I just see a lot that doesn't add up.refinancing might be a BIG problem ( and not just higher interest rates , many incomes are NOT keeping pace with inflation , even if job stability holds firm )
I just see a lot that doesn't add up.
On one hand it's inflation, soaring cost of everything from food to utilities to housing, interest rates going up is supposedly bad, it's real wages not keeping up and so on. That's the narrative.
On the other hand, what I see is new cars, full shops and restaurants, airlines booked out and so on. Consumers are spending big.
Doesn't add up.
I have been watching the cba presentations for a long time, they are generally pretty open and honest about their loan books.Agree, a lot of people would be way ahead in their repayments.
Is CBA going to hide any issues with their loan book somehow? No way.
The economy running a bit hot is a cause of inflation, so when you see lots of spending that’s what the interest rate rises are trying to quell.I just see a lot that doesn't add up.
On one hand it's inflation, soaring cost of everything from food to utilities to housing, interest rates going up is supposedly bad, it's real wages not keeping up and so on. That's the narrative.
On the other hand, what I see is new cars, full shops and restaurants, airlines booked out and so on. Consumers are spending big.
Doesn't add up.
Smurf1976 totally agree with you. Perhaps 10-15% of the peasants are the ones suffering while the rest are cashed up and not really hurting or in danger of hurting. Or perhaps is it that having a multitude of credit cards gives the feeling of having an endless supply of moolah. The debt has to be repaid or is bankruptcy an answer for some.I just see a lot that doesn't add up.
On one hand it's inflation, soaring cost of everything from food to utilities to housing, interest rates going up is supposedly bad, it's real wages not keeping up and so on. That's the narrative.
On the other hand, what I see is new cars, full shops and restaurants, airlines booked out and so on. Consumers are spending big.
Doesn't add up.
ahead ? yes some but for how longAgree, a lot of people would be way ahead in their repayments.
Is CBA going to hide any issues with their loan book somehow? No way.
well the narrative is, this will only be temporary ( say three years ) , i don't believe that , but many doI just see a lot that doesn't add up.
On one hand it's inflation, soaring cost of everything from food to utilities to housing, interest rates going up is supposedly bad, it's real wages not keeping up and so on. That's the narrative.
On the other hand, what I see is new cars, full shops and restaurants, airlines booked out and so on. Consumers are spending big.
Doesn't add up.
Is this a cliff?
View attachment 151774
Source: Jarden, Company reports
[There is an ] ever escalating game of ‘whack a mole’ being played by governments in trying to control the ever increasing divergence between taxation and spending. Continuing to rely on taxing the earnings of a dwindling working age population to fund outlays to the growing population outside this category who also own most of the country’s net assets is seemingly a recipe for disaster. The cost of living issues which have precipitated action on energy prices across the world are symptomatic of far deeper issues. The reliance on the working age population is deep. In addition to providing most of the tax revenue, they form the new businesses in the economy, they are the incremental borrowers in the housing market and the incremental consumers as families grow. Lowering interest rates has papered over growing cracks for many years. We’d expect higher interest rates will see the cracks widen quickly. Expiring fixed interest rate housing loans will extract significant purchasing power from a demographic cohort already shouldering more than their fair share. We’d expect businesses, particularly those reliant on consumer spending will prove far more sensitive than is envisaged in many current forecasts.
- Martin Conlon
USUALLY refinancing depends on the lender being willing to lend against the collateral offeredIt might depend what interest rates are when those fixed terms expire. How much can people absorb?
Another factor might be that a lot of people bought these fixed loans when property was peaking. It’s come off quite a bit since the top in a lot of regions. Will people be forced to sell for a loss?
View attachment 152757
But did the banks cared?I think that some of these current borrowers and the banks in particular have either been under a rock or had their heads buried in a sand dune. Surely they didn't think virtually 0% interest rates would be with us for an extended time.
well i remember one official promising NO interest rate hikes until 2024I think that some of these current borrowers and the banks in particular have either been under a rock or had their heads buried in a sand dune. Surely they didn't think virtually 0% interest rates would be with us for an extended time.
I think that some of these current borrowers and the banks in particular have either been under a rock or had their heads buried in a sand dune. Surely they didn't think virtually 0% interest rates would be with us for an extended time.
And look how well that strategy worked, in the USA , during the prelude to the GFC:But did the banks cared?
They got mortgages insurances...
See it that way, you can buy a widget and resell it on 20y to someone, anyone who is actually paying to ensure you will be paid back,moreover you can choose to increase your return rates more or less at will as long as the government is not too angry and your 3 other mates do not give you unfair competition...
Hum..ohhhh and you can also print the money to buy that widget.
Seen that way, isn't banking a great business....
Another rise. Is 800,000 mortgages to be imminently reset to much higher rates enough to cause a problem? I think the wealthy end of town might be OK, but the average punter? Sure they've saved over Covid and may have excess equity in their new homes, maybe.
Yeah RBA boss Philip Lowe keen to "go out on a high".bang
He will certainly leave on a high. Just how many mortgage fire sales will be coming up due to his incompetant statements of earlier..Yeah RBA boss Philip Lowe keen to "go out on a high".
P.S. He'll retire soon "happy ever after" life scenario as it won't affect/impact him whatsoever
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