only further weaken the economies …
Don't forget that the USA is fighting a war they can't afford to fight (averaging about $90 billion per year for the last 6 years, with an estimated flow on $2 trillion cost to the US economy), so there are other factors at play other than interest rates with the economy in the US. Australia's govt is using it's money more wisely, hence we are in a better economic situation.
Also consider this – Iraq has the second largest supply of oil in the world, second only to Saudi Arabia, which hasn't been put to good use due to the war. And the price of oil (and petrol) is so high, why? Because there's a shortage on the world market…hmmm I wonder what's causing that???
I think the global economic situation will get better when the US pulls out of Iraq, so let's all hope the next US president isn't white – hint, hint…
By the way, i think interest rates will go down, but whether or not the banks pass that on might be a different story. At least if the RBA lowers interest rates, and if the banks don't pass that on, then they're very unlikely to go up any futher, unless the banks want a full – scale riot! Can you picture that, RBA lowers interest rates, banks then raise interest rates…I can't.
Regardless, these announcements of interest rates possibly coming down is a more positive tone than we've had for the last year or so, which can only be good news for the property market and us investors.
mpertile wrote:And the price of oil (and petrol) is so high, why? Because there's a shortage on the world market…Wrong. There's plenty of oil. Speculation drove oil prices up , not 'shortage'. Basically, the exact same thing that happened to housing. Speculation drove those prices up also, not shortage. There's no shortage of housing in Australia. There's no shortage of oil in the world.
Anyway, RBA will not lower interest rates upcoming week : Keep dreaming.
Scamp
Lost a lot of credibility with your most recent statements.
No one can make a reasonable assessment of whether RBA will decrease rates or not as they do tend to make mistakes and bow to political pressure. US a third world country? – US minimum wage is $6 per hour, they have a very low currency, they are recognising their problems, the bank deposits are insured to $100,000 per depositor and the Role of any Federal Reserve is to ensure the stability of the financial system. I feel the US will fix their problems eventually and return to be an ever stronger powerhouse, but not without considerable pain from those who borrowed too much – they will all be wiped out.
The RBA should not have decreased rates in 2002 – 03 but they did. Now look at the problems.
Anyway, high interest rates put pressure on the housing markets and resetting loans deepen the problem..But it is losing jobs and rising unemployment that finishes the job. Higher interest rates slows the economy, increases borrowing costs for companies and individuals, company profits deteriorate, companies cut costs and sack people. Unemployment rises. This is the economic cycle or clock. A country needs to have a recession every 5 years or so on average to keep it healthy and stop unrealistic expectations from developing.
Australias problem is we have been living in a perfect world for 15 years and we do not think a recession is a normal part of the economic cycle. We have tried to rewrite the economic text books (because it is different now.)
It is not different now!
Whether the RBA bows to political pressure and reduces interest rates or not will not stop the property market from crashing as people have taken on too much debt and now people are going to lose their jobs and not be able to service their debt. The damage has already been done.
It is not rising interest rates that crash property markets, it is rising unemployment after massive expolsion in debt and after massive price gains.
Australia is squeezed between a rock and a hard place.
Any reduction in interest rates will cause the $A to fall and this will cause imported inflation from all the imports we are sucking in. We have stagflation. Slowing economic growth and rising cost push inflation. The oil price will fall, but the falling $A will negate this effect and put upward pressure on petrol prices.
Rock and a hard place. – Now the pain must happen to correct our excesses of the past.
There are only 3 ways debt disappears – paid back – taken back – or bankruptcy.
longterminvestor wrote:ScampLost a lot of credibility with your most recent statements.
No one can make a reasonable assessment of whether RBA will decrease rates or not as they do tend to make mistakes and bow to political pressure. US a third world country? – US minimum wage is $6 per hour, they have a very low currency, they are recognising their problems, the bank deposits are insured to $100,000 per depositor and the Role of any Federal Reserve is to ensure the stability of the financial system. I feel the US will fix their problems eventually and return to be an ever stronger powerhouse, but not without considerable pain from those who borrowed too much – they will all be wiped out.
The RBA should not have decreased rates in 2002 – 03 but they did. Now look at the problems.
Anyway, high interest rates put pressure on the housing markets and resetting loans deepen the problem..But it is losing jobs and rising unemployment that finishes the job. Higher interest rates slows the economy, increases borrowing costs for companies and individuals, company profits deteriorate, companies cut costs and sack people. Unemployment rises. This is the economic cycle or clock. A country needs to have a recession every 5 years or so on average to keep it healthy and stop unrealistic expectations from developing.
Australias problem is we have been living in a perfect world for 15 years and we do not think a recession is a normal part of the economic cycle. We have tried to rewrite the economic text books (because it is different now.)
It is not different now!
Whether the RBA bows to political pressure and reduces interest rates or not will not stop the property market from crashing as people have taken on too much debt and now people are going to lose their jobs and not be able to service their debt. The damage has already been done.
It is not rising interest rates that crash property markets, it is rising unemployment after massive expolsion in debt and after massive price gains.
Australia is squeezed between a rock and a hard place.
Any reduction in interest rates will cause the $A to fall and this will cause imported inflation from all the imports we are sucking in. We have stagflation. Slowing economic growth and rising cost push inflation. The oil price will fall, but the falling $A will negate this effect and put upward pressure on petrol prices.
Rock and a hard place. – Now the pain must happen to correct our excesses of the past.
There are only 3 ways debt disappears – paid back – taken back – or bankruptcy.
You just typed over exactly what I said already a long time ago. What's new ?
RBA will *NOT* lower the rates, how many times do you want me to tell you.
Just take the advice, and do something with it. It can be predicted, and it just was.
Just do the maths and you will know why they won't lower the rates.Scamp wrote:Interest rates won't fall…
It's a hoax, just like all the spruiker stuff the real estate agents post.You mean like your genius hoax ?
Scamp wrote:My genius plan was to advertise houses for 30% under the price of an auctioned house, with public viewings the same date as the auction, and the same times too, just to make sure I'm the only one at the auction
Nothing a RE can come up with that I can't counter.http://forum.globalhousepricecrash.com/index.php?showtopic=35049
.
That's what I call a good plan, Scamp. Now all you need is to find a house without a reserve price and you could end up buying it for $1.
Scamp wrote:RBA will *NOT* lower the rates, how many times do you want me to tell you.
Just take the advice, and do something with it. It can be predicted, and it just was.
Just do the maths and you will know why they won't lower the rates.So you are now qualified to give financial advice AND have mates over at RBA, right ? I think you've been hanging around the wrong forum for too long.
Scamp wrote:mpertile wrote:And the price of oil (and petrol) is so high, why? Because there's a shortage on the world market…Wrong. There's plenty of oil. Speculation drove oil prices up , not 'shortage'. Basically, the exact same thing that happened to housing. Speculation drove those prices up also, not shortage. There's no shortage of housing in Australia. There's no shortage of oil in the world.
Anyway, RBA will not lower interest rates upcoming week : Keep dreaming.
Scamp, do a bit of research and you will find you're incorrect on both counts. The middle eastern oil producers/suppliers recently met to discuss increasing supply to help meet the extra demand from oil hungry China and India. Also, there have been many reports on the fact that there is not enough real estate being build it Aust to match the demand, especially in capital cities…
just on the oil debate, and it is a complex one with plenty of factors to consider
but i agree with scamp. oil isnt exactly in short supply, there's plenty of it.
the US hasnt even exhausted its domestic supply while Venezuela and Canada supply the US with as much if not more than the arab states- and they have plenty of reserves albeit in harder to extract tar sands.
the US, contrary to popular myth, didnt go into Iraq to get cheap oil to flood the market (which however was the neocon plan ie, to smash OPEC)- they went in their to control the oil. big difference. the influence of Big Oil in the US Admin is huge- most of the major players still around are Oilers not neocons. so control the output and drive prices up and your million barrels at 20 per barrel (end of clinton admin) is now worth 100+ per barrell, so you have 5x the profit without doing much.
and iraq was the designated minor player in opec, having a production limit well below the other opec members and only using5 of their 75 oil fields (will have to check ths fact). sanctions dictated iraq couldnt sell their oil- except to Halliburton to the tune of 20 odd billion to rebuild their damaged refineries.
on top of this, the US needs to finance its invasion without a war tax, an expensive task. hence the saudi's lend them the money on the pretence it all filters back to them via increased petrol prices.
probably a bit off topic, but the speculation of the public that there isnt any oil left, drives up the price…imho
Thanks for explaining wireless. Yes that's the main reason : speculation.
Anyway, just like with oil, there is NO SHORTAGE OF AUSTRALIAN HOUSES.
In fact, there are 900.000 EMPTY HOUSES in australia.
And.. how do you explain the massive amount of houses for sale ? If there was a real shortage, surely these would have been bought.
The only 'shortage' there is in Australia is one of luxury. Not having to drive 2 hours to work every day, not having to live next to criminals, not having to walk 800 long meters to the beach. Yes, we all want a McMansion on the beaches.
"oooh.. gee Bondi Beach is really crowded… it really sucks to own a house on this busy beach".The fact that there aren't 1 million Ferrari's in Australia doesn't mean there's a shortage of Ferrari's.
It's just means people can't afford them…. that's all. Same with houses.I won't discuss the housing shortage anymore : There is NO housing shortage. I have done the research, and there are 900.000 EMPTY HOUSES. EMPTY… NOT USED… 900.000 !!…
US is going through its worst phase…I have a relative in USA who is owner of 17 Dunkin Donuts Franchisees + couple of motels. He is on the verge of retirement (wanted managers to run the businesses)..Now he has decided to sell off everything & settle in India for his retirement. With the kind of money he would have after selling everything, he can surely live like a Royal King. I talked to him few days ago & he is very pessimistic about future of USA. I guess USA has lost its properity & unmatched shine that the world was envy of.
well share your research with us scamp where do you get your numbers from?
within 500 meters of my house there are 3 empty houses … the are being developed into multi unit sites. There are many reasons a place may be empty.
In another thread you said that sellers are moving out and renting there places while trying to sell, now you say there are 900k empty houses….we are we all living ? under a corrugated iron sheet in a creek bed somewhere?
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