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SteelBlue05
Guest
Hi Efm,
I read this today on rte.ie...
"The European Central Bank sent a clear signal today that it is about to raise its key interest rates, with ECB President Jean-Claude Trichet saying the guardian of the euro was 'ready' to take a decision on rates. "
So it looks like its on its way....
I read this today on rte.ie...
"The European Central Bank sent a clear signal today that it is about to raise its key interest rates, with ECB President Jean-Claude Trichet saying the guardian of the euro was 'ready' to take a decision on rates. "
So it looks like its on its way....
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SteelBlue05
Guest
ClubMan said:
Is this a competition on who has the last word? Ok Clubman you have it.
ClubMan said:
I took your reference to " stuff " as a reference to financial markets generally. You don't have to second guess anyone .You need to make sure that you make more on your winning positions than you lose on you losing positions. What distinguishes success from failure in trading financial markets is discipline and money management.
DrMoriarty
Moderator
- Messages
- 5,173
Sinfully so...Duplex said:soooo liberating.
Now, can we please delete posts #2 through #24 and have a bit less of 'that kind of thing', please? It hurts my poor old eyes.
A guy in the pub here beside me swears they're gonna kick the ECB rate up to 9% or 10% — sort of 'back to the Seventies' vibe by Monsieur Trichet, as he finally loses the plot. But then again he might just be indulging in idle speculation...
To make money on interest rate speculation you need to second guess the fixed rates set by the institutions. For example, to make/save money on a fixed rate mortgage I need to second guess the lender's fixed rate and assume that I can figure out that they are wrong and that my prediction of the future is more accurate. This is effectively gambling. Since this thread was originally posted in the Mortgages & Home Buying forum I assume that the context is primarily in relation to mortgages. I see no logical reason why anybody can or should base mortgage selection decisions on speculation about future interest rate fluctuations. But I'm just a clown so what would I know...demoivre said:
CoffeeBrew
Registered User
- Messages
- 40
I'd expect .25% in the first move - looking like December.
Please note:
The words "expect" and similar expressions are intended to identify forward-looking statements.
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Please note:
The words "expect" and similar expressions are intended to identify forward-looking statements.
This forward-looking statement speaks only as of the date of this message. I expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the my expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based, in whole or in part.
CoffeeBrew
Registered User
- Messages
- 40
SteelBlue05 said:
You read it on RTE.ie ? I posted it on this website hot off the line before RTE carried the story
I agree with that . As I said I thought when you asked "what point is there in speculating about this stuff?" you were referring to financial markets generally ie what's the point in speculating on financial markets ?ClubMan said:
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What amazes me about this apparent abhorrence of making reasonable forecasts of such important issues as the cost of money is that the distain does not seem to extend to plainly uninformed decisions by posters discussing investments in property here and abroad.
These investors taking wild stabs at the net present value of a flat in Sophia are never chided for their barefaced conjecture, even thought the time frame is measured in decades and not months and the variables involved are numerous and unfathomable.
Any investment is time specific and therefore dependent on occurrence in the future, think about it.
These investors taking wild stabs at the net present value of a flat in Sophia are never chided for their barefaced conjecture, even thought the time frame is measured in decades and not months and the variables involved are numerous and unfathomable.
Any investment is time specific and therefore dependent on occurrence in the future, think about it.
Z
z107
Guest
It would be excellent if they were to raise the interest rate by -4%. Would the bank start paying me the interest on my mortgage?
(Although I wouldn't fancy having any savings accounts)The reason why interest rate changes are interesting(No pun intended) is twofold. Firstly the pricing of shorterm interest rates is unique in that is set by a human/committee of humans. This means that central banking watching is akin to soviet style Kremlin watching in which every phrase is pored over and analysed and that's done secondly because interest rates are the price of money which in turn effect the price of ALL financial assets. If monetary policy is held tight this favours bonds and cash. If monetary policy is loose it favours equities and hard assets like property and commodities.
The 0.25 on Dec 1 seems to be a given IMO. After that it is hard to say though I think there will be at least one extra hike by April. I wonder if this will have any effect on property prices though I expect a raft of reports about more huge increases in property and how the market will be unaffected by interest rate increases. No wonder why Trichet is particularly concerned with the state of our housing market.
"If monetary policy is held tight this favours bonds and cash. If monetary policy is loose it favours equities and hard assets like property and commodities."
Well monetary policy has been loose since 1981 and bonds have been on a bull run since then and commodities in a bear market. However the tide seems to have turned since 2001 and commodoties have been rising strongly along with property. However we have had a few short term property booms since 1981 but bonds and commodities seem to follow much longer cycles. In the 1970s we had rising interest rates and rising commodities and falling bond prices. Then interest rates were chasing commodity prices which were causing the inflation. However this time it is not commodities that are causing the inflation but property prices and the additional costs it is putting on other sectors of the global economy. It is note worthy that one commentator on another thread asked the question whether rising interest rates could themselves be inflationary because they caused the price of debt to increase.
Well monetary policy has been loose since 1981 and bonds have been on a bull run since then and commodities in a bear market. However the tide seems to have turned since 2001 and commodoties have been rising strongly along with property. However we have had a few short term property booms since 1981 but bonds and commodities seem to follow much longer cycles. In the 1970s we had rising interest rates and rising commodities and falling bond prices. Then interest rates were chasing commodity prices which were causing the inflation. However this time it is not commodities that are causing the inflation but property prices and the additional costs it is putting on other sectors of the global economy. It is note worthy that one commentator on another thread asked the question whether rising interest rates could themselves be inflationary because they caused the price of debt to increase.
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SteelBlue05
Guest
ClubMan said:
FYI, it was originally posted in the "Banking,Borrowing, and Credit Cards" forum.