It's the economy, stupid!

 
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE


Anyone who thought they could live off the interest of their savings is presently in a world of pain; many bank accounts aren't even paying one percent and its likely they'll go even lower than that soon.
don_dunstan
As we have discussed before, there needs to be a cultural shift away from even attempting to live off Term Deposits, there are plenty of other low risk, low complication options that delivery 4 - 8%pa returns.  

While I understand its difficult to trust anyone in the finance sector, the govt should take the lead in helping educate OAP and perhaps even look at providing some guarantees.

People may say they want "Risk free" investments because its their last and only money. Agree on this statement, however Term Deposits are not risk free, never have been and their returns certainly subject to not just the Australian economy but more importantly the global economy.

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  nswtrains Chief Commissioner

Record low interest rates are working their way through to rates for savers: via Banking Day;

NAB’s UBank is the early mover on deposit rates, reducing the “Ultra bonus” rate by 25 bps yesterday.

This takes the bonus saver rate on UBank’s premium savings product to 1.85 per cent, more than 20 bps better than the rate NAB pays on a similar product under its main brand.

NAB’s move represents almost the only reduction in at call rates so far since the RBA cut the cash rate by 25 bps on Tuesday, at least as monitored by the comparison service InfoChoice.

Anyone who thought they could live off the interest of their savings is presently in a world of pain; many bank accounts aren't even paying one percent and its likely they'll go even lower than that soon.
don_dunstan
The so called poor on the aged pension would have to have a million in the bank to earn the equivalent of the aged pension. Where are all these working poor Don?
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Record low interest rates are working their way through to rates for savers: via Banking Day;

NAB’s UBank is the early mover on deposit rates, reducing the “Ultra bonus” rate by 25 bps yesterday.

This takes the bonus saver rate on UBank’s premium savings product to 1.85 per cent, more than 20 bps better than the rate NAB pays on a similar product under its main brand.

NAB’s move represents almost the only reduction in at call rates so far since the RBA cut the cash rate by 25 bps on Tuesday, at least as monitored by the comparison service InfoChoice.

Anyone who thought they could live off the interest of their savings is presently in a world of pain; many bank accounts aren't even paying one percent and its likely they'll go even lower than that soon.
The so called poor on the aged pension would have to have a million in the bank to earn the equivalent of the aged pension. Where are all these working poor Don?
nswtrains
Can you rephrase the question so it makes sense - I'm not sure what you are asking.

It would be possible to have a million dollars in a pension fund and to live off the interest - and indeed many retirees in the past have tried to live off the interest of their superannuation (and succeeded when retail interest rates were high). But in the current environment it isn't really feasible at retail rates of less than two percent, that's the only point I'm trying to make.
  Groundrelay Chief Commissioner

Location: Surrounded by Trolls!
It would be possible to have a million dollars in a pension fund and to live off the interest - and indeed many retirees in the past have tried to live off the interest of their superannuation (and succeeded when retail interest rates were high). But in the current environment it isn't really feasible at retail rates of less than two percent, that's the only point I'm trying to make.
don_dunstan
$1,000,000 and you'll get around $12,000.
There's talk about deeming rates would be cut as part of some stimulus package. Deeming rates are still relatively high however cutting it would provide the most benefit to retirees with relatively significant financial assets, hardly the majority of pensioners. Mind you that would be a very LNP policy.
  Groundrelay Chief Commissioner

Location: Surrounded by Trolls!
CBA is no longer ASX #1,  shares falling almost 20% from its February high.
Shares in the other 3 banks had underperformed CBA for months before so much greater pain for mum and dad investors there.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
CBA is no longer ASX #1,  shares falling almost 20% from its February high.
Shares in the other 3 banks had underperformed CBA for months before so much greater pain for mum and dad investors there.
Groundrelay
Their dividend yield is still a whopping $4.21 per share while the others have marginally cut theirs; most retirees are interested in what that figure is rather than the share price.

The taxpayers of Australia were completely ripped off when Keating sold the whole thing for a miserly $2 or so a share; it's been a money-making market-altering behemoth ever since.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
CBA is no longer ASX #1,  shares falling almost 20% from its February high.
Shares in the other 3 banks had underperformed CBA for months before so much greater pain for mum and dad investors there.
Their dividend yield is still a whopping $4.21 per share while the others have marginally cut theirs; most retirees are interested in what that figure is rather than the share price.

The taxpayers of Australia were completely ripped off when Keating sold the whole thing for a miserly $2 or so a share; it's been a money-making market-altering behemoth ever since.
don_dunstan
It was $5.40 a share, but took 4-5 years before it moved away from the All Ord index growth.
https://www.smh.com.au/business/banking-and-finance/cba-shareholders-in-the-money-25-years-after-float-20160912-gre7i9.html
Most of the big growth in CBA is years after it was sold, initially through the Howard years likely indicating it took 5-8 years to rid itself of the public service shackles. The biggest jump in CBA shares compared to All Ords was post GFC, 2012 to 2015. Even Keating couldn't see that far into the future.

Anyway
When privatising govt assets that is very sensitive to voters. Remember the govt has a vested interest to talk it up which is a conflict of interest in my book as its both the seller and ultimate regulator.

Rule #1, Sell it cheap to the same voters so they are guaranteed a capital return, regardless of market conditions that might follow.

Rule #2, the first big public float of a public asset needs to be even more likely a winner, thus generating public acceptance of the process and opening the door for more publicly more sensitive assets worth many more times to follow, ie Telstra.

So by and large Keatings move was very successful. Remember the govt later wins when you sell your prized capital tax laden shares.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
It would be possible to have a million dollars in a pension fund and to live off the interest - and indeed many retirees in the past have tried to live off the interest of their superannuation (and succeeded when retail interest rates were high). But in the current environment it isn't really feasible at retail rates of less than two percent, that's the only point I'm trying to make.
$1,000,000 and you'll get around $12,000.
There's talk about deeming rates would be cut as part of some stimulus package. Deeming rates are still relatively high however cutting it would provide the most benefit to retirees with relatively significant financial assets, hardly the majority of pensioners. Mind you that would be a very LNP policy.
Groundrelay
Maybe time for deeming rates to be abolished.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
It was $5.40 a share, but took 4-5 years before it moved away from the All Ord index growth.
https://www.smh.com.au/business/banking-and-finance/cba-shareholders-in-the-money-25-years-after-float-20160912-gre7i9.html
Most of the big growth in CBA is years after it was sold, initially through the Howard years likely indicating it took 5-8 years to rid itself of the public service shackles. The biggest jump in CBA shares compared to All Ords was post GFC, 2012 to 2015. Even Keating couldn't see that far into the future.

Anyway
When privatising govt assets that is very sensitive to voters. Remember the govt has a vested interest to talk it up which is a conflict of interest in my book as its both the seller and ultimate regulator.

Rule #1, Sell it cheap to the same voters so they are guaranteed a capital return, regardless of market conditions that might follow.

Rule #2, the first big public float of a public asset needs to be even more likely a winner, thus generating public acceptance of the process and opening the door for more publicly more sensitive assets worth many more times to follow, ie Telstra.

So by and large Keatings move was very successful. Remember the govt later wins when you sell your prized capital tax laden shares.
RTT_Rules
Where do you get $5.30? It was $2.30 in 1994.

I'm not even going to bother arguing you over that taxpayer rip-off privatisation, you have already made up your mind that it was a wonderful thing so that's the end of the story.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
It was $5.40 a share, but took 4-5 years before it moved away from the All Ord index growth.
https://www.smh.com.au/business/banking-and-finance/cba-shareholders-in-the-money-25-years-after-float-20160912-gre7i9.html
Most of the big growth in CBA is years after it was sold, initially through the Howard years likely indicating it took 5-8 years to rid itself of the public service shackles. The biggest jump in CBA shares compared to All Ords was post GFC, 2012 to 2015. Even Keating couldn't see that far into the future.

Anyway
When privatising govt assets that is very sensitive to voters. Remember the govt has a vested interest to talk it up which is a conflict of interest in my book as its both the seller and ultimate regulator.

Rule #1, Sell it cheap to the same voters so they are guaranteed a capital return, regardless of market conditions that might follow.

Rule #2, the first big public float of a public asset needs to be even more likely a winner, thus generating public acceptance of the process and opening the door for more publicly more sensitive assets worth many more times to follow, ie Telstra.

So by and large Keatings move was very successful. Remember the govt later wins when you sell your prized capital tax laden shares.
Where do you get $5.30? It was $2.30 in 1994.

I'm not even going to bother arguing you over that taxpayer rip-off privatisation, you have already made up your mind that it was a wonderful thing so that's the end of the story.
don_dunstan
...and you wonder why I don't always bother post links, because you don't read them.

The Commonwealth Bank was privatised in three stages: In July / August 1991 an offer of newly issued shares in the Bank was made to the public. 230 million shares, comprising 30% of its voting shares, were issued on 12 September 1991 at an issue price of $5.40.
http://fillyourmoneybox.com/cba-shares-floated/

When did Commonwealth Bank float on the stock exchange?
The Group was a Government owned enterprise until the conversion of the Bank into a public company with share capital on 17 April 1991.  The Commonwealth Bank was privatised in three stages:

In July / August 1991 an offer of newly issued shares in the Bank was made to the public.  230 million shares, comprising 30% of its voting shares, were issued on 12 September 1991 at an issue price of $5.40.

In October 1993, the Commonwealth Government further reduced its shareholding in the Bank to 50.4% of the total number of issued voting shares. 178 million shares were listed on 1 November 1993, at an issue price of $9.35 for retail investors and $9.60 for institutional investors.

In July 1996, the Commonwealth Government made a public offer of its remaining 50.4% shareholding in the Bank.  In conjunction with this offer, the Bank agreed to buy back 100 million shares from the Commonwealth Government.  The buyback price was $10.01 per share, with the Bank paying the Commonwealth Government just over $1 billion.  The public offer and buyback were completed on 22 July 1996.  The Government’s public offer was for 399 million shares.  Investors paid $6, with the remaining instalment of $4.45 being due on 14 November 1997.  Investors were entitled to the three dividends payable in the intervening period.

https://www.commbank.com.au/about-us/investors/managing-your-shares-faqs.html


As linked and discussed before, the CBA share price followed the All Ord's trend for around 5 years post float, so hardly a rip off for taxpayers at the time. The main growth in CBA shares was in 2000's prior to GFC and from 2012 to 2015. This is not my agenda or made my mind up, its all there in link provided.

If you think some how growth in a company that doesn't occur for more than a decade after its sold = the taxpayer being screwed, then good for you Don.

Would you be confusing the $2.30 price with Qantas or another?
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
  michaelgm Chief Commissioner

Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
don_dunstan
If it’s the same CSL, last trade was $341.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
don_dunstan
Ahhh CSL, I was going through a list of floats back then (that I could remember) and trying to find one for that price. Couldn't find QF's IPO price as was busy so I assumed it might be it.

This might explain that issue
https://www.asx.com.au/education/investor-update-newsletter/201610-shares-that-have-rewarded-investors-many-times-over.htm
It originally floated at $2.30 per share in 1994 but given all the share buybacks the company has embarked on, the adjusted entry price is equivalent to around 76 cents.

An initial $10,000 investment in CSL would now be worth over $1.3 million with more than $140,000 dividends paid in that time.
Mmm, its share price growth since 2011 has been exponential, I need to look into this some more.


I'll leave the point scoring to the sports freaks.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
If it’s the same CSL, last trade was $341.
michaelgm
This comment
An initial $10,000 investment in CSL would now be worth over $1.3 million with more than $140,000 dividends paid in that time.

I'm sure a few of us had wish we spent $10k in this stock back in the 90's.
  michaelgm Chief Commissioner

Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
If it’s the same CSL, last trade was $341.
This comment
An initial $10,000 investment in CSL would now be worth over $1.3 million with more than $140,000 dividends paid in that time.

I'm sure a few of us had wish we spent $10k in this stock back in the 90's.
RTT_Rules
Thanks for spelling that out SO CLEARLY!!!!Crying or Very sad
My accountant is keen to remind me annually at tax time.
  michaelgm Chief Commissioner
  Carnot Chief Commissioner

30% drop in oil price overnight.  Oh well, makes it cheaper to escape to the outback when the Coronavirus virus hits...

https://www.bloomberg.com/news/articles/2020-03-08/oil-in-freefall-after-saudis-slash-prices-in-all-out-crude-war
  Carnot Chief Commissioner

30% drop in oil price overnight.  Oh well, makes it cheaper to escape to the outback when the Coronavirus virus hits...

https://www.bloomberg.com/news/articles/2020-03-08/oil-in-freefall-after-saudis-slash-prices-in-all-out-crude-war
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
If it’s the same CSL, last trade was $341.
This comment
An initial $10,000 investment in CSL would now be worth over $1.3 million with more than $140,000 dividends paid in that time.

I'm sure a few of us had wish we spent $10k in this stock back in the 90's.
Thanks for spelling that out SO CLEARLY!!!!Crying or Very sad
My accountant is keen to remind me annually at tax time.
michaelgm
Haha, we all need reminders.

Anyway its still on a steep curve prior to the virus, so get in there, its now over 10% lower from its peak.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
The Aussie dollar has suddenly dropped a whole 2% overnight - down to US$0.644. No apparent reason although I suspect that international money markets have decided that if China can't consume our iron ore (our number one export and our number one customer) that we're in diabolical trouble. Which we are.

There's a rumour that the RBA may have an emergency meeting and cut to official ZIRP for the first time in history. Australia will have an official zero interest rate.

EDIT: Also forgot to mention that the ASX All Ordinaries has slipped below 6,000 today and lost over $100,000,000,000 this morning, down six percent since opening to 5,845.

Interesting times.
  michaelgm Chief Commissioner

Okay I think in this instance you are RIGHT; I may have been looking at yet another Commonwealth float from that era so savour the moment. I think I was looking at CSL @ $2.30 in 1994... But then this ASX website contradicts that yet again and says that CSL floated at AU$0.76.
If it’s the same CSL, last trade was $341.
This comment
An initial $10,000 investment in CSL would now be worth over $1.3 million with more than $140,000 dividends paid in that time.

I'm sure a few of us had wish we spent $10k in this stock back in the 90's.
Thanks for spelling that out SO CLEARLY!!!!Crying or Very sad
My accountant is keen to remind me annually at tax time.
Haha, we all need reminders.


Anyway its still on a steep curve prior to the virus, so get in there, its now over 10% lower from its peak.
RTT_Rules
Funds burning holes in pockets. Grey matter and gonads need to align.
Grey matter says not bottomed just yet, nuts say have a go.
  7334 Chief Commissioner

Location: In the workshop wondering why I started 7334 in the first place
Funds burning holes in pockets. Grey matter and gonads need to align.
Grey matter says not bottomed just yet, nuts say have a go.
michaelgm
If it helps you are not alone!

Gut feeling is pick a number where the grey matter will be happy and place buy order.

If it comes off everyone is happy.  If not hard cheese.

Known too many guys who didn't think with grey matter and wound up deep in the doo doo although it usually had nothing to do with the share market.

7334
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
I've gambled and won... and lost... on the ASX. Better odds than any other form of gambling but still gambling at the end of the day - as I think people are finding out at the moment.

THE AU$ bounced back a bit to $065.5 but apparently there are rumours that the RBA may have a second meeting later this week and cut to ZERO - meaning that we will finally have achieved the distinguished and enviable position of moribund basket case economy like Japan.

There could be a run on cash and the banks in general if we do end up in that position - mark my words. Total loss of confidence in the financial system... the panic started with poop paper and ends up crashing the entire banking system.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Funds burning holes in pockets. Grey matter and gonads need to align.
Grey matter says not bottomed just yet, nuts say have a go.
michaelgm
Yes, but its conflict of interest.

Grey matter wants to keep you in the work place and earning money to justify its on going needs and existence.

Nuts see the bigger picture, winning means no work and potential to get out there and live and other for which grey matter takes 2nd place.....
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
It's official: ScoMo and Fydenberg have just announced a flat $750 for anyone and everyone on Centrelink (including long-derided job-seekers) to be delivered with normal payments from 31/3.

"Go out and spend it" they declare... in the meantime the ASX has slumped again this morning and is now down to 5,750 - and the Aussie battler is down to US$0.645. Started the year @ 70 cents and has lost five cents since then, I'm guessing inflationary impacts will probably be felt as time goes on.

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