GFC 2 is here.......Oh dear.

"Will not buy managed fund again."

Good idea, the bloke making the investment decisions is working for himself, NOT you! He needs a new BMW next year!

OC
 
Australia was lucky in 2008...Next time we may well be in big trouble as Australian banks borrow short and lend long! Last time we got help from the US Federal Reserve...

Don't expect to be rescued next GFC!

Regards Errol 43
 
errol43 said:
Australia was lucky in 2008...Next time we may well be in big trouble as Australian banks borrow short and lend long! Last time we got help from the US Federal Reserve...

Don't expect to be rescued next GFC!

Regards Errol 43
Click to expand...

What help did we get from the Fed?
 
@House,

"as Australian banks borrow short and lend long!"

ALL banks do that, it is the nature of banking practice. Borrowing from a zillion customers mainly 'at call', and lending to home buyers and businesses long term.

OC
 
I know that, was asking about when we got help from the Fed. AFAIK it was only NAB and Westpac that borrowed a few billi and both have a bank/entity in the US that took advantage of the Fed's emergency facility.

By 'lend long' I assume he's referring to the 30 year mortgage? If only people knew how to structure it correctly they could easily save half the time and interest at no extra cost.
 
"By 'lend long' I assume he's referring to the 30 year mortgage? If only people knew how to structure it correctly they could easily save half the time and interest at no extra cost."


Agree with that 100%.

I made the last payment on ours at age 44. Had a lot of fun going up to the branch teller and paying in $10.

Together with an extra on the basic monthly payment, and a % of the annual salary review, never reducing payments with an interest reduction, all adds up over time. And the interest saved is TAX FREE!

OC
 
The real GFC 2 will be far worse than GFC 1 because there's not enough liquidity in the global banking system to prop things up, unlike GFC 1.
 
Old Codger said:
"By 'lend long' I assume he's referring to the 30 year mortgage? If only people knew how to structure it correctly they could easily save half the time and interest at no extra cost."


Agree with that 100%.

I made the last payment on ours at age 44. Had a lot of fun going up to the branch teller and paying in $10.

Together with an extra on the basic monthly payment, and a % of the annual salary review, never reducing payments with an interest reduction, all adds up over time. And the interest saved is TAX FREE!

OC
Click to expand...

Nice! Even better would have been to also have direct salary deposit into a 100% offset with a 55 day interest free credit card to pay all expenses. Something so simple yet very few do this.

Old Codger said:
I will refrain from mentioning the 'Primary Dealer Credit Facility' for the nth time!

OC
Click to expand...

I cannae find any reference to PDCF lending to Australia during the GFC on the first 2 pages of Google. Is that what you were implying?

SilverPete said:
The real GFC 2 will be far worse than GFC 1 because there's not enough liquidity in the global banking system to prop things up, unlike GFC 1.
Click to expand...

Source?
 
Nice! Even better would have been to also have direct salary deposit into a 100% offset with a 55 day interest free credit card to pay all expenses. Something so simple yet very few do this.
Click to expand...

Thats a great idea but I reckon alot of people wouldnt have the restraint to make it work for them.Most would treat the house as an atm and never pay it off.Its a great idea if you can control your spending, alot of poeple are unable to do that.
 
fosinator said:
Nice! Even better would have been to also have direct salary deposit into a 100% offset with a 55 day interest free credit card to pay all expenses. Something so simple yet very few do this.
Click to expand...

Thats a great idea but I reckon alot of people wouldnt have the restraint to make it work for them.Most would treat the house as an atm and never pay it off.Its a great idea if you can control your spending, alot of poeple are unable to do that.
Click to expand...

Too true but if it saves you a few hundred K in interest, halves the loan term and you're still not willing to work on money management... Something wrong there!

Old Codger said:
http://www.bloomberg.com/news/artic...data-compiled-by-bloomberg-released-to-public

I am having trouble with all this old data, but I will do some searching and give links. This one first.

OC
Click to expand...

Thanks but no reference to lending to Australia in the article and the zip/Excel file they link to no longer exists :(
 
Can someone please explain why government bond yields all over the world are falling when central banks have been printing? Thanks.
 
Ouch said:
Can someone please explain why government bond yields all over the world are falling when central banks have been printing? Thanks.
Click to expand...


The 'money' that they are printing is going into buying bonds.

This creates more demand for bonds, pushing their yields down ... that and the fact that every market in the world is manipulated.
 
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