# Interest Rates 10%



## BradK (3 February 2008)

Hi, 

Im not talking about official rates, but rather those that filter down to borrowers. 

Do we think they are going to get to 10% before the end of 2008? 

Brad


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## numbercruncher (4 February 2008)

Unlikely but still possible imho.

Minimum of 9pc and maybe as high as 9.5pc is what im thinking. But the banks seem to do whatever the hell they want so maybe theyll throw in the wild card 

Good to see the RBA doing its job and protecting our savings from the ravages of Inflation 

I notice in 94' they went up 2.75pc , now that would hurt the highly leveraged!(Imagine having a 350k mortgage an then have to come up with an extra 10k p/a! ouchers.)


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


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## Bill M (4 February 2008)

Economists are predicting two rate rises of .25% for this year so that would bring our RBA cash rates to 7.25%. Considering there is a lot of competition for home loans and most of the better home loans are at around 8% now that would bring it up to 8.5% which is still reasonable.

For current variable home loans rate click on http://www.ratecity.com.au/home-loans/lowest-rates/


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## BradK (4 February 2008)

Some are going as high as 1% for the year. 

Oh, you're going to ask me to name them, aint ya? huh? Huh? HUH? 

Brad


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## theasxgorilla (4 February 2008)

BradK said:


> Oh, you're going to ask me to name them, aint ya? huh? Huh? HUH?




It would be useful...just so we can hack them to pieces from a 'vested interest' perspective.

Everyone else is credit crunching like mad and Aust is targeted for 1% over the next 12 months???  Give me break...r they for real?

Yes, names please.


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## BradK (4 February 2008)

ASX, 

I dont want to get all Marxist on you, but dont you think that this whole 'credit crunch' and 'subprime' crisis was mostly caused by bankers - but the punters are going to pay for it? 

Meanwhile, come reporting season, there are going to be reports of record profits? 

Brad


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## theasxgorilla (4 February 2008)

BradK said:


> I dont want to get all Marxist on you, but dont you think that this whole 'credit crunch' and 'subprime' crisis was mostly caused by bankers - but the punters are going to pay for it?




Don't hold back.   Yes.  One way or another, yes they will.



BradK said:


> Meanwhile, come reporting season, there are going to be reports of record profits?




No, not this year.

ASX.G


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## xoa (4 February 2008)

I hope so.

But I'm sure the government would bailout the baby boomers and speculators before rates reach 10%.


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## nioka (4 February 2008)

xoa said:


> I hope so.
> 
> But I'm sure the government would bailout the baby boomers and speculators before rates reach 10%.



 Don't be so sure about that. We didn't get bailed out in the 80's when rates got to 20%. The best way to get bailed out is to do it yourself and borrow less.


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## xoa (4 February 2008)

nioka said:


> Don't be so sure about that. We didn't get bailed out in the 80's when rates got to 20%. The best way to get bailed out is to do it yourself and borrow less.




I hope you're right. But the government understands and fears the power of the baby boomer vote, in a way they didn't in the 1980s. The government would rather kill every first born son, than piss off the grey army.


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## nioka (4 February 2008)

xoa said:


> I hope you're right. But the government understands and fears the power of the baby boomer vote, in a way they didn't in the 1980s. The government would rather kill every first born son, than piss off the grey army.



I am a captain in the grey army. Interest rates don't worry us as much as inflation. We LOVE high interest rates (to a degree.) It could be my money someone in the "must have it at all costs" generation has borrowed to maintain a lifestyle they haven't yet earned.


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## xoa (4 February 2008)

nioka said:


> I am a captain in the grey army. Interest rates don't worry us as much as inflation. We LOVE high interest rates (to a degree.) It could be my money someone in the "must have it at all costs" generation has borrowed to maintain a lifestyle they haven't yet earned.




Who is the "must have it at all costs" generation?


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## Kauri (4 February 2008)

Well the  TD-MI Inflation gauge is out...it rose 0.3% in January while the underlying inflation gauge rose 0.2% putting the underlying inflation at 4.0% Y/Y and a 20- year high. The RBA *??will??* hike rates tomorrow and *increases??* the likelihood that they will still have a leaning to the hawks  in their talk after the decision. Of course, what the banks do in the future now that a lot of their competition has foundered on the sub-prime reef is open to debate.. 
Cheers
...........Kauri


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## numbercruncher (4 February 2008)

xoa said:


> Who is the "must have it at all costs" generation?





Thats what the Boomers refer to gen X and Y as.


Apparently we are only interested in Mcmansions, iPods and sportscars


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## nioka (4 February 2008)

xoa said:


> Who is the "must have it at all costs" generation?



 Those that want instantly all the things that our generation worked hard for many years to obtain. They buy with credit rather than with the fruits of hard work or time in the workplace. It represents a high proportion of those in the 20 to 35 yr age bracket. Including some in my extended family I regret to say.


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## explod (4 February 2008)

xoa said:


> I hope you're right. But the government understands and fears the power of the baby boomer vote, in a way they didn't in the 1980s. The government would rather kill every first born son, than piss off the grey army.




Bigger percentage of baby boomers voted conservative.  It was the changing attitudes of youg voters who swung it to the left.  Most of the younger ones cant afford a mortgage so we will see what pans out.

Interest rates will be determined by the banks regardless of what governments think or want.  The US are dropping interest rates for support of the Dow which is the very last bastion on which they can hang thier hat.  Watch interest rates rise when that also fails.

There is a money supply problem which is being solved in the US at this juncture by helicopter Ben's presses.   Again when that fails the money supply problem or shortage of it will require massive increases in interest rates in order to tempt anyone to lend it out.      May not happen this year but when it does, look out above for interest rates.


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## xoa (4 February 2008)

nioka said:


> Those that want instantly all the things that our generation worked hard for many years to obtain. They buy with credit rather than with the fruits of hard work or time in the workplace. It represents a high proportion of those in the 20 to 35 yr age bracket. Including some in my extended family I regret to say.




I'm not aware of anybody in that age bracket who's used credit to buy a widescreen plasma tv, luxury imported car, or a dubious investment property (things that my parents have done). 

My experiences with the workforce have left me with the impression that young people are working harder than ever before. They're pressured to support themselves through university, repay their HECS debt, and save for a hefty home loan deposit. 

Young people are eager to work overtime and unsociable hours. Visit a hospital, police station or convenience store on a Sunday night and you'll see what I mean.


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## Kauri (4 February 2008)

nasty *chatter* suggesting that a 50bps may be on the cards on the morrow... but methinks it is just prejudiced punters pushing their punts... 
Cheers
..........Kauri


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## wayneL (4 February 2008)

Kauri said:


> nasty *chatter* suggesting that a 50bps may be on the cards on the morrow... but methinks it is just prejudiced punters pushing their punts...
> Cheers
> ..........Kauri



Speaking of decoupling.....

....or is it just that Oz reports CPI more honestly?


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