DECISION DAY

What is everyone’s predictions for the RBA?

Punxatawny Phil will just go another 0.5% and meet expectations?

Peachy has been very quite the last few days – probably busy at her job at Coolabah capital

I note the AUD is up this morning so maybe the market expects a 0.75% surprise

what’s interesting for me is that the RBA still hasn’t reversed its QE, so there are excess reserves in the system which would normally force the overnight rate to 0

Instead of using repo and reverse repo, it now has to manipulate the overnight rate by paying interest on excess reserves – how long can this go on for? Are they going to be paying 3 or 4% on excess reserves?

And is that inflationary?

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stagmal

i’m with MB on this one raising interest rates isn’t doing shit about inflation, and probably wont matter for houses that much either so there’s no saving grace

Last edited 4 months ago by stagmal
stagmal

they dont

lowe is seriously the dumbest cunt you ever did see, hes got everyone fooled into thinking he’s this genius playing 5D chess because nobody who would become the chair of the reserve bank could possibly be a dumb cunt

but nope he is seriously just a dumb cunt

Aussie Soy Boy

Of course it’s not doing anything the real rate must be -10%

Peachy

Stagmal, I disagree. While higher interest rates definitely won’t reduce the price of steaks and fuel and stuff, they will strangle wage growth/employment.

in the RBA’s mind, that will be “mission accomplished” as -they will figure- their intervention will have prevented a wages-prices-wages-prices positive feedback loop.

as to houses – interest rate rises will exert ENORMOUS pressure for transaction prices to fall. It’s how interest rates work in relation to asset prices.

This is why I always laughed at the “pushing on a string” theorists who figured that prices won’t rise even if interest rates fall because “nobody wants more debt”. lol

stagmal

ya idfk anything about it peachy

Aussie Soy Boy

You should have borrowed less champ

Peachy

..

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Aussie Soy Boy

Fair enough. Do you just feel silly buying at the peak then?

Aussie Soy Boy

Enjoy the show then

Ramjet

EmBee narrative is that rates can’t go up, but they have funds to sell. So, I don’t trust their narrative.

Raising rates will slay inflation, but it will come at a great cost. If the CPI is made up of goods that are essential and discretionary, then discretionary will have to deflate in order for inflation to be brought under control.

Once again another poor prediction by EmBee.

DictatorDavid

65bps for a nice even 1.5%. If they do a token 50bps then the RBA is going to be boned. Given the metrics they are using has a ?3 month lag they are chasing their tail and won’t get inflation under control. Fuel excise getting cut in Sept will really have people howling. It’s a good time to be debt free. Cant say I feel bad for those that are leveraged to the eyeballs. You see them in their 80k cars going to the food bank drive thru… and the pain hasn’t even really started yet…

T

Yeah i reckon they would want aussie to be above .70 so probably surprise on the upside.

A fly in your ointment

I hope for the same

stagmal

how much do these interest rate raises actually feed into term deposits?

Garry Hitler

Term deposit rates doing weird things. Last week judobank had one year paid monthly at 3.05%. This week its down to 2.85%, same conditions. So i have no idea whats happening.

Garry Hitler

Soo, my prediction is rate CUT or leave as is.

stagmal

heil hitler

Garry Hitler

Call me Garry. People give me crap about my last name all the time.

stagmal

lol r u FR is that really your last name

Gruppenführer Mark

Heil Garry!

Garry Hitler

That’s not funny. My father died in a German concentration camp.
He fell out of his guard tower.

Peachy

You are just being unpleasant, I think.

Gruppenführer Mark

Oh, I’m sorry, that was very insensitive of me. The dude that I heard of with a similar name fell on his bunker floor.

Garry Hitler

Ta thanks. That may help me work out when to lock in this lump sum I’ve got.

Garry Hitler

Ok, now Macbank Term Dep has gone from 2.75% year/paid monthly last week, to 3.20% today.
Is this a funding or aus govt bond issue do you think?

Ramjet

They probably needed some one year funding and did it by term deposits. You can sometimes see some odd term deposit rates that may not make sense, so you will know that they need some additional funding for a certain duration.

Peachy

I don’t have a strong view for this month, I’m afraid.

just to have a prediction out there, though, I’d say 0.5. that can be spun as acting decisively…but also in a measured way, not foolhardy.

Freddy

Peachy is definitely on the RBA board.

stagmal

life’s a peach when you can make predictions this good

stagmal

4 minutes

ARE YOU ALL

PUMPED

DictatorDavid

The fact it’s being televised on a couple of channels live makes me think they are going to surprise people

DictatorDavid

50bps. Boooooo

stagmal

the peach got it again

DictatorDavid

That’s because she has insider knowledge.

stagmal

peachy can i have investment tips pls

canuckdownunder

While everyone is distracted by the RBA Brad Hazzard has come out and recommened a 4th dose of the jab for under 65s. I guess contracts have been signed and the plebs have to line up for their own good.

Peachy

Fuckenell…. I don’t think that even the 65+ folks want this shit anymore.

seem to recall they were pretty horny for dose 1 and 2, but that has faded. By my barometer, anyway.

Last edited 4 months ago by Peachy
DictatorDavid

Meh. I saw a poll today on the age or somewhere. Asking if people would get 4th booster. It was overwhelmingly yes and surprised me. Probably 80% had voted yes.

A fly in your ointment

I saw that poll too.

there’s a funny ring to 80% metric, it tends to be the most believed fake. Actually 82% is the most gullible fake number.

Peachy

80% is bullshit.

with the 3rd dose, only 60+ cohort got to over 80%. Victoria does nice graphs for this.

4th dose will be lower

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A fly in your ointment

The poll was if the punters would punt their long term health to make HapHazzard Brad have a wet dream (i.e. punters to get the next -4th- round of jabbadabba) and the poll was at 80% to have said yes.

It was on either FakeNews.dot.dot or Sydney Morning ‘Heap’

LostSocialist

If the poll was in the SMH which has an average readership age of around 70-80 then the results could just be reflecting that.

DictatorDavid

I don’t agree with it but if you talk to the average punter who isn’t a tradie then they are happy to roll up their sleeve and get as many jabs as theyre told.

A fly in your ointment

undoubtedly, the complacency down under is probably second to Danes and/or Swedes.
I was pointing towards the poll being fake, serving only to peddle the chosen narrative. 80-84% is subconsciously the most believable fake % number.

Ramjet

No, 80% of their readership voted yes. Given about 65% of over 16s had a booster, it is more of a reflection of their readership than on general society.

DictatorDavid

Yeah I know. Figured that was implied and didn’t need to be spelt out for folks around here.

canuckdownunder

It makes no sense. So the unjabbed can come visit now but the locals need 4 doses?

I still think a lot of people will line up even though they’ve had the ‘Rona and have better protection than a jab would offer.

Garry Hitler

Yep, all my mudblood acquaintances said nah after clot-shot 2

Peachy

This bloke has tapped out due to “suddenly”.

he was the chairman of some healthcare company, so presumably 3x shots into the regimen.

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Aussie Soy Boy

64 is the new 84.

LSWCHP

Or even 54, according to all the recently dead people I used to know.

A fly in your ointment

the same mob likely sad no to jabbadabba last year until it became compulsory prescription and then a resunding NO became “it’s the right thing to do, MOIT”

so not underestimate the power of the complacency.

LostSocialist

That was an unintentionally heart warming article. I particularly liked the bit where the property parasite claimed he might have to put the rent up as rates were rising, good luck with that.

DictatorDavid

Let’s take a moment to remember macrobusiness’ favourite punching bag, Nathan “IQ” Birch. The amount of shit that they hung on him and yet if we compared his gains to DLS et al over the last ~7 years he’s come out with the last laugh one would think.

A fly in your ointment

Smart people make money on a specific ‘up’ event. Very smart people make money on many shifting event be it up or down.
Nathan made money on property rise, he is likely to make money on property downturn (now that apparently he pulled out of overleveraging and owns only what rent income can pay).
Imagine the purchasing power of those that have several self-sustaining properties during a severe downturn (nice D2L ratio)…

Gouda

Nathan’s been fairly quiet on social media – his last video in March about buying Gold…

Reus's Large MEMBER

Probably was long crypto ….

Peachy

Would be funny if a large cohort of “leverage the equity in housing” bros were brought undone by large crypto bets 😜

Reus's Large MEMBER

I will get the popcorn … 🙂

Gouda

They really couldn’t find anyone better? Most people would have a PPOR worth more than this guy’s total investments…

JimsCentralBanking

https://www.abc.net.au/news/2022-07-06/interest-rates-are-rising-and-australians-are-hurting-is-the-rba/101209428

Another article featuring Sara Ibrahim the mega mortgage muppet.

Sarah Ibrahim said while there were many different variables regulators like the RBA needed to consider, “one of them needs to be highly geared mortgages and people in that situation”.

Cry more.

And look at this mess.

The RBA may argue its messaging always comes with disclaimers, and APRA may argue its mandate is to protect the financial system (in other words, the banks), but enabling borrowers to take on massive debts that lead to more defaults under higher rates must factor in financial instability. Who guards against that outcome?

Umm, APRA are supposed to guard against that outcome, but the RBA got on the phone and told them to back off the buffer.

If the coming RBA review doesn’t look into the way monetary policy has been used to target housing it will be a waste of time. I’m worried we’re going to end up with a woke board and that’s about it.

Peachy

If the coming RBA review doesn’t look into the way monetary policy has been used to target housing it will be a waste of time. I’m worried we’re going to end up with a woke board and that’s about it.

alright, I’m pencilling in a work board, then!

this should be good for MOAR easy credit. As each wokester representative will want to ensure that their particular constituency gets a goodly cut of easy money.

Ramjet

Woke board, you mean to get credit to diverse parts of the community. Hasn’t this been tried before in the US? What was the result again?

Freddy

RBA got on the phone and told them to back off the buffer.

When did this happen?

It makes sense to back off a little as rates are rising. The mistake was made by APRA retaining the same buffer when rates were temporarily lowered to emergency levels.

JimsCentralBanking

It happened after the 10-15% housing correction caused by the royal commission fallout. Prudent lending is unEZFKA.

Ramjet

Even if the RBA kept rates at 0.1% until 2024, it would not help Sara anyway. If you only pay your minimum payments, it is unlikely that the total loan would reduce much in three years. Higher interest rates would affect her in two years instead of now.

Far easier to blame someone like the RBA or the bank for your failure to grasp basic finance and basic risk management concepts.

Aussie Soy Boy

“Like thousands of others, Ms Ibrahim and her partner, who have two young kids and already were struggling with the cost of living

So she goes out and borrows $1.5 million? Idiot.

Lazer Eyes

already were struggling with the cost of livingSo she goes out and borrows $1.5 million?

I’m glad its them and not me.

Gruppenführer Mark

At the risk of starting a shit fight….. You’d rather “invest” in bitcoin?

Lazy Eye

Oh for sure. Get with the times daddy-o – i got granite hands and I’m buying the dips. It’s going to the moon

Peachy

Coming… you’re fetishising the idea that QE isn’t money printing.

but this is neither here nor there. QE might or might not be money printing. It is not the be all and end all.

and in either state of the world housing might rise or fall with QE on or off. Because other things are at play too.

Gruppenführer Mark

Coming,

The original post re: schizophrenic psychosis deserves it’s own post, methinks. This way we can all come unglued and argue for the millionth time all things money, bitcoin, interest rates and other beliefs that ppl hold near and dear to their hearts, and will not, for the most part, change their mind on.

Peachy,

Do you think my weekend “Stories” post was worthwhile? I have enough to eek out another few weeks of stories….

Peachy

Peachy,

Do you think my weekend “Stories” post was worthwhile? I have enough to eek out another few weeks of stories….

Mr Mark, I do like reading stories, so would be fun if you posted more.

I generally don’t visit EZFKA much on weekends, on account of awesome social life and bountiful beauty sleep, but catch up on weekend happenings at a later date. Unfortunately that doesn’t really avail me of the opportunity to provide feedback to the generous posters 🙁

Peachy

It is money printing. It is. But that – in itself – means basically nothing. What matters is how that QE money is deployed, and that is affected by other bits of the system.

to help you understand – just think of something that is definitely “money printing” – printing physical currency in the form of notes.

let’s say Lowe prints up $400b in nice new pineapples tomorrow. That is clearly money printing. But just because we have established that there has been money printed, we are not in a position to predict the effect on the economy.

what will really matter is what happens to the printed money.

  • maybe Lowe will physically burn it all on a bonfire tomorrow
  • maybe Lowe will lock it in an underground vault, never to be opened
  • maybe Lowe will use it to purchase gold
  • maybe Lowe will use it to buy foreign currencies
  • maybe Lowe will sprinkle it from helicopters… maybe only in Sydney… maybe in multiple locations
  • Maybe Lowe will lend it to the commercial banks at 0.01%… perhaps overnight. Perhaps for 60 years.
  • Maybe Lowe will use it to lend to government & then you need to think about how government will use it… build public housing? Develop publicly owned gas wells? More submarines? Launch rockets to Pluto?
  • etc…
Peachy

All Lowe can do is buy bonds from banks, and give them reserves

which is what he has been doing

What have the banks been doing with the reserves?

Increasing IOER is giving them more and more reserves every day – what are they going to do with THOSE reserves?

Are THOSE inflationary?

dont get overexcited.

clearly pumping money into the banks (which is what rba has done) is inflationary at the margin, in particularly wrt those things that banks then point the money hose at (viz. housing).

that’s not hard to understand.

what seems to be harder for you to accept is the “at the margin” bit, above. that there are other things at play too.

so if banks are pumped full of cash while everything is humming, housing inflates.

but if they’re pumped full of cash whole salaries across the EZFKA are all halved (because magic), then housing deflates notwithstanding the banks being pumped.

but perhaps housing would deflate MORE if salaries halved AND banks weren’t pumped full of cash.

Peachy

how are we going to get inflation if salaries are halved?

ah, you see – now you are asking more relevant questions. This is better than just focussing on whether interest on reserves is money printing or is not(and other similar matters), which you were overindexing on.

and we haven’t even gotten to the most basic question of “what is inflation?”

Once you start thinking about the right questions, you’ll see that there is no contradiction of the kind you originally suggested:

one day it’s : oh noes, the rba is printing money . It’s going to be inflation

the next day : RIP everyone who has taken out debt at 2% – now interest rates are 2.5% house price crash incoming

it’s one or the other you stupid cunts

Last edited 4 months ago by Peachy
Peachy

Don’t be a dunce.

I’ve explained with very simple examples how the binary distinction of “money printing” vs “not money printing” is inadequate and insufficient to the task of predicting “inflation” or “not inflation”.
(putting aside even the question of what is inflation or what kind of inflation)

an even simpler example that even you will understand^: if Lowe prints a dozen pineapples and gives them to you personally – will this money printing cause inflation?

^
I thought I’d try your combative style of rhetoric… does it suit me?

MR coal

Haven’t you worked out yet that coming simply cant deal with any ideas more complex than a binary thing x causes inflation/deflation.

Peachy

Haven’t you worked out yet that coming simply cant deal with any ideas more complex than a binary thing x causes inflation/deflation.

No, but I’m a bit slow :/

JimsCentralBanking

if we are in deflation, then QE was never money printing

Hypothetically, if there is a period of, say, 5% asset deflation caused by tighter monetary policy following on from a period of 30% asset inflation fueled by QE, QE was never money printing? That 25% remaining is what?

Peachy

Yes JCB – you are very correct to add the time dimension!

Peachy

and i’m pretty confident that the retards that come to this place are expecting houses and other assets to crash by more than 5%

im pretty confident we’ll see houses more than 5% down. That’s how interest rates work.

JimsCentralBanking

If QE was money printing, and we are now paying interest on the QE that was printed – that is still money printing

Yes, QE is money printing. I don’t give a fuck if they physically print it or magic up some numbers to put into a banks account. And it’s the amount/liquidity that matters, probably rate of change too.

QE was never reversed. In fact, we are still rolling over bond purchases that come to maturity.

Yeah, but the “cheap” money has stopped flowing. The central banks could print up trillions a day and if it just sat on a balance sheet it wouldn’t do much.

AS WELL AS creating more reserves out of thin air through IOER

Paying IOER is a few drips into the bathtub, and with inflation running at well over the cash rate, it’s even less of an issue.

and i’m pretty confident that the retards that come to this place are expecting houses and other assets to crash by more than 5%

Stocks have already and I’d be surprised if housing didn’t drop more than 5% in real terms.

I guess if inflation remains high enough and real interest rates are still negative, nominal prices could be sticky. But that would probably require some juicy wage growth.

Any way I’m off. Stop listening to Jeff Snider. He’s a spastic.

Hoody

Can’t wait for Boomers to start talking about how bad they had it

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harry

Well, I’m stealing that least one.

JimsCentralBanking

LOL

Lazer Eyes

the last part is a goody lol