Plonk

Got Interest Rate thread

901 posts in this topic

My thoughts exactly. I see the ASX Target Rate Tracker is slowly moving from a decrease to no change. I expect that soon to show a chance of a rise.

Cheers

Absolutely. IRs as a tool are to target broad economy (employment and inflation), its in the charter. If the RBA want to quash bubbles hammer the money supply (they are easing as we write).

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I recall the minutes of the last RBA meeting fairly clearly indicating that the bank would wait until the official July inflation rates to make any move, although in lieu of there being official monthly figures, the TD inflation gauge is a pretty useful one.

Do you people think the RBA will be compelled to move at some popint if we have higher inflation but the global economy is in trouble? Australia is looking bearish, too, even if inflaiton is looking bullish. What happens with such a combo?

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Plonk, good question. Who knows what the RBA will do if their is global turmoil and high inlfation here. You can be sure that the Fed will be firing up QE though as they are facing deflation, so we'll have to stay tuned as to how that will affect us.

BTW, Louis Christopher (black_dragon) says that the next rate movement will be down.

Note that he didn't even consider inflation in his argument.

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Plonk, good question. Who knows what the RBA will do if their is global turmoil and high inlfation here. You can be sure that the Fed will be firing up QE though as they are facing deflation, so we'll have to stay tuned as to how that will affect us.

BTW, Louis Christopher (black_dragon) says that the next rate movement will be down.

Note that he didn't even consider inflation in his argument.

Be funny if the RE spruikers inadvertently caused a housing crash :)

Would love to be Glen Stevens in a discussion with an "RE to the moon" type:

RE: You can't raise rates, it will cause a housing price crash

GS: Nah mate, it's different here

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Apologies I posted some interest rate speculation elsewhere. Didn't mean to disrespect this thread. :blush: My vote is no change. Inflation pushing the limit, but too much uncertainty. They're (the RBA) not supposed to be partisan and even consider election timing and I hope this holds true. No change. Slight chance of a rise. August a rise. .25

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Yeah, I think it will be no change as well, with a good chance of a rise in August - depending on the inflation rate reported on 28th July. Only thing that could cause a rates fall would be global chaos and a global credit squeeze (as per the GFC) before that time, but I can't see things going that pear shaped...yet. Even then, I can't see the RBA cutting rates as severe as last time unless inflation takes a huge dive as well.

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I can't see the RBA cutting rates as severe as last time unless inflation takes a huge dive as well.

I can. The game is rigged.

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I'm feeling another +25bps in August. Low unemployment and highish CPI hifg as prime reasons. Also some utter bollocks economic data from China (see my post on the Asia Thread in Economics).

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That tool Abbott was on sunrise this morning, he said to Kochie "IRs will fall under a Liberal govt". Kochie replys, "so you are going to send the economy backwards because everyone knows thae IRs rise in a strenghthening economy and fall in a shrinking one". The mindless monk was taken back "errrr, em no we will reduce debt so IRs will fall...". The guy is f*cking idiot. Understanding of Monetary policy by the Monk? 0/10. Tony the tool.

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That tool Abbott was on sunrise this morning, he said to Kochie "IRs will fall under a Liberal govt". Kochie replys, "so you are going to send the economy backwards because everyone knows thae IRs rise in a strenghthening economy and fall in a shrinking one". The mindless monk was taken back "errrr, em no we will reduce debt so IRs will fall...". The guy is f*cking idiot. Understanding of Monetary policy by the Monk? 0/10. Tony the tool.

it's sad isn't it... its as though the aussie right decided to emulate the US republican party in 2000... abbott seems to have roughly the same intellectual capacity as gw...

i guess they didn't see rudd losing popularity as fast as he did, otherwise they would've had a more formidable candidate waiting in the wings. they thought his 60%+ popularity ratings were going to continue past the election, which is why they put tony in charge.

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That tool Abbott was on sunrise this morning, he said to Kochie "IRs will fall under a Liberal govt". Kochie replys, "so you are going to send the economy backwards because everyone knows thae IRs rise in a strenghthening economy and fall in a shrinking one". The mindless monk was taken back "errrr, em no we will reduce debt so IRs will fall...". The guy is f*cking idiot. Understanding of Monetary policy by the Monk? 0/10. Tony the tool.

it's the shoulda, woulda coulda policy.

if we were in power we should have not run up the deficit (of course os budgets have nothing to do with irs). we could have have reduced all sorts of pressure's on rates and we would have had policy that meant the economy was phucked and there would be low interest rates. qed. swc policy proves interest rates would be lower in a monastery.

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The important question is if Australians are smart enough to vote for independents to put all parties out of the political business.

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The important question is if Australians are smart enough to vote for independents to put all parties out of the political business.

If that happened I would expect to see a whole lot of nothing happening in canberra until they worked out de facto parties.

Not saying it is bad, as previously expressed I don't vote because I don't think it makes a world of difference who is in power, just saying that the democratic process seems to be one which depends on conglomeration of people at each step of the pyramid.

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"Interest rates will fall under a liberal government... because I have remortgaged my house to pay for my campaign."

If he came out and said that I reckon there is a good chance it would get him elected.

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Didn't learn from the Howard era promise I see.

I guess it is human nature to do everything you can for the here and now and worry about the future then. I can imagine him kicking himself in 3 years if he actually gets elected and interest rates go up. Again he will say but under Labor they would have gone up so much more....

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If that happened I would expect to see a whole lot of nothing happening in Canberra.

Some would call that progress.

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If that happened I would expect to see a whole lot of nothing happening in canberra until they worked out de facto parties.

Not saying it is bad, as previously expressed I don't vote because I don't think it makes a world of difference who is in power, just saying that the democratic process seems to be one which depends on conglomeration of people at each step of the pyramid.

and that would be different to the past how?

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Nobody is going to vote for him, he's a joke.

Online polls at news.com.au (every bogan rag in the country except the West, SMH and Age)) plus galaxy and newpoll say differently.

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Bank rules threaten growth, warns RBA

CLANCY YEATES AND ERIC JOHNSTON

July 21, 2010 THE Reserve Bank has warned that tough global regulation planned for banks threatens to constrain the pace of economic growth by driving up borrowing costs for business and home owners.

The comments by Reserve Bank governor Glenn Stevens came amid growing speculation that banks will attempt to push through an interest rate rise after the election to help recoup rising wholesale funding costs.

Opposition Leader Tony Abbott yesterday turned his campaign to interest rates, saying he would keep downward pressure on interest rates by slashing $1.2 billion from government spending.

delayedAds.push(function(){ FD.addExternalReferralsAd($merge(FD.baseAd, { id: "adspot-300x250-pos-3", iframeId: "adspot-300x250-pos-3-iframe", params: $merge($merge(FD.baseAd.params, { pos: 3, aamsz : "300x250" }),getAdParams("300x250")) ,addSmall: true ,smallText: "Advertisement: Story continues below" }) ); });In a wide-ranging speech in Sydney yesterday, Mr Stevens highlighted the risk that over-regulation could have on growth in the long term. His comments also suggest the Reserve Bank is taking a softer approach to re-regulating the sector than the bank regulator, the Australian Prudential Regulation Authority.

Regulations, which are still under development by global regulators, are aimed mainly at making banks safer by forcing them to hold more capital. But this can be an additional cost for banks because capital generally costs more than debt.

The Basel Committee, the global regulator that oversees bank rules, said last week it was hoping to finalise a package of capital and liquidity changes in time for the November summit of the G20 leaders in Seoul.

Other measures aimed at lowering bank risk, including holding more high-quality liquid assets such as government bonds and a push to lengthen the maturity of debt, have a similar effect. ''Put simply, the customers of banks around the world, and especially of large, internationally active banks, will generally be paying more,'' Mr Stevens said.

While there was not a mechanical link between credit and economic growth, the higher cost of credit for borrowers would probably slow growth over several years.

Mr Stevens said banks had generally been passing on higher funding costs to business customers as funding costs had risen over the past few months.

Banks have urged politicians to stay out of their decisions on fees and mortgage rates, amid predictions that they will sting borrowers with a post-election rate rise.

Australian Bankers Association chief executive Steven Munchenberg said elections always raised the risk of increased regulation. ''We'd be very concerned about any proposals that would mean that banks weren't able to lend money in a way that reflects the actual costs to banks,'' he said.

Morgan Stanley yesterday became the latest broker to claim that after the election, rates would go up independently of the Reserve Bank.

Banking analyst Richard Wiles said the early election would allow banks to push up standard variable interest rates by 10 to 15 basis points ''sooner rather than later'' as they repriced $725 billion in Australian home loans.

Others, including brokerage Goldman Sachs JBWere, said it was apparent that funding costs for banks would be higher over the medium run and that this would be passed on to customers ''at some stage over the coming months''

http://www.watoday.com.au/business/bank-rules-threaten-growth-warns-rba-20100720-10jla.html

Squeezaroony. Global anti-bubble Safety measures threaten bubble. Abbott will fight them.

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