Originally posted by spurner
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My pick on the next OCR - 100 bp drop which up to 80% will be passed onto the 6 mth, 1 & 2 year rates.
There might be a "shave" taken off the 3, 4 & 5 year rates.
Re-read this
http://www.propertytalk.com/forum/sh...44&postcount=2
and
http://www.propertytalk.com/forum/sh...47&postcount=3Patience is a virtue.
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Out of the blue we received a letter from our bank on Friday............our floating rate was dropped to 3.375%. The ECB does not meet for another couple of weeks. Our Bank is part of the Unicredit group and with Soem other banks is in talks with the Austrian and Italian Governments. A few weeks ago these same banks (ours included) were being slammed for not passing on the full reductions in the base lending rate. Now they are compensating fast................!!!!! In compaison in the past it took them 4-8 weeks to pass on ECB rate cuts!!!
As Badger said low interest rates indicate a sick economy.......But NZs aren't low yet. Once they start heading to 3% then they are low. NZ has been out of Sync with many countries for a long time.The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.
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The bank(s) that lead the way with lower long term rates, will be getting plenty of new long term business.
Looks like they are having trouble coming to grips with this concept. The way it is now there is no real competition. Six months? so bloody what.
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Originally posted by Hound View PostThe bank(s) that lead the way with lower long term rates, will be getting plenty of new long term business.
Looks like they are having trouble coming to grips with this concept. The way it is now there is no real competition. Six months? so bloody what.
It is really worth reading Bernards Article as posted by jabroni1.
Here in Europe Fixed mortgage rates have ( at least for the last 8 years) been higher than variable. Short term funding is cheaper than long term!!!The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.
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Originally posted by Austrokiwi View PostIt is really worth reading Bernards Article as posted by jabroni1.
Here in Europe Fixed mortgage rates have ( at least for the last 8 years) been higher than variable. Short term funding is cheaper than long term!!!
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Originally posted by Jabroni01 View Post
Don't think Bernard is ahead of the game with these comments. They were picked a while ago by Austro (I think).
As mentioned earlier in this thread, Tony Alexander saw 5 year rates bottoming out at 5.5% (not sure if he still picks this). This makes pretty good sense to me.
If I was a banker in uncertain times with talk of potentially uncharted inflation on the cards, would I lend out at less than 5.5% over 5 years? Commit to debt (largely foreign) to feed a 5.5% appetite. My layman's guess is not.
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The RBA decision was a great way to choke on my coffee GRRRRRR! Got up this morning made the coffee logged on to catch up with what was happening, and ended up spluttering. Like SB I would half expect that the RB will follow Australias lead except Bollard has been raising expectations of a cut......my best guess would be that the possibility of only a .25 cut has just increased!The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.
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