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/
The Mystery Of The Disappearing Buffers…
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.
FINAL REMINDER: DFA Live Q&A Adam Stokes: Crypto – Where To Next? 8pm Sydney.
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/
Get Behind This Economic Solution…
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.
Flyer: https://citizensparty.org.au/sites/default/files/2022-06/flyer-australia-needs-a-public-post-office-bank-citizens-party-june-22.pdf
MP contact details: https://www.aph.gov.au/Senators_and_Members
Go to the Walk The World Universe at https://walktheworld.com.au/
Its Edwin’s Monday Evening Property Rant!
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…”
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
The Part-Time Amateurs At The RBA!
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.
Another Crypro-Currency Lender Goes Pop!
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/
Operation Anti-spruik Part 3: Queensland
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/
Australian Housing Is Broken!
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/
Humanity Moves Dangerously Closer to the Edge of the World
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/