Bonds boom as RBA breaks

The Aussie dollar is still falling after the RBA buckled today:

Bonds are booming and breaking out:

XJO is enjoying the lower dollar:

Big Iron is running. This is the monthly chart. I’m wondering now if RIO won’t charge a record high before the crash:

Big Gas is down on the US inventory build:

Big Gold is trading the metal not AUD today:

Big Banks have flamed out already after the CBA dud:

Big Realty got nuthin’ from the RBA roll over:

Next question: will rate cuts even help house prices? I have my doubts.


David Llewellyn-Smith is chief strategist at the MB Fund and MB Super which is long international equities and local bonds that will benefit from a weakening Australian economy and dollar.

If the ideas above interest you then contact us below. 

Comments

  1. Next question: will rate cuts even help house prices?

    Nope.

    50 basis points? How much passed on? Past form says none, as they rebuild their margins.
    bahahaha, what a ridiculous situation they’ve got themselves (us) in.

    • Mortgage rate on the loan doesn’t matter squat once they’ve looked at your income and expenditure and used a minimum 7% against that for serviceability checks.

      • It not only has to stimulate new credit, but more importantly, it has to provide immediate debt servicing relief to the specufestors. The brutality with which the banks have smacked this massively over-indebted sector says that they will receive exactly diddly squat from the Banks, who are thirsty to repair their profits/share price. What a time to be alive!

      • HadronCollision

        Jeez why is it always about specufestors here.

        Debt relief for P&I people who just want a roof over their heads is a good thing. Got it?

        Bit more room for food on the table. Or to pay the mortgage off faster. Or the credit card. Or to pay some mounting bills. Or to mortgage offset/save.

      • The focus is on specufestors because they are the drivers of asset prices and are the probable shear point for failure of the bubble.

        No one here has engineered the bubble. We all know people that are going to get smashed, but there’s no benefit in putting your head in the sand either. Anyone with any sense is looking after their own and protecting their capital (preferably building upon it). The time for warning others is long gone… and has probably been long ignored anyway.

      • Just keeping specufestors above water isn’t enough. You’d need to get them and a new crowd of greater fools to start buying again. That is a bridge too far.

      • >Debt relief for P&I people who just want a roof over their heads is a good thing. Got it?
        >Bit more room for food on the table. Or to pay the mortgage off faster. Or the credit card. Or to pay some mounting bills. Or to mortgage offset/save

        they shouldn’t have bought in on P&I. suck it P&I people.

      • Hadron they took on excessive debt (the lazy option) instead of renting for longer and saving up enough. Remind me why they deserve sympathy. Yes I get it, because no one should be expected to do research or maths before buying a million dollar cardboard box, because “it’s a necessity”.

        Heads up, spending all your money on that sh!t is not a necessity any more than paying $1000 for a dozen eggs is a necessity just because people need food.

      • Or put it another way, imprudent P&I borrowers who borrowed too much have directly helped price out prudent borrowers.

  2. This is interesting! If I recall correctly central banks always move up and down in bundles of same-direction moves. So if the next move is down… … … how many more to come and where does THAT end?!

    Maybe we will be paid to borrow? Reusa’s going to need a bigger boat!