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#811 | ||
Thailand Specials
Join Date: Aug 2009
Location: Centrefold Lounge
Posts: 49,028
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#812 | ||
FF.Com.Au Hardcore
Join Date: Jul 2009
Location: melbourne
Posts: 4,649
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It’s the first time in a decade since I’ve seen the RBA so animated. Don’t think this was by accident. It was carefully orchestrated signaling.
Reserve Bank paves way for further cuts in official interest rates. The Reserve Bank has paved the way for further cuts to the official interest rate and could even resor*t to quantitative easing — “printing money” to buy government bonds — to ward off a potenti*al downturn. In a major speech last night, RBA deputy governor Guy Debelle declared the central bank was prepared to “go fast, go hard and not die wondering” by stimulating the economy — a nod to the Rudd government’s $52 billion cash injection to insulate against the global financial crisis. He also warned that a lending slowdown could hurt the economy, in a sign the bank is fretting about the potential fallout from an emerging slump in house prices*. “There is a risk that a reduced appetite to lend will overly curtail borrowing with consequent effects for the Australian economy,” Dr Debelle said. READ NEXT No deadline for trade deal: Payne AMANDA HODGE Noting the Reserve Bank had “repeatedly” said the next move in interest rates was more likely up than down, Dr Debelle said there was “still scope for further reductions in the policy rate”. “It is the level of interest rates that matters and they can still move lower,” he added, in remark*s that could foreshadow a sharp reappraisal of the outlook by the Reserve Bank board when it next meets in February, after the summer break. The official interest rate has been unchanged since August 2016, when former governor Glenn Stevens reduced the cash rate to a record low of 1.5 per cent — the final in a series of cuts that has seen the rate fall from a 10-year peak of 4.75 per cent in late 2011. The plain-speaking Dr Debelle, a currency and bond market veteran, said the Reserve Bank was also prepared to create new money to buy government bonds from private banks, a policy pursue*d vigorously — and controversially — by central banks in the US, Japan and Europe to try to keep interest rates low. “Quantitative easing is a *policy option in Australia, should it be required,” he said, adding it could be even more effecti*ve here than abroad becaus*e of the scarcity of Aust*ralian government bonds. His comments come against a backdrop of deteriorating econo*mic data: house prices and building approvals have been falling, while the national econo*mic growth rate dropped from 3.4 per cent to 2.8 per cent, it emerged this week, surprising economists. Analysts at rating agency Fitch said yesterday the Reserve Bank’s growth forecasts were “overly optimistic”. “We are bearish on the Australian economy, which differs sharply from the RBA’s upbeat outlook,” it said, dumping its expectati*on the RBA would lift rates any time in 2019. Speaking at the Australian Business Economists’ annual dinner, Dr Debelle said the federal government had room to borrow and spend to stimulate the economy, if needed. “Fiscal space is really important; we still have that in Aust*ralia,” he said, backing former treasurer Wayne Swan’s controversial $52bn fiscal stimulus of late 2008 and early 2009, which gave $900 payments to households, help for first-home buyers, discount roof insulation and a school hall building boom. “Fiscal stimulus in Australia in my view was absolutely necessary and was a critical factor behind Australia’s good economic outcome*s,” Dr Debelle said. Adam Boyton, chief economist of the Business Council of Australia, said maintaining fiscal “firepower” was critical. “When it comes to the budget, that means not just getting back into surplus but reducing debt too,” he said. In a speech that focused on the perils of excessive debt and leverage, Dr Debelle said the jury was still out on how much was too much. “We still don’t really have a great handle on what level of leverage is dangerously excessive for governments, households, banks and corporates,” he said. “Leverage significantly magnifies the effect of any shock that hits the economy; it might not start the fire, but it will pour petrol on a burning platform.’’ Standard measures of household leverage, which showed total mortgage debt was 27 per cent of the value of housing in June, could provide false comfort, he suggested. “(They are) very much dependent on the value of the denomina*tor, house prices in this case, and we know they can declin*e quite rapidly,” he said. The similarity of the big four banks, reeling in the wake of the financial services royal commission, was “not so obviously benefici*al”, leaving the door open to ideas that they should maintain higher levels of capital. “Their similar behaviour and similar reaction functions to events such as falling house prices run the risk of amplifying the downturn in the housing *market,” Dr Debelle said. “Those such as Anat Admati still make the argument that furthe*r reduction in leverage is necessary.’’ Stanford’s Professor Admati slammed the banking regulator APRA in The Australian this week for “outrageously inadequate” minimum capital standards. |
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#813 | |||
FF.Com.Au Hardcore
Join Date: Feb 2005
Location: Sth Coast NSW
Posts: 1,512
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I've got a good idea - let's put in a Mining Tax - we'll rake the $$$ in ![]() |
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#814 | |||
Budget Racer
Join Date: Dec 2004
Location: Melbourne
Posts: 2,420
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Quote:
Politicians will try and confuse the two to make themselves look good. Government debt (the amount we have to pay back) was at $174.5 billion in September 2013. Government debt is now about $341 billion. So both major parties have run up this debt. Is Government debt a good thing or a bad thing? Ask 5 different economists you will get 6 different answers. IMHO the housing bubble is deflating. How fast and far it will deflate is the reason this thread is still going..... ![]()
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12.1@112Mph 285rwkw on n2o Cleveland Power |
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#815 | |||
FF.Com.Au Hardcore
Join Date: Jul 2009
Location: melbourne
Posts: 4,649
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Quote:
Risk for small business is especially horrendous. And the government is making that risk worse and worse. Electricity prices through the roof. Taxes upon taxes, mostly crazily levied on inputs. Red tape exploding. Green tape exploding even worse. |
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#816 | |||
Budget Racer
Join Date: Dec 2004
Location: Melbourne
Posts: 2,420
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Quote:
Our governments have some levers they can pull which effect Australias economy, including housing. Australia is a small player in the world economy. Our economy is influenced more by factors outside the Australian Governments control.IMHO
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12.1@112Mph 285rwkw on n2o Cleveland Power |
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#817 | |||||
FF.Com.Au Hardcore
Join Date: Feb 2005
Location: Sth Coast NSW
Posts: 1,512
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#818 | ||
FF.Com.Au Hardcore
Join Date: Apr 2005
Location: Canberra
Posts: 13,374
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Yep it might be a budget surplus but we are still about $500 billion in the hole.
Low rates are very good for me. Not sure it works for everyone else or country though. These idiots only care about politics though rather than make things better for ordinary people. |
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#819 | |||
Rob
Join Date: Sep 2006
Location: Woodcroft S.A.
Posts: 21,504
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It makes no sense that Australia has some of the highest rates in the world for utilities etc.
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UA2 TREND 4WD BI TURBO |
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#820 | |||
Bolt Nerd
![]() Join Date: Jan 2005
Location: Ojochal, Costa Rica (Pura Vida!)
Posts: 14,616
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Quote:
Have a whinge down the pub over a beer about it, (or on a forum!)... and that’s as far as it goes! We are a nation of friggin masochists, I swear! Meanwhile the “elected ones” pull their snouts out of their troughs just long enough to vote “aye” to some BULL **** motion that benefits either themselves or friggin minority factions! Watch France this coming weekend.... This is going to be scary stuff!! But at least they have the balls to stand up to their government and say “enoughs enough”!! It’ll NEVER happen in Oz though, because we somehow enjoy being bent over and reamed!! Pura Vida...
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Current vehicles.. Yamaha Rhino UTV, SWB 4L TJ Jeep, and boring Lhd RAV4 Bionic BF F6... UPDATE: Replaced by Shiro White 370z 7A Roadster. SOLD Workhack: FG Silhouette XR50 Turbo ute (11.63@127.44mph) SOLD 2 wheels.. 2015 103ci HD Wideglide.. SOLD SOLD THE LOT, Voted with our feet and relocated to COSTA RICA for some Pura Vida! (Ex Blood Orange #023 FPV Pursuit owner ![]() Last edited by GasoLane; 08-12-2018 at 10:09 AM. |
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#821 | |||
Thailand Specials
Join Date: Aug 2009
Location: Centrefold Lounge
Posts: 49,028
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#822 | |||
Rob
Join Date: Sep 2006
Location: Woodcroft S.A.
Posts: 21,504
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Quote:
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UA2 TREND 4WD BI TURBO |
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#823 | ||
Banned
![]() Join Date: Dec 2004
Posts: 8,303
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#825 | ||
Kicking back
Join Date: Dec 2013
Location: Western sydney
Posts: 8,528
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Yeah utilities arent the cheapest, im not going to elaborate on that and open a can of worms. But technology has come leaps and bounds making things cheaper to be more energy efficient. For example a 35w downlight kit costs $6 wholesale, but an 8w led down light costs $8 wholesale. So the immediate cost is slightly more, but for the added life span of the led fitting youre looking at 5 or 6 replacement halogen dichroics over a few years and the extra power consumption, so cheaping out in the short term costs more in the long run. Granted a house with downlights has more then one, but that means the savings multiply. Its just being proactive not making yourself sound like a victim.
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#826 | ||
Bolt Nerd
![]() Join Date: Jan 2005
Location: Ojochal, Costa Rica (Pura Vida!)
Posts: 14,616
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I never said rioting was the answer!
I see their government has back peddled pretty smartly on the proposed diesel tax though?... Power of the people?
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Current vehicles.. Yamaha Rhino UTV, SWB 4L TJ Jeep, and boring Lhd RAV4 Bionic BF F6... UPDATE: Replaced by Shiro White 370z 7A Roadster. SOLD Workhack: FG Silhouette XR50 Turbo ute (11.63@127.44mph) SOLD 2 wheels.. 2015 103ci HD Wideglide.. SOLD SOLD THE LOT, Voted with our feet and relocated to COSTA RICA for some Pura Vida! (Ex Blood Orange #023 FPV Pursuit owner ![]() |
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#827 | ||
BLUE OVAL INC.
Join Date: Feb 2006
Posts: 8,645
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https://www.msn.com/en-au/money/home...id=mailsignout
Hmm..back in 08 we had the GFC to blame for the short term cooling of the housing market, there is no financial crisis now and were seeing bigger falls. I think the reduction of foreign investment has brought reality back into the equation. |
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#828 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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Quote:
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Daniel |
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#829 | ||
BLUE OVAL INC.
Join Date: Feb 2006
Posts: 8,645
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#830 | ||
FF.Com.Au Hardcore
Join Date: Dec 2004
Posts: 22,900
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Let’s not forget the banking royal commission and the fact that banks have been forced to re write their lending criteria, and lvr’s. Can’t say there is no financial crisis when there actually is.
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2022 RAM Laramie 5.7 2023.50 Ranger Wildtrak 3.0 V6 Premium Pack 2024 Everest Sport 3.0 V6 Touring Pack 2024.50 Mustang Darkhorse 6M Blue Ember + Appearance pack ETA Jan 25. |
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#831 | ||
Ford screwed the Falcon
Join Date: Sep 2013
Posts: 7,061
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Anybody who purchased in the last two years must be crapping bricks
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Falcon: 1960 - 2016 My cars Current ride 2016 FG X XR6 - 6 speed manual Previous rides 2009 FG XR6 - 6 speed auto 2006 BF MkII XT ESP - 6 speed auto 2003 BA XT V8 - 5 speed manual 1999 AU Forte - 5 speed manual 1997 EL Fairmont - 4 speed auto 1990 EAII Fairmont Ghia - 4 speed auto |
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#832 | |||
Peter Car
Join Date: Dec 2004
Location: geelong
Posts: 23,145
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Quote:
That’s not to say those rises won’t decrease, but the experts are saying some of those outside the big 2 won’t go backwards, just go neutral at worst. Syd and melb should decrease because they were so overpriced anyway. |
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#833 | ||
T3/Sprint8
![]() Join Date: Jan 2005
Location: Australia
Posts: 16,334
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Those who over extended themselves, thats life.
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Tickfords T3/TS50 '02 Sprint8 manual Sept 24 '16 Daily Macan GTS "Don't believe everything you read on the internet. Abraham Lincoln" |
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#834 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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Quote:
At this point in time and after the royal commission money has been tightened (personally this is a good thing). If the money dried up during the GFC then we would have seen the same thing happen as now...probably worse.
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#835 | ||
Kicking back
Join Date: Dec 2013
Location: Western sydney
Posts: 8,528
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The whole housing market debate about the current climate sort of falls into the category of people who annoy me and buy stuff then complain because they keep shopping afterwards and complain when what they bought goes on sale. If you need somewhere to live and have the means to purchase and plan to be there a while, its just a purchase. Markets affect people more who are using it as an investment. Buy sell kind of stuff. I am pretty sure the rental market isnt going to deflate as quickly as property prices. So there is still some merit in buying if you plan to live there. I lucked out to a degree being a fool at 25 buying my house because the market isnt going to see a loss as big as the appreciation my area has seen in the past 7 years. I have no plans to sell because i live there.
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#837 | ||
Peter Car
Join Date: Dec 2004
Location: geelong
Posts: 23,145
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#838 | |||
Rob
Join Date: Sep 2006
Location: Woodcroft S.A.
Posts: 21,504
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Quote:
4% on $500k + is considerably more than when interest rates were near 20%
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UA2 TREND 4WD BI TURBO |
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#839 | ||
FF.Com.Au Hardcore
Join Date: Jun 2008
Posts: 1,137
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Another risk people forget about is that if the value of the property falls lower than than the mortgage then the bank will want some cash. There will be nowhere to lend this from (other than friends or relos) and the bank will forclose the mortgage.
Falls were always on the cards and should have happened 10 years ago but shortsighted policies are now being felt. There will be a dead cat bounce in a year or so and the big correction around 2022-2023. |
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#840 | ||
HUGH JARSE
![]() Join Date: May 2005
Location: Yap-Hoon
Posts: 21,503
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Politicians should stop fiddling let the market burn and it will eventually put its own fires out.
Hey I got an idea. The family home is not included in the asset test for the old age pension. For a married couple the threshold is a little under $400,000. After that there is a sliding scale of reduction until the pension is no longer available. So why not include the value of the family home in the asset test? This will mean that oldies living in a huge home worth $$$ would be forced to sell and move into something smaller, thus opening up the market with more supply of family type homes and therefore reduce prices. If this seems a bit onerous, the asset limit could be varied or how about we introduce a sliding discount scale on the % $$$? The longer they are on the pension, the lower the discount % becomes. |
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