Interest Rates

[Anthonyacat]

Generally (haven't dealt with that particular institution) paying interest more than once per year results in a lower base rate. This is certainly the case with Rabodirect, and everything over here in the UK.

[Wayne]

I thought Tony killed his mailer? Or is it operating under a different name now? Will go have a look. I miss reading his comments each week.

Monthly now

[Judge]

Does anyone have any idea what impact higher interest rates by the fed in the US will have on NZ interest rates?

[Wayne]

Does anyone have any idea what impact higher interest rates by the fed in the US will have on NZ interest rates?

I posted at #3298 what Tony Alexander thought.

[Damap]

Does anyone have any idea what impact higher interest rates by the fed in the US will have on NZ interest rates?

Researchers with a brain, like Rodney Dickens, say rates will increase here. Maybe for once Tony will be right!

[eri]

sydney has the same affordability problem as auckland

but with rising unemployment to boot

...

Sydney's housing market is soaring and showing no signs of slowing,

with its median house price expected to climb well above A$1 million ($1.02 million) within two years.

Prices in Sydney have risen almost 14 per cent in the past 12 months, according to the Australian Bureau of Statistics.

With house prices rising much more quickly than incomes, and household debt still high, the property market could pose a risk to the economy,
"If you look at the conditions we are in at present, where we have

- very low interest rates,

- very high household debt,

- subdued income growth,

- rising unemployment,

- very high house prices,

- a very competitive financial market in terms of house lending ... there's a lot of potential for risk,"

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11421403

[Davo36]

Australian Prudential Regulatory Authority chairman Wayne Byres:
"I don't know what a bubble is and I don't quite know how you spot it ... If these things were easy to spot and define, almost by definition regulators could deal with them," he said.

This is the crux of it for me. If the guy in charge of this sort of thing can't see it, and knows he can't see it until possibly too late...

[Perry]

I think most people actually do know what a bubble is, but not until
after its burst and the consequences are everywhere to be seen.

I.e. after the fact, they say that period was a bubble.

Before that happens, all we get is the usual econo-babblers' (and
related) soothsaying, of course.

[eri]

possibly part of why they call it a bubble

when blowing bubbles with gum or detergent

you never know which ones will only grow a little, then burst

and which ones will grow and grow and grow and grow

and then burst!

[Davo36]

I think most people actually do know what a bubble is, but not until
after its burst and the consequences are everywhere to be seen.

I.e. after the fact, they say that period was a bubble.

Before that happens, all we get is the usual econo-babblers' (and
related) soothsaying, of course.

Well of course Perry, you can always tell in hindsight. But not before. Alan Greenspan said he saw no signs of a bubble only 3 months before their one popped.

[Wayne]

The best bet is to continue to delude yourself that you are not in a bubble and it will all be fine in the end.

[Damap]

If you're in Auckland it's a safe delusion as it will be OK in the end. 5 to 10% down then another 100% up.

[Wayne]

If you're in Auckland it's a safe delusion

Of course it is

[Damap]

Contrary to what the Finn brothers say history does repeat itself :-). We already survived the biggest depression in 80 years unscathed :-)

[eri]

Well of course Perry, you can always tell in hindsight. But not before. Alan Greenspan said he saw no signs of a bubble only 3 months before their one popped.

here's greenspan now