2024 Off-Topic Chat Thread - time for a title update šŸ˜

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catempire said:
I do my best impression of one.
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I only partly paid attention in that class at Uni, focussing more on Accounting/Auditing.

Explain to me why this wouldn't work, it seems like it shouldn't work long term, and would create more problems than it solves.

www.unitedaustraliaparty.org.au

National Policy - United Australia Party

United Australia Party National Policy HOME OWNERSHIP A maximum of 3% interest on home loans Liberal and Laborā€™s trillion dollars of debt ($1,000,000,000,000 ā€“ a million million) will increase home loan rates to 4% in two years and to over 6% in three years. At 4%, over 60% of Australians will...
www.unitedaustraliaparty.org.au www.unitedaustraliaparty.org.au

A maximum of 3% interest on home loans to save Australian homeownership​

Liberal and Laborā€™s trillion dollars of debt ($1,000,000,000,000 ā€“ a million million) will increase home loan rates to 4% in two years and to over 6% in three years.

At 4%, over 60% of Australians will default on their mortgages and will lose their homes. At 6% or more over 80% of Australians will lose their homes.

The real estate market will then collapse and foreign buyers will flood our real estate market as they will have the money to buy up our properties. We have to stop Australians from losing their homes!

The United Australia Party will introduce a maximum interest rate for all home loans of 3% per annum for the next five years to save Australian homeownership.
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This is electoral candidate research btw, and the UAP candidate for Corangamite has virtually no info.
 
Art Vandelay_ said:
I only partly paid attention in that class at Uni, focussing more on Accounting/Auditing.

Explain to me why this wouldn't work, it seems like it shouldn't work long term, and would create more problems than it solves.

www.unitedaustraliaparty.org.au

National Policy - United Australia Party

United Australia Party National Policy HOME OWNERSHIP A maximum of 3% interest on home loans Liberal and Laborā€™s trillion dollars of debt ($1,000,000,000,000 ā€“ a million million) will increase home loan rates to 4% in two years and to over 6% in three years. At 4%, over 60% of Australians will...
www.unitedaustraliaparty.org.au www.unitedaustraliaparty.org.au



This is electoral candidate research btw, and the UAP candidate for Corangamite has virtually no info.
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The interest rate bit is essentially a price cap and when you cap prices you artificially prevent transactions occurring that otherwise would. So it would mean a bunch of people couldnā€™t get a home loan at all because banks wouldnā€™t be willing to lend at 3% to them, not that they would get it at 3%.
 
catempire said:
The interest rate bit is essentially a price cap and when you cap prices you artificially prevent transactions occurring that otherwise would. So it would mean a bunch of people couldnā€™t get a home loan at all because banks wouldnā€™t be willing to lend at 3% to them, not that they would get it at 3%.
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The cash rate set by the RBA is affected by market forces, and it fluctuates based on numerous factors. This seems to me to be market manipulation that after that 5 years is up could make things worse.

Hypothetically if the economy is progressing over the next 5 years in a direction that sees the RBA increase the rate numerous times, going beyond 3%. let's say to 4.25%. 5 years expires. Cash rate that banks charge home loan customers then has to jump from the UAP capped 3% max and jump massively in one hit to 4.25% that it should have been does it not?

I would have thought that the independent RBA was in place as to stop government manipulation making things worse in the long term as politicians will always take their short term vested interests over the long term. Self preservation 101.
 
Art Vandelay_ said:
The cash rate set by the RBA is affected by market forces, and it fluctuates based on numerous factors. This seems to me to be market manipulation that after that 5 years is up could make things worse.

Hypothetically if the economy is progressing over the next 5 years in a direction that sees the RBA increase the rate numerous times, going beyond 3%. let's say to 4.25%. 5 years expires. Cash rate that banks charge home loan customers then has to jump from the UAP capped 3% max and jump massively in one hit to 4.25% that it should have been does it not?

I would have thought that the independent RBA was in place as to stop government manipulation making things worse in the long term as politicians will always take their short term vested interests over the long term. Self preservation 101.
Click to expand...
A bit to unpack here and more than I have time for on Easter Saturday!
 
Art Vandelay_ said:
The cash rate set by the RBA is affected by market forces, and it fluctuates based on numerous factors. This seems to me to be market manipulation that after that 5 years is up could make things worse.

Hypothetically if the economy is progressing over the next 5 years in a direction that sees the RBA increase the rate numerous times, going beyond 3%. let's say to 4.25%. 5 years expires. Cash rate that banks charge home loan customers then has to jump from the UAP capped 3% max and jump massively in one hit to 4.25% that it should have been does it not?

I would have thought that the independent RBA was in place as to stop government manipulation making things worse in the long term as politicians will always take their short term vested interests over the long term. Self preservation 101.
Click to expand...
So, a couple of thoughts.

In theory, yes I think youā€™re right. If rates were held down artificially for a period then youā€™d expect them to bounce back to their real level after the regulation ended.

However, per my earlier response, what we would expect to happen if banks were prevented from setting rates above 3% is that theyā€™d stop or significantly reduce supplying mortgages. So in practice itā€™s unlikely that youā€™d have rates held down and then jumping up; they just wouldnā€™t be lending.

In general any sort of price regulation doesnā€™t often work well. If you cap prices you simply create shortages of the product youā€™re trying to regulate. So also agree with you that the government shouldnā€™t be playing with mortgage rates. Leave it up to market forces, the RBA and the banks.
 
Wouldn't banks just put their money into the debt market if the rates were above 3%?
Government bonds and other safe debt etc.
Rather than lend to people who may possibly default and only get 3%?
 
Just read this review on TripAdvisor - someone not happy with other people enjoying their experience at the restaurant

Beige and previous reviewers need to be mindful that their ratings are not helpful
I reviewed previous feedback and maybe this made me feel that this was going to be an experience better than what it was. It is a good local restaurant - all four patrons rated the their meals about 6/10, pork belly, pasta and steak, average at best. Not the experience I was expecting, service was mediocre, food average, prices ok and beverage list ok. I certainly wouldnā€™t rave about it, there are limited local opportunities, so please keep this in mind when selecting. I donā€™t want to be disrespectful to other reviewers, but for me, would I go back, the answer would be no.
 

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