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  • Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    At its meeting today, the Board decided to raise the cash rate by 25 basis points to 4.0 per cent, effective 3 March 2010.

    The global economy is growing, and world GDP is expected to rise at close to trend pace in 2010 and 2011. The expansion is still hesitant in the major countries, due to the continuing legacy of the financial crisis, resulting in ongoing excess capacity. In Asia, where financial sectors are not impaired, growth has continued to be quite strong. The authorities in some countries are now seeking to reduce the degree of stimulus to their economies.

    Global financial markets are functioning much better than they were a year ago and the extraordinary support from governments and central banks is gradually being wound back. Credit conditions remain difficult in some major countries as banks continue to face loan losses associated with the period of economic weakness. Concerns regarding some sovereigns remain elevated.

    In Australia, economic conditions in 2009 were stronger than expected, after a mild downturn a year ago. The rate of unemployment appears to have peaked at a much lower level than earlier expected. Labour market data and a range of business surveys suggest growth in the economy may have already been at or close to trend for a few months. There are some signs that the process of business sector de-leveraging is moderating, with the pace of decline in business credit lessening and indications that lenders are starting to become more willing to lend to some borrowers. Investment in the resources sector is very strong. Credit for housing has been expanding at a solid pace, and dwelling prices have risen significantly over the past year. New loan approvals for housing have moderated a little over recent months, however, as interest rates have risen and the impact of large grants to first-home buyers has tailed off.

    Inflation has, as expected, declined in underlying terms from its peak in 2008, helped by the fall in commodity prices at the end of 2008, a noticeable slowing in private-sector labour costs during 2009, the rise in the exchange rate and the earlier period of slower growth in demand. CPI inflation has risen somewhat recently as temporary factors that had been holding it to unusually low rates are now abating. Inflation is expected to be consistent with the target in 2010.

    With the risk of serious economic contraction in Australia having passed, the Board moved late last year to lessen the degree of monetary stimulus that had been put in place when the outlook appeared to be much weaker. Lenders generally raised rates a little more than the cash rate and most loan rates rose by close to a percentage point.

    Interest rates to most borrowers nonetheless remain lower than average. The Board judges that with growth likely to be close to trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. Today’s decision is a further step in that process.

    Richard Taylor | Australia's leading private lender

    Profile photo of Dan42Dan42
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    @dan42
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    It'll be interesting to see what the banks do. It wouldn't look good to rise rates by more than 25bps after some of the big 4 have posted increased profits.

    Then again, it hasn't stopped them before…

    Profile photo of Richard TaylorRichard Taylor
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    Agreed Dan but i think some of the publicity they have received over this in the past may make them think twice this time.

    Credit markets definately starting to open up again with second tier lenders becoming more attractive by the day.

    Richard Taylor | Australia's leading private lender

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Well CBA & Anz didnt long to answer the call and have only raised 25 bhps.

    Richard Taylor | Australia's leading private lender

    Profile photo of WhatIfWeFinanceWhatIfWeFinance
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    @whatifwefinance
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    Lets see how NAB and Westpac react?

    Profile photo of GrantH_1974GrantH_1974
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    @granth_1974
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    Anyone heard how much Suncorp will raise?

    Profile photo of keikokeiko
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    @keiko
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    westpac will sit tight after last time.

    How hard would it be to source cash from say the states or japan etc where there interest rates are next to nothing and you can lock a rate in for 30 years at only a few %

    Profile photo of god_of_moneygod_of_money
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    keiko… the problem is where to get such an easy money
    if the big banks cannot source the money from overseas.. how could you get it then???

    Profile photo of god_of_moneygod_of_money
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    @god_of_money
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    Bank of QLD.. just put on 1 billion dollars bond with Rudd Bank's guarantee at 5.75% with maturity in ?2014

     

    Profile photo of god_of_moneygod_of_money
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    All big banks posted 0.25% increase ONLY…

    Profile photo of thecrestthecrest
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    @thecrest
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    God of money's bum looks like poo bear, just saw 3 in a row, more than enough this time of night.

    BTW, great post thanks Richard.

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
    Email Me | Phone Me

    selling motels in NSW

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Keiko, guess Gail Kelly at Westpac didnt take advice from your post as they went up the same as everyone else.

    Richard Taylor | Australia's leading private lender

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Keiko, guess Gail Kelly at Westpac didnt take advice from your post as they went up the same as everyone else.

    Richard Taylor | Australia's leading private lender

    Profile photo of keikokeiko
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    @keiko
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    I guess not, silly move if they are not getting much business from what they did last time, If they stayed below everyone else and did not get greedy again then they may have got some extra business this time around.

    Richard my last post disapeared, But was wondering is there any way to get my hands on $1.8m asap without having to go threw the banks slow process, possibly from a private lender that wants a $100k return in 6 months

    Profile photo of Richard TaylorRichard Taylor
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    Yes not sure what happened to it but i did answer it with a couple of questions which included type of security, location how will it be repaid lvr etc etc.

    To be honest anyone prepared to offer $1.8 will probably want more than $100K in return.

    Richard Taylor | Australia's leading private lender

    Profile photo of keikokeiko
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    @keiko
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    Thanks Richard, Do you know any one with that kind of money sitting around? I may be able to cut them a good deal

    Profile photo of YoungInvestorYoungInvestor
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    Keiko – In my experience, they will want around $180k-200k over 6 mths I would suggest if the position is mostly unsecured.

    If secured you might be able to return them $100k

    Profile photo of keikokeiko
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    @keiko
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    Hi YoungInvester

    I can do it secured

    The $1.8 will be buying $2.5

    so there is $700 there if something went wrong but nothing will go wrong

    I would get approved from a bank but this deal came up at short notice and there is no time for a bank to do everything they need to do, well there probably is but you no how slow they are, so a private investor is my last chance at this stage
    If someone has this kindof money sitting around ready to go then I would cut them a very good deal
    or if they want half the deal they will make about $300k overnight but if they want to sell then they will make this within a couple of months

    Profile photo of BankerBanker
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    I know you guys are not keen on majors but I just approved a deal, did rp data Val and printed contracts within 2 hours. If you can’t get a deal done with Westpac or Cba wihin 7 days you don’t have the right contact.

    Profile photo of GrantH_1974GrantH_1974
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    @granth_1974
    Join Date: 2004
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    In my experience with private investors, you would need to offer around $350-400K (or approx 20%) if you were going to ask for $1.8M. We've been trying to get PI funds for a project (not property – something entirely different) for about 5 years now and the closest we have come, despite everyone saying, "yeah, this is a great concept and we're really interested" is someone saying, "you raise $1M from other people and I'll give you the $10M you're after". These guys don't part with their money easily in my experience.

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