Disappointing Q3-2018 GDP - rate cuts on the cards

i bought a lot of CBA shares during the depths of the GFC, offloaded them when Trump was elected, now wondering if I should buy some at these lower prices.

 

https://www.forexlive.com/centralba...ee-how-data-goes-for-next-few-months-20181206
Thu 6 Dec 2018 09:46:06 GMT

RBA's Debelle says will see how data goes for next few months, reassess outlook if need to

This simply says that the RBA is starting to get worried

The poor Q3 GDP report yesterday is having a real significant impact on the central bank's outlook. As mentioned then, the report bodes ill for the RBA's outlook in 2019 and they're starting to be concerned about the possible downturn the economy could take if consumption continues to slump amid falling house prices and rising household debt/low savings ratio.

Debelle's comments above basically means that the central bank will watch out for more data to feed into their outlook and if things aren't looking bright, they may consider moving away from hiking rates and possibly move towards cutting them instead; as he mentioned earlier.

We've seen the Aussie dollarydoo being smashed in past 36 hours or so.

 

Reserve Bank says rate cuts, QE possible as housing enters 'uncharted territory'

RBA's Debelle has finally brought up the possibility of QE down under. But seems like neither him nor the market has taken this seriously, hoping that the housing market will somehow muddle thru without causing a deep recession.

 

Time to buy Aussie government bonds!

 

In a period of low inflation, further monetary stimulus of zero rates and QE could be appropriate!

 

imho, not only appropriate but imperative, should the current downturn continues. Cutting OCR doesn't always work as banks source a sizable chunk of their funds from overseas where rates are higher.

There is still one thing I don't quite understand: why our banks can't get funding from countries with zero/negative rates such as Japan/EU?

 

Its pretty hard to use Japan as an example as virtually all their debt is sources internally .
High Business Debt vs High savings rate , one can lend to the other and it is not influences by currency rates.

 

When you look at the CBA,over the entire time it has always produced a dividend that is always worth something unlike several other listed asx that went belly--up,and if you want to control the price of something you make it price wise more available..

 

It's messy out there. All my gains were wiped out for the year with the flash crash in oil prices hitting my LNG shares (which had been doing well as Brent crude rose to $85 or whatever, now ~$60).

2018 will be a year where you did well to not lose money, whether property, equities, cryptos etc.