Thread: 7:30 report tonite...

Originally Posted by mns488

My guess (guess at best these days)

Start really badly (-4%) and then recover late afternoon ending about -1.5% down.

well Matt you were pretty much spot on - except for the last hour of trade

I got this in an email today-

Monkey Business
Once upon a time in a remote town, a man appeared and announced to the people in the town that he would buy monkeys for $ 10. On seeing that there were many monkeys around, they went out to the forest and started catching them. The man bought thousands at $10 and as supply started to diminish, the people in the town stopped their effort.
He further announced that he would now buy at $20. This renewed the efforts of the people in the town and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms.
The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it! The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.
In the absence of the man, the assistant told the people in the town, “Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $ 35 and when the man returns from the city, you can sell it to him for $ 50.” The villagers squeezed up with all their savings and bought all the monkeys.
Then they never saw the man nor his assistant, only monkeys everywhere!! !
Welcome to the “Stock” Market!!!!!

[Start of Opinon/]

My uneducated speculation is that the our dollar is dependant on the commodity sector. ATM China has excess iron ore and has slowed down production rapidly meaning there is currently a big drop in the price of iron ore and consequently the value of BHP and the likes. There are a few small iron ore companies about to start their first shipments that are seriously facing going bankrupt now because demand is so low and unless China starts production up again soon the boom could end.

I believe Australia's shelter from the crisis is the commodities sector and if there's severely reduced demand for commodities our boom bubble could be popped and we're in just as much poop as everyone else. Mines would no longer be screaming out for employers and unemployment could skyrocket. But according to the press talks between rudd and wen, china has assured that they will continue their economic growth which means we should get through lightly in comparrison to other countries.

[/End of Opinion]

Question for people: why has the UK govts trillion dollar bailout gone so quietly through the press here in Aus?? So much talk about the US bailout but very little about the UK one.

On a positive note for those looking to buy a house in the future it might once again become a real possibility to buy a house in reasonable proximity to the city.

I was reading this from the Reserve Bank from the 7th...
RBA: Media Release-Expansion of Domestic Market Facilities

STATEMENT BY GLENN STEVENS, GOVERNOR
MONETARY pOLICY

At its meeting today, the Board decided to lower the cash rate by 100 basis points to 6.0 per cent, effective 8 October 2008.
Conditions in international financial markets took a significant turn for the worse in September. Large-scale financial failures in several major countries were accompanied by serious dislocation in interbank markets and heightened instability in other markets, including sharp falls in share prices. Official actions in a number of countries have been aimed at restoring stability, by adding to short-term liquidity and laying a foundation for longer-term recovery in the health of balance sheets. Nonetheless, financing is likely to be difficult around the world for some time ahead. This is also affecting Australia, albeit by less than in many other countries, given the relative strength of the local banking system.
Economic activity in the major countries is also weakening, and evidence is accumulating of a significant moderation in growth in Australia’s trading partners in Asia. The expansionary effects of the recent surge in Australia’s terms of trade are still coming through, but some decline in the terms of trade now looks likely over the coming year, with many commodity prices having declined from their peaks. This, combined with the likelihood of below-trend growth in the global economy, suggests that global inflation will moderate in 2009.
Thus far, the overall path of economic activity in Australia appears to have been close to what the Board had expected, with the needed moderation in demand occurring. The next CPI is likely to show an increase of around 5 per cent over the four quarters to September, but the Bank remains of the view that inflation will start to decline in 2009.
The recent deterioration in prospects for global growth, together with much more difficult market conditions even for creditworthy borrowers, now present the risk that demand and output could be significantly weaker than earlier expected. Should that occur, inflation would most likely fall faster than earlier forecast.
Given that background, the Board judged that a material change to the balance of risks surrounding the outlook had occurred, requiring a significantly less restrictive stance of monetary policy. The Board also took careful note of movements in funding costs in wholesale markets. Having weighed these considerations, the Board decided that, on this occasion, an unusually large movement in the cash rate was appropriate in order to bring about a significant reduction in costs to borrowers. The Board does not, however, regard that movement as establishing a pattern for future decisions.
The Board will continue to assess prospects for demand and inflation over the period ahead, and set monetary policy as needed to bring inflation back to the 2–3 per cent target over time.

For the Layman (like me), is this saying in a nutshell that they have dropped interest rates, but they will probably go up again when things settle to control inflation???

Originally Posted by waynep

well Matt you were pretty much spot on - except for the last hour of trade

ha ha, the only thing i picked right today was a clean shirt out of my wardrobe.

For those interested the median house price in Queensland fell 2% in July, and 4% in August. If August goes on for 10 months