# March 08 RBA Interest rate decision



## Uncle Festivus (3 March 2008)

Which way and by how much; or is it a question of how much it will go up by - 0.25% or 0.5%


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## numbercruncher (3 March 2008)

Seen as the banks have indicated they will probably bashing on an extra .1 or .15 , I think the RBA will only go the .25.

Got to tame the Inflation beast !


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## agro (3 March 2008)

more than certainly increased

rate cuts are not on the agenda imo

anyone notice the inflationary prices at woolworth$ of late


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## Real1ty (3 March 2008)

With the claim that they nearly moved by 50 BP's at the last meeting, then it is guaranteed that it will move up again.

Probably just the 25 BP's again would seem the way they will go.


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## ROE (3 March 2008)

you will get 0.5 either way
If RBA increase by 0.25 banks will tag a long to push it close to 0.5

If RBA increase 0.5, bank may cope a little more and increase independently in May or June 

The way I see it the poor going to get a lot worse and the rich getting much richer, as interest hasn't made any dent in consumer spending..so I guess the rich are spending it up.
Push up rate... Asset price drop..they come in for the bargain because they have little debt.


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## dalek (3 March 2008)

ROE said:


> You will get 0.5 either way
> If RBA increase by 0.25 banks will tag a long to push it close to 0.5
> 
> If RBA increase 0.5, bank may cope a little more and increase independently in May or June




Radio reports today  Kev07 has told the major banks he will be really cross if they exceed any RBA increase. That should do the trick.


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## ROE (3 March 2008)

dalek said:


> Radio reports today  Kev07 has told the major banks he will be really cross if they exceed any RBA increase. That should do the trick.




What is he going to do? write them an angry letter .....
they can regulate more and cost the bank more..then the bank just pass the bucks to customers ....

I think they will do it doesn't matter what the government thinks.. I think the more the government up the anti the easier for them to do it and it could cost them the next election   crazy for government to be get involve in the market.

I'm not pro banks but I think that just the way it is with the big 4 controls the market.


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## MRC & Co (3 March 2008)

I go with the consensus here, in that RBA will increase IR by 25bps this time around. 

Though, hope not, want this AUD to fall!


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## Smurf1976 (3 March 2008)

They'll keep raising until something breaks IMO. Questions being how far, how fast, what breaks, and when?


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## Kauri (3 March 2008)

Kev has come out with his day before housing help policy... as he did last time... so it is set in concrete.. a la Billy Bathgate and Bo Weinberg..



Cheers
........Kauri


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## Nyden (3 March 2008)

I'm gunning for .5 - .25 obviously isn't scaring too many people; need to frighten the people into a cool-off period 

... plus, I'm still cashed up, could do with higher interest / a plummeting market :


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## xoa (3 March 2008)

I'd like another to earn an extra 0.5% on my websaver account thankyou very much.

Thanks for renting my money, real estate speculators!


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## numbercruncher (4 March 2008)

Tomorrows a given it seems and they are talking May as well already ! 



> INFLATION data released on the eve of today's Reserve Bank board meeting strengthens the chance of an interest rate rise in May to follow an expected announcement this afternoon of a rise in the cash rate from 7% to 7.25%.
> 
> Inflation powered to a six-year high in the 12 months to February 29, according to the TD Securities-Melbourne Institute Monthly Inflation Gauge.




http://business.theage.com.au/may-rate-rise-likely-after-inflation-hits-sixyear-high/20080303-1wkw.html


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## Real1ty (4 March 2008)

25 it is

http://www.rba.gov.au/Statistics/cashrate_target.html


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## tayser (4 March 2008)

AUD/JPY was massacred by 80 pips after the announcement... ouch.  6.75% interest rate differential with Japan now.


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## Nyden (4 March 2008)

Darn. Now I need to wait until May for extra interest :


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## Kimosabi (4 March 2008)

numbercruncher said:


> Seen as the banks have indicated they will probably bashing on an extra .1 or .15 , I think the RBA will only go the .25.
> 
> Got to tame the Inflation beast !



hahahaha, RBA taming the inflation that they cause by printing more money, hahahaha...

They must be laughing all the way to the bank, hahahaha, they are the bank, bahahahaha, how stupid are we for putting up with this ****....

And K Rudd is going, I want to make the RBA even more independant so they can rape us even more, hahahahahaha...

And everyone who actually has some money in the bank is excited at getting 7% when the money they have in the bank is getting devalued quicker that the Interest they get paid, bahahahahaha...

hhhhmmmm, I checked the M3 on the RBA's own website and it was running at 16% last year, hahahaha, suckers...




http://en.wikipedia.org/wiki/Money_supply

Maybe you people should watch this video and see how much inflation there was when Gold and Silver is used as money...


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## Julia (4 March 2008)

If Mr Rudd genuinely had the best interests of the country at heart, he would cancel the $31B of tax cuts and as an alternative put it into super.  

Isn't the RBA going to be looking at counteracting the inflationary effect this extra spending power will have?  The next interest rate rise won't be too far away.


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## Prospector (4 March 2008)

Maybe, just maybe, raising the interest rates has no effect on inflation?  It just seems it attacks those who can afford it least, and who are subjected to the most taxes when purchasing property.  How much of our inflation rate is influenced by our discretionary spending anyway?

Maybe the poll now needs to be - Which Bank will increase their rate first?  And which will be the last to increase its deposit interest.  Probably the answer will fit both questions.

And those rates cuts would be best served going into Super - except at the moment the share market investments in Super are like a drain.  Will be some nasty surprises when people get their Super statements - then those smarties like my brother who thinks that buying shares is too risky, will see that his Super fund has done this anyway!


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## dalek (4 March 2008)

Julia said:


> If Mr Rudd genuinely had the best interests of the country at heart, he would cancel the $31B of tax cuts and as an alternative put it into super.
> 
> Isn't the RBA going to be looking at counteracting the inflationary effect this extra spending power will have?  The next interest rate rise won't be too far away.




I believe you are right, however Ms Gillard stated on a recent ABC interview that the tax cuts would create more positive outcomes for jobs and the workplace in general, than it would add to inflationary woes !?!? Not sure how she plans to substantiate that claim, but surely adding more disposable cash *must*be inflationary.
I guess it is more important to deliver an election promise for the next Kev's 200 day scorecard publication.


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## Mofra (4 March 2008)

Kimosabi said:


> hhhhmmmm, I checked the M3 on the RBA's own website and it was running at 16% last year, hahahaha, suckers...




From Wikipedia


> *The Federal Reserve ceased publishing M3 statistics in March 2006*, explaining that M3 did not appear to convey additional information about economic activity compared to M2, had not been used in determining economic policy, and that the costs to collect M3 data outweighed the benefits. Some of the data used to calculate M3 are still collected and published on a regular basis.




Am I the only person who finds this bolded sentence frightening? As the first serious signs of stagflation hit they reduce their disclosure levels?


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## Julia (4 March 2008)

Prospector said:


> Maybe, just maybe, raising the interest rates has no effect on inflation?  It just seems it attacks those who can afford it least, and who are subjected to the most taxes when purchasing property.  How much of our inflation rate is influenced by our discretionary spending anyway?



It's beginning to look as though you are quite right, Prospector.
That the continuing spending is being done by people on high incomes (e.g. members of the RBA!), whilst people on low and fixed incomes are really doing it tough with increased mortgage/rent plus hugely higher general cost of living with increases in food/electricity/water etc.


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## Kimosabi (4 March 2008)

Julia said:


> It's beginning to look as though you are quite right, Prospector.
> That the continuing spending is being done by people on high incomes (e.g. members of the RBA!), whilst people on low and fixed incomes are really doing it tough with increased mortgage/rent plus hugely higher general cost of living with increases in food/electricity/water etc.



Well, how else are you meant to transfer wealth from the poor and middle classes to the rich without them even realising...


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## Bill M (5 March 2008)

*Economists say rate peak may be in sight*

Economists say there are signs that interest rates may be nearing a peak after the Reserve Bank of Australia (RBA) delivered its widely anticipated rate rise on Tuesday.

Full Story Here


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## ROE (5 March 2008)

http://www.news.com.au/business/story/0,23636,23323416-462,00.html

so what Rudd going to do now? write them an angry letter like I said earlier  ?


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## MRC & Co (5 March 2008)

Bill M said:


> *Economists say rate peak may be in sight*
> 
> Economists say there are signs that interest rates may be nearing a peak after the Reserve Bank of Australia (RBA) delivered its widely anticipated rate rise on Tuesday.
> 
> Full Story Here




I would have to agree.


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## bvbfan (7 March 2008)

Cash Rate Yield Curve and Implied Expectations of Changes to the Target Cash Rate for the next 18 months. from the ASX/SFE shows that odds are at 104% for a 25bp cut to 7% in June 09

http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf


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## tech/a (7 March 2008)

MRC & Co said:


> I would have to agree.




Seems the RBA dont agree.


> The RBA has since projected underlying inflation remaining at the top of or above the inflation target until mid-2010.




From the article tenderd.
Until we see a slow down in inflation figures---a weakening in employment figures,Wages stop expanding (Not likley),the spiral of goods and services toward outer space---expect more.



> However she still expects a rate rise in May following the release of the March quarter consumer price index in late April.




Banks dont think so either they belt on a basis point or 2 of their own.

Nothing seen yet.


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## Sir Burr (17 March 2008)

Just got my letter today on the interest rate increase from my mortgage company. Up *0.35%* to 8.95%.

Always only ever up'd it by the reserve bank amount over the past 10 years. First time ever, it has been more.

Geez, I really wish it had been lowered like Amazing Loans 

Amazing Loans cuts rate to 39.9 per cent :22_yikes:

SB


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## ROE (17 March 2008)

Sir Burr said:


> Just got my letter today on the interest rate increase from my mortgage company. Up *0.35%* to 8.95%.
> 
> Always only ever up'd it by the reserve bank amount over the past 10 years. First time ever, it has been more.
> 
> ...




There will be more rise in coming months independent of the RBA.
Banks are losing money on increase credit cost. There are only 2 solutions

1. Increase the rate and make it profitable so they can write new loans

2. If no profit can be made write no loan and dry up credit and that going to be real BAD ass for the economy.

so which one Kevin want to pick ? bad economy or higher interest rate 

sometimes you just cant have both ...

with high rate people still have a job and can afford to pay something back, with bad economy people dont have a jobs and there goes everything ..their house, their cars and everything else they buy on credit.

the way I see it ... high rate going to stay for a while.


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## Sir Burr (18 March 2008)

ROE said:


> the way I see it ... high rate going to stay for a while.




Yes and I see your smiling.

I'm also smiling as being a long only trader with a market filter all my capital is out of the market onto my home loan. The way I see it is I'm not paying interest on my home loan so is returning ~15+% if tax was included.

Being out of the market is a position, I find shorting too difficult so 15% isn't so bad is it? 

SB


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