Recession?

[CaptainR 514]

8 hours ago, Blue Flu said:

LOL. Did you expect something other from the industry? Thank goodness the RBA is not totally under the influence of the real estate industry. Unlike the media. Still should have been 0.5% to shock the market into slowing down. The death by a hundred cuts will just prolong the situation. Saying that though, it is unlikely rates will ever return to the low levels recently experienced. 

But this also worsens the ever-increasing mortgage defaults that are happening, Australia is now only second to Canada for household debt and risk of defaults. Further increases could potentially create a situation in Australia similar to the US Subprime Mortgage crisis. It appears that there is no good option, only a least-worst option. 

[FirstWorldProblems 2,135]

4 hours ago, Lavers said:

Start taxing the big companies who are recording record profits through all this.

Certain forecasters have said that its the big companies driving inflation and inflation would half if profits weren’t so high.

The problem with that is the big companies are all owned by the same people and most people in power have interests in these companies so nothing will ever be done.

You need a package of anti-tax avoidance legislation 

• if companies shift profits to companies they own in lower-tax countries, the profits will still be taxed in the country of the parent company
• stop companies moving new products to lower-tax countries just before their development is completed to avoid tax
• stop a company reducing the tax it has to pay by paying excessive interest charges to another company, usually one that it owns in a different country
• stop companies exploiting differences between countries' tax rules
• make all of the complicated plans companies use to reduce tax bills ineffective, even if there are no specific rules against the particular scheme they''ve come up with [this is where a lot of tax avoidance lives, inside the rules but outside the spirit of the rules - in the gaps]

Oh, and whilst we are at it, lets block people from being non-domiciled for tax purposes.

 

[Rallyman 4,099]

21 hours ago, Blue Flu said:

Another 0.25% rise. It should have been double that IMO. WE are still way behind New Zealand, USA , UK . What this means is that rates will need to go higher for longer regardless of what RBA and commenters say within Australia. men

You obviously don’t have a mortgage and young family.

stop funding the war in Ukraine ( we’re told this is impacting the world economy) 

stop this nonsense with green energy it’s clearly not cheaper it it was our power prices would not be skyrocketing. 
The wastage of money in the public sector is off the scale. And maybe get a PM who is interested in Australia and collecting air miles. 
Also don’t forget what Lowey said no interest rates to rise until 24 

Edited June 7 by Rallyman

[InnerVoice 1,231]

8 hours ago, CaptainR said:

Most are owned by superannuation funds, which creates the catch-22 where the public wants their super to go up by 5-10% per annum but complains about inflation. It's the same irony of a homeowner rejoicing at their house price increasing, but then becoming upset about inflation. 

Always a moot point unless one is downsizing or moving to a cheaper location in the foreseeable future.

[InnerVoice 1,231]

8 hours ago, CaptainR said:

But this also worsens the ever-increasing mortgage defaults that are happening, Australia is now only second to Canada for household debt and risk of defaults. Further increases could potentially create a situation in Australia similar to the US Subprime Mortgage crisis. It appears that there is no good option, only a least-worst option. 

Australia hasn't had a major property crash like other developed countries, but I reckon it's on its way if current high interest rates are sustained for any period of time. When we remortgaged we could've borrowed up to 5 times our household income, which I thought was crazy. We actually borrowed 4 times and fortunately I have plenty of savings/investments should we fall on hard times, but that isn't the case for most people. I know from talking to my colleagues that anyone under 40 is either paying exorbitant rent or is borrowed up to the eyeballs. A couple of them have already taken on second jobs.

[Parley 7,908]

9 hours ago, CaptainR said:

Most are owned by superannuation funds, which creates the catch-22 where the public wants their super to go up by 5-10% per annum but complains about inflation. It's the same irony of a homeowner rejoicing at their house price increasing, but then becoming upset about inflation. 
 

Interest rates at about 5% on deposit funds seems like a good number. People can invest and get a reasonable return just in term deposits or cash and not take on a lot of risk to get a reasonable income on retirement savings.

[Blue Flu 1,166]

10 hours ago, CaptainR said:

But this also worsens the ever-increasing mortgage defaults that are happening, Australia is now only second to Canada for household debt and risk of defaults. Further increases could potentially create a situation in Australia similar to the US Subprime Mortgage crisis. It appears that there is no good option, only a least-worst option. 

The financial industry's irresponsibility in maintaining interest rates to low, for way to long though, cannot be reason all suffer due to even growing prices. I'm afraid the RBA as I recall at the time them announcing, that the massive rise in house prices  was not part of their concern (as not included in the measurement of inflation) It was more than a little obvious that the likelihood 'the bubble' would come to a sticky ending. I didn't hear many, if any buyers complaining though. A number even cheated their claim on earnings to purchase something way beyond their capacity to afford.  The interminable rise in property prices was bound to ensure an impossible favourable longer term outcome. 

 

[Blue Flu 1,166]

3 hours ago, Rallyman said:

You obviously don’t have a mortgage and young family.

stop funding the war in Ukraine ( we’re told this is impacting the world economy) 

stop this nonsense with green energy it’s clearly not cheaper it it was our power prices would not be skyrocketing. 
The wastage of money in the public sector is off the scale. And maybe get a PM who is interested in Australia and collecting air miles. 
Also don’t forget what Lowey said no interest rates to rise until 24 

What I have been aware of for some considerable time was the folly in believing interest rates would stay low indefinitely as well as a belief that the bubble could continue . If I had been in the market, I would not have lied about income or gone with a semi dodgy loan provider or broker with self interest at heart. I heard a wonderful expression about this recently, which went along the lines of banal insurgency of salesmen (those within the industry) 

I have for a considerable time gave my view that property was way over priced, along with the levels of personal debt in this country was insane. The real estate industry had far too much influence over government and media. This has resulted that since the late nineties real estate became an asset increasingly to buy and sell and all that went before was largely lost. 

Green energy is everywhere in the western world. It will be the future. I do believe though that Australia is perhaps a little different, considering its vast size. Especially with electric cars. 

WE don't want to follow Britain in austerity. Not sure which public services you refer to. 

 

[Blue Flu 1,166]

Canada has raised their interest rates to 4.75. That should be where Australia is at, at the moment. Probably no escaping at least 5% here though.

[renebascossarabi 40]

Please raise interest rates soon Australia us Filipinos and have raised interest rates several times over.

https://www.cnnphilippines.com/business/2023/3/23/bsp-interest-rate-march.html#:~:text=It%20also%20raised%20interest%20rates,%25%20and%206.75%25%2C%20respectively.

[Blue Flu 1,166]

2 hours ago, renebascossarabi said:

Please raise interest rates soon Australia us Filipinos and have raised interest rates several times over.

https://www.cnnphilippines.com/business/2023/3/23/bsp-interest-rate-march.html#:~:text=It%20also%20raised%20interest%20rates,%25%20and%206.75%25%2C%20respectively.

That's quite a hefty amount but totally called for. The Philippines needs to prevent inflation spiraling out of control to protect the population from greater poverty. They are unlike Australia, very much given over to the housing market. Lets call it the Propertocracy. In Australia far more personal debt to be concerned about as well. Where as I imagine in Philippines it is prices.

[Blue Flu 1,166]

I don't get the talk heard over the TV news last night with people having to go without buying a morning coffee Around me in inner city Perth, cafes continue to do a roaring trade. Take home scores well also. Home delivery's are very big, with numerous home all day with curtains drawn. Lots of money around here, even if black economy, which is massive. It is probably a case of inflation, what inflation ? Just wondering is the price of drugs going up with inflationary pressures or down due to lack of demand? Still a popular pursuit to make a living is all I know. 

[Blue Flu 1,166]

I do wonder though why we should be overly concerned for those that took on more than they could chew? I understand the greed factor, or scared of missing out factor in the housing market, but not the irresponsibility and/or risk when long obvious a bubble. As in UK, people can take out extended loans, up to 35 years over there. Obviously this means paying until retirement or in some cases into retirement. 

[simmo 21,932]

On 01/06/2023 at 09:15, unzippy said:

Do you think it's imminent in Aus?

https://www.news.com.au/finance/economy/interest-rates/finance-guru-mark-bouris-makes-grim-prediction-of-looming-recession-in-australia-as-cost-of-living-pressures-grow/news-story/d6c360787b77e4c19bf147ee44bb167d

I think it's on the way.

It's hit the Eurozone

 

[s713 2,065]

On 08/06/2023 at 00:59, Blue Flu said:

WE don't want to follow Britain in austerity. Not sure which public services you refer to. 

 

Austerity hasn't worked in the UK. People earn less now than they did in 2008 whilst public services (all of them) are absolutely diabolical, and I say that working in the public sector.

[FirstWorldProblems 2,135]

40 minutes ago, s713 said:

Austerity hasn't worked in the UK. People earn less now than they did in 2008 whilst public services (all of them) are absolutely diabolical, and I say that working in the public sector.

Starmer will fix it

(is there an emoji for ‘extreme sarcasm’?)

[simmo 21,932]

1 hour ago, FirstWorldProblems said:

Starmer will fix it

(is there an emoji for ‘extreme sarcasm’?)

Word is Dave Cam is sniffing around.

[FirstWorldProblems 2,135]

17 hours ago, simmo said:

Word is Dave Cam is sniffing around.

I just spat cornflakes all over my phone screen. 

[Blue Flu 1,166]

22 hours ago, s713 said:

Austerity hasn't worked in the UK. People earn less now than they did in 2008 whilst public services (all of them) are absolutely diabolical, and I say that working in the public sector.

I know. It has been a disaster. Along with a loss of rights gradually being removed since Brexit. This is resulting in a loss of course of professionals to countries like Australia. (not without iis  own problems with are many) 

[FirstWorldProblems 2,135]

18 minutes ago, Blue Flu said:

I know. It has been a disaster. Along with a loss of rights gradually being removed since Brexit. This is resulting in a loss of course of professionals to countries like Australia. (not without iis  own problems with are many) 

Which is a perfect topic for this forum isn't it.......right now which is a better place for those people and do we thing that will change in the mid-term?

[Blue Flu 1,166]

20 hours ago, FirstWorldProblems said:

Which is a perfect topic for this forum isn't it.......right now which is a better place for those people and do we thing that will change in the mid-term?

I still consider UK just as good a place to be. Just depends on personal circumstances. Neither is the perfect place. Both offer different incentives.

[InnerVoice 1,231]

On 14/06/2023 at 20:28, s713 said:

Austerity hasn't worked in the UK. People earn less now than they did in 2008 whilst public services (all of them) are absolutely diabolical, and I say that working in the public sector.

From memory the government at the time (2008) had to chip in half a trillion quid to prop up the UK's financial system, or 3 of the big 4 banks would have gone bust. There was no division between corporate and domestic banking operations at the time, so people would have lost their life savings and pensions.

Understandably austerity measures have been very unpopular, especially considering the fat-cat bankers that caused the GFC are no doubt financially very comfortable, whilst the people who have really suffered are those less well off. That said, it was a necessary evil, and I don't see how subsequent governments have had any other choice than to focus on debt reduction.

[FirstWorldProblems 2,135]

A government report out yesterday shows that company liquidations have jumped 40% year over year in the UK

[simmo 21,932]

5 hours ago, FirstWorldProblems said:

A government report out yesterday shows that company liquidations have jumped 40% year over year in the UK

What years?  COVID would have had something to do with it.

[FirstWorldProblems 2,135]

22 hours ago, simmo said:

What years?  COVID would have had something to do with it.

Oops, sorry. It was for the 12 months ending May this year. .