Interest rates lower today

[JulieW]

Didn't USA have near zero percent interest for a while? Does anyone know if that boosted real estate prices?

The United States has an oversupply of housing. We have an undersupply.

It's different here.

 

[southerncross]

Didn't USA have near zero percent interest for a while? Does anyone know if that boosted real estate prices?

The United States has an oversupply of housing. We have an undersupply.

It's different here.

Yeah, like we are severely restricted on available land donch ya know, cause of ...um like....Koala's like um, yeah the Koala's need more trees like..... and so if, um we restrict the supply of available land for housing like... um....yeah (pause)....yeah the koala's....

 

[petey]

Didn't USA have near zero percent interest for a while? Does anyone know if that boosted real estate prices?

The United States has an oversupply of housing. We have an undersupply.

The 'ol chestnut.. Does every man woman and child need a 3 bedroom house of their own?

 

[petey]

Everyone is paying back their mortgages with MORE valuable dollars than when the mortgage was started. Massive wealth transfer from the Australian people to the Australian banks and the Australian government.

Wouldn't they be paying back their mortgages with LESS valuable dollars than when the mortgage was started?

 

[mmm....shiney!]

The United States has an oversupply of housing. We have an undersupply.

It's different here.

Yeah, like we are severely restricted on available land donch ya know, cause of ...um like....Koala's like um, yeah the Koala's need more trees like..... and so if, um we restrict the supply of available land for housing like... um....yeah (pause)....yeah the koala's....

There are severe restrictions.

 

[Big A.D.]

Swan is a complete tard. He acts as though having the lowest interest rates in the nation's history is a desirable thing when in fact is is a symptom of severe structural damage to the economy caused by his incompetence and corruption.

So when John Howard said "interest rates will always be lower under a Coalition government than under a Labor government", what he was really saying was that the Coalition would do more damage than Labor?

Sorry, that's a cheap shot.

Politicizing rates is something both sides do and it is stupid. Low rates? Great, we'll spin that in favor of property owners. High rates? Great, we'll spin that in favor of savers. Doesn't matter which side it's coming from, they'll both say the same thing as the other one if they were in the same position.

 

[bordsilver]

Swan is a complete tard. He acts as though having the lowest interest rates in the nation's history is a desirable thing when in fact is is a symptom of severe structural damage to the economy caused by his incompetence and corruption.

So when John Howard said "interest rates will always be lower under a Coalition government than under a Labor government", what he was really saying was that the Coalition would do more damage than Labor?

Sorry, that's a cheap shot.

Politicizing rates is something both sides do and it is stupid. Low rates? Great, we'll spin that in favor of property owners. High rates? Great, we'll spin that in favor of savers. Doesn't matter which side it's coming from, they'll both say the same thing as the other one if they were in the same position.

x2

Taking the credit for the way a group of nine people randomly choose to unnaturally muck about with one of the most fundamental prices in the economy is just frickin' stupid. Take credit for removing their existence.

 

[JulieW]

The fix is in.
Along with the rest of the world it's the stock market and forget about savings.

So you're a self-funded retiree cursing the Reserve Bank for cutting interest rates. Don't. If the RBA has forced you to realise your term deposits are duds, the mandarins have done you a favour.

Savers dependent on fixed interest have been poorly advised for decades, not just over the past year as interest rates have tumbled. The dividend flow from a boring portfolio of industrial stocks trounces fixed interest and whatever the best daily rate might be from the on-line banks.

And right now, even after the market has rallied to start the year, equity yields slaughter the best term deposit rates you could have grabbed last year. Of course the yields aren't as tasty as they were in January or as extremely tasty as they were a year or two ago, but they're still fine in the general scheme of things.
Advertisement

As a rough and simplified demonstration using five stocks (not a recommendation), the BusinessDay quotes page shows Telstra closed yesterday with a yield of 5.6 per cent, NAB 5.5, Westpac 5.2, Wesfarmers 4.1 and Woolworths 3.7 an average of 4.8 per cent. Add the franking credits and the effective pre-tax yield is more than 6.7 per cent. Who wants term deposits?

Those who think they're risk averse or scarred after confusing trading with investing will no doubt wail at this point about shares perhaps falling in price but for someone after an income stream, the price isn't the point it's the sustainability of dividends and their potential to grow. The price will take care of itself eventually and the capital appreciates over history.

The sure thing about term deposits is that the capital is being steadily devalued and that the return from the dividends on Australian industrial stocks rapidly outpaces the best that the banks can offer. That's the key message financial commentator Peter Thornhill has been making in presentations over the past couple of decades. I've heard his story before, during and after the GFC and it has added up every time.

The search for yield has been the market's main theme over the past year and it's not over yet. The analysts suggesting bank shares had reached a bubble high last week don't seem to realise that.

Read more: http://www.theage.com.au/business/m...s-are-a-dud-20130508-2j6p1.html#ixzz2Sfi4Lnzr

 

[bordsilver]

If you're quick many of the REIT's are paying dividends above the margin loan rates. Time to leverage up and get free money - the price is irrelevant it's the dividends.

 

[hawkeye]

Swan is a complete tard. He acts as though having the lowest interest rates in the nation's history is a desirable thing when in fact is is a symptom of severe structural damage to the economy caused by his incompetence and corruption.

So when John Howard said "interest rates will always be lower under a Coalition government than under a Labor government", what he was really saying was that the Coalition would do more damage than Labor?

Sorry, that's a cheap shot.

Politicizing rates is something both sides do and it is stupid. Low rates? Great, we'll spin that in favor of property owners. High rates? Great, we'll spin that in favor of savers. Doesn't matter which side it's coming from, they'll both say the same thing as the other one if they were in the same position.

x2

Taking the credit for the way a group of nine people randomly choose to unnaturally muck about with one of the most fundamental prices in the economy is just frickin' stupid. Take credit for removing their existence.

It's not stupid from their perspective. In fact, it's something that can help them get re-elected, so there is a real incentive for them to do so.

 

[Shaddam IV]

Swan is a complete tard. He acts as though having the lowest interest rates in the nation's history is a desirable thing when in fact is is a symptom of severe structural damage to the economy caused by his incompetence and corruption.

So when John Howard said "interest rates will always be lower under a Coalition government than under a Labor government", what he was really saying was that the Coalition would do more damage than Labor?

Sorry, that's a cheap shot.

Nowhere did I say that low interest rates were bad. I said that having interest rates at historically low levels now is a sign of severe structural damage caused by Swan. And I am correct. Even Swan himself said that 3% indicates an emergency condition. He is now trying to cover his terror as his self made disaster sinks underneath him by babbling about mortgage savings while we now follow the USA and Japan to lower and lower rates due to a stalling economy.

 

[RetardedMonkey]

So.

2% before the end of the year?

 

[Big A.D.]

Swan is a complete tard. He acts as though having the lowest interest rates in the nation's history is a desirable thing when in fact is is a symptom of severe structural damage to the economy caused by his incompetence and corruption.

So when John Howard said "interest rates will always be lower under a Coalition government than under a Labor government", what he was really saying was that the Coalition would do more damage than Labor?

Sorry, that's a cheap shot.

Nowhere did I say that low interest rates were bad. I said that having interest rates at historically low levels now is a sign of severe structural damage caused by Swan. And I am correct. Even Swan himself said that 3% indicates an emergency condition.

No he didn't, he said the exact opposite.

"To compare this level of interest rates and the circumstances of the Australian economy now to what they were at the height of the global financial crisis is just utterly irresponsible."

There is no "emergency interest rate level". Cutting rates by a full percentage point in one go is the action you take in an emergency but there's nothing special about 3%. If rates were cut from 8% to 7% in one go then that would also indicate an emergency.

The size of the cut dictates is what defines an emergency, not the rate itself.

 

[hawkeye]

Isn't it funny how everyone is far more concerned about getting cheap credit than, say, cheap houses (or whatever)?

And people wonder why inflation (and prices) are constantly rising...

Still, I guess people don't get taught about credit in schools for a reason. Wouldn't want fiscally responsible citizens. That wouldn't suit the government's goals at all. And the government can all look after us financially anyway. Or so the story goes...

 

[Yippe-Ki-Ya]

"To compare this level of interest rates and the circumstances of the Australian economy now to what they were at the height of the global financial crisis is just utterly irresponsible inconvenient."

 

[SliderC]

Stock market up tomorrow then...

I'm surprised no one has commented on this reply. I agree, stocks are likely to go up on this news. I think we're going to see the same rise in stock values based on cheap money speculators as the US has seen. If hedge funds ands banks expect they can inflate the market greater then 2.75%, it will be a classic pump and dump.

 

[Nugget]

Stock market up tomorrow then...

I'm surprised no one has commented on this reply. I agree, stocks are likely to go up on this news. I think we're going to see the same rise in stock values based on cheap money speculators as the US has seen. If hedge funds ands banks expect they can inflate the market greater then 2.75%, it will be a classic pump and dump.

Courtesy of Macrobusiness http://www.macrobusiness.com.au/2013/05/asic-warns-on-chase-for-yield/

ASIC warns on chase for yield


Record low interest rates could push investors to chase higher returns via riskier investments, Australian Securities and Investments Commission chairman Greg Medcraft has warned.

He said interest rates were a high-level concern for the regulator amid fears it could fuel another fiscal crisis.

"This is the real high-level concern risk in the search for yield, people invest in products that are probably inappropriate for their needs or they don't understand," Mr Medcraft told The Australian Financial Review after speaking at an Australian Shareholders' Association conference in Sydney on Wednesday.

"That's going to be a very, very important thing that we'll focus on."

 

[trew]

And here's d*psh*t Michael Pascoe telling retirees that saving their money in term deposits is a 'dud' and they should be buying stocks with it for higher yields.

http://www.theage.com.au/business/markets/penny-drops-savings-are-a-dud-20130508-2j6p1.html