Rising interest rates

[Drake Tungsten]

I thought the Panda ****er was perma-banned?

[ricketyclik]

OK now I know you're just ****ting with me and pulling my leg in some big joke.

Unless you do seriously believe that money can be continuously just created out of thin air.

.

Asian savings accounts are still chockers.

[ricketyclik]

From your link Dale:

Why might such a temporary operation be necessary? The federal funds rate could rise above the Fed’s target for several reasons: either unexpected high demand for reserves, or restricted supply. The precise reason for last week’s rise in short-term rates remains unclear. It may be that European banks, some of whom have U.S. units that participate in the fed funds market, faced an unexpected jump in loan demand, perhaps from issuers of commercial paper who could not roll the paper over and thus turned to back up lines of credit at banks. It may be that some banks holding excess reserves were reluctant to lend them out, anticipating a need for them for their own purposes or uncertain as to the safety of the counterparties to whom they might otherwise lend.

(Emphasis mine).

[Dale]

Let's try for a simpler answer to your original ascertion that the recession occured due to a drop in consumer confidence and consequent attempted rebutes against my explanations: http://answers.yahoo.com/question/in...4173545AAUiOaT

Note where it says:

In the US, people were buying homes and other things they could not afford, and doing it on credit. Well, eventually many people have lost their homes because they bought more than they could afford (stupid) and the banks loaned them the money to do it (even more stupid). So those homes were foreclosed on, and the property values have declined, and the banks have lost huge amounts of money on these homes.

That highlights quite clearly in plain language that OVER confidence in the ability of credit paybacks and property values to remain at ballooned levels. Once it popped, the banks were massively out of pocket and either went bust or held onto whatever was left (or given to them by the Govts) to remain afloat. In other words, credit dried up completely. And so on deeper into the recession. Which is exactly what I said!

[ricketyclik]

Let's try for a simpler answer to your original ascertion that the recession occured due to a drop in consumer confidence and consequent attempted rebutes against my explanations: http://answers.yahoo.com/question/in...4173545AAUiOaT

My original assertion was that the fact that consumer confidence in Australia dropped to near record lows was a good indicator that we were heading for recession if there weren't strong measures.

Note where it says:


That highlights quite clearly in plain language that OVER confidence in the ability of credit paybacks and property values to remain at ballooned levels. Once it popped, the banks were massively out of pocket and either went bust or held onto whatever was left (or given to them by the Govts) to remain afloat. In other words, credit dried up completely. And so on deeper into the recession. Which is exactly what I said!

Edit: Yes, note - "That highlights quite clearly in plain language that OVER confidence in the ability of credit paybacks and property values to remain at ballooned levels. Once it popped, the banks were massively out of pocket and either went bust or held onto whatever was left (or given to them by the Govts) to remain afloat. In other words, credit dried up completely." /edit


The sub-prime quanta was not equal to the amount of available credit. True, some banks were over exposed and either went or should have gone bust. But the whole thing ballooned when the remaining institutions with credit refused to lend it, not knowing how exposed other institutions were to sub-prime loans. Once the public got wind of it, there were runs on banks and of course a massive devaluation of existing assets.

Twist and turn as much as you like, but if everyone reacted to sub-prime with "meh" there wouldn't have been a collapse.

[Dale]

Oh my ****ing god, you're a complete moron! Not worth talking to and you know nothing of what you talk about. Goodbye.

[self biased]

I thought the Panda ****er was perma-banned?

it was some amnesty thing someone came up with.

[ricketyclik]

Well, he is after all an extremely affable and on-point debater, so we'd miss him if he weren't here.

[Felch]

Oh my ****ing god, you're a complete moron! Not worth talking to and you know nothing of what you talk about. Goodbye.

Wow, that was quick.

[Drake Tungsten]

Well, I'd be impatient too if I knew Ling Ling was all lubed up and waiting for me back home.

[trev]

The government is still pumping the economy full of stimulus spending and consequently once again just 4 weeks later our Resrve bank has raised interest rates by another 0.25% to 3.5%.
In Australia unlike many countries nearly all home mortgages are written as variable loans which rise and fall almost immediately with the Reserve bank changes. Within hours all major banks altered their house mortgage rates effective immediately for all existing and new loans. So the governments spending which does not benefit me in any way has already begun chewing up my weekly income in a big way with these increases in interest rates, with more rises to come rapidly unless the government changes its policies.

[rah]

Nearly all? Can you get fixed rates, and if so, what the difference in the rates?

[Dale]

The government is still pumping the economy full of stimulus spending and consequently once again just 4 weeks later our Resrve bank has raised interest rates by another 0.25% to 3.5%.
In Australia unlike many countries nearly all home mortgages are written as variable loans which rise and fall almost immediately with the Reserve bank changes. Within hours all major banks altered their house mortgage rates effective immediately for all existing and new loans. So the governments spending which does not benefit me in any way has already begun chewing up my weekly income in a big way with these increases in interest rates, with more rises to come rapidly unless the government changes its policies.

Boo hoo have a sook. I bet you voted Labour so it's your fault.

[MRT144]

Boo hoo have a sook. I bet you voted Labour so it's your fault.

HAHA, what recession?

[trev]

It is certainly not my fault, I never voted for Labour.
In Australia fixed rates are offered, but always at a premium and for a maximum term of 5 years. The higher rates on the fixed loans means it is very rare for the borrower to benefit from the fixed rates over the term of the loan and there are significant penalties for paying out a fixed loan early too, so going that way is generally a poor decision.