The Indo sees rate cuts - again!

This morning’s Indo leads with an angle on the inflation figures yesterday to suggest that interest rates may be cut on the back of the reduced inflation rate from 5 to 4.4%. The article is credited to Brendan Keenan.

Outside of the fact that yesterday’s figures are just one month when there were deep sales with interest rate, electricity and gas increases to be added in the Index August/September. However, the Indo link this ‘surprise drop’ in Irish inflation with the ECB cutting interest rates. Specifically two cuts in the first half of 09. However, Eurozone inflation actually increased to 4.1% last month - no ‘surprise drop’ in inflation there. Or does the Indo really believe that the ECB basis their interest rate decisions on inflation in Ireland?

This is just yet another nonsense headline from the Indo, a few months ago they had that headline story that rates would fall 0.75% by the end of the year only for the ECB to increase rates as many pinsters would have told them was more likely to happen!

The level of analysis in the Indo group is so bad it is beyond a joke. The Indo group only seem interested as acting as the poster boy for property Vi’s of which it has an interest with the property/recruitment advertsing revenue it generates. What a rag of a newspaper group.

independent.ie/business/pers … 49251.html

All this means is that Ireland’s contribution to the target (Eurozone inflation) has fallen from 0.050% to 0.044% (out of a total of c. 4%)

FFS :unamused:

Group Business Editor :question: :question: :question:
What a pile of misinformed drivel and regurtitated crap.

Or to apply the corrollary:
“Trichet gave no indication that rate cuts are in the pipeline.”

Not surprising though, the meeja generally in this country lost touch with reality a long time ago, and objective journalism was consigned to the big printing press in teh sky.

The term F***in eejits is too good for them. :unamused: Strewth :exclamation:

Keenan also wrote the following, but completely failed to appreciate it significance:

Eurozone inflation is a still an issue Brendan.

Compare and contrast the FT take on Trichet’s comments.

Obviously the FT don’t talk to the analysts that matter (Desparate, Comical and co.)

Lets say the central bank do reduce the base rate. Does anyone actually believe that the Irish banks, in this current climate, will pass these rate cuts on to mortgage holders? IMO only tracker rates will go down if the ECB rate goes down.

Or even if rates did come down would it make the slightest difference to the property market? US rates have more than halved and all that the Fed did is debase the dollar just that little bit more. Ask the Japanese if 0.25% would make much of a difference in a post-property bubble economy.

Houses are still too expensive.
Banks have no money to lend.

Talking about interest rates at the moment is like being 4-0 down
in the dying minutes of a game and thinking that winning a corner is going to swing things in your favour.

-Rd

Exactly…
Even if they cut 50bps in the next 12mos, it will do nothing to stop the rot, although it might make it slower

Its the “supply of credit” that is much more important. Just because the ECB cuts does not mean banks are going to let people have another roll of the dice. Even if they did, am not convinced there are too many people out there chomping at the bit to inherit someone elses headache until things are appropriately priced for the risks people previously felt were non-existant.

There are harsh lessons in the perils of leverage being learnt here. Historically they are ingrained in peoples minds for a good 10-15 years. At some point, a new generation of monkeys will come along and create another mess, sadly that generation is still in nappies :smiley:

No, but this article is not about the property market or house prices, nor is it suggested that a drop in rates would mean that house prices would go up or stablise. But what they are suggesting is that there will be relief to people who already have mortgages in that they are predicting that their mortgage bills will be on average €50 less per month per drop.

No it’s not, or at least it’s not unless the only thing you can think about are house prices. If mortgage interest rates went down this would slightly ease the pressure on a lot of people’s monthly budgets.

However, talking about ECB interest rate cuts and expecting them to be passed on to the consumer is kinda like seeing a FF government with a budget surplus and expecting this to be passed on as some kind of increase in public spending on health, education, infrastructure etc.

folks,

oil has dropped another 5 dollars today and will be under 100 in a few weeks, the commodity bubble has well burst,

this will lead to lower inflation, as oil leads into everything!

secondly the euro is now dropping, 3 cents today alone, this will help the exporters etc.

in the long run, i do think interest rates will drop, what it will do for houses is another thing, lets ll remember

00 dot com boom - rags to riches

06 propert bursts all over

08 commodity

what will the money roll into now,

What money? Between property and the stock market Irish wealth is being destroyed with nothing but a lot of debt to show for it.

there’s always money to flow around,

the investors get in at the start beef it up and get out before it bursts.

the only people loosing out on money at the moment are people that are forced to sell, globally this is a small amount of people.

think of all the investors that dont even play the property market.

Unfortunately, most of these people are not Irish.

The people who had money until recently were the emerging economies with huge trade surpluses and those countires that have commodity wealth (oil in particular).

I cannot see any of this money coming to Ireland!

The drop in oil is a welcome relief for post property bubble economies but don’t wish for too weak a euro or you will end up importing inflation.