Ratescut by 1% or 100 basis points

[FenianEel]

Wow!!:eek::eek::eek:
Now - let's see what the banks do!

[mns488]

my guess, half and half....0.5% passed on

[Xtreme]

Probably just a small rate cut and increase their profits!

Hmmmmmmmmm............... maybe it's a good time to buy some bank shares.

Roger

[Xavie]

Weren't they saying they it was expected the RBA would not have any movement on this today?

1% is a lot. My poor savings account.lol.:(

Would it be partly because of the hype around global economics?

[mark2]

The odds were 100% of at least a 25 point cut.

I think the 100 point cut has caught a lot of people by surprise and is an indication of how worried the RBA is and how bad this global financial meltdown is likely to be.

[EchiDna]

1% is basically panic stations by the RBA - it is higher than anyone was predicting...


I think it is intended to be a liquidity top up for the banks, to keep them "safer" during this credit crunch situation. Just wait and see how long the banks will take to make announcements on passing it on (or not) will be a good indicator.

[feral]

The odds were 100% of at least a 25 point cut.

I think the 100 point cut has caught a lot of people by surprise and is an indication of how worried the RBA is and how bad this global CREDIT financial meltdown is likely to be.


There you go...fixed. :eek:

And the RBA just added fuel to the fire...:firedevil:

[Phoenix]

woah, I didn't see that one coming!

the banks were saying they wanted to keep .25%, let's see what they say now!

[Slunnie]

Falling interest rates are good. They'll help me to take out an obscene loan now. :(

The credit union will take about a week to work out what they're going to do.

[mark2]

There you go...fixed. :eek:

And the RBA just added fuel to the fire...:firedevil:

It may have started in the credit sector but its gone way beyond that:(

[cartm58]

Westpac saying they going to pass on 80 points of the cut other thieves yet to announce their intentions

None of them will pass on 100% of the 1% cut

Global credit crisis, why ? bankers greed, unrealistic and unsustainable commissions and bonus to the financial wizards who thought up the shakey credit schemes so they could lend money to people who couldn't afford it.

Why are the tax payers forking out to bail these smoke and mirror merchants with no accountability for their actions and yet Govts wont support local manufacturing and companies who actually employ people and make money for the country.

Guillable politicians and their economic advisors have a lot to answer for in their handling of the economy in the last 20 years.

[Xtreme]

Ah................just as I thought, bank shares up 3 to 4% in late trading today!

Roger

[stevo68]

I think it is great news, whether they pass on .25/.5/ or the full 1%, hopefully it will start to stimulate the economy, especially in the business sector. All we hear of late is doom and gloom, finally something positive. I run my own business as a finance broker and this year has been horrid. I just received my equipment rates from Westpac and for the first time in a while I am seeing rates in the '8's.

Regards

Stevo

[scarry]

Dont think its going to stimulate much,just a panic by the RBA.
With all the hype in the media about a world recession that may or may not happen,i wouldnt think to many people or businesses are going to race out suddenly borrow heaps of money.(sorry stevo)

I have my own business,& have noticed a definite slowdown.:(

In the short term,i recon most people will play the waiting game,& see what happens.

People in serious debt,and not much positive cashflow have every reason to be worried.

As said,at least its something positive,the media seem to love hyping on about all the negative stuff.

[Xavie]

Yeah but tomorrow when the banks don't offer the full 1% cut to people then the news will be negative. And it is negative for us savers :wasntme: Cause no matter what we will get the full 1% cut.

[mcrover]

1% is RBA saying......We are on the ball and know that people have slowed down on borrowing so we want to get it back to where people can see value out of credit.

This doesnt mean bad credit, it means business borrowing etc.

Im in the midst of organising a type of loan for some machines at the moment and Im worried that our commitee is going to knock the loan because of this hype by the media.

I'd be happy to get a loan at the moment due to it turning to a borrowers market so to speak.

To keep it all rolling the rates will keep going down until they hit around the 5% mark (where it is no longer prifitable to loan money) and they will bend over backward for a secure loan (e.g. full doc type loan).

Ive been doing a bit of research into investment property etc as well as I see an oppertunity here to take some money from the people who pay too much for things and buy a rental so that some one can keep their SS comondoor and plasma TV.

Im happy with the Landy and the 84cm old style telly and my 11 square Ex housing commision house with a reasonable mortgage :D

The only problem will be when the dumb people decide to keep the economy slow because they saw it on ACA that if they borrow to buy that nice house around the corner they are going to die a terrible death for light pocket/wallet syndrome.

The trick is to not borrow more than you can pay back taking in account life changes over the years and this is what some banks over in the states the most didnt take into account and just lent money to whom ever asked until all they could do was to take a US$486,000,000 pay out before closing the doors.

I think it is more terrorism by stupidity that the yanks have done to them selves that we will all have to pay for in the end but there isnt any need to panic, that is what the RBA is trying to tell us.

They are on top of it.

[slug_burner]

Plenty of cheap properties going in Cranbourne:)

[Captain_Rightfoot]

The fundamental problem is that we have a nation of over-valued assets. Just like the US.

If asset values continue to drop, and then we start getting margin calls then there is a chance we could loose a bank or more. It's just ugly.

What narks me is the usual vested interests are now saying BUY BUY BUY. That's how we have got ourselves into this mess.

As to house affordability. 1% interest isn't going to help all that much but a 30-40% reduction in house prices would make a **really** big difference.

[extreme]

Im excited/confused too, i have put a offer in today for a house and land package. Does any body want to rent a house in 8 months time.:twobeers::clap2:

[Captain_Rightfoot]

Im excited/confused too, i have put a offer in today for a house and land package. Does any body want to rent a house in 8 months time.:twobeers::clap2:

I hope it was a silly offer! We're no where near the bottom yet...

[extreme]

deflation only relates to tyres?

[Captain_Rightfoot]

deflation only relates to tyres?

Certainly yes... that's what the real estate vested interests would have you believe. :eek:

[extreme]

seriously,$195800.00 for a 450m2 block at fairway chase,northlakes.doesn't seem to be a bad price for the location.Ithink we're buying on a falling market,perhapsthis intrest rate cut may send prices up.

[Captain_Rightfoot]

seriously,$195800.00 for a 450m2 block at fairway chase,northlakes.doesn't seem to be a bad price for the location.Ithink we're buying on a falling market,perhapsthis intrest rate cut may send prices up.
Maybe. I don't know! Probably worst case is a 40% reduction which is 80k.

Have a read of this (http://www.businessspectator.com.au/bs.nsf/Article/Interest-rate-give-and-take-K76HB?OpenDocument).

The RBA didn't do that to help home buyers. They did it to try and mitigate the risk of recession!

That the Reserve Bank has decided to go for a full 1 per cent rate cut is a massive shock, and risks causing as much damage as benefit.

But so great is the emergency in global financial markets that Australia’s central bank is not worried about giving the impression of panicking, and is going for all of this year’s rate cuts at once.

And let’s face it – the RBA is panicking. “A material change to the balance of risks surrounding the outlook (has) occurred, requiring a significantly less restrictive stance of monetary policy.”

[waynep]

Did anyone else see the court report from the US where the CEO of Lehrmans (sp) was asked if he thought it was right that he should keep his $US480 billion income while the share holders have lost all in the crash?

$480 billion :eek:

No it was only $480 million over seven years.
Lehman Brothers chief executive Richard Fuld grilled by Congress over compensation | Business | guardian.co.uk (http://www.guardian.co.uk/business/2008/oct/06/creditcrunch.lehmanbrothers)
No problem ....Average wage really.

The problem with these guys is that they have lived outside of the real world so long, they really believe they deserve this amount of money.

[landy63]

Might be time to think about withgdrawing savings from the Bank and puting it under the bed befor it goes the same way as Super. Or frozen like Icesavings.

[Captain_Rightfoot]

I'm getting the vibe you may all think I've lost it (again) but I'm telling you this is really big and Australia is going with the rest of the world on this - like it or not. We might not go quite as bad as the US but we're arguing Grizzly or Polar. :)

Still, don't believe me! Read what Robert Gotlieibesen is saying (amongst others).


Don't Kid Yourself

When the stock market of any country falls 5 per cent in a single day and around 40 per cent over the course of a year it is a clear alert to all its inhabitants that there is going to be a significant fall in not only business and consumer activity, but also asset prices.

Here in Australia, we keep telling ourselves that we're different from the US and Europe. Our banks are in good shape. We have a budget surplus. We have enormous natural resources. Then we point to China and assure ourselves that demand from the Asian powerhouse will get us through.

That might all be true, but right now the world is trashing our shares and the dollar. We are kidding ourselves if we think that we will somehow sidestep the downturn.

Australian banks are tightening their lending criteria across the board, which is going to affect both businesses and asset prices.

Credit has been loose for a long time and many undercapitalised businesses will go to the wall. Banks are going to have to deal with a great many bad debts, although at nothing like the disaster levels in the US.

Property prices will fall and jobs will become less secure. Those getting by on contract work will suddenly find less demand. Customers and clients will be squeezed.

Continues..... (http://www.businessspectator.com.au/bs.nsf/Article/Dont-kid-yourself-K89SF?OpenDocument)

[extreme]

paying the deposit on the block of land today.

[blurryone]

this is starting to sound like some sort of conspiracy theorist board. :eek: (Conspiracy Theory, UFO, and Alternative Topics (http://www.abovetopsecret.com))

seriously though. you guys can't expect it to grow forever can you?

good luck with the property mate. all the best.

check out this movie if you have broadband.

Money As Debt (http://video.google.com/videoplay'docid=-9050474362583451279)

Cheers

Blurry

[mark2]

this is starting to sound like some sort of conspiracy theorist board. :eek:

Cheers

Blurry

Touche.......:eek:

[stevo68]

Panic Stations everyone....the "henny pennys" are out and about :p. If your fighting for whatever it maybe and all you think is negative and doom and gloom, one may as well turn up their heels. The negative media and comments across the board does not help in a potential crisis, some thrive on it though ie the "henny pennys". Sure things may get a bit tougher, in fact they have been tough for many for the whole year, if everyone runs around with flailing arms it can be contagious and it is not the whole reason but in part with some of what we are seeing. If you tell a child it is useless enough times...guess what it loses confidence. If you keep telling the nation that all is doom and gloom, as has the media for so long now, it starts to get entrenched.

We have had an interest rate cut...THIS IS GOOD.....my equipment finance rates with some lenders have dropped by a whole %....THIS IS GOOD.....there could be further interest rate cuts which should start to stimulate the economy as people will start to see a light at the end of the tunnel.....THIS IS GOOD....Ok...the "henny penny's" turn :D,

Regards

Stevo

[blurryone]

i agree mate, its good. :cool:

still i can't afford to discount the 'henny pennys'

its a risk either way, but i stand to loose more if they are right so one would think i should prepare myself for that and if it never eventuates think of it as a bonus/close call/what ever...

of course i could discount them as the chance is not THAT great of a global depression, however if it happened i would be totally screwed.

what do you think about that sir? ;)

[Slunnie]

Thats a eyeopener of a video.:eek:

[stevo68]

i agree mate, its good. :cool:

still i can't afford to discount the 'henny pennys'

its a risk either way, but i stand to loose more if they are right so one would think i should prepare myself for that and if it never eventuates think of it as a bonus/close call/what ever...

of course i could discount them as the chance is not THAT great of a global depression, however if it happened i would be totally screwed.

what do you think about that sir? ;) Look I agree, you cannot discount the "henny pennys" but one still has to remain objective. Just as people can be caught up with a positive vibe....they tend to be more easily led with a negative vibe. How often when asking how someone is, do you hear in response " Not bad".

I also believe prevention is better than the cure and you have to look at where you are, what you have at risk and what measures to take............but that should be through all economic situations. IMO I think despite what is happening globally, Australia is weathering pretty well. For sure if you have $000,s or $millions tied up in the stock market, then a very rough ride is ahead. The "henny penny's will lose their cool, the objective ones will ride it out...........just as in the past.

Regards

Stevo

[Rayngie]

Doom and Gloom...pah

Just bought my first place ( in Australia ), I know I paid well below what they were asking ( by 55k ), and my offer of that 55k less was also below what someone else had offered ( they had offered exact asking price but needed to offload another property before they could settle, I could settle immediately ), so I'm charging ahead, it's up on the Northern beaches and as they are not making any more land up there the prices are pretty solid, luckily enough I have equity in it from the moment I get the keys, the .8% has taken my interest rate to just over 6.5% so pretty happy really...

I say carry on as normal if you can...keep buying toys, the economy needs you!

[FenianEel]

Stevo,

Could not agree more. ;)

The sky is not falling. There are a few clouds, but Australia's economy is not going to collapse in a burning heap.
House prices at least in Qld, specifically SEQ are not going to go down anywhere near 40%. If they do, I will walk backwards to Stevos, in the buff, with a feather duster up my clacker. :eek:

As a mortgage broker, and previous student of economics, I hope I know a little about the market and hopefully a bit about the economy. Some may think I have a vested interest.
People make money in good times and bad. People are smart with money, some aren't. Debt is like fire, it can be a great slave or a horrible master.

House prices have been flat, or receding, in the southern states, particularly Syd,Melb and inner city, they have gone backwards - slightly. But they were overpriced, had too much growth too quickly, and this is the result.
WA is crazy, due to the resources boom, this will correct, but it is totally different.
SEQ is different to most markets. There is a massive housing shortage, ridiculous population growth, and prices have settled over the last 12 mths.

The rate cut was large, but necessary. It says as much about the way the RBA gave death of 1000 cuts, and ineffective, increase of rates 0.25% each time, as it does about the world situation.

Super is in the toilet and those with equities probably lost on average 10-15% over the last 12mths. But they probably made 10-15% every year for the last 10. A loss is never good, and particularly not if your near retirement.
But ....markets fluctuate. That means they go up....and they go down....
The volatility at the moment means it happens over a shorter period of time, and that worries people - but this will settle as well.

Most of the effects, for Australia, in terms of funding costs, policy tightening and banks hitting the wall has already been felt.

The economy is cyclical, this means inflation at some stage will rise, so will unemployment.

Make yourself un-unemployable, work smarter and harder, look at your own situation, and what you have control over -and do something about them if your concerned. BUT keep smiling...this will pass, you're still breathing and the sun will come up tomorrow

Unless those atom smashers in Europe, make things go bang -but the Henny Pennys are probably already sweating over that. :p

[LOVEMYRANGIE]

You would think that if a bank or finance company collapsed and you had a loan of somekind with them, you would essentially have no one to pay back the money you borrowed wouldn't you!!! :p

[blurryone]

stevo, fenianeel

:D

I personally have always had the sort of prepare for the worst, hope for the best train of thought.

must be in my nature i 'spose.

I agree things are definitely cyclical and the sky is definitely not falling.

I just hope this will be enough to make enough people realize that sustainability is the answer not continuous growth.

You can only have one or the other and one lives a lot longer.

good to see your both being so positive about things its very refreshing :)

fenianeel, i hope i don't have to call you on that bet! :lol2:

rayngie, congrants on the place man. sounds like a ripper deal. now i just have to get something like that sussed for the place i want to buy and i will be sorted lol.

Blurry

[roverrescue]

I watched the movie - finally in simple terms someone has explained to me "why" and how there is essentially continuous growth of financial markets. It seemed illogical that we aim for example 2-4% positive growth p.a. - surely exponential growth cannot be sustainable... now I can see where this stems from. Thank you.

The movie also gives a very subtle indication as to the great importance of the US fed bail out of the failing debt market...

anyways - S

[Slunnie]

I assume the australian economy is as in that video also.

I just look at everything around me differently now, like everything around me is bought by a debts that we have to have. Whats scarier, is that we cant operate without it and nobody will ever be able to pay it off.

[Captain_Rightfoot]

Anyone want a house :)

Try Toledo Ohio! (http://realestate.yahoo.com/Ohio/Toledo/Homes_for_sale/result.html;_ylt=AlI4GRgGHuIAp_02M.Kxv6bnMrQs?cc=r ealestate&p=toledo%20ohio&priceHigh=&priceLow=&nodeId=750007014&sortBy=price%201&radius=&bedrooms=&bathrooms=&type=foreclosure&b=1)

Have a look through the 50+ pages of foreclosures!

How about a 3 bedroom for $2500! (http://realestate.yahoo.com/Ohio/Toledo/Homes_for_sale/3c4ecf6751ccb855b328c3682d9a79;_ylt=AhA.rfSIYdgpxY bvvuu3k4I4OrQs?cc=realestate&p=toledo%20ohio&priceHigh=&priceLow=&nodeId=750007014&sortBy=price%201&radius=&bedrooms=&bathrooms=&type=foreclosure&b=1&ltype=0)

[Slunnie]

Thats quite scary.

Are the previous owners then able to buy the house at that price and then own it again or have a close relative do the same if they've been declared bankrupt?

[roverrescue]

Simon Im not sure of the australian ratios, but essentially at a fundamental level with a floating economy there is no underwritten material wealth (read Gold in the vault) underpinning any part of the financial system... it is smoke and mirrors that we best not disturb.

Just go out and buy toys, preferably on you platinum visa with a 20% rate and dont you dare pay it off at end of month :)

Im grateful that in my industry I have a limitless supply of customers - at least last time I checked people keep getting sick, or crash their bikes into posts, or try to breathe water at the reef. Until of coarse health is fully privatised and no-one can afford to pay for it?

S

[Captain_Rightfoot]

I know you all think that I'm being overly pessimistic about this.. but I still think we're watching the world slip into a global recession. Maybe a depression.

All the markets were down again last night and Wall St in particular (7.3%). It's not entirely share brokers being skittish. They understand the problem and they are scared!

Just last night I heard Kevin dodging questions about houses crashing and telling us that China is full steam ahead. I get up in the morning and....

Mining sector feels pinch as Chine reduces demand..... (http://www.news.com.au/couriermail/story/0,23739,24473483-3122,00.html)

[FenianEel]

I know you all think that I'm being overly pessimistic about this.. :rolleyes: Yes!
but I still think we're watching the world slip into a global recession. Maybe a depression.

I think you're slipping into depression and taking everyone with you Capt :p
But thanks for the constant negativity and stream of one sided updates :D

[Captain_Rightfoot]

I think you're slipping into depression and taking everyone with you Capt :p
But thanks for the constant negativity and stream of one sided updates :D

Sorry! The cricket was on the radio last night... and I'm always so much happier when I hear that. :)

[DiscoStew]

. If they do, I will walk backwards to Stevos, in the buff, with a feather duster up my clacker. :eek:

:rulez: I think you are safe but just in case, Stevo keep the camera ready:D

[JohnE]

:rulez: I think you are safe but just in case, Stevo keep the camera ready:D


matt knowing you are an 'expert' and this is unlikely , it would not be a good look. But i have two cameras in case the sky does fall. But that too is Another unlikely prospect.

The word of the day is cyclical!


john

[tony]

well theres a lot of the 'glass is half full' types here nothing like burying

your head in the sand, if i close my eyes it wont hurt me....

I'm no expert, not particularly good with money either, but hang onto

your hats boys because its gonna get very bumpy sooner rather than

later....

the only thing shielding Au at the moment is the recourses boom,

now what happens when the country's who buy our coal, iron oar and the

like decide to cut back on the amount they spend overseas to protect

there own economy.....

My old man lived through the great depression and one of things he

taught me was if you Carnot afford it wait till you can, theres too much of

I wont it and I wont it now, stuff knows how I'm gonna pay for it....but I

gotta have it......

That movie was spot on, how long can you keep harvesting non

re-newable stuff.....how long can you play with money that is not real...

sooner or later its gonna come back an bite you....

were due for another great depression an all of you glass half full types

you realize this..... but wont admit it.....

because you realize everything is cyclic


Roll on the revolution

Tony

[stevo68]

well theres a lot of the 'glass is half full' types here nothing like burying

your head in the sand, if i close my eyes it wont hurt me....

I'm no expert, not particularly good with money either, but hang onto

your hats boys because its gonna get very bumpy sooner rather than

later....

the only thing shielding Au at the moment is the recourses boom,

now what happens when the country's who buy our coal, iron oar and the

like decide to cut back on the amount they spend overseas to protect

there own economy.....

My old man lived through the great depression and one of things he

taught me was if you Carnot afford it wait till you can, theres too much of

I wont it and I wont it now, stuff knows how I'm gonna pay for it....but I

gotta have it......

That movie was spot on, how long can you keep harvesting non

re-newable stuff.....how long can you play with money that is not real...

sooner or later its gonna come back an bite you....

were due for another great depression an all of you glass half full types

you realize this..... but wont admit it.....

because you realize everything is cyclic


Roll on the revolution

TonyActually if you read the thread, there are more "glass half empty"...than full. Secondly you state you are no expert and not good with money, soooooo in essence you are saying "take what I say with a grain of salt"? Ok, lets assume your scenario, is it better to tackle it with a positive or a negative attitude? If your going to war, knowing you may stare death in the face, is it better to have everyone running around, scared ****less, losing control..............or to be objective, clear minded and positive? In a crisis, any crisis, it is far better to have the "glass half full types" around than the "glass half empty types"...in my book anyway. The one thing you hit the nail on the head with....its cyclic and that is something the glass half fulls understand and the glass half empties dont,

Regards

Stevo

[Panda]

Actually if you read the thread, there are more "glass half empty"...than full. Secondly you state you are no expert and not good with money, soooooo in essence you are saying "take what I say with a grain of salt"? Ok, lets assume your scenario, is it better to tackle it with a positive or a negative attitude? If your going to war, knowing you may stare death in the face, is it better to have everyone running around, scared ****less, losing control..............or to be objective, clear minded and positive? In a crisis, any crisis, it is far better to have the "glass half full types" around than the "glass half empty types"...in my book anyway. The one thing you hit the nail on the head with....its cyclic and that is something the glass half fulls understand and the glass half empties dont,

Regards

Stevo



Hi Yer Stevo....Tony here (not Panda)

Mate I'm no expert, not good with money...but that don't mean take everything with a grain of salt....I own my home everything in it from the 42"plasma to the cat bowl, we own our cars, and I have a small CC debt for net buying etc ect...

OK you agree every things cyclic so why not a depression that doesn't suit the way you think??

As for the glass half full and the glass half empty ways of thinking I was always thought plan for the best but prepare for the worst....then no matter what happens you will be ok.....

And I was reminded only yesterday that no plan lasts after the initial contact....


Mate this link just about sums up my opion of the brains behind the money market...

How the markets really work (from 2007) (http://www.brasschecktv.com/page/187.html)

And the money lenders shell be cast from the temple.....


Tony