Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
The ECB joins the rate rise club, with a 50 basis point hike – which was bigger than expected by the markets. They expect inflation to hang around, and they expect further normalization ahead.
So this marks the end of the negative interest rate experiment, other than in Japan, Denmark and Sweden. Banks will see profit uplifts as a result.
But the result will be higher rates around the world – until something breaks…
Go to the Walk The World Universe at https://walktheworld.com.au/
My latest Friday afternoon chat with journalist Tarric Brooker, in which we explore home price dynamics, politics, and much more besides.
https://avidcom.substack.com/p/charts-that-matter-22nd-july-2022 for copies of the slides.
https://avidcom.substack.com/p/rising-rates-and-australias-over
Go to the Walk The World Universe at https://walktheworld.com.au/
More examples of asking price falls across NSW, QLD and SA, courtesy of Cookie Boy. We focus in on the South Coast where price falls are accelerating.
Go to the Walk The World Universe at https://walktheworld.com.au/
Have you noticed how everyone is now trying to pass the buck for the failed monetary policy, the disastrous results of which were magnified by the COIVD response. Politicians are pointing to the Central Bank.
Central Bankers point to conflict between Ukraine and Russia, and then also point to the COVID caused supply chain disruption (which was largely created by households and businesses suddenly being given cash to buy stuff, creating high demand as the lockdowns took a toll.
In effect no-one in authority wants to accept they helped create the problems we are now facing. And because of that reflex, we may not get to first understand the root causes which created the issues, and so how to address them correctly, and avoid similar issues down the track.
On just this theme, Bernard Hickey wrote an interesting piece on the New Zealand Site interest.co.nz titled “Reserve Bank may have lots of good company in the money-printing dog box, but that doesn’t let it or the Government off the hook on inflation”
Go to the Walk The World Universe at https://walktheworld.com.au/
Social unrest is on the rise in China, triggered by a range of financial services related issues, across deposits and mortgages, with ordinary Chinese people are publicly revolting, with rapidly escalating boycotts on mortgage payments spread across at least 301 projects in about 91 cities.
In addition there were large-scale protests in the Henan province by bank depositors over the release of their frozen funds over what may be the nation’s biggest-ever bank scam. The incident comes in the light of the Henan branch of the Bank of China declaring that people’s savings in their branch are ‘investment products’ and can’t be withdrawn.
Authorities say they started repaying some victims last week even as a police investigation is still ongoing. But Chinese state media has not posted anything about the repayments.
The Henan bank scandal, in which 40 billion yuan (US$6 billion) in deposits have disappeared, is more than a Chinese banking crisis – it is a political crisis that could undermine people’s confidence in local governance and also other local banks, according to analysts.
The blow to public confidence in financial stability and the government’s ability to protect their legitimate interests could be a long-term issue, unless the central government can find ways to promptly repay the depositors, they say.
Police in central China’s Henan province have arrested a number of suspects allegedly involved in a “complicated” cash crisis involving rural banks, while investigators continue to search for the whereabouts of customers’ missing deposits.
The arrests come after months of protests from anguished savers, who have been unable to withdraw cash from their accounts at small rural banks in Henan and Anhui provinces.
The case has highlighted the vulnerability of lenders in China’s less-developed regions as the risk of recession grows in the world’s second largest economy.
The Chinese Communist Party’s tanks on Wednesday rolled on the streets to scare Henan bank protestors amid large-scale protests in the province by bank depositors over the release of frozen funds.
Go to the Walk The World Universe at https://walktheworld.com.au/
We know rates are going up, even the RBA confirms this, and now our new Prime Minister has stepped in saying the Central Bank needs to be careful. So what’s going on?
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
I discuss the creation of Kiwi Bank, a National Bank In New Zealand with one of its architects Hon Matt Robson.
Matt Robson’s commercial experience began in the Netherlands thirty years ago, working in the oil industry. This introduced him to the rigours of international commerce, budgets, deadlines, understanding complex commercial operations and structures, it also gave him management experience and familiarity of working with a multicultural, multilingual workforce, where reading and writing in foreign languages was a necessity. As a result he is fluent in speaking reading and writing Dutch, speaking and writing French and German and competent in reading Spanish.
In the 1970’s Matt qualified with a Diploma in Teaching and taught through the 1980’s in a number of secondary schools in New Zealand the majority in the South Auckland area.
In the 1980’s-1990’s Matt became engaged in party politics. As deputy leader of both the Alliance and Progressive Parties he acted as spokesperson and policy developer across a wide spectrum of policy issues in areas as diverse as economic development, social matters and international affairs.
Matt was a Cabinet Minister in the Labour-Alliance Coalition Government (1999-2002) and was allocated the following portfolios: Minister of Corrections , Minister for Land Information, Associate-Minister of Foreign Affairs (responsible for official Overseas Development Aid [ODA]), Minister for Disarmament and Arms Control.
He was also a significant driver in achieving justice for Algerian asylum seeker Ahmed Zaoui, both while as a Member of Parliament and as an independent barrister/solicitor.
He continues to practice law in Auckland and specialises in immigration law and migrant advocacy. Matt remains active in advocating global peace and justice and is a regular speaker at disarmament and anti-nuclear conferences around the world.
Go to the Walk The World Universe at https://walktheworld.com.au/
The released terms of reference for the review of the RBA are limited, and specifically excludes APRA – thus credit creation, and omits reference to the Council of Financial Regulators, the peak influential body, which includes RBA, APRA, ASIC and Treasury. Thus while the focus on the board, culture, and objectives are laudable, the terms of reference are clearly architected to avoid some of the most fundamental issues. A major opportunity lost, Neo-liberalism wins again… Go to the Walk The World Universe at https://walktheworld.com.au/
You may well remember the previous Treasurer trumpeting on about the $250 billion dollars of household savings which we have over 2020 and 21. And Phil Lowe recently quoted a similar figure in one speech, though on the ABC 7:30 seemed to lower it to 200bn. Those buffers came from multiple sources, including JobKeeper, other Government benefits, sanctions withdrawal from super, and of course direct household savings. We also know these same buffers are now being spent.
The Buffers question in an important one, especially given the forecast for continued rising rate, and the impact on the overall economy. In a recent RBA FOI, they discussed beefing up wording in a recent RBA Outlook, to “however, consumption growth could also be weaker than expected, for instance if asset prices were to decline or if the effects of higher inflation and interest rates weighed on discretionary spending by more than anticipated. This risk is most pronounced for households with relatively low savings buffers and high debt relative to income”.
Phil Lowe replied “When talking about uncertainties, I was a bit surprised there wasn’t more about how households/businesses/asset markets might respond to higher interest rates”.
We agree, this becomes the critical. ANZ Bank yesterday dramatically lifted its forecast for Australia’s official cash rate (OCR) to 3.35% by November 2022
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Join us for a live discussion about the current state of the crypto markets with Adam Stokes. You can ask a question live.
https://www.youtube.com/c/AdamStokes24
Go to the Walk The World Universe at https://walktheworld.com.au/