Potential Big GFC Discussion Thread

[Chopped]

All of this Doom & Gloom is for nothing....The system is working fine and benefiting the same people as it always have. Nothing needs to change.

The US can pay back any debt, here's is the proof >

http://www.youtube.com/watch?v=q6vi528gseA

See....nothing to worry about.

Right now, I'm printing some more money to cover my lunch expenses. It's great, I'll never have to worry about debt again

[|||]

Originally Posted by Chopped

Right now, I'm printing some more money to cover my lunch expenses. It's great, I'll never have to worry about debt again

let us know how that goes. i'll watch for the story on the news

[trippytaka]

Originally Posted by FTe342

Mate you & Trippy don't know what your talking about when it comes to whats happened with the fixed rates. (which makes me wonder how much credence we can place on your other comments about things financial)

Here, the variable rate is set by the RBA (except on the odd occassion when the majors add some extra). However, fixed rates are more determined by the cost of funds oseas, primarily the US bond market. This is because after deregulation years ago, Aust can't fund H/L demand from our own savings, so it comes by sourcing from oseas.
The fixed rate drop by CBA & Wpac (the others will have to follow) is in response to the decrease in cost of funds.
If the banks wanted to increase demand for H/L's they would shave off some of the extra margin they have added above the RBA increases of past . We might well see this happen.

My advice for borrowers is its too early to rush out and fix just yet. Wait and see where things settle. Aussie John reckons we might see fixed rates below 6%.

You are right I have no idea about rates. That's why I just report what I hear, and as stated, I was watching the news last night and an economist on there said that the move to drop the fixed rates was about the drop in home loans.

I never claimed to know why, all I did was report back whart I had heard.

[FTe342]

Originally Posted by trippytaka

You are right I have no idea about rates. That's why I just report what I hear, and as stated, I was watching the news last night and an economist on there said that the move to drop the fixed rates was about the drop in home loans.

I never claimed to know why, all I did was report back whart I had heard.

Originally Posted by dave289

If you are referreing to me , I was not being quiet, my kid took over the pc last night . Yesterday I said I guess we could expect to lose 50 billion + probably closer to 70 billion, well I was spot on , by 11.30 or so 68 billion had been wiped off the market.

Then as you all saw we made what could only be described as a miraculous recovery(only for the day) on the rollercoaster ride we saw ,you all know where the word miraculous is derived from .

I would like to remind everybody that we are still down 15% in less than two weeks. Its great how many have the courage to say something after the event, shows people can really think for themselves.

The move by the banks was nothing more than a desreate bid to save theri own ****. LiKE HOW THEY DROP RATES IMMEDIATELY WHEN THEY ARE IN TROUBLE BUT NOT WHEN EVRYBODY ELSE WAS. playing people like fools if you had not noticed.

We merely dogged a bullet yesterday , and while I dont really think the bank interest rate drop was then saviuor of the day it must go some way to explaining what happened ,cause it was the most miraculous recovery and one day ride we have evr had, so it was a preety big day on the market none the less.

The day before the US copped the 6th biggest one day loss in history ,so again a big day on the market, while I did think the dow might go below 10,000 points that day, it did not , but it is now only a matter of time before it does .

There was another rollercoaster ride in the US last night ,simliar to what we saw on our market yesterday , they ended up pretty even at the end ,slightly down , but better than I probably would have thought , so I dont know what to expect today , once again good luck all.

Apologies - so you did. All the worse for dave289 then

[NAK302]

Originally Posted by Resurrection

Not GFC1 or GFC2. We are heading for a depression. Don't worry about house prices. Worry about putting food on the table people!

..........but we still have our health

[TheSneakiness]

I'm just going to say this.

Kneejerk reactions and outlandish statements are going to be the death of this country.

Rapid_Axe out.

[Professor Farnsworth]

i've changed the OP's thread title to something less 'end of the world/nuclear bunker' type deal. Keep the posts on track people as this thread is very borderline as it is.

[dave289]

Originally Posted by FTe342

Mate you & Trippy don't know what your talking about when it comes to whats happened with the fixed rates. (which makes me wonder how much credence we can place on your other comments about things financial)

Here, the variable rate is set by the RBA (except on the odd occassion when the majors add some extra). However, fixed rates are more determined by the cost of funds oseas, primarily the US bond market. This is because after deregulation years ago, Aust can't fund H/L demand from our own savings, so it comes by sourcing from oseas.
The fixed rate drop by CBA & Wpac (the others will have to follow) is in response to the decrease in cost of funds.
If the banks wanted to increase demand for H/L's they would shave off some of the extra margin they have added above the RBA increases of past . We might well see this happen.

My advice for borrowers is its too early to rush out and fix just yet. Wait and see where things settle. Aussie John reckons we might see fixed rates below 6%.

So you think they just happened to drop rates half an hour before the market opened on a potentially devastating market day because of cheaper funds, brilliant.

All you can do is state the obvious, of course when all this hits the fan interset rates will go down , you will probably have 5% fixed rates sometime next year . So yes I would not be rushing out to fix your rate just yet folks ,but hey thats quite obviuos, is it not. Tell me something I dont know ,just for once maybe . You advised people in the house thread to negative gear while evrything is going down , another non brilliant idea from someone claiming to be an expert with over forty years experience, I'm not see anything mate apart from the obviuos.

[AMGC63]

If interest rates start to drop in Australia it will start to put upward pressure again on housing prices.
If nothing else it will certainly halt any further softening of the market.

If the RBA announce any official drop in rates then get in quick.:-)

[dave289]

Originally Posted by FTe342

Apologies - so you did. All the worse for dave289 then

It will be all the worse for the people you give advice too

[trippytaka]

Originally Posted by Professor Farnsworth

i've changed the OP's thread title to something less 'end of the world/nuclear bunker' type deal. Keep the posts on track people as this thread is very borderline as it is.

Haha that's gold. I think it has a ring to it, but wouldn't sell any newspapers, that's for sure.

[Scott]

Originally Posted by dave289

So you think they just happened to drop rates half an hour before the market opened on a potentially devastating market day because of cheaper funds, brilliant.

They dropped rates to get a jump on their competitors. Whatever they can secure now as far as fixed rates go will be gravy compared to what they will be when we see the wholesale shift.

FWIW, I don't have any fixed rate mortgages. When they ended in 2008 I was happy enough to keep my discount (.79%) and roll with the variables. I might look at fixing somewhere in the 5's if/when we get there.

[Professor Farnsworth]

Unfortunately in the world there are those who can't see the forest for the trees, then those who can see the trees and stare directly at them without averting their gaze. Then there are those who can see the convoy of bulldozers heading for those pretty, 'completely un-changing' trees.

There is no crystal ball, all i can say is if some ridiculous bailout occurs then fantastic, i'm sure we all hope for a stable economy. However some of us have been into this for a while and are just hinting that it could turn sour. Read it or dismiss it, your choice.

p.s. the world is flat and the sun revolves around us

[trippytaka]

Originally Posted by AMGC63

If interest rates start to drop in Australia it will start to put upward pressure again on housing prices.
If nothing else it will certainly halt any further softening of the market.

If the RBA announce any official drop in rates then get in quick.:-)

I was talking to my GF about that exact same scenario today.

Interestingly the data that came out yesterday or today shows a 4.4% drop in investors getting loans.

I just don't know how far up the prices can go if investors don't come back in. The prices have hit that ceiling...

And back on topic, more household debt and less REAL $$ to spend in the economy would be a bad thing for the long term, surely.

[trippytaka]

Originally Posted by |||

Quantitative easing isn't about adding more debt. It's the US saying "we'll just print more money to pay back our debts". It has negative consequences for inflation, but its actually a way to reduce debt not increase it.

But doesn't that mean the debts are bought out by the State, so the banks can then go and borrow more, to lend more to stimulate spending in economy?

[dave289]

Originally Posted by Scott

They dropped rates to get a jump on their competitors. Whatever they can secure now as far as fixed rates go will be gravy compared to what they will be when we see the wholesale shift.

FWIW, I don't have any fixed rate mortgages. When they ended in 2008 I was happy enough to keep my discount (.79%) and roll with the variables. I might look at fixing somewhere in the 5's if/when we get there.

I will also be looking to fix rates when I think the time is right. Not a stategy I would normally recommend but when they drop down to next to nothing you would be crazy not to, at least you know where you stand that way, to a certain degree.

[Professor Farnsworth]

the more a country prints money to alleviate debt, the more the currency will decrease in value

[trippytaka]

Originally Posted by Professor Farnsworth

Unfortunately in the world there are those who can't see the forest for the trees, then those who can see the trees and stare directly at them without averting their gaze. Then there are those who can see the convoy of bulldozers heading for those pretty, 'completely un-changing' trees.

There is no crystal ball, all i can say is if some ridiculous bailout occurs then fantastic, i'm sure we all hope for a stable economy. However some of us have been into this for a while and are just hinting that it could turn sour. Read it or dismiss it, your choice.

p.s. the world is flat and the sun revolves around us

All too true.

[StrokedXT]

Originally Posted by Professor Farnsworth

the more a country prints money to alleviate debt, the more the currency will decrease in value

Maybe a name change to captain obvious

[Professor Farnsworth]

Originally Posted by StrokedXT

Maybe a name change to captain obvious

have a read back through this thread and you'll possibly comprehend why i am having to say these things

[dave289]

Originally Posted by Professor Farnsworth

the more a country prints money to alleviate debt, the more the currency will decrease in value

Exactly professor , that is their only solution, to print more money , not much of a solution , get some paper ,print something on it and hope this will solve the problem. It only increases the problems and delays the problems further , there is no wealth in doing such a thing.

[AMGC63]

Originally Posted by trippytaka

I was talking to my GF about that exact same scenario today.

Interestingly the data that came out yesterday or today shows a 4.4% drop in investors getting loans.

I just don't know how far up the prices can go if investors don't come back in. The prices have hit that ceiling...

And back on topic, more household debt and less REAL $$ to spend in the economy would be a bad thing for the long term, surely.

Yes i agree the prices have hit a ceiling, which is why prices have stagnated where they are for the moment for how things stand today, but if money becomes cheaper and or wages start to climb again then people can borrow more which means more competition for housing and up things go again.

[trippytaka]

Originally Posted by AMGC63

Yes i agree the prices have hit a ceiling, which is why prices have stagnated where they are for the moment for how things stand today, but if money becomes cheaper and or wages start to climb again then people can borrow more which means more competition for housing and up things go again.

We'll have to wait and see I guess... I certainly hope housing doesn't get too much higher. I want people to have spare coin to buy my tees for Christmas when I re-launch the site. I don't want people struggling to pay off bigger mortgages :( that extra income is the buffer that I buy toys, furniture, etc with.

[AMGC63]

Originally Posted by trippytaka

We'll have to wait and see I guess... I certainly hope housing doesn't get too much higher. I want people to have spare coin to buy my tees for Christmas when I re-launch the site. I don't want people struggling to pay off bigger mortgages :( that extra income is the buffer that I buy toys, furniture, etc with.

In my opinion there's no way we'll see housing prices out grow inflation in the short term, but i fully expect it to hold pace with it, beyond 5 years will come back to how interest rates and wages are..

[dave289]

Originally Posted by AMGC63

Yes i agree the prices have hit a ceiling, which is why prices have stagnated where they are for the moment for how things stand today, but if money becomes cheaper and or wages start to climb again then people can borrow more which means more competition for housing and up things go again.

Now, one would think that when interest rates do hit rock bottom ,whenever that is, that people would start to maybe buy again. But this is whats happened in the states , but realestate has crashed there , and interest are behond cheap . I think you can lock in a fixed rate for 15 years for less than 4%.

But it has not increased prices, or even held them flat , thay have still continued to fall , and this has been going on for years over there. So to me it defies all logic , and whats to say things here are really that much different, we have mirrored them for years and continue to do so . and we have the same problem as they do, morons running the show here too with no idea, who go on a never ending wasteful behond belief spending spree , things just dont work this way.

[|||]

Originally Posted by trippytaka

But doesn't that mean the debts are bought out by the State, so the banks can then go and borrow more, to lend more to stimulate spending in economy?

the debt is "bought out" by everyone holding the currency not (just) the state. it really is the last resort of an economy & can destroy any value built up over time due to the usual supply & demand forces.

its like cheating in Simcity to give you more money. You can do it, but it doesnt feel right & you know its cheating

[Chopped]

Some people may even think printing money is a scam.
Some people may think enough with that.......let's riot

[AMGC63]

Originally Posted by dave289

Now, one would think that when interest rates do hit rock bottom ,whenever that is, that people would start to maybe buy again. But this is whats happened in the states , but realestate has crashed there , and interest are behond cheap . I think you can lock in a fixed rate for 15 years for less than 4%.

But it has not increased prices, or even held them flat , thay have still continued to fall , and this has been going on for years over there. So to me it defies all logic , and whats to say things here are really that much different, we have mirrored them for years and continue to do so . and we have the same problem as they do, morons running the show here too with no idea, who go on a never ending wasteful behond belief spending spree , things just dont work this way.

We are nothing like America when it comes to the economy, debt or leverage.

Our lending criteria is totally different, so is the mortgage guarantee.

We have far better employment levels and natural resourse stocks.

If you're basing your wild claims on us following their plight you've be very much mislead...

[FTe342]

Originally Posted by AMGC63

We are nothing like America when it comes to the economy, debt or leverage.

Our lending criteria is totally different, so is the mortgage guarantee.

We have far better employment levels and natural resourse stocks.

If you're basing your wild claims on us following their plight you've be very much mislead...

Save your breath AMG, may as well be talking to a brick wall You know how it goes - if America sneezes we'll catch the flu - housing has crashed there, its a foregone conclusion we're headed for the gurglar! Our economy is a duplicate of theirs

Don't invest in housing, buy shares (glad I didn't) or you could put your money under the mattress

[CJR09]

Originally Posted by FTe342

Don't invest in housing, buy shares (glad I didn't) or you could put your money under the mattress

or silver?