Interest Rates/Aust economy discussion

[BigDaddy]

One of the funniest things I have seen in a long time!!

Here's the youtube vid of it. Check out the computer on the left hand side of the presenters head...
http://www.youtube.com/watch?v=RotaSnenNyQ

His reaction at the end is pricless!!!!!!

[devilsadvocate]

Rates up .25% again.

Totally warranted given their hold in Feb, unemployment diving, house prices and auction clearances continuing to increase and todays strong retail sales figures.

IMO, expect the same again next month!

[mighty_tiger_79]

gotta agree DA

[gossipgirl]

sucks the big one

[devilsadvocate]

sucks the big one

Nah, it's sensible financial management by the RBA.

It will prevent inflation going bananas, particularly house price and wage inflation.
It will keep Australia's growth in check and moving forward at a steady pace without getting ahead of ourselves.

Hopefully it will also bring government spending in check to save our current account deficit spiralling into a position that we will never be able to repay. Thanks Kevin '07........his legacy may cost every future Australian for the rest of time.

[gadj1976]

Rates up .25% again.

Totally warranted given their hold in Feb, unemployment diving, house prices and auction clearances continuing to increase and todays strong retail sales figures.

IMO, expect the same again next month!

Yeh DA, it was the responsible move, however the speed at which they're passed on doesn't seem to equate to the speed in which reductions are passed on. That's what I'M pi$$ed about!

[redandblack]

sucks the big one

Nah, it's sensible financial management by the RBA.

It will prevent inflation going bananas, particularly house price and wage inflation.
It will keep Australia's growth in check and moving forward at a steady pace without getting ahead of ourselves.

Hopefully it will also bring government spending in check to save our current account deficit spiralling into a position that we will never be able to repay. Thanks Kevin '07........his legacy may cost every future Australian for the rest of time.

Australia's debt ratio is one of the lowest in the developed world.

Interest rates are at historic lows. Remember that slogan that interest rates would always be higher under a Labor Government

[Psyber]

....Australia's debt ratio is one of the lowest in the developed world.
Interest rates are at historic lows. Remember that slogan that interest rates would always be higher under a Labor Government

I'm not sure that makes our debt ratio necessarily OK or sustainable - perhaps the whole "developed world" is in a debt crisis.
I suspect it is, because all production is moving to the "developing world", and so are the profits.
Australia has been cushioned to some extent by our capacity to sell raw materials to the manufacturing countries.
But, we need to prevent debt build up now in case they find cheaper sources, and then we can't pay our way either.

I predict interest rates will be higher under this Labor government too by the end of its term.
Let's wait and see..

[devilsadvocate]

sucks the big one

Nah, it's sensible financial management by the RBA.

It will prevent inflation going bananas, particularly house price and wage inflation.
It will keep Australia's growth in check and moving forward at a steady pace without getting ahead of ourselves.

Hopefully it will also bring government spending in check to save our current account deficit spiralling into a position that we will never be able to repay. Thanks Kevin '07........his legacy may cost every future Australian for the rest of time.

Australia's debt ratio is one of the lowest in the developed world.

Interest rates are at historic lows. Remember that slogan that interest rates would always be higher under a Labor Government

You are clearly measuring Australia's debt ratio against inflated asset prices. Consider this. At the peak of the US housing bubble, the median US house price was approximately 3.5 times the average household income. Australia's Median house price is currently just over 5 times average household income. 5 TIMES!!!!! The US housing market fell approximately 30% accross the board. Australia's has remained constant and even grown marginally over the last 12 months. (I understand there are different driving forces in the Australian and US markets, but you cannot overlook this HUGE discrepancy).

Interest rates WERE at historic lows. At a time when the economy threatened to sink into a decline worse than the great depression. The sharemarket tanked 35%. On what planet would you expect rates to rise in this case?

As a response, Labour has spent ENOURMOUS sums of money to bring the economy back on track. IMO, some of this spending was very well directed. However, Kevin '07 just didn't know when to pull back and let the economy stand on it's own two feet. The result will be continuing interest rate increases. There will be a minimum of another 3 rate rises this year and I wouldn't be surprised if we see another 5.

So perhaps be wary of how loud you broadcast the low interest rates line.....in 10 months, you may be eating humble pie and by April next year, it may be served by Mr Abbott.

[mick]

Fixed rates already have the next 12 months of predicted increases built into them...unless you absolutely need to know exactly what your repayments need to be for the next X years dont fix is my advice

Could not agree more, I've always saved money sticking to variable, however if you want certainty...... I think DA's analysis nails the challenges that will be faced by borrowers over the next couple of years.

[mighty_tiger_79]

http://www.adelaidenow.com.au/business/ ... 5850189400

[devilsadvocate]

http://www.adelaidenow.com.au/business/interest-rates-tipped-to-rise-again/story-e6frede3-1225850189400

Still 2-3 more left before Christmas too folks.

[mighty_tiger_79]

http://www.adelaidenow.com.au/business/interest-rates-tipped-to-rise-again/story-e6frede3-1225850189400

Still 2-3 more left before Christmas too folks.

absolutely

I think most people with mortgages do realise that the increases will continue and i think people have reacted with reducing the amount being spent on retail etc...

will be interesting to see how many people struggle with the rate rises, and if any lose their property, a lot of houses purchased were done so by first home owners grant

[devilsadvocate]

http://www.adelaidenow.com.au/business/interest-rates-tipped-to-rise-again/story-e6frede3-1225850189400

Still 2-3 more left before Christmas too folks.

absolutely

I think most people with mortgages do realise that the increases will continue and i think people have reacted with reducing the amount being spent on retail etc...

will be interesting to see how many people struggle with the rate rises, and if any lose their property, a lot of houses purchased were done so by first home owners grant

I bought using the FHOG, but I factored in 5 interest rate rises in 2010 and could probably afford to keep repaying my debt even if rates got to 15%.

Imagine being in Sydney/Melb, where some FHB's have loans of 500-600k.

[Squawk]

Factoring in interest rate increases is fine, but it's a helluva lot harder when Kevin07 has increased taxes by stealth and been on a bender of a marathon spend-a-thon. Suddenly your budget for interest rate increases has been blown by Kevin07 taxing you stealthily with no mandate to do so other than being the autocrat that he is.

[devilsadvocate]

Factoring in interest rate increases is fine, but it's a helluva lot harder when Kevin07 has increased taxes by stealth and been on a bender of a marathon spend-a-thon. Suddenly your budget for interest rate increases has been blown by Kevin07 taxing you stealthily with no mandate to do so other than being the autocrat that he is.

Exactly. Kevin 07 - his debt legacy will live with all Australians FOREVER. We will never repay the debt K07 has racked up. But we'll pay for it forever.

Don't blame me - I didn't vote for him!

[aceman]

Which large provider of home loans is about to announce a " change of name" of their business??

[devilsadvocate]

Rates up again.

This one will help cool the property market a bit IMO.

I'm still expecting 1-2 more before Christmas too.

[mighty_tiger_79]

Which large provider of home loans is about to announce a " change of name" of their business??

if its bernie lewis its already been mentioned somewhere on here.

[mighty_tiger_79]

gone up in what is a bit of a surprise