# August '07 interest rate decision?



## Uncle Festivus (7 August 2007)

What will it be - up or steady?


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## numbercruncher (7 August 2007)

*Re: August '07 Interest rate decision*

Up one tick - Id like to see it at 10pc in the medium term.


Thankyou.


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## Ageo (7 August 2007)

I thought they announced that its going up? 0.25%?


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## Gundini (7 August 2007)

*Re: August '07 Interest rate decision*

I think it's a flip of the coin job on this one, though I am leaning to no rise.

Inflation is rising at 2.6% which is slightly on the high side of the RBA range of between 2% and 3%.

Surely they don't want the AUD to get any stronger, although those importing are getting a lot of bang for their buck, as are holiday makers.

But housing affordability is a major issue in all states, and a rise in rates wont help the cause. Also, with a credit squeeze on the cards, it will be harder to get borrowed money.

Credit Card debt is at critcal levels with people living beyond their means.

You could argue for a rise in rates to curb spending in an attempt to slow the economy a tad, but the top end of town are less affected and may well go on a import spending spree. 

I personally don't think a rise will get the desired affect, and ironically could cause more damage down the track.

And let's not forget, it is an election year!


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## brendan87 (7 August 2007)

Another factor is the high dollar and oil prices being back up again acts in the same way as an interest rate rise. As well - the interest rates businesses can borrow at in the corporate bond market has alread gone up substantially in the wake of the sub-prime mortgage crisis.


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## The Mint Man (7 August 2007)

Early on in the year all the so called 'experts' gave a rate rise a 70% chance. almost everyone was saying that there would be one, but what do you know?, there wasn't one.
This one seems almost the same only this time none of these experts have publicly said (on the news, where most people get their info from) how much of a chance they give a rate rise.

I voted steady. but even if it did go up, so what! Interest rates would still be in the low region.

Cheers


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## krisbarry (7 August 2007)

*I am more than happy for interest rates to rise*

We would hate to have a housing crisis now would we?

Familes sleeping in tents, while others gorge on a property portfolio of 97 homes.

Time to re-distribute the wealth a little and take the heat out of a basic human need.


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## Awesomandy (7 August 2007)

I would say it's a 50/50 chance. Inflation is still within the target range, the bond market is up, and higher the AUD is, the worse it is for our exporters. It is also an election year, so that might have a factor as well. So, I'm leaning to steady this time, but there might be a rise before the end of the year.


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## numbercruncher (7 August 2007)

Stop_the_clock said:


> *I am more than happy for interest rates to rise*
> 
> We would hate to have a housing crisis now would we?
> 
> ...





lol i can see it now, 60 minutes , Hello im property investor 06457, I used to have an empire of 97 Investment properties, I now sleep in the back of my XF falcon. Anyone can join this riches to rags rollercoaster, just visit your friendly Subprime broker and realty agent today (>:


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## dhukka (7 August 2007)

With some strong economic data of late there is definitely a case to be made for a rate rise. It has been factored in by most of economists in the market now. IMHO I think the RBA has time to sit back and wait a little longer but as mentioned before, toss a coin.


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## moXJO (7 August 2007)

Isn’t the next RBA meeting early next year? So there is a pretty good chance of a rate rise given the amount of time in between and the chance of inflation running up.


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## bean (7 August 2007)

The US will take an easing stance on interest rates.
The RBA well they raise and our $ will go through the roof
Inflation - who believes the figures anyway we all know its higher than what is said.  We need to keep the printing press going as well


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## dhukka (7 August 2007)

moXJO said:


> Isn’t the next RBA meeting early next year? So there is a pretty good chance of a rate rise given the amount of time in between and the chance of inflation running up.




Yes they will be meeting early next year. They'll also be meeting every month  until early next year as they've done for decades. 

More importantly they are meeting today with a decision on interest rates due tomorrow.


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## Pommiegranite (7 August 2007)

Well it looks like I'm the only one who voted for a decrease.

Logic: The fed bank has no logic.


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## moXJO (7 August 2007)

dhukka said:


> Yes they will be meeting early next year. They'll also be meeting every month  until early next year as they've done for decades.
> 
> tomorrow.




yes but because of the election circus I thought they put off raising rates.So the next chance of raising rates will be next year


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## Mofra (7 August 2007)

moXJO said:


> yes but because of the election circus I thought they put off raising rates.So the next chance of raising rates will be next year




Technically the RBA are a body independant of the government. Just how independant is on occasion a matter of debate


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## chops_a_must (7 August 2007)

The Mint Man said:


> I voted steady. but even if it did go up, so what! Interest rates would still be in the low region.
> 
> Cheers



Funny that, it would be as low as when keating left wouldn't it? I thought this party always kept interest rates _lower_ than Labor?


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## moXJO (7 August 2007)

Mofra said:


> Technically the RBA are a body independant of the government. Just how independant is on occasion a matter of debate




True, but I doubt they would raise rates during an election campaign as it could make or break it for libs or labs.I think they will take into account the fact that they will have to wait so they don't influence the outcome during election time.


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## springhill (7 August 2007)

moXJO said:


> Isn’t the next RBA meeting early next year? So there is a pretty good chance of a rate rise given the amount of time in between and the chance of inflation running up.




Its my understanding they meet and discuss interest rates every 3 months. Next one will be round election time, no way in hell there will be rate rise then, next year is too long to wait, so mortgage the house and put it on rising tomorrow. Not a bad thing, people are pissing their money up the wall left, right and centre. Not to mention first home buyers wanting the 4 by 2 as ther first home and borrowing the absolute maximum amount they can to get it,then cry when interest rates rise. Tough sh*t IMO. Start affordable then work your way up. Housing envy is the new pen*s envy!


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## Smurf1976 (7 August 2007)

*Re: August '07 Interest rate decision*



Gundini said:


> But housing affordability is a major issue in all states, and a rise in rates wont help the cause. Also, with a credit squeeze on the cards, it will be harder to get borrowed money.



And if it's harder to get borrowed money, what's likely to happen to house prices? 

Hint: Same or increased supply, reduced demand as fewer are able to get finance to buy.

Low interest rates / easy credit are what caused the unaffordable housing in the first place. 

My best guess is an increase of 0.25% followed by another one in a few months. That's based on looking at the markets more than anything else. The market says it's time to raise the rates.


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## Smurf1976 (7 August 2007)

moXJO said:


> True, but I doubt they would raise rates during an election campaign as it could make or break it for libs or labs.I think they will take into account the fact that they will have to wait so they don't influence the outcome during election time.



Johnny has put the hard word on the RBA in the past and they didn't seem to like it one bit. Payback time?


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## Wysiwyg (8 August 2007)

The cost of stuff is going up more often in recent times so a  .5 % increase for mine.


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## Gundini (8 August 2007)

The media is really hyping up this interest rate rise.

Surely our markets will tank if this occurs with a weak lead from the US.

On the other hand, keeping the rates steady should shoot our market up 100 points!

Interesting to see what happens, I'm sitting on the fence...


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## explod (8 August 2007)

Smurf1976 said:


> Johnny has put the hard word on the RBA in the past and they didn't seem to like it one bit. Payback time?




Yeh, that was for the audience, this one will be for Johnny, no rise in my view


In my posts, any semblance to fact may be a dream


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## Gundini (8 August 2007)

Interest Rate RBA Decission:

Up .25% 

Suppose our market will head SOUTH !!!


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## Awesomandy (8 August 2007)

Gundini said:


> Suppose our market will head SOUTH !!!




I wouldn't worry too much about that. Assuming our poll is an accurate representation of market sentiments, most of the effects of the rate rise would have already been factored in during the past days/weeks.


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## Gundini (8 August 2007)

Awesomandy said:


> I wouldn't worry too much about that. Assuming our poll is an accurate representation of market sentiments, most of the effects of the rate rise would have already been factored in during the past days/weeks.




Yes I agree, but I think it will probably end up a nice day trading opportunity, initial tank, then a solid buy up, IMO...


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## numbercruncher (8 August 2007)

Great Decision!!


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## KIWIKARLOS (8 August 2007)

Well things are certainly looking bad for Johnie right about now 

What implications do you think increasing rates will have?
House prices remain at current levels for a while.
Perhapes with more rises we can bring down our trade deficit?
With inflation growing in China i can't see our inflation going down enough to warrent a cut in the short - medium term. 

Wish i had of gone the fixed rate loan a year ago at 5.75 %


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## Gundini (8 August 2007)

Gundini said:


> Interest Rate RBA Decission:
> 
> Up .25%
> 
> Suppose our market will head SOUTH !!!




Must admit I am suprised at the power of this rally... They really did factor the rise in... Oh well, no opportunities for me today...


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## Kathmandu (9 August 2007)

numbercruncher said:


> lol i can see it now, 60 minutes , Hello im property investor 06457, I used to have an empire of 97 Investment properties, I now sleep in the back of my XF falcon. Anyone can join this riches to rags rollercoaster, just visit your friendly Subprime broker and realty agent today (>:




Think you may find that the smarter property investor won't have 100% loan's and will have a nice LOC in place to take care of any additional interest payment's though.

I know I do 

Don't have anything like 97 properties, but when some of the less than smart (100% loan's, no equity, no backup plan) lose their homes through lack of foresight/planning, I will probably start to increase my portfolio.

That is unless some emotional first home buyer decides to pay too much for the "house they have to have".

Dave


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