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  • Well its probably a good marketing ploy.

    Put the rates up a little now and then when the OCR comes down again next month we can show big drops in our rates which will catch the eyes of the media and we will get free publicity....lol

    Perhaps also they are starting to factor in that some of the bonds being issued at the moment have been at up to 4% margin over the OCR.

    ARC are going to do one at about 2.5% over the OCR which is 1.5% higher than what they would normally go to market at.

    Comment


    • Originally posted by tpr2 View Post
      And there raising was over subscribed. Oh yeah that's a loan isn't it
      Many M&A's are a swapping of equity for debt, this is why prices tend to rise to service that debt burden, services drop to a lower standard along with potential job layoffs etc etc

      I wouldnt go near fonterra is business model is flawed.

      Comment


      • What about the ARC raising at 6.5%?

        Comment


        • Had a tenant tell me, this morning, that he'd
          been 'casualised.' For quite a while, said chap
          had been taking voluntary time off, when things
          were quiet. Now he's not saying to the boss,
          shall I not come tomorrow, but the boss' saying
          don't come unless I call you.

          An engineering-type-business.

          Once the fruit picking is over and the pack houses
          all go quiet, I suspect things will get a bit scary
          around the Hastings and Napier areas.
          Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

          Comment


          • Interesting Perry

            One of the tenants in the same building as us on the Gold Coast has an engineering business which had 9 staff.

            When I was back over there 2 weeks ago he had cut his staff to 3.

            The office block has three floors with 6 suites of which we lease 2 on the ground floor.

            He is the only other tenant in the building and has just given the land lord notice.

            Comment


            • Engineering in Tauranga the same. We've gone from5 to2 with not even sufficiant for those two some days. Not good at all.
              Least no of job adverts in tonights times that I can remember since the early 90's.

              Comment


              • Queensland stripped of AAA rating







                Sean Parnell, Queensland political reporter | February 21, 2009

                Article from: The Australian
                VOTER confidence in Labor's ability to govern during the economic crisis will be tested for the first time in Queensland, where an early election is almost certain after the Bligh Government revealed yesterday the state budget had plunged $1.6billion into deficit.
                The collapse of fortunes forced ratings agency Standard & Poor's to lower the state's long-cherished AAA credit rating for the first time to AA.
                The lower credit rating will put further pressure on the state's finances by increasing the cost of borrowings to fund a growing budget deficit and heavy capital works program.
                Once Australia's boom state, riding a wave of property and mining investment, Queensland has an economy grinding to a halt. Treasury officials issued a dire warning yesterday for the next financial year, when they fear the budget deficit will double to $3.2billion.
                The latest forecasts, which take into account the Rudd Government's $42 billion stimulus package and recent interest rate cuts, predict a further 60,000 people will be laid off in 2009-10, when economic growth will slump to 1per cent, putting Queensland on the brink of a recession.
                With the property market stagnant and weakening global demand for coal, the $809 million surplus forecast for this financial year had become $54 million by December and was revised yesterday to a $1.573 billion deficit.
                In the past two months, Treasury officials have revised down revenue collections by $500 million in transfer duty, $427 million in royalties and $334 million in GST, and for the first time will have to top up the supposedly fully funded government superannuation scheme.
                State Treasurer Andrew Fraser said yesterday if Queensland did not fall into recession, it would certainly feel like one and he could not rule out having to increase taxes or cut services.
                But Mr Fraser said the Government remained committed to its borrow-for-building campaign, even though it would cost more to deliver, and was going into deficit to sustain economic growth as much as possible. "We've thrown everything we've got - the kitchen sink has been thrown at this," he said.
                But while Mr Fraser maintained Labor had a mandate to deliver the next budget in June, the chances of Premier Anna Bligh calling an election for March 28 are increasing.
                Legislation designed to put Opposition election promises under greater scrutiny will be fast-tracked through parliament next week, Labor is rapidly preselecting candidates in seats where MPs have recently announced their retirement, and party advertising has started seven months before an election is due.
                The biggest influence on the campaign may be the Rudd Government's latest cash payments, which will start being distributed next month and for which the Bligh Government is likely to take some credit, having campaigned heavily for the conservatives to support the second stimulus package.
                Kevin Rudd and Wayne Swan will be watching developments in their home state closely, given it will be the first election since the crisis and Queensland remains a vital electoral battleground.
                But Ms Bligh - who spent yesterday in the industrial city of Gladstone, to open new offices for oil and gas producer Santos and emphasise she was still working - again refused to comment on the prospect of an early election.
                "Clearly every government, mine included, has a responsibility to lead a path through these very turbulent circumstances," Ms Bligh said, pointing out that Santos still expected to spend $1billion on Queensland gas projects this year.
                "I am going to lead that path honestly and transparently, but with a high degree of confidence that we will come out of this stronger than before." With Opposition Leader Lawrence Springborg also out of Brisbane, working in his southern Queensland electorate, LNP Treasury spokesman Tim Nicholls took Mr Fraser to task.
                Mr Nicholls - who only months ago declared an LNP government could maintain a surplus simply through better management - said the crisis was partly of the Government's making.
                "For 10 years we have had rivers of gold flowing into this state ... and for 10 years Labor has wasted that money," Mr Nicholls said, highlighting poor management, cost blowouts on major projects, a lack of savings and a belated reliance on borrowings. But Ms Bligh said Mr Springborg and Mr Nicholls had "buried their heads in the sand", refusing to acknowledge the global financial meltdown everyone else was so concerned about.
                "People are not fools: they know there are job cuts in their community, they know that people have stopped buying property, they know that the private sector has pulled back on some building projects, and in central Queensland particularly they know that the world demand for coal is collapsing," Ms Bligh said.
                Queensland joins NSW, South Australia and Tasmania in deficit, with other states yet to provide a budget update.
                The Queensland Chamber of Commerce and Industry and the state chapter of the Australian Industry Group expressed alarm at the size of the deficit and called on the major parties to outline their economic recovery plans.

                Comment


                • Originally posted by Viking View Post
                  Least no. of job adverts in tonight's Times that I can remember since the early 90's.
                  That's always a much better indicator than
                  the waffle coming out of Wellington.

                  There will always be a difference between
                  jobbing and production eng'g workshops,
                  but it still doesn't look good, to me.
                  Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                  Comment


                  • C'mon Badger our economy is hardly "dying"! Low interest rates present an opportunity. And if our interest rates were high I'm sure you'd be saying how unprofitable leveraged investments are?!

                    And yes, I think leveraging up to buy quality assets which are well priced and making good money is a very smart thing to do.



                    Originally posted by Badger View Post
                    Low interest rates indicate a sick economy.

                    In a dying economy is it really that smart to be leveraging up more debt + interest?

                    Comment


                    • Originally posted by spurner View Post
                      C'mon Badger our economy is hardly "dying"! Low interest rates present an opportunity. And if our interest rates were high I'm sure you'd be saying how unprofitable leveraged investments are?!

                      And yes, I think leveraging up to buy quality assets which are well priced and making good money is a very smart thing to do.
                      If the economy was in good shape low interst rates would not be required to finanace business activities.

                      Public opinion always wants easy money, that is, low interest rates.
                      Von Mises lays out my angle best.

                      The endeavors to expand the quantity of money in circulation either in order to increase the governments capacity to spend or in order to bring about a temporary lowering of the rate of interest disintegrate all currency matters and derange economic calculation.
                      Leverage is up to the individual. I didnt mention that last year when rates were high, being a financer/saver high rates are fine. Being a player that would depend on what Im leveraging into and what return im expecting over what time...

                      Comment


                      • ASB Rates

                        I'm really starting to get worried.

                        ASB have dropped their one year fixed rate to 5.80%.

                        All this tells me, is that the Bank is trying to lock people into a short term Fixed rate and then during that time the Bank foresee interest rates going up - sharply.

                        Wait and watch.
                        Patience is a virtue.

                        Comment


                        • No essence.

                          ASB over jumped the mark with their 5yr rates. They lowered too far. The others never followed so they raised the rates back up.

                          Their 1 yr rate is still 0.01% higher than the other major banks - 5.80% to 5.79%.

                          Just like petrol prices.
                          Sometimes they all follow a company who lowers the price or that company raises again if the others don't follow.

                          http://www.interest.co.nz/mortgages.asp
                          "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

                          Comment


                          • Thats a good thought though essence, coming out of a 5.80% rate and heading into a 9- 10-12% rate, I remember 20-18-15% rates in the late 80's early 90's.

                            Comment


                            • I'm inclined to agree. I'm seriously considering fixing all my loans shortly after the next OCR announcement, for long periods. General consensus now is that any future drops in long term rates are going to be quite small.

                              Originally posted by essence View Post
                              All this tells me, is that the Bank is trying to lock people into a short term Fixed rate and then during that time the Bank foresee interest rates going up - sharply.

                              Wait and watch.

                              Comment


                              • Bernard Hickey has been saying that the cost of overseas borrowing is getting more expensive and so the longer term rates are unlikely to drop much below 6%.
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