The Household Debt Quagmire

We know that household debt has never been higher in Australia, but I do not think the true impact of this, especially in a rising interest, low income growth environment is truly understood.  We have to look beyond mortgage debt. The latest RBA E2 – Households Finances – Selected Ratios shows that the ratio of … Continue reading “The Household Debt Quagmire”

Norway’s House Price Boom

Does this sound familiar? From The IMF Blog. Think Londoners and New Yorkers have it bad when it comes to sky-high house prices? Residents of Oslo have reason to gripe, too. House prices in the Norwegian capital are among the world’s highest, as measured by the average cost of a home relative to household median … Continue reading “Norway’s House Price Boom”

It’s official. Regular Australians are getting poorer

From The New Daily. Of all the measures of wellbeing of Australia’s workers and families, one has reliably increased over the decades. That is despite droughts, floods, recessions, changes of government, jobless rises and falls, and housing booms and busts. Until now. ‘Household gross disposable income’ quantifies the cash families and individuals receive from all … Continue reading “It’s official. Regular Australians are getting poorer”

Three reasons the government promotes home ownership for older Australians

From The Conversation. Government strategies to manage population ageing largely assume that older Australians are home owners. There is often an implied association between home ownership and ageing well: that is, older Australians who own homes are seen as having made the right choices and as being less of a budget burden. The problem with … Continue reading “Three reasons the government promotes home ownership for older Australians”

Banks do what RBA won’t: hike interest rates

From The New Daily. The Reserve Bank may hold rates for as long as a year, but mortgage borrowers could be punished anyway by rising house prices and gouging by the banks. Australia’s central bank held the official cash rate at 1.5 per cent for the tenth time on Tuesday. It hasn’t moved since a 25 basis point … Continue reading “Banks do what RBA won’t: hike interest rates”

Australian household debt breaks new records

From The New Daily. The Reserve Bank board will be facing record-high debt levels when it decides on Tuesday whether or not to follow other central banks by lifting the official cash rate. Ten years after the global financial crisis – which many trace to the collapse of two Bear Sterns hedge funds in July 2007 … Continue reading “Australian household debt breaks new records”

Household Debt Busts the 190

The latest RBA E2 – Households Finances – Selected Ratios – data has been released. The inexorable rise in debt continues. No wonder mortgage stress is rising. The ratio of household debt to annualised household disposable income , rose to 190.4, the ratio of housing debt to annualised household disposable income rose to 135, and … Continue reading “Household Debt Busts the 190”

Record US Ratio of Debt to GDP Contains Growth and Interest Rates

From Moody’s. The leverage of the US nonfinancial sector has reached unprecedented heights according to the US’s never before seen ratio of nonfinancial-sector debt to GDP. Nonfinancial-sector debt includes the credit obligations of households, nonfinancial businesses, state and local governments, and the US government. Though the ratio of US nonfinancial-sector debt to GDP’s moving yearlong … Continue reading “Record US Ratio of Debt to GDP Contains Growth and Interest Rates”

Eight rate hikes in two years? Our economy should be so lucky!

From The New Daily. A widely-misreported warning of eight rate hikes in two years would in fact be good news for the economy, according to the man who made the prediction. Dr John Edwards, former economic advisor to Paul Keating, former RBA board member and former chief economist at HSBC, struck fear into the hearts of mortgage holders … Continue reading “Eight rate hikes in two years? Our economy should be so lucky!”

RBA may raise rates eight times over two years

From Bloomberg. Australia’s central bank could increase interest rates eight times in the next two years, former board member John Edwards said. The Reserve Bank of Australia (RBA) is probably already considering a program of rate increases given its forecasts for inflation returning to target and economic growth to accelerate to 3% against a stronger … Continue reading “RBA may raise rates eight times over two years”