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0.25% rate cut

Discussion in 'Real Estate' started by jimmyjim, 7th Apr, 2009.

  1. jimmyjim

    jimmyjim Guest

    are we at the bottom of the rate cuts? what do people think?
     
  2. jimmyjim

    jimmyjim Guest

    I just came across this chart of historical interest rate moves...interestingly after almost every lowering cycle it has been over a year between the last rate cut and the first rate rise...ao we have at least a year of these low rates -

    The following table is a history of the official cash rate for you to see where we have been...
    Effective Date Change in cash rate
    (Per cent) New cash rate target
    (Per cent)
    8 Apr 2009 -0.25 3.00
    4 Feb 2009 -1.00 3.25
    3 Dec 2008 -1.00 4.25
    5 Nov 2008 -0.75 5.25
    8 Oct 2008 -1.00 6.00
    3 Sep 2008 -0.25 7.00
    5 Mar 2008 +0.25 7.25
    6 Feb 2008 +0.25 7.00
    7 Nov 2007 +0.25 6.75
    8 Aug 2007 +0.25 6.50
    8 Nov 2006 +0.25 6.25
    2 Aug 2006 +0.25 6.00
    3 May 2006 +0.25 5.75
    2 Mar 2005 +0.25 5.50
    3 Dec 2003 +0.25 5.25
    5 Nov 2003 +0.25 5.00
    5 June 2002 +0.25 4.75
    8 May 2002 +0.25 4.50
    5 Dec 2001 -0.25 4.25
    3 Oct 2001 -0.25 4.50
    5 Sep 2001 -0.25 4.75
    4 Apr 2001 -0.50 5.00
    7 Mar 2001 -0.25 5.50
    7 Feb 2001 -0.50 5.75
    2 Aug 2000 +0.25 6.25
    3 May 2000 +0.25 6.00
    5 Apr 2000 +0.25 5.75
    2 Feb 2000 +0.50 5.50
    3 Nov 1999 +0.25 5.00
    2 Dec 1998 -0.25 4.75
    30 Jul 1997 -0.50 5.00
    23 May 1997 -0.50 5.50
    11 Dec 1996 -0.50 6.00
    6 Nov 1996 -0.50 6.50
    31 Jul 1996 -0.50 7.00
    14 Dec 1994 +1.00 7.50
    24 Oct 1994 +1.00 6.50
    17 Aug 1994 +0.75 5.50
    30 Jul 1993 -0.50 4.75
    23 Mar 1993 -0.50 5.25
    8 Jul 1992 -0.75 5.75
    6 May 1992 -1.00 6.50
    8 Jan 1992 -1.00 7.50
    6 Nov 1991 -1.00 8.50
    3 Sep 1991 -1.00 9.50
    16 May 1991 -1.00 10.50
    4 Apr 1991 -0.50 11.50
    18 Dec 1990 -1.00 12.00
    15 Oct 1990 -1.00 13.00
    2 Aug 1990 -1.00 14.00
    4 Apr 1990 -1.00 to -1.50 15.00 to 15.50
    15 Feb 1990 -0.50 16.50 to 17.00
    23 Jan 1990 -0.50 to -1.00 17.00 to 17.50
     
  3. Billv

    Billv Getting there

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    Jimmy

    IMO if we are not at the bottom we are very close to it.

    Cheers
     
  4. AsxBroker

    AsxBroker Well-Known Member

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    Hi,

    I agree with BV.

    Though with the banks passing on a small portion of the actual interest rate reduction, one would expect the government to pipe up and remind the banks that the lowering of rates is for the borrowers benefit and not for the banks benefit.

    It also seems a bit rich of NAB saying that they aren't passing on the rate cut while dropping their term deposit rates to 3.40% pa for 4 months while SGB is paying 3.75% pa, ANZ 3.60% for 3 months, Westpac 3.70% and CBA also 3.70% pa.

    NAB refuses to pass on rate cut

    Cheers,

    Dan
     
  5. dmesh87

    dmesh87 Member

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    Its a good point but also a slippery slope. Once government starts exerting too much of an influence over private companies and starts trying to push them in a certain direction part of the autonomy of being a private company owned by shareholders is gone.

    Part of what created the subprime crisis was the US government during the Clinton administration pushing for american financial institutions to lend more risky loans to try and create a society where people on lower incomes or in worse financial situations could own homes. Even though the governments intentions to decrease borrowing rates is good interfering with private companies might not set a good precedant.
     
  6. Chris C

    Chris C Well-Known Member

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    Well 3% is still well above 0% so I'm going to say "no"...

    Are we at the bottom of mortgage rates? We are definitely getting closer, I'd expect if the RBA dropped the cash rate to 0% tomorrow most commercial banks would probably offer mortgage rates somewhere between 3.5% - 4.5% (please note that those figures aren't based on anything other than my intuition).


    And I expect the bank to respond by telling government to get back to what they do best, talking crap, going back on promises, lying to the public and buying votes with back economic strategies.

    Honestly the government has no place reminding the banks of anything - they're not stupid - they operate in a reasonably competitive market as PRIVATE institutions accountable to shareholders and want to increase market share just like any other company. I can appreciate why the government wants to be "seen" in the public as putting pressure on banks, but why the public believe that the government doing that is anything other than showmanship is beyond me.

    So if the PRIVATE & COMPETITIVE commercial banks are not passing on rate cuts there is a bloody good reason for them not doing so because you can bet your bottom dollar they are well aware that every misinformed Australian out there will interpret them not passing the rate cuts on as some sort of "evil greedy banker" tactic to make more money out of them and that with the government and media hyping up the issue it is only going to result in more negative publicity for any bank that doesn't pass the rate cut on in entirety. Trust me, these bankers aren't stupid they know their reputations count.

    LMAO, the government has NO influence - it's all media showmanship to win support from the public so when the next election comes up Labor can claim they were standing up to the banks, and other rubbish like that.

    Ahhh governments good intentions... I read a good quote once by a man named Karl Marx, it went like this - "the path to hell is paved with good intentions".

    It seemed appropriate...

    :D
     
  7. AsxBroker

    AsxBroker Well-Known Member

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    Hi Chris,

    Good post. Very appropriate quote at the end as well...
    Politicians love jaw-boning for the media.

    Cheers,

    Dan
     
  8. Chris C

    Chris C Well-Known Member

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    It seemed appropriate seeing as everyone is also calling for the end of capitalism and greater government influence, so there was a bit or irony in it as well.

    :p