cobran20

The AK Thread

1555 posts in this topic

The AK replacement stated that if the borrowing cost from the US do not drop (as reflected in the 3M bank bill yields), then our banks will have to increase rates ... effectively the same as an official rate rise by the RBA!

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I couldn't find a copy of the speech Philip Lowe presented yesterday, so I can't perceive the context for his comment, but if he sees a need for a rate rise, I would like to know what is the driver. Is it the housing bubble any longer, or something else more insidious? Is it wage freeze, in which case would a rate rise influence companies to hire or to fire? Is it price inflation on good's or services? Again I ask which way would a rate rise drive these things.

I say this, because as the housing bubble comes off the boil, wouldn't the RBA be more likely to want to hold rates where they are, for a slow release? Any manipulation of the levers could set off a domino.

In my/our focus on housing, have we actually missed some other section of the economy that is a cause for concern.

I'm asking questions, because I don't see from any recent data, any indication that a rate rise is warranted.

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16 hours ago, Solomon said:

I couldn't find a copy of the speech Philip Lowe presented yesterday, so I can't perceive the context for his comment, but if he sees a need for a rate rise, I would like to know what is the driver. Is it the housing bubble any longer, or something else more insidious? Is it wage freeze, in which case would a rate rise influence companies to hire or to fire? Is it price inflation on good's or services? Again I ask which way would a rate rise drive these things.

I say this, because as the housing bubble comes off the boil, wouldn't the RBA be more likely to want to hold rates where they are, for a slow release? Any manipulation of the levers could set off a domino.

In my/our focus on housing, have we actually missed some other section of the economy that is a cause for concern.

I'm asking questions, because I don't see from any recent data, any indication that a rate rise is warranted.

Following the cost of funds as the RBA usually does. Avoiding pension funds who hold bonds going bust, ...

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My guess if RBA raises rates it is because 90 day bank bill rates have gone up. That's pretty much the pattern they follow... or at least that is my impression over the last decade or so.

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On 5/3/2018 at 7:26 PM, cobran20 said:

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We really are different here!!!!

Edited by Solomon
Included all the screenshots

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