Rising Interest Rates and a Rising Dollar - Cruel!

[irish2]

Originally Posted by vztrt

AFAI understood the support wasn't all that good so if you needed cash during the GFC the big 4 were really the only way to go.

I also know a few big credit unions got bought out.

Credit unions gernerally 'merge'. They are owned by their members. Each member holds an equal 'share'. I had no trouble getting a home loan from a credit union during the GFC. Better rates than the big 4, no fees, free offset account, unlimited withdrawals.

[dannyhilton]

Yup, I'm in the same position as you irish2 (car loan not a home loan). I'm only 21, they gave me a cheap rate, great access to my account, high interest on my savings, I can't fault them, and at no time have I had any issues. I'm also with another smaller bank, and again, the same story, all is great as far as I'm concerned with either...

[fmc351]

Originally Posted by Dr Jekkyl

Indeed! And don't any of you communists question it!

You're not a communist are you?

[insert word here that is not allowed] that. Nah, I couldnt be happy in a society like that. But Im also smart enough to know that no matter how much money I make, the lowest common denominator effects my life too. Thus I believe in social medicine, education, and regulation of any industry that has demonstrated it cant be trusted. Additionally, anything like airlines re: maintenance and a few others too.

Laissez Fares capitalism is just as bad/evil as communism IMO. Big government is bad, but small government could be worse.

[bingoTE50]

I have no problem with rising interest rates,geez ,I paid 17.5 % on 110k in the late 80's,but it really irks me that they blatantly go for a profit grab.
Stop paying your Executives way too much money.

[ebxr8240]

St George is now Wespac...

[divine_afg]

Originally Posted by ebxr8240

St George is now Wespac...

Bank West is CBA
NAB Tried to Buyout AXA I think to capitalise on Super and Investments
ANZ has recently purchased Landmark and owns ING and if you purchase car
through dealer it most likely to be financed with ESANDA who is own by ANZ.

Many more like this...

[4Vman]

Solution? buy bank shares, share in their wealth.. Problem solved....

[divine_afg]

Originally Posted by 4Vman

Solution? buy bank shares, share in their wealth.. Problem solved....

best time for this was yesterday....

[4Vman]

Originally Posted by divine_afg

best time for this was yesterday....

LOL, it would appear so!!!

[Resurrection]

There are a number of issues people need to consider before they become emotional:

(1) It is important for a country to have a strong financial sector. As can be seen by what is occuring in the USA, once the banks go broke, society suffers.
(2) Many Australians have some part of their superannuation linked to the local banks. If the banks do well, so does their super. But nobody is either willing to acknowledge that or link its performance to the banks performance.
(3) The banks are not at fault. It is succesive Australian governments (and the ACCC) which have created the current climate where four banking organisations dominate the local scene. The banks are only doing what we would all do in similar circumstances - taking advantage.

I blame the ACCC for being a useless organisation. How they allow the big banks to take over the small banks is beyond me. Whenever a new bank provides a real alternative and starts to make a presence in the market, one of the big four take them over and absorb them. How the ACCC allows this to occur is criminal. The consumer is not being protected by allowing these aquisitions to occur and competition being effectively stifled. This is not true capitalism.

As everything, a happy medium needs to be found between the two extremes of the Australian and US financial models. But this will not occur until the ACCC gets overhauled and grows some balls.

[gtfpv]

ohhhhhh crikey , my fingers are shaking . PARITY with the $US where are our 90c litre petrol prices ??? electricity ^^^^ water and gas to follow no doubt . speed- safety happy snap cams everywhere , groceries rising , highest average mortgage amounts ever on record . now please i am comfortable , but crikey i should be at my age 41 . many are not even above my age , and those mr and misses average 30 somethings , well i cringe at the thought , in times gone by such as this , --------- " MASSIVE WAGE GROWTH AND INFLATION" ------- have always followed to keep living inline with the times . A FEAR this may not happen this time though .

[Revolver]

Originally Posted by Resurrection

Great news for us who are fiscally responsible.

Yep, with that statement, it's obvious you don't know the value of a "dollar".

Every interest rate rise attributes to loanee's paying more. Now for astute investors (a rule of thumb for any one who is borrowing to invest or buy) they will account for up to & including a 12% interest rate. However every dollar that has to go towards loan payments is one less dollar that can be invested (as I do) somewhere else to make more money. Which sounds better to you?

BTW it has nothing to do with the government, reserve bank, banks or ACCC.

Its to do with all of us. Everytime you have over money for a product or service (whether it is a packet of mints, or a brand new Aston Martin) it is calculated into inflation. I've also heard rumours that whenever you swipe a credit card its calculated as twice that amount in inflation against if you had just handed over cash........ So the more you spend (whether it be essential for survival, or total luxury) the more inflation rises. Simple.

Which I might add is yet to be substantiated or dis-proven. but I will find out when I have time to fully research the subject.

[Scott]

^^ GT - you should write for Billy Joel ("we didn't start the fire" lyrics sprung to mind).

The only way to beat the banks, is to leave the banks. Much like O&G - the only way to save on fuel is to not use it.

But they always get you somewhere...

[Iggypoppin']

Resurection, just a quick point, didn't the American banks go broke because they gave loans to people who simply could not afford them? As well as investment instruments so complex even the bankers creating them couldn't fully understand them?

[ebxr8240]

Banks with the name Fannie May and Freddie Mac...
No wonder they are in trouble !!!

Who would have ever thought U.S would have to print money to keep itself afloat ??
Zimbabwe did this a few years ago with 200% inflation...

A socialist way of getting a capitalist country out of it's trouble...
IMO it has a LONG way to go !!!

[4Vman]

Originally Posted by Iggypoppin'

Resurection, just a quick point, didn't the American banks go broke because they gave loans to people who simply could not afford them? As well as investment instruments so complex even the bankers creating them couldn't fully understand them?

In the US you can walk away from your home if you cant afford to repay it too.....
Bankruptcy there is different to here.

[Resurrection]

Originally Posted by Iggypoppin'

Resurection, just a quick point, didn't the American banks go broke because they gave loans to people who simply could not afford them? As well as investment instruments so complex even the bankers creating them couldn't fully understand them?

Yes. The US banking system was too losely regulated, their SEC was inept, the ratings agencies were dancing to their task-masters tune and the US Federal Reserve is a law upon itself. A dangerous mix.

[Revolver]

Not to mention that the US no longer has Gold to back its currency... Which it was law to have until Nixon broke the Bretton woods agreement. Which devalues the currency. Its quite literally ink & paper now.

When compared to hard money backed by gold or silver, this debt-based approach has the advantage of making the currency elastic, giving the government a means of expanding or contracting the money supply in response to changing economic conditions. The disadvantage of this approach is inflation. The money supply must be continually expanded in order to finance interest payments on the debt by which it is issued. This devalues the currency, causing inflation.

[BENT_8]

Originally Posted by 4Vman

In the US you can walk away from your home if you cant afford to repay it too.....
Bankruptcy there is different to here.

How?
If my debts outweigh the value of my secured posessions, what more can they really take?
At best they can prevent me from borrowing again, but considering the situation, thats proberbly in my favour too...

[gtfpv]

yesterday on talkback they had a banking proffessional finance rep saying that there will be another 1.25% rise to go .
the 64 000 000 $ question is . ? some of us must have lots and lots of dough , infact a high number of us must , and this must be doing 2 things, 1 leaving the rest of us behind , and 2 keeping the economy steaming .

i should explain this post a little further ; in the late 80's and early 90's , the amount of people getting into investing in realestate became astonishing , i remember thinking , if too many people get hold of this and it works , in years to come too many people will be creating wealth . in a capatolist system only the top runners can be wealthy, therefore , i remember thinking at the time , if the middle class can become wealthy , then the wealthy will have to downgrade the middle class back to the relative reality of the pyramid . therefore the person with a few houses , of which now there are many , must become the new middle class , those without ; join struggling street .
3rd time edit . i'll add a little more , the solution is more heads of population , and lower productive wages , which in turn keeps the economy striving , whilst lowering living standards australia wide .

[Iggypoppin']

Originally Posted by BENT_8

How?
If my debts outweigh the value of my secured posessions, what more can they really take?
At best they can prevent me from borrowing again, but considering the situation, thats proberbly in my favour too...

You can hand the keys back, effectively saying goodbye to your mortgage. Imagine, whole suburbs of people who signed a loan whose terms stated that for the first five years, the interest on payments can be placed onto the principle amount borrowed. After five years, it reverts to principle+interest(and interest on the interest!!!!!) ouch! Mr sanchez can't afford his mortgage, so he just coughs up the keys and walks away with wife, kids and pooch. But all around him, his neighbours are doing it too. All too soon an entire suburb has handed in the keys, reducing the value of the land to virtually nothing. The banks suddenly have a heap of land, that's all worthless. This is effectively(but not the sole purpose behind) the market going belly up in the US.
I am not %100 sure on whether my info on those odd loans is true; my accountant and I get on the beer every now and then, and that's a garbled version of events from him, and what I can remember of it. It's probably not so clear cut.
The problem in the US is that they mostly wrote those toxic loans to people who they knew could not afford them, and banked on the value of the house going up to cover their bum. Obviously it didn't work.

[Scott]

Originally Posted by Iggypoppin'

The problem in the US is that they mostly wrote those toxic loans to people who they knew could not afford them, and banked on the value of the house going up to cover their bum. Obviously it didn't work.

They were forced to offer loans to every schmuck, they were made knowing they would default and they thought they had a strategy to cover it.

As you say, obivously it didn't work.

[Resurrection]

Originally Posted by Blue Beast II

Not to mention that the US no longer has Gold to back its currency... Which it was law to have until Nixon broke the Bretton woods agreement. Which devalues the currency. Its quite literally ink & paper now.

There are calls to audit the US gold reserves to confirm how much gold exists. Naturally these requests are being ignored as there may not be as much (or none at all) which would cause a panic.

[gtfpv]

Originally Posted by Resurrection

There are calls to audit the US gold reserves to confirm how much gold exists. Naturally these requests are being ignored as there may not be as much (or none at all) which would cause a panic.

very interesting prediction this month . not that i believe this crap , but this guy has put his balls on the line with what he has said towords the end of this vid . if he is right , this will be massive , if he is wrong than he bites the dust with his rep , within the next 2 weeks .
http://www.youtube.com/watch?annotat...K9w&feature=iv

[Iggypoppin']

Gtfpv whilst your posts are informative, I am having serious vision problems reading the posts due to the space after any punctuation, just wondering if you could maybe tone that down on long posts. My eyes really are not great and it can cause migraines if I strain too hard to read something.

[BENT_8]

Originally Posted by Iggypoppin'

You can hand the keys back, effectively saying goodbye to your mortgage. Imagine, whole suburbs of people who signed a loan whose terms stated that for the first five years, the interest on payments can be placed onto the principle amount borrowed. After five years, it reverts to principle+interest(and interest on the interest!!!!!) ouch! Mr sanchez can't afford his mortgage, so he just coughs up the keys and walks away with wife, kids and pooch. But all around him, his neighbours are doing it too. All too soon an entire suburb has handed in the keys, reducing the value of the land to virtually nothing. The banks suddenly have a heap of land, that's all worthless. This is effectively(but not the sole purpose behind) the market going belly up in the US.
I am not %100 sure on whether my info on those odd loans is true; my accountant and I get on the beer every now and then, and that's a garbled version of events from him, and what I can remember of it. It's probably not so clear cut.
The problem in the US is that they mostly wrote those toxic loans to people who they knew could not afford them, and banked on the value of the house going up to cover their bum. Obviously it didn't work.

I agree with what your saying, no doubt, but it is no different here.
An inability to pay the mortgage caused the US to fall over, and an inability to pay the mortgage can do the same here.
If you walk away from your debts here they cant lock you up or anything, all they can do is force the sale of your secured assets minus general living requirements, fridge, beds, childrens furniture etc.

I only heard on the radio yesterday that 1/3 of sales in Adelaide are bank forced sales that the banks dont want you to know about...

[4Vman]

Originally Posted by BENT_8

I agree with what your saying, no doubt, but it is no different here.
An inability to pay the mortgage caused the US to fall over, and an inability to pay the mortgage can do the same here.
If you walk away from your debts here they cant lock you up or anything, all they can do is force the sale of your secured assets minus general living requirements, fridge, beds, childrens furniture etc.

I only heard on the radio yesterday that 1/3 of sales in Adelaide are bank forced sales that the banks dont want you to know about...

There is 1 significant difference, Aussie banks wont provide unsecured home loans, i.e they wont lend more than the fire-sale value of the property, in the US they will lend well over 120% property MARKET value...

If you default in Australia they sell your house and pay out the loan, in the US they sell your house and there's still a debt you don't have to pay...

[Iggypoppin']

Originally Posted by 4Vman

There is 1 significant difference, Aussie banks wont provide unsecured home loans, i.e they wont lend more than the fire-sale value of the property, in the US they will lend well over 120% property MARKET value...

If you default in Australia they sell your house and pay out the loan, in the US they sell your house and there's still a debt you don't have to pay...

And this is why Americas banks fell over. I can't see what happened in the US happening here though.

[ebxr8240]

They also loaned to agents then agents .. When interest rates dropped so low there was no meat left to pay all the middle men...
Then the middle class wages dropped.. There pay conditions are far different to here...
Such as Las vegas there heaps of nice houses empty..

[gtfpv]

Originally Posted by Iggypoppin'

Gtfpv whilst your posts are informative, I am having serious vision problems reading the posts due to the space after any punctuation, just wondering if you could maybe tone that down on long posts. My eyes really are not great and it can cause migraines if I strain too hard to read something.

sorry mate, i try my best , but i finger type quite fast, because i finger type i cant see my errors, i would be very slow to post if i spent the time for correct grammer. and if i did take the time my grammer and punctuation would barely pass anyways . but i will try to neaten up a little . cheers