How many times could you say that you went to a business seminar, and it changed your life – and that it is still your daily focus 20 years later
Ron Kaufman, Singapore: 2001 – Ron Kaufman is who Singapore Airlines sought out in 1990 help them achieve their goal – “Service Even Other Airlines Talk About.”
“Singapore Airlines trains for service at an unbelievable level. Their quality is simply unmatched – but if you fly with them, you know this already.”
Read moreThe Reserve Bank has cut rates to low levels to encourage borrowing.
This is a good thing.
The strategy has worked.
Housing and construction are the backbone of our economy – because they generate so much employment and activity.
House price has increased – and that in itself is not a bad thing.
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Bill Evans took up the Chief Economist role at Westpac in 1991 and has consistently been “getting the big calls right for 30 years”.
When he talks – I listen.
Bill Evans predicts (The Australian Sat 11th Sep 2021) “Interest rates will rise… starting in the first quarter 2023… and going up (in steps) by (only) 1.25%”.
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Since the day ASIC reported back on a finding from the Royal Commission on charging older loyal clients more than new ones, I have refused to take a backward step on this issue… Because it represents the worst possible example of bank behaviour.
In a related article (The Australian) – it notes that CBA and Afterpay are locked in a battle for banking customers… but the MAIN prize is home loans.
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Banks and Commentators alike are saying this week; “The next move on rates is UP – You must lock in now!”
What complete twaddle! (Commentators are back at work after the holidays and feel the need to say something to start the year, banks however, are saying things out of complete self-interest).
I only listen to the person with the RED Rate Button on their desk.
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As of Tuesday, the Reserve Bank Cash Rate is at 0.1%, The Reserve Bank also announced it will buy Australian Govt 3, 5 and 10 year bonds to keep them at their desired target of 0.1%.
So, if banks can be profitable with an interest rate margin of 1.8%-2.2% – then your home loan rate should be 1.9% to 2.3%.
However, with Covid loan losses that banks are having to provision for, it means that we aren’t at these low levels yet – but this is where they are going.
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This morning as I was sitting down to write on the (immediate and medium) future of interest rates, knowing that they are poised to head down again – two clients of long standing emailed me.
One wrote to me – tongue in cheek;
“I know (how much) you “adore” fixed interest rates, not, but now, locking part or all of a home loan in at these ever so low interest rates needs to be considered?
I still remember the painful 14% home loan interest rates.
Looking forward to your opinion in regard to this matter.”
Surely with rates now under 3%, surely with banks offering fixed rates in the mid 2%’s – SURELY it must now be time to fix … Surely!!
The best time to fix is still never.
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Economically they used to say, “when America catches a cold the world catches the flu”.
At the moment because of the literal corona virus in China, the world is at risk of catching the economic flu.
Aside from the presidential election and the post Brexit trade negotiations (both of which are the long game for 2020 -being Nov and Dec respectively), the length of time that the world takes to adjust to the economic impact of the corona virus will be the story of significance in 2020.
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The scene is now set for the rest of 2019.
I give credit to the Reserve Bank and the Government for pre-empting.
The Reserve Bank cut rates by 0.5% (0.4% of which was passed through) and the Government passed tax cuts through to everyone.
What was the background? The two big ticket items – Brexit and the US China Trade War.
Read moreFollowing the most recent Reserve Bank meeting earlier this month, it is being widely interpreted that the official cash rate is likely to stay on hold until late 2019 (Bill Evans, Westpac Chief Economist. There are now even interpretations of rates on hold until late 2020. ClickHere
The factors in play: the exuberance of regulators (APRA / ASIC) have done all of the Reserve Bank’s heavy lifting. The Royal Commission is causing banks to pull back even further. The Treasurer now mentions an “unintended” credit tightening.