Forums / Getting Technical / Finance / RBA drops rates 50 basis points

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  • Profile photo of Jamie MooreJamie Moore
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    Happy times.

    http://www.rba.gov.au/media-releases/2012/mr-12-10.html

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of moxi10moxi10
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    NAB chief economist says the previous two rate cuts didn't help the housing market, so he's dubious about the prospects of further rate cuts having a positive impact (what a fool).  He neglected to mention that the banks didn't pass on the previous cuts in full, and subsequently raised their rates independently of the reserve, thus stomping on any prospect of positive sentiment improving as a result of lower rates. The banks should do themselves a favour and pass on the rate cuts in full, which would no doubt result in them seeing greater demand for their loans. Can they resist the greedy impulse to pocket some of the cut?

    Profile photo of JpcashflowJpcashflow
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    Rba one thing banks another what’s the point of having an Rba

    Jpcashflow | JP Financial Group
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    Profile photo of fWordfWord
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    Yes, I got happy for about 5 seconds, and then figured, what the heck. The banks wouldn't necessarily cut my loan by 50 basis points. It's pretty frustrating, but this is reality I guess.

    Profile photo of xdrewxdrew
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    THIS NEWS IS AWESOME !

    Finally the Reserve Bank is stepping up to reality !!!

    A couple of points down is JUST what the doctor ordered !

    Its like a flat battery and using jumper leads to restart the motor .. its what the engine needed !

    This is big.

    Profile photo of Deano the braveheartDeano the braveheart
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    Optimism abounds when the RBA tweaks the rates….funny really….yes..another way for the big banks to tweak their profit margins as Fword and JPcashflow point out. Also another way for property spruikers to lay claim to the spurious potent of the real estate market to be revitalised. Are people that …ummm..lets say that blindly optimistic?

    As i just read elsewhere…There is real growth and there is fraudulent growth . Real growth comes from taking inputs — labour, capital, energy, raw materials — and turning them into something people want, preferably something that’s useful or maybe beautiful. This growth comes from enterprise, but requires all those inputs, not least energy.

    But, Fraudulent growth comes from debasing the currency, increasing the money supply, and expanding credit. You generate the appearance of economic activity by hosing down the economy with money, much the same way you’d pour gasoline on a fire. It’s bright, hot, and loud for awhile. But the only way to keep it going is to pour more on the fire. And even then, all you’re doing is creating an incredibly warm sideshow. It’s not real growth.

    The 50 basis points drop could also be seen to discourage saving and therefore makes it harder for first home buyers to achieve their hefty deposits needed to enter the market…Ahh..theres many ways to look at statistics aint there…

    Perhaps there is a need to look at why the engine needed restarting..why the battery was flat in the first instance Xdrew….

    Who was the roman who twiddled on his fiddle, whilst rome burnt?…

    Profile photo of CatalystCatalyst
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    Yeehah!!!
    CF+.  Retirement here I come.

    Profile photo of xdrewxdrew
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    Deano the braveheart wrote:
    Perhaps there is a need to look at why the engine needed restarting..why the battery was flat in the first instance Xdrew…. Who was the roman who twiddled on his fiddle, whilst rome burnt?…

    His name was Nero .. and it remains a false accusation against Nero .. as the fiddle wasnt even invented at that time in history.

    Nero may have been a madman .. and in his operation as emperor a troubled genius .. but he was not a fool.

    The 50 Basis points SHOULD discourage saving. The major problem is that people are so fixed on existing price schedules and the possibilities of discounts from existing price schedules that they believe it will continue to happen. The ongoing inflationary rate that is broadcast over the media includes depreciating items such as plasma TVs .. computers and mobile phone technology. That produces a FALSE inflationary rate which biases any movement in monetary streams. Which actually devalues the buying power of your money as the real inflation is not dealt with properly in either annual increases or ongoing expenses. This means standard consumables keep going up .. the wage does not .. and it gets to the point where something has to give .. either groceries .. or the mortgage. And unsurprisingly enough .. there ARE people who will give up groceries over rent or mortgages. Literally reducing their consumption of food .. for the potential of paying their rent / mortgage payment.

    Not a healthy procedure.

    What needs to happen in the nearer term is the publics UNDERSTANDING of money needs to change. Once they have to reset their expectations as to what they can get for their money .. they wont be as scared to spend it.

    Profile photo of Eddy123Eddy123
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    I was too happy telling everyone about this in office and someone said you'll be lucky enough if the banks hold onto their current rates and not increase them despite what rba rates are, lol.

    Profile photo of luke86luke86
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    The banks recently raised rates independent of the reserve bank by 0.10% or so. The Reserve Bank cuts rates by 0.5%. The banks will now pass on 0.35-0.4% rate cut.

    So the net reduction in rates will be about 0.25% – 0.3%. As I see it, the reserve needed to reduce rates by 0.5% to get a reduction in variable mortgage rates of 0.25%.

    Cheers,
    Luke

    Profile photo of Jamie MooreJamie Moore
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    BOQ is the first to move and has just dropped their rates 35 points.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of Richard TaylorRichard Taylor
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    Same old story thought 35 bps off what base rate.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of DerekDerek
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    Was at a business breakfast this morning with Michael Pascoe.

    His opinion was the rate reduction was not so much about trying to kick start economy again as we are going OK (graphs to reinforce that argument) but as a pre-emptive strike against the Federal Budget due for release next week. Swan et al have harped on the need to return government budget to surplus and to do this they have decided to remove government spending of 2.7%  out of the economy in order to return the budget to surplus. This is why we needed a rate reduction – not so much in response to current conditions but what the RBA's models show when govt spending reduces by 2.7%

    Interestingly our government deficit amounts to two bits of not much when compared to other benchmark economies.

    Profile photo of Richard TaylorRichard Taylor
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    See NAB went down 32 bps this afternoon.

    At least that is something from one of the majors.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Richard TaylorRichard Taylor
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    And now CBA 40 down bps.

    Looking better as each goes by.

    At least next week we will have some sort of gauge as to what everyone is doing.

    Not that rate is the main criteria when choosing a long term lender.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of JpcashflowJpcashflow
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    I dislike how swan calls the banks greedy and that more rate cuts are needed, yet he and that other moron Julia implement a carbon tax
    The ripples of the carbon tax will cause more problems!!!

    Jpcashflow | JP Financial Group
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    Profile photo of DWolfeDWolfe
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    Cut back on groceries to pay mortgages – what a great idea.

    Hear me out, firstly, obesity epidemic, might reduce that. Secondly food wastage. We've cut back on junk, basically quit drinking alcohol, and make sure we use up all the food in the fridge. I'm happily cutting back on the food bill, fresh fruit and veg is cheaper and better for you! Supposedly Aussies throw out heaps of food, so maybe it'll cut that down.

    Now, aside from that anyone got a crystal ball on petrol prices, I almost cracked $100 for a tank the other day……….. between that, the carbon tax, and lower immigration, it'll be watch this space for consumer spending.

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of JpcashflowJpcashflow
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    Thanks god work pay for my fuel and car lol
    But any extra money goes into my bussiness

    Jpcashflow | JP Financial Group
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    Your first port of call in finance :)

    Profile photo of david4000david4000
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    BankWest have dropped their standard variable to 6.98%

    Profile photo of JpcashflowJpcashflow
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    Also news just in banks just dropped their service levels

    Jpcashflow | JP Financial Group
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    Your first port of call in finance :)

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