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It was almost eight years ago. I was sitting in a cafe at Manly drinking what back then would have almost certainly been a skim double shot flat white. I had just finished my last day of night shift which meant there was no point going to bed and wasting the day under the covers.
In fact it was too hot to sleep anyway and my mind would have been racing with all the opportunities that the four day break and the end of roster would present.
Something did catch my eye though. The headline perched neatly between the half filled coffee cup and ash try (back then I smoked and it was even legal to do so in a cafe) Read "Zero Percent Interest Rates".
NSW property markets were moving off the back of pent up demand for housing and cheap money. I read the article, filed it under interesting in the big grey filing cabinet and went about planning a 4 day break.
Today, no ash tray and the coffee is filter brewed to a reasonable and drinkable strength. It's not Manly this time but the view is better.
David Koch has written an interesting piece in the Sun-Herald. He proposes that the latest round of interest rate cuts have gone too far, that mortgage stress is "real" and that alot of aussie families and businesses are in for an uncertain future - despite record employment levels.
The last two rate rises have had the desired effect. The westpac consumer sentiment index has just recorded its biggest fall since it started measuring the confidence of average consumers.
We are not the US (thank heavens) but David does go on to present some interesting facts about the US economy and the housing market.
* The fed could cut official interest rates to zero - off the back of a recent .75 percent cut
* In January the US fell into recession, which they predict will last until the end of 2010 or 2011
* By the end of this year 25 Million Americans will have negative equity in their home 0r in other words 20% of all homes and up to 7 trillion in Cap losses
* The Average house price will fall 25 Per cent but will halve in places like Miami and LA.
Now David is a local financial Journalist and certainly does not profess to be an expert on US matters. However he has drawn from the work of Paul Krugman, professor of economics at Princeton University. Professor Krugman is also a columnist for the New York times.
The US Fed has taken action. Recently becoming actively involved in the bail out of financial instutitions and making it known that it will print money if it has to in order to bail out others in the future.
Will US rates hit zero to help bolster this failing economy and avoid another great depression? It's possible but unlikely in my opinion.
Will the the Australian Reserve continue to raise the cost of finance in this very uncertain global market?
One hopes not - but given the strong economic data coming out of certain states and the serious pent up demand for housing - it's a 50/50 bet.
Have a great Day!
Don
In fact it was too hot to sleep anyway and my mind would have been racing with all the opportunities that the four day break and the end of roster would present.
Something did catch my eye though. The headline perched neatly between the half filled coffee cup and ash try (back then I smoked and it was even legal to do so in a cafe) Read "Zero Percent Interest Rates".
NSW property markets were moving off the back of pent up demand for housing and cheap money. I read the article, filed it under interesting in the big grey filing cabinet and went about planning a 4 day break.
Today, no ash tray and the coffee is filter brewed to a reasonable and drinkable strength. It's not Manly this time but the view is better.
David Koch has written an interesting piece in the Sun-Herald. He proposes that the latest round of interest rate cuts have gone too far, that mortgage stress is "real" and that alot of aussie families and businesses are in for an uncertain future - despite record employment levels.
The last two rate rises have had the desired effect. The westpac consumer sentiment index has just recorded its biggest fall since it started measuring the confidence of average consumers.
We are not the US (thank heavens) but David does go on to present some interesting facts about the US economy and the housing market.
* The fed could cut official interest rates to zero - off the back of a recent .75 percent cut
* In January the US fell into recession, which they predict will last until the end of 2010 or 2011
* By the end of this year 25 Million Americans will have negative equity in their home 0r in other words 20% of all homes and up to 7 trillion in Cap losses
* The Average house price will fall 25 Per cent but will halve in places like Miami and LA.
Now David is a local financial Journalist and certainly does not profess to be an expert on US matters. However he has drawn from the work of Paul Krugman, professor of economics at Princeton University. Professor Krugman is also a columnist for the New York times.
The US Fed has taken action. Recently becoming actively involved in the bail out of financial instutitions and making it known that it will print money if it has to in order to bail out others in the future.
Will US rates hit zero to help bolster this failing economy and avoid another great depression? It's possible but unlikely in my opinion.
Will the the Australian Reserve continue to raise the cost of finance in this very uncertain global market?
One hopes not - but given the strong economic data coming out of certain states and the serious pent up demand for housing - it's a 50/50 bet.
Have a great Day!
Don
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