I am joined by Robbie Barwick from the Australian Citizens Party to discuss a critical policy area, ahead of the new Parliament sitting next week. We want to make sure the politicians are aware of the benefits of a National Postal Bank, and how you can help to raise that awareness.
We look at the latest from China, cheap food, more listings, and unions in the Real Estate sector with our property insider Edwin Almeida. And we ask what’s wackier than a conspiracy theory, and look at “Frictional Unemployment…”
The RBA could soon see a major overhaul, amid accusations that its nine-member board lacks economic qualifications writes Frank Chung over at news.com.
As inflation skyrockets and borrowers grapple with sharply rising interest rates, a series of “embarrassing” missteps have focused public attention on the Reserve Bank like rarely before.
With the new Federal Government preparing to undertake a “once-in-a-generation” review of the RBA, former insiders have delivered a blunt assessment of the institution responsible for setting Australia’s monetary policy.
“The board is failing, and the reason it fails is because it lacks expertise,” said Peter Tulip, former head of research at the RBA.
Well, we argue the much needed review MUST be extended to include APRA and the Council Of Financial Regulators, the peak body chaired by the RBA as well.
A raft of poor policy and decisions have led us to create an over-leveraged society, at risk from rising interest rates. And there must be accountability and transparency, unlike at the moment.
But will the proposed review get to the heart of the matter – we doubt it.
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.
Cryptocurrency lender Celsius Network Ltd. filed for Chapter 11 bankruptcy, the latest casualty of a $2 trillion crash that has wiped out some of the industry’s biggest names and exposed hundreds of thousands of individual investors to steep losses.
We can again see the cross-leverage between large crypro-firms, how individuals are at the end of the unsecured creditor queue, and that many will lose their shirts in the largely unregulated and speculative market.
Celsius, which has more than 100,000 creditors, said it took the step to stabilize its business and work out a restructuring for all stakeholders. The filing was made in the Southern District of New York and listed Alameda Research, the trading firm co-founded by crypto billionaire Sam Bankman-Fried, among major creditors.
The platform held about $4.3 billion of assets against $5.5 billion of liabilities as of Wednesday, according to court papers. The company has been trying to obtain new financing from third parties.
Celsius invested about $500 million in Celsius Mining and even prepared it for an initial public offering in May.
“The Mining Center is an essential driver of growth in the debtors’ business and will allow the debtors to expand and more profitably mine Bitcoin.” according to the filing.
Go to the Walk The World Universe at https://walktheworld.com.au/
Another set of asking price cut case studies, from QLD, courtesy of CB, inter-cut with relevant data from the DFA models. Still think prices are booming in QLD?
Go to the Walk The World Universe at https://walktheworld.com.au/
The proportion of Australians who own their home outright has halved over two decades for most age groups while the proportion of people with mortgages in retirement years has tripled.
Data from the Australian Bureau of Statistics shows that outright home ownership has more than halved for 25 to 54-year-olds between 2001 and 2021. At the same time, the number of mortgage holders and renters across all age groups has ballooned.
The number of Australians who own their homes outright has plummeted over the last 20 years.
The proportion of Australians who completely own their property has fallen by 11 percentage points according to the latest census data. According to the recent Census data, which counted 25,422,788 Australians the proportion of Australians who own a home outright dropped from 41.6 per cent in 1996 to 31 per cent in 2021.
The same data also noted that, over the last 25 years, the number of Australians who owned a home with a mortgage also doubled, rising by 96.8 per cent.
Go to the Walk The World Universe at https://walktheworld.com.au/
This week, we saw significant developments in both inflation, interest rates, bond yields and financial instability. Inflation is still running red hot and some central banks are putting an aggressive stance to combat this inflation through aggressive interest rates rises, however, the real test of central bank resolve is soon approaching.
Adams suspects much faster than what people anticipates. Adams believes that the central bank pivot is coming because the implications of the debt bubble unravelling go beyond just economics, as in the case in Sri Lanka political and social stability are also at risk.
The ruling elite will be looking at Sri Lanka and be extremely nervous about chaos and revolution in their own countries and whether they are at risk of losing political power or even worse – risk of imprisonment or assassination.
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest edition of our finance and property news digest with a distinctively Australian flavour.
In this week’s market review, consider the hangover coming as the punch bowel of cheap funds is taken away. We start as always with the US, go across Europe and Asia, and end in Australia. Why, because like it our not our fate will be largely determined by what happens in the US – which drives the price of money via the US dollar, and China, our main export partner.
The US FOMC raised interest rates in June by 75 basis points in June. And last month, the U.S. central bank also started reducing the size of its enormous balance sheet. Until September, the Fed will be cutting $45 billion a month from its massive holdings, and it will increase to $95 billion, almost twice as much as it did in the previous episode of quantitative tightening. So the value of the Fed’s assets has already peaked, reaching $8.95 trillion in mid-May 2022.
But, although the Fed is tightening its monetary policy, its stance remains accommodative. According to the Taylor rule, the federal funds rate shouldn’t be just between 1.50% and 1.75%, but at least above 5% .
So the U.S. central bank remains behind the inflation curve and would have to raise interest rates much further to combat high inflation. But in the previous Fed’s tightening cycle of 2017-2019 which led to the repo crisis, forced the U.S. central bank to reverse its stance and cut interest rates.
Given how fragile the financial system is and how much indebted the American economy is, it’s almost certain that the current monetary policy tightening will lead to a sovereign-debt crisis or another kind of financial crisis.
[CONTENT]
0:00 Start 0:15 Introduction 00:46 Removing The Punch Bowel 2:45 US Dollar 4:00 Economic Indicators 5:45 US Markets 08:00 Bonds 8:50 European Markets 10:25 Oil and Gold 12:40 Asian Markets 14:00 China Economics 15:30 China Property Bust 19:25 Australian Market 22:00 Crypto Crash 23:00 Conclusion
Go to the Walk The World Universe at https://walktheworld.com.au/
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and his Morgan Stanley counterpart, James Gorman, both said Thursday that they aren’t steering their firms toward shelter even as they see a confluence of global events denting the economy in the months ahead.
“The consumer right now is in great shape,” Dimon said on a conference call discussing his company’s second-quarter results. “So even if we go into a recession, they’re entering that recession with less leverage and in far better shape than they did in ’08 and ’09.”
Gorman, on his bank’s earnings call, said a deep or dramatic recession in the US is unlikely, and Morgan Stanley is “long the US” in most of its businesses. “The US is a great region to be in the world.”
Those verdicts come even as second-quarter results at both JPMorgan and Morgan Stanley were hurt by a slowdown from the pandemic-era bonanza that gave them record revenue and profits.
Risks abound, with soaring inflation spurring central banks around the world to dial back the easy-money policies that had pushed markets to all-time highs. Russia’s invasion of Ukraine, along with worries about food and energy security as well as political instability across regions, are also keeping investors on edge.
“If I had to use one word to describe it, it would be ‘complicated,’” Gorman said on the challenges facing the global economy. He said that “Europe is fighting the hardest,” with the dual threat of the war in Ukraine and pressure on gas prices that’s been particularly problematic for countries such as Germany.
Go to the Walk The World Universe at https://walktheworld.com.au/
Following the Reserve Bank’s double rate hike, big banks have lifted all their variable mortgage rates by 0.5 percentage points.
As a result, the average variable borrower will have seen their rate rise by 1.25 percentage points since the start of May.
That means someone with a $500,000 mortgage, with 25 years remaining, will see their repayments increase by an estimated $333 in total across the three hikes, RateCity.com.au said.
While variable rate borrowers with loans with CBA, NAB, and ANZ will be charged a higher interest rate starting today, it will take weeks for their monthly repayments to rise. In fact, the increase in monthly repayments many of these customers are currently seeing resulted from the May hike. This is because banks typically give 20 to 32 days’ notice before lifting their monthly repayments, despite charging their customers the higher rate from the effective date.
Even then, the increase to their monthly repayment might not take effect for another few weeks, depending on when they are due.
UBS has predicted interest rates will peak at around 3.5 per cent in March next year, but said this will still hit the housing market hard.
“We still think market pricing of about 3.5 per cent – if delivered – would likely crash housing, and see the economy nearing a recession,” George Tharenou, chief economist at UBS, told The Australian.
If interest rates were to rise to 3.5 per cent it would likely see the average variable mortgage rate hit a whopping 6 per cent and could plunge the economy into recession, according to the investment bank.
“Interest payments across the economy next year for the household sector will close to double from now,” Mr Tharenou said.
“We have never seen such a sharp increase in repayments. That really crushes household cashflow next year when you have cost-of-living issues.”
Go to the Walk The World Universe at https://walktheworld.com.au/
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.
