Interest Rates

[eri]

many books on the increasing? divide between the sexes

reading 1 by a pulitzer-prize winner right now



written about 2005 when she was single + angry

quick google shows she's still single

hope she's less angry

...

is it meaningful

that at only 10 years old

the library was selling it for only 20c?

well-written

but wrong-headed

[eri]

"When pension funds renege on promises, or inequality widens further, or savers become desperate, huge public and political anger is going to burst over the heads of the world's central banks," he wrote.

"The only way out is for the US Fed to summon the courage to lead the way to higher interest rates, and others to follow slowly but surely. If they fail to do so, the era of their much-vaunted independence will come, possibly quite dramatically, to its end."

Pumping up the prices of stock markets and houses without an underlying improvement in economic performance would become increasingly difficult to unwind "and ultimately threatens an almighty crash whenever it does come to an end

- wiping out business and home buyers who got used to ultra-low rates for too long".

http://www.nzherald.co.nz/business/n...ectid=11731446

[Bluecoat]

Got a question for you folks

Given the current and future LVR changes, will it be better to use from cash savings , existing RC and equity of IPs and personal home or get an 60% approval at another Bank (this will provide for split banking strategy). Have more than enough equity to purchase without getting a loan.

Current bank has come back with:
having discussed with our senior lenders. We've concluded that since you have the funds available to you in your loan account for the purchase of the house, it is best for you to use these funds for the purchase of the house.

[Nick G]

I split recently, now my old bank (BNZ) has started to really be a pain. A recent settlement they ignored all attempts to communicate and took 70k more than they needed at 60% LVR. Now I'm considering the one bank strategy again - my new one!

[Bobsyouruncle]

It's all uncertain right now Blue, none of us knows what the banks are going to do next. To maximise your freedom shall we say I would be borrowing as much as I can and keeping my cash elsewhere with another bank for a rainy day. We just might need it soon the way things are going.

[Bluecoat]

My thoughts exactly, I had a pre approval but lapsed while I was still looking so was looking to get it approved again.

To put into perspective things must be really turning dire when I cant get a loan from the same bank which has equity double the value of my properties.

[Bobsyouruncle]

Mate tell me about it. 3 months ago they are chasing us to get more business, now it takes 10 days to get a reply on email. And then they say no anyway :-).

[PTILoveYou]

The Reserve Bank will now issue formal projections of the future expected Official Cash Rate

http://www.interest.co.nz/bonds/84232/reserve-bank-will-now-issue-formal-projections-future-expected-official-cash-rate

It appears to indicate two things: One, that a drop of the OCR to a historic low of 1.75% on November 10 appears virtually 'locked in' and that two, the RBNZ appears to be forecasting a future level of about 1.6%.
In reality there will be no such thing as an OCR of 1.6%, so, the projection (which will be updated next month), shows that as of August the RBNZ was having a bob each way as to whether it saw the low point of interest rates in this cycle at 1.75% or at 1.5%.

[Lanthanide]

There's no reason the OCR can't be 1.6%. There's no rule that says it must only be dropped in increments of .25%

When they dropped it to 2% and the dollar jumped, it's because the market had priced in a drop of .40% - meaning that a .25% drop would be 'less' than expected, and a .50% drop would be 'more' than expected.

The RBNZ should have been aggressive and dropped it by .35% - just to put the cat among the pigeons and keep the market on their toes. Instead they did the same-old pussy-footing around and did 0.25%, resulting in the currency jumping.

[orion]

Mate tell me about it. 3 months ago they are chasing us to get more business, now it takes 10 days to get a reply on email. And then they say no anyway :-).

Might have something to do with you being bankrupt a few times Dean, do you think?

[Wayne]

Might have something to do with you being bankrupt a few times Dean, do you think?

You think they only twigged to that in the last 3 months?
Probably more to do with their risk appetite (or lack of it).

[Meehole]

Even if the RBNZ drop their rates what is to say that the banks are going to follow? Most of the money is sourced offshore so it doesn't matter what the RBNZ does? Or is that not correct?

[Wayne]

Even if the RBNZ drop their rates what is to say that the banks are going to follow? Most of the money is sourced offshore so it doesn't matter what the RBNZ does? Or is that not correct?

It's correct.
The OCR doesn't drive the long rates anyway - it should really only be driving the floating rate.

[Bluecoat]

Mate tell me about it. 3 months ago they are chasing us to get more business, now it takes 10 days to get a reply on email. And then they say no anyway :-).

Someone I know has zero debt and $3M in equity, wanted preapproval of $500K , bank has come back with "use your RC first" . Just last year he said they were giving it away without asking !

[muppet]

ASB have raised long term interest rates.

http://www.stuff.co.nz/business/86087916/asb-increases-home-loan-rates-other-banks-expected-to-follow