RBA – Page 10 – Digital Finance Analytics (DFA) Blog

Everything Is Fine Boys… Honest!

At a gathering of central bankers in Hong Kong on Tuesday, RBA Governor, Michelle Bullock claimed that household finances in Australia are holding up well, despite 4.25% of rate hikes. The rookie RBA governor appears even more out of touch than her predecessor.

“Households and businesses in Australia are actually in a pretty good position. Their balance sheets are pretty good”, she said.

“We’ve been surprised a little bit on the strength of activity. It’s held up a little better than we thought. That’s meant that services price inflation has held up a bit more. So what we’re observing is a bit more domestic price pressures than we’d expected”.

Bullock pointed to the $300 billion in excess savings built up over the pandemic and rising house prices as reasons behind the resilience in consumer spending.

The reality is not nearly as rosy as Bullock claims. Aggregate household spending is holding up first as population is growing at a record pace because of the Albanese government’s record immigration program, which saw an estimated 500,000 net migrants land in Australia in 2002-23.
Yet, Individual Australian households are cutting back on their expenditure.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog

Everything Is Fine Boys… Honest!

00:00 / 00:14:03

Youngsters Thrown Under The Bus [Again]

The massive hike in interest rates imposed by the RBA in its attempt to squeeze out inflation is not hitting all household cohorts’ to the same extent. Indeed, some older households with savings and no mortgages are enjoying their wealth boost, after years of low rates eroded their incomes. It is worth noting that the rate of rate increases is the sharpest lift in mortgage rates on record.

Overall mortgage stress, defined in negative cash flow terms has never been higher, as we discussed in our recent live show.

Within that, the consequences are perhaps most profound for younger, often more leveraged households. Indeed, the 2023 Risk Radar Report from credit bureau Experian shows that recent first home buyers that purchased in 2019 or later are suffering the highest rates of mortgage stress, as well as missed payments.

A decline in living standards will most acutely be felt by younger cohorts, as well as those with big mortgages held into retirement and beyond.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog

Youngsters Thrown Under The Bus [Again]

00:00 / 00:09:16

When Hype And Reality Collide….

This is our weekly market update.

Here is the big question. Are U.S. stocks poised to continue their dramatic run, or is a pause ahead? That’s the question investors are asking as the S&P 500 heads into the close of the year with fresh highs possibly coming into view. A softer tone to U.S. economic data this week has fueled rate-cuts bets, pushing Treasury yields down and lifting equity markets. For the week, the S&P 500 added 2.2% while the Nasdaq composite rose 2.4% and the Dow climbed 1.9%.

This extended a rally that has seen the S&P 500 gain over 9% since late October. The index is now up nearly 18% for the year and less than 2% away from its year-high, reached in July. Its record closing level, from January 2022, is some 6% away.

Whether it can reach those levels in coming weeks depends in-part on how convinced investors are that the U.S. economy is on track for a so-called soft landing, where the Fed brings down inflation without badly damaging growth. So far, the economy has proven resilient in the face of tighter monetary policy, though some measures of employment and consumer demand have softened.

Leading global investors expect inflation and interest rates to remain high well into next year and are bracing for more volatile sharemarkets where easy returns will be hard to find.

Top fund managers, company founders and superannuation funds told the Sohn Hearts & Minds event at the Sydney Opera House on Friday that they were looking beyond big name, overpriced Wall Street stocks that would struggle to deliver growth.

Instead, investors willing to gamble on unloved and unpopular stocks would do best, they said. Many investors warn there is a huge insolvency risk lurking in private markets.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

When Hype And Reality Collide....

00:00 / 00:25:57

When Hype And Reality Collide….

This is our weekly market update.

Leading global investors expect inflation and interest rates to remain high well into next year and are bracing for more volatile sharemarkets where easy returns will be hard to find.

Instead, investors willing to gamble on unloved and unpopular stocks would do best, they said. Many investors warn there is a huge insolvency risk lurking in private markets.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

How To Stop The Central Bankers’ Power Grab!

Time to act to save Australia from the Central Bankers’ Power grab. I discuss the impending legislation which would disable Parliament’s power to intervene on what the RBA does; with Robbie Barwick from the Australian Citizens Party.

We need to register our opposition to the bill which is being snuck in via the back-door of cross-party consensus. The very future of Australia as a democratic country is at stake. Call and email now!

Breaking news! Treasurer Jim Chalmers is preparing to introduce a bill to implement the RBA Review recommendations, including removing democratic accountability over the Reserve Bank, in two weeks – the last week of November.

Don’t let the major parties do a back-room deal to wave this bill through!

Help fight to protect the most important democratic protection in Australian law by calling and emailing three people immediately:

Treasurer Jim Chalmers: Electorate (07) 3299 5910; Parliament House (02) 6277 7340; Email: Jim.Chalmers.MP@aph.gov.au
Shadow Treasurer Angus Taylor: Electorate (02) 4658 7188; Parliament House (02) 6277 4362; Email: Angus.Taylor.MP@aph.gov.au
Your local Member of Parliament – click here to find your local MP’s details: https://www.aph.gov.au/Senators_and_Members/Members

Tell them they have no right to repeal Section 11 of the RBA Act, which would give up the power of democratic accountability over the RBA and the banking system that political giants in history like John Curtin and Ben Chifley fought so hard to establish.

Robbie’s earlier video : https://youtu.be/EA7FhBZxfuM

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

How To Stop The Central Bankers’ Power Grab!

00:00 / 00:36:44

Households In The Cross-Hairs As Real Wealth Falls…

The latest from the RBA – Statement On Monetary Policy November 2023, outlines the bank’s latest thinking. The Reserve Bank updated its economic forecasts, which explain why it raised interest rates this month – from 4.1 per cent to 4.35 per cent after four consecutive pauses. And importantly, it shows just how the economic engine is misfiring, with households very much on the front line.

While the business sector, overall, appears to be doing fine, it appears working-age households will continue to do the heavy lifting on containing inflation via higher interest payments, cutting their individual consumption and falls in real wages that are expected to continue until the middle of next year. And due to the combination of stubbornly high inflation and relatively weak income growth, the RBA now expects real household disposable income — a key measure of living standards — to keep sliding sharply until the second half of next year.

And to underscore this, recent OECD data shows that Australian households have suffered the biggest fall in real per capita household disposable income of any advanced economy over the past year. In the 12 months to June, Australian household incomes slumped 5.1 per cent, the sharpest fall recorded across the OECD.

Real view management of the monetary settings from the RBA are simply not working.

https://www.rba.gov.au/publications/smp/2023/nov/

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

Households In The Cross-Hairs As Real Wealth Falls...

00:00 / 00:14:52