Black Monday

[SailorRob]

https://www.nzherald.co.nz/business/...EE2WZJ3RTCACI/

Reserve Bank hikes Official Cash Rate to 5.25 per cent


That wasn't very ORR-SOME - Adrian

Fancy being known as the pr*ck who pushed Aotearoa into RECESSION
and untold financial suffering by many out there.. ?

You bought it on yourself .. Stupid stupid befuddled grandiose money shuffling twit
many might be left thinking

Indeed. Remember in 2019 he was ordering banks to prepare for negative.

[Valuegrowth]

Low, high and zero interests rates are a time bomb. This time is no different. What happened in the past will happen in a different manner. Hope,there won’t be depression or great depression.

[nztx]

Indeed. Remember in 2019 he was ordering banks to prepare for negative.

That's dead right .. He was too

[Habits]

More than trippled in 'price'

He would probably be referring to market value which would be correct. Price is the replacement value, and given building costs, I would expect that would be more

[SailorRob]

He would probably be referring to market value which would be correct. Price is the replacement value, and given building costs, I would expect that would be more

I thought value was all the NET cash that an asset produces over it's lifetime, discounted to today.

I would call it market price and value something different.

Remember in aggregate all people can ever earn from any asset is the sum of its net cash flows. Individuals can earn more or less but aggregated it's not possible.

[Rawz]

The NZ economy is too resilient!. Who would have thought the economy would have been able to take on such a swift increase in the cost of funds in such a short period of time.

The not so old way of thinking was that business and home balance sheets were carrying too much debt that interest rates would never be able to increase for fear it would wipe the entire system out.

Orr is onto it and knows 50bp increases the only way and maybe not even enough to kill the economy…

[SailorRob]

The NZ economy is too resilient!. Who would have thought the economy would have been able to take on such a swift increase in the cost of funds in such a short period of time.

The not so old way of thinking was that business and home balance sheets were carrying too much debt that interest rates would never be able to increase for fear it would wipe the entire system out.

Orr is onto it and knows 50bp increases the only way and maybe not even enough to kill the economy…

Yep, every dollar of debt is someone's asset and a lot of people who were earning nothing on a million bucks are now out spending their new income. Which isn't real of course. But higher rates can be stimulating as well...

[Grumble]

For most people on wages/salaries they will be permanently disadvantaged from 15% cumulative inflation since covid began (or whatever the number ends up being) because they’ll never get that through pay rises.

Mortgage holders will suffer some pain in the interim, but eventually those rates will go down. And there is some level of responsibility on taking up a 2.5% mortgage and thinking it would stay there forever.

Inflation needs to be cut as soon as possible and this is the right move.

Btw had Orr taken a more cautious approach before slashing OCR right after the first lockdown and keeping it down despite a booming late 2020/ all of 2021, maybe house prices wouldn’t have surged as much as they did, maybe the mortgage rates wouldn’t have cut as low as they did, and then maybe people wouldn’t be in such a difficult position today. But I guess if my aunt had b*llocks…

[SailorRob]

For most people on wages/salaries they will be permanently disadvantaged from 15% cumulative inflation since covid began (or whatever the number ends up being) because they’ll never get that through pay rises.

Mortgage holders will suffer some pain in the interim, but eventually those rates will go down. And there is some level of responsibility on taking up a 2.5% mortgage and thinking it would stay there forever.

Inflation needs to be cut as soon as possible and this is the right move.

Btw had Orr taken a more cautious approach before slashing OCR right after the first lockdown and keeping it down despite a booming late 2020/ all of 2021, maybe house prices wouldn’t have surged as much as they did, maybe the mortgage rates wouldn’t have cut as low as they did, and then maybe people wouldn’t be in such a difficult position today. But I guess if my aunt had b*llocks…

He was slashing in 2019 and ordering banks to prepare for negative the absolute pillock.

[Baa_Baa]

Yep, every dollar of debt is someone's asset and a lot of people who were earning nothing on a million bucks are now out spending their new income. Which isn't real of course. But higher rates can be stimulating as well...

Interesting, yes a return to interest on savings and higher dividends, but perhaps not all of those beleaguered savers and investors are spending their recently resumed 'income' from savings and investments. They have a lot of catch-up to do first, having taken conservative positions and been hammered for it for a long time and are in net effect still losing against inflation, though not losing quite as much as recent past times.

Best not to generalise imo, a large percentage of the population will not be feeling any serious threats from the rising CPI or rising mortgage rates, and remember that a huge proportion of NZ'ers wealth is in property, and a large percentage of that is debt free. If they have no debt and are not selling, and they have some savings or investments that are paying out increasing returns, then realistically it's only consumable inflation that affects them and that's a rounding error on their cashflows and has no material effect on their balance sheets.

They might not be 'rich' by your standards, but very few are I suspect. Let alone as savvy about money, investing and wealth creation as you purport to be. And that said, I suspect a lot don't really care too much about it either, in favour of a good life without concern for whether they can afford a latte or a holiday, or to renovate heir home. Most people I suspect lead a lot more simple lives, saving what they can, getting out of debt, building a legacy they can live on and pass on to their offspring.

Few I suspect really give a second thought about being rich and making all the right decisions every time at exactly the right time, whatever they are.