RBA’s Incompetence

Everything is bullish for people who are remunerated from the property industry.

 

All eyes on the US cpi figures tonight.

Remember the Fred has already met for the month of May and there are no more earnings to come in the US for awhile so it’s all gonna be based on the CPI read from tonight, sentiment and emotions. Enjoy the ride!

 

3.5 hours to go

 

One thing often gets lost in translation,
Just because RBA cuts cash rate from X to Y, doesn't mean bond market will start falling head over heel to adhere to RBA's cash rate.
If Market thinks is not worth it they will only lend banks/gov on a rate that they think is right.
Today's AOMC bond issuance was a clear example of it,
the borrower was Australian Fed Gov aka the most credit worthy of a country,
the lender was international bond market
Bond was offered at 1.75%, but it was sold at an avg of 3.832%
which gov of Australia has to pay every year as interest.

RBA in 2020, when it cut the cashrate from 2 to 0.1, had to back it up by QE,
aka you buy your own produce by printing.
Without QE, artificially low cash rates risks being sidelined aka meaningless, and no matter what RBA doesn't even want to appear meaningless as then they risk pushing entire country at mercy of 'Mr Bond the barbarians'.

 

mom counting the minutes lol.
IMO us inflation is close to 20% .. but I have a feeling park inflation bulls might get their way . 7.9%

 

The bond market is trying once again to bully the RBA. I don’t think they will be successful long term (ie implied cash rate) as the RBA wants to appear to have some semblance of control.

 

US inflation rate 8.3%...slight slowing...but still high..... 50 basis point increase by Fed next month on top of the 50 basis point is now a 80% probability....reckon the RBA will move 40 basis points again a 80% probability.....

12ft |

Sydney/Hobart markets might be in for a hard landing. Melbourne negative and slowing ....Brisbane about to slow in the next 6 months. Adelaide/Perth/Darwin still going steadily upwards...

 

Wonder if the feds can make a soft landing.

 

Central banks will go a little too hard, economic conditions will weaken rapidly again, we will have more QE and a final boom before a long, drawn out correction. New all time highs will be reached somewhere around mid decade not to be seen again for a decade plus!
Don’t let me down crystal ball!!

 

History would say no

 

stock market smashed

 

Und make avocado toast.. whilst smashing happening.

 

yep all markets and sentiment looking bad. cash is king again

 

Never went out of style that's why I horde it. Just hold it in offsets.

 

Not the case in Perth
26 offers on one property sound like a slump?

 

ABS released overseas arrivals and departures today:

More people are leaving the country, than arrivals, so net immigration is now trending negative.

At what stage will our youth just look at house prices and determine they will get a better life overseas? Could it be now?

 

One thing you can count on for Australia is that it's a great country to live. If we wanted, we can turn on migration tap for population growth.

In the last few decades, a lot of the migration have come from China and other Asian countries. Brought a lot of wealth with them and most have contributed to our nation.

If geopolitics get a bad, we may not have these positive trends from migration for a while.

 

Lol this is interesting perspective. There should be catchup leaving.

For many born overseas, Australia is a dreamland.

There’s about 150m people where I’m from who’d bite my hand off to have the opportunities I do. All from the luck of being a citizen in one of the greatest countries in the world. Personally I plan on grabbing this gift with both hands. Many migrants and new entrants would think the same about the opportunities on offer.

I genuinely believe if we allowed 25m skilled migrants to come in 5 years and double the population, make it easy to come in, demand would still outstrip supply. I.e. there’s plenty in the world who want to live here.

 

There is some of that....but more importantly....immigration tap cannot be turned on like a switch....it takes time.

Real issue is there is not enough manpower to process immigration numbers. I reckon Sydney/Melbourne/Brisbane imbalance might be short lived.

 

For sure, and then we might be able to find some people who know how to build, maintain and operate a nuclear submarine.