I think the crunch was around when the finance was applied for/granted. Quite often the actual credit extension comes later. (About the only reason I can think of off the top of my head).
I'm so ready I can't wait for the day.
I think I got this one under control.
Oops! Just had a spasm - got to go to the bathroom.
It's not going to happen.
I think the crunch was around when the finance was applied for/granted. Quite often the actual credit extension comes later. (About the only reason I can think of off the top of my head).
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The other thing that I thought might be a factor is that not as much money as expected is actually affected by the NCA. Those borrowing large amounts of money probably have net asset values over R1mil, and the bulk of the money may be going to juristic persons. Not sure, we'll have to watch the numbers over the next couple of months.
Based on the banks' actions it looks like we're heading for a further 100 basis points increase.
Banks expect interest rates to rise in the short term. They are currently paying nearly a percentage point more for 12-month funding than they are for three. This indicates that they are expecting two more 50 basis point rate hikes, says Coronation (JSE: CML) money market manager Tania Miglietta. Either that or there is a need for money available for that time horizon.
Banks are paying 10,8% for 12-month negotiated certificates of deposit (NCDs), which is a significant premium over shorter-term NCDs. This means that if interest rates don’t go up, they might have a squeeze on their profit margins, because they will be paying a higher price for money, but will be lending it at an unchanged rate.
Full article on MoneyWeb
Or they could just jack up their base rates anyway. I don't think banks are obliged to set prime based on the Reserve Bank's rate.
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Tito has pretty much indicated that we should expect a rate hike, but I found this comment really intriguing, and I wonder how much it would impact on the SARBs next steps,
And on the lighter side, George Bernard Shaw's view of economists, "If all economists were laid end to end, they would not reach a conclusion.""Should interest rates go higher" we "might see lots of insolvencies," Mboweni said. "We'll see lots of repossession of cars, houses, which we don't want to see."
Full article on MoneyWeb
Nice to see some concern for the state of the voters in all this. But he has his mandate - an inflation target."Should interest rates go higher" we "might see lots of insolvencies," Mboweni said. "We'll see lots of repossession of cars, houses, which we don't want to see."
It's going to be up to government to make the hard decisions if they're going to rein inflation in without beating us to a pulp with the interest stick.
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Fascinating!
@Dave: I see they have a javascript thingy for adding to websites23% of homeowners (aged 21+) have heard the phrase 'mortgage loan' and know what it means. 40% have heard the phrase 'interest rate' and know what it means. (FinScopeTM 2006)
From Eighty20's Fact-a-day
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Do they really know???the phrase 'mortgage loan' and know what it means
Mort = Death; gage = pledge or I prefer the more obscure = grip
So very apt - mortgage = death grip
Start a fun page of useless information and dinner table discussion items!
Well, yet another 50 basis points (here is the full statement of the MPC).
I'm casting my mind back a while to this post, where Trader Vic was calling for a 2% hike. What where the rates back then, and have we moved up 2%? I think so.The MPC identified a number of risks to the inflation outlook and is of the view that these risks remain on the upside
I wonder how different the current economic environment would have looked if the hike had been a shock, rather than a gradual one?
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