Opinion The Adelaide Board Politics/COVID Thread Part 3

[WaynesWorld19]

It got put to +3% plus the banks were ruthless in assessing expenditure specifically to avoid the s**t show. I’m not worried. There’ll be some who suffer but not enough to affect the market. The rate of saving was never higher than the last few years.

The current market hurts new home buyers .....I assume the same ratio's that apply to business loans, apply with residential .

Good times, you can borrow up to 90% of valued property ....which is less than market rate
That can drop back to 80% in tough times ....but the kicker is, if the property is dropping in value, so is your loan amount on twin levels

This also has a massive impact on developers, who struggle with the 80% financability ....but also incurring massive labour and material price increases

It is indeed a shit-show

Did I hear correctly, that China is not allowing property investment in Australia .....or did I hear that wrong ??

 

[Vader]

There is a bit leading into this nobody believe it was a Priority, but now it is.
As his lawyer at the time was found Guilty and additional person 1 was untouchable at the time Trump could be in trouble.

His co-conspirator has already been tried & convicted. Surely this one is a slam dunk?

 

[Mr_Moogle]

Spot on. It's the worst way to address inflation caused by supply side factors

I'm going under the assumption that the solution to supply constraints would be increases in production. More production requires investment. Investment requires the issuing of debt and central banks, in their infinite wisdom, decided to make debt really expensive.

Powell just seems to be trying to recreate what Volcker did in the 70s which ended up inducing a horrible recession. It did sort out the inflation but it was pretty rough with unemployment peaking at 10.8% in the early 80s.

 

[George Kramer]

The sad thing is that many of these corporate economists are so removed from reality that they only see numbers and that's all.

I heard one of them (might have been from Citibank) claim the government went too soft on interest rates and said that the RBA need to go back to 50 basis point rises and there needs to be 3 or 4 in quick succession ie another 2% rise in rates.

I don't get it, the problem was never demand driven. Raising interest rates was never going to be the answer and now that it's become clear that raising them hasn't worked their big idea is to lift rates even more?

Are they joking?

Lifting interest rates has been about as useful as pulling the handbrake on a car when you're falling off a cliff.

I remember arguing about this when they first started, it was obvious what a massive round of interest rate hikes would do when we’ve just let the country borrow and get used to low rates.

These blokes will keep their jobs and their multiple houses, but a vast number of people who can least afford it are going to get smacked big time.

If I’m not mistaken big drivers of the recent inflation rates were airfares and rent. Ok so let’s stop flying and watch the assistance the airlines get. As for rents, what the **** do they think raising interest rates will do for that? Morons, the lot of them.

 

[Mr_Moogle]

As for rents, what the * do they think raising interest rates will do for that? Morons, the lot of them.

With rates nearly tripling in the space of a year, landlords won't even feel guilty about raising rents. The state governments will need to introduce some sort of rent cap and I'm sure that will go down well.

 

[Crow till I die]

But they’ve already given them a loan which they’ve decided can be serviced with a 3% interest rate increase

What i am saying is they are coming off the 2 year fixed at 2% and moving to a 5.5% variable rate, it might cripple them. If they try to refinance, it would be tested at an even higher servicability rate so they are screwed either way.

 

[Crow till I die]

The current market hurts new home buyers .....I assume the same ratio's that apply to business loans, apply with residential .

Good times, you can borrow up to 90% of valued property ....which is less than market rate
That can drop back to 80% in tough times ....but the kicker is, if the property is dropping in value, so is your loan amount on twin levels

This also has a massive impact on developers, who struggle with the 80% financability ....but also incurring massive labour and material price increases

It is indeed a s**t-show

Did I hear correctly, that China is not allowing property investment in Australia .....or did I hear that wrong ??

If its true re china, that will hit 90% of multistorey apartment projects

 

[WaynesWorld19]

If its true re china, that will hit 90% of multistorey apartment projects

Should have edited that comment .....read today, we're expecting a renewed level of property investment by Chinese in Australia ....as a result of the relationship improving

IIRC the est figure was $3B +

 

[CrowsB4hoes]

What i am saying is they are coming off the 2 year fixed at 2% and moving to a 5.5% variable rate, it might cripple them. If they try to refinance, it would be tested at an even higher servicability rate so they are screwed either way.

It might. Will for some. Won't for a lot of others. Won't be this force people are getting in a tiss over.

 

[George Kramer]

It might. Will for some. Won't for a lot of others. Won't be this force people are getting in a tiss over.

800,000 coming off fixed rates this year. Let’s just say it a qtr that struggle, 200,000 is a massive amount.

But it’s just not that. Those 800,000 are going to be tightening their belts, the economy will suffer and then that brings unemployment into the picture as businesses suffer.

Plus we have more coming off fixed rates next year.

The issue also is when these low rates were taken out, cost of living was low. We’ve all been whacked with price increases for everything.

Plus business borrowing costs have been steadily increasing to go along with their other costs.

We are in for a shitshow alright. This isn’t just a matter of shrugging the shoulders and thinking nah mate we will be ok.

It’s unparalleled with what we are going through and are about to go through.

 

[Coopers]

800,000 coming off fixed rates this year. Let’s just say it a qtr that struggle, 200,000 is a massive amount.

But it’s just not that. Those 800,000 are going to be tightening their belts, the economy will suffer and then that brings unemployment into the picture as businesses suffer.

Plus we have more coming off fixed rates next year.

The issue also is when these low rates were taken out, cost of living was low. We’ve all been whacked with price increases for everything.

Plus business borrowing costs have been steadily increasing to go along with their other costs.

We are in for a shitshow alright. This isn’t just a matter of shrugging the shoulders and thinking nah mate we will be ok.

It’s unparalleled with what we are going through and are about to go through.

Well, that would put 200k houses back on the market, which solves the supply problem right?

I could be an economist, this shit is easy.

 

[George Kramer]

Well, that would put 200k houses back on the market, which solves the supply problem right?

I could be an economist, this s**t is easy.

Yeah that’s how it works

 

[CrowsB4hoes]

800,000 coming off fixed rates this year. Let’s just say it a qtr that struggle, 200,000 is a massive amount.

But it’s just not that. Those 800,000 are going to be tightening their belts, the economy will suffer and then that brings unemployment into the picture as businesses suffer.

Plus we have more coming off fixed rates next year.

The issue also is when these low rates were taken out, cost of living was low. We’ve all been whacked with price increases for everything.

Plus business borrowing costs have been steadily increasing to go along with their other costs.

We are in for a shitshow alright. This isn’t just a matter of shrugging the shoulders and thinking nah mate we will be ok.

It’s unparalleled with what we are going through and are about to go through.

There are 9million households per the last census. We'll be fine.

 

[George Kramer]

There are 9million households per the last census. We'll be fine.

Unless a lot of these properties are owned freehold, that’s a lot of money taken out of the economy to pay higher interest rates and rents.

 

[Crow till I die]

800,000 coming off fixed rates this year. Let’s just say it a qtr that struggle, 200,000 is a massive amount.

But it’s just not that. Those 800,000 are going to be tightening their belts, the economy will suffer and then that brings unemployment into the picture as businesses suffer.

Plus we have more coming off fixed rates next year.

The issue also is when these low rates were taken out, cost of living was low. We’ve all been whacked with price increases for everything.

Plus business borrowing costs have been steadily increasing to go along with their other costs.

We are in for a shitshow alright. This isn’t just a matter of shrugging the shoulders and thinking nah mate we will be ok.

It’s unparalleled with what we are going through and are about to go through.

I said earlier and I will say it again, those with money will profit and those without are in real trouble. The divide gets bigger and god help the kids of tomorrow getting onto the property ladder and with Rent prices going through the roof - looks like we are heading towards the UK scenario where kids will have to live with mum and dad for much much longer

 

[relapse]

I remember arguing about this when they first started, it was obvious what a massive round of interest rate hikes would do when we’ve just let the country borrow and get used to low rates.

These blokes will keep their jobs and their multiple houses, but a vast number of people who can least afford it are going to get smacked big time.

If I’m not mistaken big drivers of the recent inflation rates were airfares and rent. Ok so let’s stop flying and watch the assistance the airlines get. As for rents, what the * do they think raising interest rates will do for that? Morons, the lot of them.

The other stupid point some of these economists keep making is arguing that the upshot is that this will trigger wage growth.

Wage growth ultimately has to be funded, which normally is offset by increases in price for goods and services. This will do nothing but further fuel inflation.

By trying to offset inflation by wage growth you're pretty much putting yourself at risk of the economy going into a death spiral.

The other issue too is that we're one of the few countries in the world that has variable rates on home loans so our economy is completely different and responds differently to rate rises than other countries yet they keep trying use overseas rate rises as justification for ours to continue to rise.

The scary thing is that they actually have no idea what the long term damage to the economy could be from taking so much money out of it so quickly.

 

[footy4ever]

ABC’s reporting of local meeting in Alice Springs left residents ‘gutted’

Alice Springs Resident Michelle Thompson says local residents within the town were “gutted” after the ABC’s report made the meeting appear as racially divisive. “I was totally gutted by their reporting, they were so inaccurate I thought that person couldn’t have possibly have been there,” she...

www.skynews.com.au

I note that nothing's improved at that one-sided lefties shitshow of an organisation.

 

[footy4ever]

His co-conspirator has already been tried & convicted. Surely this one is a slam dunk?

One can only hope so. He'll somehow buy/trade/lie/cheat his way out of all the court cases against him. It'll be just like a game go golf to him. Cheat, more cheating, deceive, lie, and ultimately win. Such a reprehensible human.

 

[George Kramer]

The other stupid point some of these economists keep making is arguing that the upshot is that this will trigger wage growth.

Wage growth ultimately has to be funded, which normally is offset by increases in price for goods and services. This will do nothing but further fuel inflation.

By trying to offset inflation by wage growth you're pretty much putting yourself at risk of the economy going into a death spiral.

The other issue too is that we're one of the few countries in the world that has variable rates on home loans so our economy is completely different and responds differently to rate rises than other countries yet they keep trying use overseas rate rises as justification for ours to continue to rise.

The scary thing is that they actually have no idea what the long term damage to the economy could be from taking so much money out of it so quickly.

I didn’t realise that about overseas markets, that’s even more dumb

 

[Crow till I die]

The other stupid point some of these economists keep making is arguing that the upshot is that this will trigger wage growth.

Wage growth ultimately has to be funded, which normally is offset by increases in price for goods and services. This will do nothing but further fuel inflation.

By trying to offset inflation by wage growth you're pretty much putting yourself at risk of the economy going into a death spiral.

The other issue too is that we're one of the few countries in the world that has variable rates on home loans so our economy is completely different and responds differently to rate rises than other countries yet they keep trying use overseas rate rises as justification for ours to continue to rise.

The scary thing is that they actually have no idea what the long term damage to the economy could be from taking so much money out of it so quickly.

Someone say something about wage growth?

Childcare workers push for 25 per cent pay rise as fees set to reduce

In its budget submission, the United Workers Union said better pay was key to meeting the increase in demand expected in July.

www.smh.com.au

 

[fortunatecrow]

Someone say something about wage growth?

Childcare workers push for 25 per cent pay rise as fees set to reduce

In its budget submission, the United Workers Union said better pay was key to meeting the increase in demand expected in July.

www.smh.com.au

Yep. Remember Albo has a mandate to increase real wages, given by voters who can't possibly realise that it will feed back in to prices. (Unless you thought that businesses wouldn't pass the costs on, in which case I have a bridge to sell you).

That's why the RBA is acting, because they understand that the consequences of the policy of the government.

 

[Coopers]

I said earlier and I will say it again, those with money will profit and those without are in real trouble. The divide gets bigger and god help the kids of tomorrow getting onto the property ladder and with Rent prices going through the roof - looks like we are heading towards the UK scenario where kids will have to live with mum and dad for much much longer

Kids already do have to.

The cool thing about the reverse situation is the rich also profit when there are low interest rates because they have so much more buying power and can purchase more easily. And cover the small interest with the rent, then leverage that into more.

We have structured our capitalism such that this is the trajectory we are on, and there is no political will, or party attempting to change this.

An interesting relevant article:

Richest 1% bag nearly twice as much wealth as the rest of the world put together over the past two years | Oxfam International

www.oxfam.org

 

[WaynesWorld19]

I think this is a good idea ....time to Australianise our money

 

[Crow till I die]

Yep. Remember Albo has a mandate to increase real wages, given by voters who can't possibly realise that it will feed back in to prices. (Unless you thought that businesses wouldn't pass the costs on, in which case I have a bridge to sell you).

That why the RBA is acting, because they understand that the consequences of the policy of the government.

Its a bad spiral as there is a lot of supply side inflation from overseas thats hurting - Shipping containers have tripled in cost to bring in, heck you could have built a simple single storey dwelling at the start of Covid for around $1200 / m2 - its now around or above $2000 / m2. That is not the cost of labor that has done than..its materials

 

[fortunatecrow]

For the fans of US politics: