Non-AFL chat thread part 2

[LittleG]

Can't find a clip of it right now but there was an excellent piece by Alan Kohler on last night's news (one of those ones where he is sitting behind a cup of latte ... not sure if it's half full or half empty but I'm beginning to suspect the latter).

In it he outlined how Lowe and the RBA repeatedly assured everyone from 2020 to late 2021 that there would be no interest rate rises from the RBA before 2024. Since then there have been another 360,000 mortgages taken out by people who were confident they could afford the repayments. Now after two sudden increases (totalling 0.75%) there are predictions of interest rates further tripling before the end of the year. Result? (1) House prices kept rising steeply until the RBA suddenly changed direction and (2) it's expected a lot of those 360,000 will end up in mortgage stress. Even if they don't, any financial planning they might have done based on RBA statements means they will now be much worse off than they had expected.

Kohler finishes up his piece saying "how about an apology Philip?"

View attachment 1422887

RBA and many central banks printed too much money to stimulate the economy. They ALL should have stopped late 2020, even with Covid out and about. There is only so long that you can print money without causing inflation to rise due to printing money. Although non-existent energy policy has contributed significantly.


BUT no one predicted the Russian invasion of Ukraine OR the flooding in northern NSW (although it will happen again this year*). These two events have caused massive short term inflation.



*Major Rain events like cyclones usually form along the boundary between hot ocean water and cool ocean water. A quick look at the current ocean temperatures tells me that FNQ (where I live) is unlikely to cop frequent major rain events. This is due to the hot ocean water boundary to now be in southern Queensland…. Now, all you people in Brisbane should know that rain that is suppose to be watering our lovely northern rain forests is instead flooding your homes. This is due to climate change. Perhaps not rebuilding on the flood plains is a good idea.

 

[ScragCity]

RBA and many central banks printed too much money to stimulate the economy. They ALL should have stopped late 2020, even with Covid out and about. There is only so long that you can print money without causing inflation to rise due to printing money.

We're all experts in hindsight though. It might be easier to look back now and say, "they could have gotten away with only printing X amount." Much harder to get that number exactly right in real time with so many unknown variables. I'd rather the RBA err on the side of printing too much money than too little. 5% inflation isn't great but it's a heck of a lot better than deflation.

 

[dogwatch]

Lowe and the RBA have admitted the error. It was a wildly inaccurate prediction based on belief that the pandemic would be much worse and last for much longer. I think we all probably made predictions about how the pandemic turned out that would later be proven to have been way off the mark. No one thought that the vaccines would be developed as quickly as they were. It's also worth noting that the US Fed predicted the same. Predictions are just that - predictions.

Us making predictions and the RBA making predictions are chalk and cheese. The business world uses RBA information in framing its planning. Individual citizens (without the benefit of in-house professional economists) make the biggest purchasing decision in their lives based to a significant degree on what they understand the interest rates are going to be. The hardest time with a mortgage is the first 4-5 years. After that, as just about any home owner will tell you, it gets a lot easier.

"...the RBA suddenly changed direction." As opposed to what? Interest rates can't go below zero. There was only one direction they could go.

No there wasn't. They were saying the interest rates were going to stay flat (no rise) until at least 2024. Suddenly they are going up many times in 2022.

"it's expected a lot of those 360,000 will end up in mortgage stress. Even if they don't, any financial planning they might have done based on RBA statements means they will now be much worse off than they had expected."

Oh, won't someone think of the poor marginal mortgagors, who FOMOed into the housing market at its peak without a budget than can sustain interest rate rises. Give me a break. There will always be people who are unhappy with interest rate rises but it has to be done.

Pretty heartless. As a parent of one of those recent borrowers I made sure he was insulated as far as possible from interest hikes so we probably had a lower price cap than many others in the market (yes we did some sensitivity analysis) but a lot of young people don't have that advice or understanding. Yes, some would have made dumb choices under pressure from agents and lenders and the media but some also made choices based on what the RBA was telling them and they had a reasonable expectation that it would be fairly reliable. Are you putting all the blame on the home buyers?

 

[BEaston]

The amount of money people were making in crypto was a hint central banks were printing too much money.

 

[ScragCity]

Us making predictions and the RBA making predictions are chalk and cheese. The business world uses RBA information in framing its planning.

Yes. The RBA has the resources to make much better predictions than the rest of us. They don't have a crystal ball, however. What should the standard be? That they never get it wrong? Or should they just never make predictions at all? What do you think Lowe should have done differently? Should he have said "we have no idea what the hell is going to happen," and let the market fall into chaos?

Are you putting all the blame on the home buyers?

I'm not putting blame on anyone. The opposite, actually. My suspicion is that the hysterics around mortgage stress will be overblown. Speaking of in-house economists, mortgagees do have those, and many were predicting interest rate rises in 2022. Banks would factor that in when assessing borrowing capacity. I have a sister in her mid twenties who bought at the top of her purchasing power early this year. She won't like the interest rate rises. She will need to make cut backs to other areas of her budget. So what? Most people who haven't had a significant pay rise are doing the same, mortgage or not.

The RBA can't make everyone's lives rainbows and sunshine. That's not their mandate. Their job is to protect us against extreme volatility and the worst outcomes. Sometimes that means they have to inflict some pain. Let's hold them to realistic standards.

 

[D Mitchell]

We're all experts in hindsight though. It might be easier to look back now and say, "they could have gotten away with only printing X amount." Much harder to get that number exactly right in real time with so many unknown variables. I'd rather the RBA err on the side of printing too much money than too little. 5% inflation isn't great but it's a heck of a lot better than deflation.

It's your probably unconscious drift to the right that has earned you the 13 % drop in approvals from the pinko, commo, lefto, greenie Mods, Scrag. Welcome aboard.

 

[dogwatch]

Yes. The RBA has the resources to make much better predictions than the rest of us. They don't have a crystal ball, however. What should the standard be? That they never get it wrong? Or should they just never make predictions at all? What do you think Lowe should have done differently? Should he have said "we have no idea what the hell is going to happen," and let the market fall into chaos?



I'm not putting blame on anyone. The opposite, actually. My suspicion is that the hysterics around mortgage stress will be overblown. Speaking of in-house economists, mortgagees do have those, and many were predicting interest rate rises in 2022. Banks would factor that in when assessing borrowing capacity. I have a sister in her mid twenties who bought at the top of her purchasing power early this year. She won't like the interest rate rises. She will need to make cut backs to other areas of her budget. So what? Most people who haven't had a significant pay rise are doing the same, mortgage or not.

The RBA can't make everyone's lives rainbows and sunshine. That's not their mandate. Their job is to protect us against extreme volatility and the worst outcomes. Sometimes that means they have to inflict some pain. Let's hold them to realistic standards.

“In-depth interview” with your mate Phil coming up on tonight’s 7:30 Report, Scrag.

Thought you might like to watch it.

 

[dogwatch]

Did you watch the interview ScragCity ? Gotta say he was very impressive. Great answers, no hesitation, only a little bit of deflecting and totally on top of his brief.

At least I think he was. I got very distracted by his independent left eyebrow so I might have missed some of what he said.

Anyway, knowing that Bevo swung from a high-powered job with the Tax Office to being a senior coach I'm wondering if Philip might be interested in a challenging new opportunity ... ?

 

[ScragCity]

Did you watch the interview ScragCity ? Gotta say he was very impressive. Great answers, no hesitation, only a little bit of deflecting and totally on top of his brief.

At least I think he was. I got very distracted by his independent left eyebrow so I might have missed some of what he said.

Anyway, knowing that Bevo swung from a high-powered job with the Tax Office to being a senior coach I'm wondering if Philip might be interested in a challenging new opportunity ... ?

I wasn't able to tune in tonight mate. The missus hates central bankers. Do you know if there will be a replay up on the ABC app or anything like that?

 

[dogwatch]

I wasn't able to tune in tonight mate. The missus hates central bankers. Do you know if there will be a replay up on the ABC app or anything like that?

You might have misunderstood. I think she was talking in rhyming slang.

Anyway I'll see what I can find.

 

[ScragCity]

You might have misunderstood. I think she was talking in rhyming slang.

Anyway I'll see what I can find.

I just read a transcript of the interview. He's an impressive man. Australia's monetary policy is in good hands. I think Central Bankers get a lot of s**t because they're technocrats and those of us without strong economic backgrounds have trouble understanding how they come to decisions. Not only that, but every decision the RBA makes will be unpopular with some percentage of the population. They have to take a very utilitarian approach and do what is best for most of us. Interest rate rises don't just hurt mortgagors either. They lead to businesses shutting down and jobs being lost. But if you can dispassionately look at the bigger picture, hating the RBA for raising interest rates is like hating a surgeon for removing your appendix. Yeah, you're going to be sore for a while, but the alternative would have been worse. We should be grateful that the adults in charge get it right most of the time.

 

[dogwatch]

I just read a transcript of the interview. He's an impressive man. Australia's monetary policy is in good hands. I think Central Bankers get a lot of s**t because they're technocrats and those of us without strong economic backgrounds have trouble understanding how they come to decisions. Not only that, but every decision the RBA makes will be unpopular with some percentage of the population. They have to take a very utilitarian approach and do what is best for most of us. Interest rate rises don't just hurt mortgagors either. They lead to businesses shutting down and jobs being lost. But if you can dispassionately look at the bigger picture, hating the RBA for raising interest rates is like hating a surgeon for removing your appendix. Yeah, you're going to be sore for a while, but the alternative would have been worse. We should be grateful that the adults in charge get it right most of the time.

Do yourself a favour and watch the interview too, just for the eyebrow thing. It might find a place in your next erotic fiction instalment.

It's not up on iview yet. Now up on iview.

 

[ScragCity]

Do yourself a favour and watch the interview too, just for the eyebrow thing. It might find a place in your next erotic fiction instalment.

It's not up on iview yet.

Economics is really about how to allocate scarce resources in a way that maximises utility. One of the first things economics students at MIT are taught is how to raise eyebrows independently. "Why raise two eyebrows, when you can achieve the same result by raising one, and only expend half the energy?"

 

[Next Waiting]

Economics is really about how to allocate scarce resources in a way that maximises utility. One of the first things economics students at MIT are taught is how to raise eyebrows independently. "Why raise two eyebrows, when you can achieve the same result by raising one, and only expend half the energy?"

I tried this at home and counterintuitive as it may be, I found that raising one eyebrow was more taxing than raising two. The effort required to restrain one while the other soars was considerably more than that required to raise it unison with the other. That this empirically disproven premise is embraced by the modern economist raises my eyebrows.

 

[ScragCity]

dogwatch I just watched the interview. You're right, that eyebrow had a mind of its own. Thanks for the recommendation.

 

[footscray1973]

We decry football 'journalism' often on here - quite rightly as pure journalism is largely absent in football media.

In terms of tv news media and journalism, there are choices, largely between vanilla commercial TV, partisan Murdoch channels and more analytical ABC news and current affairs which is constantly subjected to scrutiny of bias which the others are not.

Here is an article highlighting the vacuous, brain-dead idiots who masquerade as, and in the embedded videos, actually claim to be, 'journalists' in the UK.

Mick Lynch has far more patience than I would have in his position:

Who has power? Australians can learn from British unionist Mick Lynch

Power isn't something you're supposed to talk about in polite society, but that needs to change, writes Gareth Hutchens.

www.abc.net.au

 

[Fossie 32]

Barnaby Joyce reckons we should buy all of Bali’s cattle and bump them. Could be a plan if they aren’t doing it themselves? Said they only have 20k I think

 

[LittleG]

Barnaby Joyce reckons we should buy all of Bali’s cattle and bump them. Could be a plan if they aren’t doing it themselves? Said they only have 20k I think

Barnaby wants to meddle in the affairs of another country…. while no longer being in government because he was so s**t at doing anything in our country, we voted him out.

 

[Fossie 32]

Barnaby wants to meddle in the affairs of another country…. while no longer being in government because he was so s**t at doing anything in our country, we voted him out.

Sounds like a fair idea though? Not a big cost compared to what it would cost if it got into our livestock

 

[dogwatch]

Sounds like a fair idea though? Not a big cost compared to what it would cost if it got into our livestock

You think?
It effectively terminates a way of life for many Balinese farmers. I don't profess to know much about Balinese agriculture but I reckon their cattle farming would have been going on for generations, from at least 1923 when their modern herds began to be established.

So we buy all their cattle, put a bullet in the head of every one of them and burn the carcasses. What next for the locals? How do they make a living in future? Or do they just use the money we pay them to buy a whole lot more from elsewhere and replace them on the very same farming land that currently plays host to foot and mouth disease? Do we then buy all the replacement herd too? What if they reckon they are onto a good thing and buy half a million cattle?

Bali is not the only likely source either. F&M is increasing elsewhere. Do we adopt the same approach in other nearby regions? There are endemic viral pools right across Asia and Africa and there have been recent (2022) outbreaks in Java and Sumatra.

This is without addressing the implications of the paternalistic attitude that might be perceived by Indonesia if we went down this path.

This is a perfect example of Barnaby's populist style. Catchy, direct, short term focus ... but in all probability ineffective and gives no consideration to the complexity of the problem.

 

[Sharpiesadog]

You think?
It effectively terminates a way of life for many Balinese farmers. I don't profess to know much about Balinese agriculture but I reckon their cattle farming would have been going on for generations, from at least 1923 when their modern herds began to be established.

So we buy all their cattle, put a bullet in the head of every one of them and burn the carcasses. What next for the locals? How do they make a living in future? Or do they just use the money we pay them to buy a whole lot more from elsewhere and replace them on the very same farming land that currently plays host to foot and mouth disease? Do we then buy all the replacement herd too? What if they reckon they are onto a good thing and buy half a million cattle?

Bali is not the only likely source either. F&M is increasing elsewhere. Do we adopt the same approach in other nearby regions? There are endemic viral pools right across Asia and Africa and there have been recent (2022) outbreaks in Java and Sumatra.

This is without addressing the implications of the paternalistic attitude that might be perceived by Indonesia if we went down this path.

This is a perfect example of Barnaby's populist style. Catchy, direct, short term focus ... but in all probability ineffective and gives no consideration to the complexity of the problem.

But, but…. He’s the best retail politician in the country!

I don’t think Barnaby provides solutions that give consideration to the complexity of problems because he is not capable of it.

 

[Fossie 32]

You think?
It effectively terminates a way of life for many Balinese farmers. I don't profess to know much about Balinese agriculture but I reckon their cattle farming would have been going on for generations, from at least 1923 when their modern herds began to be established.

So we buy all their cattle, put a bullet in the head of every one of them and burn the carcasses. What next for the locals? How do they make a living in future? Or do they just use the money we pay them to buy a whole lot more from elsewhere and replace them on the very same farming land that currently plays host to foot and mouth disease? Do we then buy all the replacement herd too? What if they reckon they are onto a good thing and buy half a million cattle?

Bali is not the only likely source either. F&M is increasing elsewhere. Do we adopt the same approach in other nearby regions? There are endemic viral pools right across Asia and Africa and there have been recent (2022) outbreaks in Java and Sumatra.

This is without addressing the implications of the paternalistic attitude that might be perceived by Indonesia if we went down this path.

This is a perfect example of Barnaby's populist style. Catchy, direct, short term focus ... but in all probability ineffective and gives no consideration to the complexity of the problem.

Yeah good points but they may end up needing to slaughter them all like they did in the UK in which case they could be better off being paid for them by us rather than their own government. I guess its a big story as we holiday more in Bali than other places where its present

 

[dogwatch]

Yeah good points but they may end up needing to slaughter them all like they did in the UK in which case they could be better off being paid for them by us rather than their own government. I guess its a big story as we holiday more in Bali than other places where its present

Yes, a much better engagement (hopefully one we are already involved in) would be to offer AQIS and agricultural science expertise to work in support of the Balinese in controlling or limiting the outbreak.

 

[D Mitchell]

Barnaby wants to meddle in the affairs of another country….

Is that you, Winnie ?

 

[D Mitchell]

You think?
...

This is without addressing the implications of the paternalistic attitude that might be perceived by Indonesia if we went down this path.

This is a perfect example of Barnaby's populist style. Catchy, direct, short term focus ... but in all probability ineffective and gives no consideration to the complexity of the problem.

I was with you until you got to "paternalistic". Right up there among the blessings of living where we do is that isolation enables the nation to preserve primary production purity and reliability. No government is entitled to prefer political correctness to the health of its citizens or their economic well being. Isn't the better approach to look at all suggested solutions to the F & M issue and to determine which to adopt with political partisanship being the very last consideration, if at all ?