We look at the question of distressed listings and sales, which appear to be quite low at the moment. Some therefore argue that things in the property market are just fine.
However, apart from the question of how distressed sales are defined and identified, the truth is that some households are being given the option to sell as a normal not distressed sale. This is better for the bank, and potentially might be something which given enough equity in the property is worth considering. But it is really important to get the right independent advice first!
Bottom line is low distressed sale counts are not a signal of a buoyant market.
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Our market update for the week, starting in the US, via Europe and Asia and ending in Australia, where markets are on a tear.
Is it possible for the US and other industrialized countries to bring inflation down without triggering huge jumps in unemployment that economists would otherwise have predicted prior to the pandemic?
Well, maybe, according to new research from the Federal Reserve Bank of Chicago. The research examines the Phillips curve – a measure of the inverse relationship between inflation and unemployment – for 29 countries in the seven years before Covid-19 and the six quarters of pandemic recovery for which there is data, beginning in January 2021.
The authors found that in each country, including the US, the curve steepened, meaning that a decline in inflation is leading to a smaller increase in unemployment than it did before the public health crisis. While the authors caution that their analysis is limited – there is only a year and a half’s worth of recovery data to examine – their conclusions bolster hopes that Fed rate hikes can curb high inflation without causing millions of Americans to lose their jobs.
If correct, that might improve the chances of seeing a unicorn-like “soft landing” for the US economy.
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Journalist Tarric Brooker and I chew over a range of audience questions in out Friday session today, from property prices and monetary policy to China demographics.
Thanks to all those who sent in questions. Tell us what you think of this format.
The latest REINZ figures for December 2022 show further falls in prices and sales volumes, linked directly to the higher interest rates and reduction in borrowing power, across most of New Zealand.
The ABS released the latest employment figures today. Media coverage amped up the “weakness” in the numbers – but most is due to external factors such as sample changes, seasonality and high rates of illness. This was a classic case of numberwang again. http://www.martinnorth.com/ Go to the Walk The World Universe at https://walktheworld.com.au/
The once famous household savings buffers are being exhausted fast according to latest research. Given the higher montage rates and inflation, more households will struggle with cash flow, even as mortgage volumes fall – refinancing apart.
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Wall Street’s main indexes closed lower on Wednesday after weak economic data and hawkish comments from Federal Reserve officials sparked worries that the central bank will keep tightening policy, perhaps enough to cause a recession. The S&P 500 fell 1.6%, the worst decline in a month, while the tech-heavy Nasdaq 100 snap a seven-day rally, after reversing gains of more than 1%. Earlier, stocks rallied as Treasury yields fell across the curve on bets weak data would prompt the Federal Reserve to downshift its tightening policy.
Before the market opened, U.S. economic data showed retail sales and producer prices declined more than expected in December. Also production at U.S. factories fell more than expected in December and output in the prior month was weaker than previously thought.
St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester stressed on the need to raise rates beyond 5% to bring inflation to heel.
Growth in US prices is expected to ease in the year ahead, contacts surveyed in the Federal Reserve’s latest Beige Book which is a based on anecdotal information collected by the Fed’s 12 regional banks through Jan. 9 and compiled by the Cleveland Fed.
“Selling prices increased at a modest or moderate pace in most districts, though many said that the pace of increases had slowed from that of recent reporting periods,” the Fed said Wednesday in the report, published two weeks before each meeting of the policy-setting Federal Open Market Committee. “On balance, contacts across districts said they expected future price growth to moderate further in the year ahead.”
The Fed commentary also highlighted the disparity between the U.S. central bank’s estimate of its terminal rate and market expectations, which were of the rate peaking at 4.88% by June. Traders are now betting on a 25-basis point rate hike in February with the Fedwatch rate probability for the next meeting in currently sitting at a 95.3% probability of a 25 basis point hike.
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This is a edited version of a live debate between Senator Gerard Rennick and Economist John Adams as we examine economic and monetary policy, debt, and the role of the RBA and other regulators. How can we improve the economic outcomes for Australia, and Australians? Who is to blame for high inflation and home prices?
Original stream: https://youtu.be/DPZNSTeAFkk with chat.
Steve and I discuss the latest in interest rate movements, refinancing, and the impact on household budgets. We look at how households can save significantly and ensure they have the best deals on mortgages and savings rates.
We know that many are still not on the best available rates and as a result are paying more than they need to, which may benefit bank profits, but which do not help individual household cashflow.
Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live debate between Senator Gerard Rennick and Economist John Adams as we examine economic and monetary policy, debt, and the role of the RBA and other regulators. How can we improve the economic outcomes for Australia, and Australians? Who is to blame for high inflation and home prices?
