Interest rate cut

[roland]

Oh well, I spent the day increasing the buy price of all our imported computer products - up about 10% since a couple of weeks ago. So let's see. stock market is stuffed for profits, bank interest drops for savings returns and all my prices have had to go up.

My business is officially stuffed, my wife had to go out and get a job today since our 2 x retail businesses no longer provides an income

 

[kitehigh]

Oh well, I spent the day increasing the buy price of all our imported computer products - up about 10% since a couple of weeks ago. So let's see. stock market is stuffed for profits, bank interest drops for savings returns and all my prices have had to go up.

My business is officially stuffed, my wife had to go out and get a job today since our 2 x retail businesses no longer provides an income

Sorry to hear that Roland, I hope things improve for you.

Its a tough business being in retail.

 

[Nyden]

Oh well, I spent the day increasing the buy price of all our imported computer products - up about 10% since a couple of weeks ago. So let's see. stock market is stuffed for profits, bank interest drops for savings returns and all my prices have had to go up.

My business is officially stuffed, my wife had to go out and get a job today since our 2 x retail businesses no longer provides an income

Exactly!

Believe me, very little good will come out of any interest rate decreases. House values are still going to plummet, people are still going to lose their jobs, Australia is still going to suffer huge losses in export revenue (as commodities continue their decent down), and many folk are still going to default on their mortgages.

All the RBA have done is drag those of us who are responsible (and not losing money every day) down the drain with the rest of the fools.



Yes, enjoy your mortgage savings. Even though your grocery prices, petrol, and just about everything else sky-rockets ... sigh, end rant

Oh, and Yelantis - the recession we're going to have in Australia has essentially nothing to do with where our rates were. The recession is going to happen because there's probably going to be a global recession.

 

[ROE]

Oh well, I spent the day increasing the buy price of all our imported computer products - up about 10% since a couple of weeks ago. So let's see. stock market is stuffed for profits, bank interest drops for savings returns and all my prices have had to go up.

My business is officially stuffed, my wife had to go out and get a job today since our 2 x retail businesses no longer provides an income

I been there but at receiving customer end my toys went up 5% the day I order till the day I get it cos our Dollar drop

 

[Herlequin]

Dead cat bouncing or a dying cat bouncing?

Most likely the later

I'm going for Dead Cat only. I think there will be panic selling but after this period we can expect a sudden reversal. yes i know saying 'The market is going to fall and then go back up' is a little 'duh '. but after the panic selling there will be a recorrection of price.

that being said keep those stops tight cause its gonna be one hell of a ride.

 

[nunthewiser]

Exactly!



Yes, enjoy your mortgage savings. Even though your grocery prices, petrol, and just about everything else sky-rockets ... sigh, end rant

BINGO! not too mention the maybe rush for the doors soon from cashed up depositors to maybe greener pastures elswhere .... gold? .um what happens when depositors leave a bank ?

 

[M34N]

1% was a good move by the RBA in my opinion. They wanted to:

a) boost confidence,
b) make sure the banks actually passed on a MINIMUM .5% rate cut, which they now have no reason not to do,
c) prevent the inevitable drop of rates next month,
d) look like they were doing something serious

All points achieved, no-one can say this doesn't inspire SOME confidence back into a panicked market.

Well done to them. They overdone the rate rises that we had earlier this year/late last and are simply correcting them back down to where they should be.

 

[nunthewiser]

1% was a good move by the RBA in my opinion. They wanted to:

a) boost confidence,
b) make sure the banks actually passed on a MINIMUM .5% rate cut, which they now have no reason not to do,
c) prevent the inevitable drop of rates next month,
d) look like they were doing something serious

All points achieved, no-one can say this doesn't inspire SOME confidence back into a panicked market.

Well done to them. They overdone the rate rises that we had earlier this year/late last and are simply correcting them back down to where they should be.

Totally agree and blessem for creating a nice lil sucka rally i reckon

oops sorry disagree with last 2 lines

as you were

 

[Nyden]

1% was a good move by the RBA in my opinion. They wanted to:

a) boost confidence,
b) make sure the banks actually passed on a MINIMUM .5% rate cut, which they now have no reason not to do,
c) prevent the inevitable drop of rates next month,
d) look like they were doing something serious

All points achieved, no-one can say this doesn't inspire SOME confidence back into a panicked market.

Well done to them. They overdone the rate rises that we had earlier this year/late last and are simply correcting them back down to where they should be.

I can appreciate that; but should people have confidence in this panicked market? I honestly believe not; and think that people should be scared, and should be reducing their portfolios.

Why would the RBA want to follow the route the US took? Look where they're at now; reducing rates obviously does not help, at all.

 

[M34N]

Totally agree and blessem for creating a nice lil sucka rally i reckon

oops sorry disagree with last 2 lines

as you were

No doubt it's going to create a 'sucker rally' as you put it, but longer term, it will help restore confidence, let banks get back to lending and maybe inspire people to start borrowing again, leading to the next bull market so we can all get on with life!

What else are they supposed to do, otherwise? You get blamed for creating sucker rallies if you lower rates, or blamed for causing chaos if they don't do anything. At least they're doing what is desperately needed for markets that are clearly crying out for action.

 

[Macquack]

BINGO! not too mention the maybe rush for the doors soon from cashed up depositors to maybe greener pastures elswhere .... gold? .um what happens when depositors leave a bank ?

Barring sticking it under their pillow, it becomes a deposit for somebody else. If you buy gold, the vendor deposits that money. Its crap that money can disappear from the system. Somebody did very nicely out of the sub-prime debacle (eg loan originators, real estate agents, developers etc).

 

[M34N]

I can appreciate that; but should people have confidence in this panicked market? I honestly believe not; and think that people should be scared, and should be reducing their portfolios.

Why would the RBA want to follow the route the US took? Look where they're at now; reducing rates obviously does not help, at all.

Like I just said above to nunthewiser, they didn't have a choice but to take action. Longer term it will help, and it helps shorter term lowering rates, dropping the lending costs and preventing this downward spiral that the market is in.

After all, what are they there for?

 

[nunthewiser]

No doubt it's going to create a 'sucker rally' as you put it, but longer term, it will help restore confidence, let banks get back to lending and maybe inspire people to start borrowing again, leading to the next bull market so we can all get on with life!

What else are they supposed to do, otherwise? You get blamed for creating sucker rallies if you lower rates, or blamed for causing chaos if they don't do anything. At least they're doing what is desperately needed for markets that are clearly crying out for action.

lol people borrowings are what set this snowball rolling in the first place .. lower rates and let them borrow more ??? aint no bullmarket for a while in my view but hey what would i know im just a bogan that can spot desparation when i see it

 

[Nyden]

After all, what are they there for?

They should only be there to regulate the dollar; and to ensure that the money I have today will be worth just as much tomorrow.

We are after all a 'free market', and all this government intervention is nonsense.

Our assets were overvalued; and they were nicely deflating. Now governments are trying to stop this ... and help those that were greedy and foolish.

 

[M34N]

lol people borrowings are what set this snowball rolling in the first place .. lower rates and let them borrow more ??? aint no bullmarket for a while in my view but hey what would i know im just a bogan that can spot desparation when i see it

So by that logic, they should of;

1) kept rates steady?
2) raised rates?

Indeed.

 

[BradK]

Hmmmm having read a number of these forums - I suspect that most of you would have found something to bitch about no matter what the fed did. All negative of course, as I am quite sure that the doom and gloom gets most of you off each day Watching peoples super and investments go to the wall is obviously more fun than I imagined, and as many members here have said - they want to see blood on the streets before they will be happy we have hit the bottom.
Of course I secretly hope that a large portion of that blood is theres!

That is right jono. There is alot of shaudenfreud around here - smart arses who 'picked it' and got out early, who are critical of people getting AVERAGE mortgages (mind you, they probably were not so critical when they were SELLING the house) and a huge lack of sympathy to the plight of fellow Australians.

To them I say - I hope your savings get savaged by inflation, and your returns get decimated by low interest rates!

Think I am going the same way as Wayne on this forum.

Brad

 

[M34N]

They should only be there to regulate the dollar; and to ensure that the money I have today will be worth just as much tomorrow.

We are after all a 'free market', and all this government intervention is nonsense.

Our assets were overvalued; and they were nicely deflating. Now governments are trying to stop this ... and help those that were greedy and foolish.

Well they intervened when the economy was going up over the past 5 years and kept raising rates, and now they are lowering it when the economy is going backwards. I don't see the problem with this intervention to be honest.

They put rates too high to begin with to be honest, and now they are lowering them back down to where they should be. But again, that's my opinion.

 

[Nyden]

That is right jono. There is alot of shaudenfreud around here - smart arses who 'picked it' and got out early, who are critical of people getting AVERAGE mortgages (mind you, they probably were not so critical when they were SELLING the house) and a huge lack of sympathy to the plight of fellow Australians.

To them I say - I hope your savings get savaged by inflation, and your returns get decimated by low interest rates!

Think I am going the same way as Wayne on this forum.

Brad

You do of course realize that if our dollar is "savaged by inflation", then folk holding stock will get hit with an even bigger double whammy? Loss of money through declining prices, and loss of value behind the money!

You seem to indulge in schadenfreude as well; hoping that those of us who were just "lucky smart arses" will lose out here? I'm quite sure there was very little luck involved with dodging a lot of these losses. Just responsibility, and hard work (studying, reading, looking out for signs). I took a few losses about a year ago when I sold out; where's your bleeding heart for me?

 

[nunthewiser]

So by that logic, they should of;

1) kept rates steady?
2) raised rates?

Indeed.

im no economist but does no one doesent pour fuel on a fire re letting ppl think they can use and borrow cheaper money .
however
as a trader i say BRING IT ON ..........gawd bless a sucka rally

 

[MrBurns]

The RBA has either lost the plot or know something we don't , ie: this is worse than we all imagine.

Either way it's bad news.

I think the banks wont lower deposit rates as they need the money, but there's no competition is there so perhaps they will stick the boot in.

I'm opening an account with the CBA to play them off against the NAB, might work.

As far as

There is alot of shaudenfreud around here

goes there was a lot of that too when the smart arses were "topping up their portfolios" and bragging about their "property portfolios" when Henry the chimp could have got a loan so they will learn a lesson and a big lesson, no sympathy from me. They'll go home whimpering to mummy and daddy to bail them out.