Economists At It Again!
Was listening to Radio National this afternoon whilst doing the dishes (item 3, standard daily house bitch duties).
Now three banks have increased their interest rates and (yet more) speculation that the RBA next meet will consider another rate increase due to stronger than the only 0.8%! forcast increase in November RETAIL spending. The report, amongst other things, went on to say that consumer spending was substantially up over the previous month depite previous interest rate increases.
Hello!
Might it JUST have to do with Christmas spending? Surely the vast majority of people that do buy presents will continue to do so and that is likley to increase around November when most are purchasing presents. (This sort of spending is always shown to inelastic and not affected in any way by market forces)
Soon to be de "dreamweaver" ed!
Andy Mac
Posts: 4778
Date Joined: 03/02/06
Seasonally Adjusted
I am no economist but I think you will find that most economic forcasts have seasonally adjusted equations in there, so the concern is not that the level of spending is high but that it was beyond their forcasts. The inflation trend is still upwards so the previous rate hikes haven't necessarily stemmed the tide. Q4 data will give a good indication of where rates are likely to head from an official cash rate perspective at the next February RBA meeting.
The sub-prime issues are what is driving the recent rate increases by the banks as their cost of funds is dependent on both official interest rates and market influences. I would expect most banks to follow suit, but there will be some variances in how much each bank passes on to the consumer. NAB, CBA and ANZ have raised their variable rates so far, but each has risen rates slightly differently.
Always a good idea to shop around however in these days of volatility the bank with the cheapest variable rate price today might not be the cheapest tomorrow, so care needs to be taken when choosing simply on price. Talk to a good
Cheers
Cheers
Andy Mac (Fishwrecked Reeltime Editor & Forum Moderator)
Youngest member of the Fishwrecked Old Farts Club
Dreamweaver
Posts: 4688
Date Joined: 01/12/07
G'Day Andy
G'Day Andy
Yup, as you say, a 'cheap' bank today could be an 'expensive' one tomorrow.
Problem was Andy, there wasn't any mention of seasonally adjusted figures (as you say though, 'seasonal adjustments are a standard economists tool).
Q4 data Andy? Would you expand on that please?
It would be a bit more informative if they mentioned not only that there was (as you say usually) a season adjustment (remember that from my High School and Uni economics units) but what eaxtly that was.
Also, was there an allowance for annual growth in the setting of the 0.8% base indicator from the previous month.
Colin MOLLOY
**** RECFISHWEST No. 576 ****
Soon to be de "dreamweaver" ed!
Andy Mac
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Date Joined: 03/02/06
email sent Colin
Cheers
Cheers
Andy Mac (Fishwrecked Reeltime Editor & Forum Moderator)
Youngest member of the Fishwrecked Old Farts Club
ody
Posts: 581
Date Joined: 30/12/06
Hi Ya, Oh, Andy, Andy,
Hi Ya,
Oh, Andy, Andy, Andy. And you being in the finance business and all. Surely by now you must recognise everything to do with banks is fishy and stinks as such. LOL
Cheers.
***** Proud RECFISHWEST member ****
Dreamweaver
Posts: 4688
Date Joined: 01/12/07
Thanks Andy
Thanks for the email buddy!
...I'll digest that...
Colin MOLLOY
**** RECFISHWEST No. 576 ****
Soon to be de "dreamweaver" ed!
jay_burgess
Posts: 4648
Date Joined: 18/08/05
Andy Mac is right consumer
big john
Posts: 8762
Date Joined: 20/07/06
Aussie $$$$
Righto Andy, here's one for you.
When are we going to see the impact of a high aussie dollar on high end tackle prices?
John
PS. Don't feed me that bumpkin about things were ordered when the $$$ was low as she's been up in the high 80c range for some time now.
I head a little FURTHER NORTH each year,
Leave the cities behind, out of sight of mind,
.......
WA based manufacturer and supplier of premium leadhead jigs, fligs, bucktail jigs, 'bulletproof' soft plastic jig heads and XOS bullet jig heads.
Jigs available online in my web store!
ody
Posts: 581
Date Joined: 30/12/06
edit.whoow, what happened
edit.
whoow, what happened there. Made one post and another with nothing appears as well.
***** Proud RECFISHWEST member ****
Andy Mac
Posts: 4778
Date Joined: 03/02/06
Crikey John
That's one for the tackle suppliers (wholesalers, not necessarily retailers) to answer. Don't take my word for it, but the economics of supply and demand are probably at play there. With a bumper state unemployment figure and big dollars being paid to hold a lollypop sign on a building site, there is plenty of latent demand for higher value products because there are lots of people with more dollars in their pockets than ever before and they are looking to spend it
As I said don't take my word for it, its just a theory. I really have no idea
Anyone want to talk petrol prices?
Better still... how about talking fishing?
Cheers
Cheers
Andy Mac (Fishwrecked Reeltime Editor & Forum Moderator)
Youngest member of the Fishwrecked Old Farts Club
deefa
Posts: 642
Date Joined: 09/09/05
i'm going fishing tonight
Dreamweaver
Posts: 4688
Date Joined: 01/12/07
Some Good Comments LOL
Andy - thanks again for the email - I'll digest the contents of that very wordy PDF. Yeah, good comment on the (so called) luxury items. Especially cars. As to downward prices - the standard (Keynesian, or was it Adams - can't remember LOL) principle of supply and demand I guess. Amongst other reasons. Petrol prices - I think we all agree that there a rip off - easy one that LOL.
Jay - thanks on Q4 - DUH! I should have realised that. Not disputing the seasonally adjusted stuff - just wish the journos (sorry COL LOL) had encouraged some more insight. Given the radio station - there style is usually a bit more in depth that the commecial ones. Mind you, no where as much as a good print article I suppose.
John - good question! As Andy said, a hard one to answer. Supply and demand, agreed, but maybe inellasticity (of demand) play a part here. In other words, no matter the overall price, fishos will still want gear. Comparative prices between competing elements may see some shift in peoples spending habbits though. But good products will always sell and have demand. For instance, we wouldn't buy cheap and nasty reels would we?
Hopefully, as the commentators say, our fiscal alignment more with SE Asia, rather than USA will act as a ride out buffer if the USA does take a nose dive.
Colin MOLLOY
**** RECFISHWEST No. 576 ****
Soon to be de "dreamweaver" ed!
Mick
Posts: 501
Date Joined: 28/08/06
G'day guys Just a question
G'day guys
Just a question to those wiser than myself. Do petrol and grocery prices fall into the "retail sales" category? Because I'm sure we are all spending more on these items purely due to increases in price rather than volume. So I guess the real question is when does it stop? When we finally cant afford to fill our cars, pay our mortgages and feed our families? It really makes the mind boggle as we supposedly live in the lucky country where we are packed to the hilt with resourses, have first class farming and producing industries and the like yet we import fresh fruits and veges from around the world, buy our resourses back as a value added commodity and buy imported fish from the nether regions of the world where you wouldn't wash your feet let alone eat out of it. It's got me absolutely stuffed.
Off my box now
Cheers Mike
If the lord did not mean for us to eat fish and game, he wouldn't have made them outta meat
The speed of light is faster than the speed of sound. That's why so many people appear bright...until they speak.
Dreamweaver
Posts: 4688
Date Joined: 01/12/07
Not sure
G'Day Mick
I'm not an economist, and I'm not sure.
One thing is evident and obvious, the more petrol prices rise, the more the incidence of a flow on effect into cost of related produce. All food items rely on transport of some sort, either road or rail. A lot by road. Therefore as road transport prices escalate, there's historical evidence of a flow on causing increased prices to these goods.
From my basic studies of economics (high school and uni), as far as produce demand goes vs price, item demand is decribed somewhere as elastic at one end of the scale to inesastic at the other - inelasticity and elasticity are the terms used.
Goods are deemed to be elastic when price varaitions have a large impact on demand (consumarability) whereas inelastic goods are not, or marinally, impacted by price, and/or it takes comparatively extreme variations in price to affect demand.
Goods of course are classified through this spectrum, not just at either end.
Whilst mainstream transport technology remains to be relied on fossil fuel derivatives and geographical mobility as a right (reasonably) subsists within our culture, then there inelastic demand for petrol, and other derivatives will continue to have a huge effect. Sure, car pooling, attenuation of non essential trips and other periferal reactions will occur, but increases in petrol prices is going to hurt a lot of people. The increase will be a ripple (conductive?) effect through the whole chain - from produce raw material extraction to value add of the final product, supply etc.
Colin MOLLOY
**** RECFISHWEST No. 576 ****
Soon to be de "dreamweaver" ed!
sid
Posts: 104
Date Joined: 09/11/06
you could try checking the
you could try checking the oil
or perhaps the tyre pressure is wrong
just a thought
sid