Can't quite see the bit in TA's article about the OCR rising by 3%.

What they are saying on stuff...

http://www.stuff.co.nz/business/3437956/Interest-rates-to-rise-3pc-by-20....

To 8.6% in 2 years isnt a huge jump not if Inflation is really raising its ugly head (which I find hard to believe). Then we see Westpac thinks the OCR will go from 2.5 to 3.75% in six months and be at 6% end 2011...some jump, seems out of line with the RB's words.......ie the OCR doesn't have to rise as the actual borrowing rate is now driven by commercial rates...and not the OCR...

@NicholasA, no, TA is talking about retail variable rates I think, but that used to translate back to OCR, so in two years yes I suppose an OCR of 5.6% is possible/probable....believable anyway..given the wide tolerances you have to allow in the future I think by 2012 a variation of the OCR being 2% to 5.6% sane...bit wide to plan on though...

So, I wouldnt be surprised if in two years the OCR is still around the 2.5% mark while the rate we'd pay on a variable rate is 8%, but that still seems lower outgoings compared to ppl who fixed for several years IMHO...

I prefer TA's forecast because I think the OCR is now disconnected...the end result between Westpac's and BNZ's (TA's) projections are the same (ish) but for differing reasons, and for me the reasons are the important part, ie right for the right reason and not right for the wrong reason.

Personally I think we will still be sub 4% OCR it all hinges on the double dip, whether it happens or not, I think it will...so 2010 and 2011 are going to be bad...hence the OCR is either staying low or will rise a bit and then have to drop as the Depression really starts...if we dont get a double dip then I can go with TA...but Im happy to be floating...

I"ve asked too, and was told to use Firefox. Hated it, but that's personal preference.

It's a bit like a possum with his tail on fire.

"What the …..is a firefox?"

It's a good looking redhead wally. You either love em or hate em, NA's a blonde or brunette lover I take it.....

For me I dont see why there is any hope of a recovery this year or even next....and hence the OCR starting such a positive rise aka Westpac...so many huge issues in Europe, Japan, the USA...and the risk that there are huge hidden ones in China. How can the likes of BNZ and Westpac be so......hopeful.....?

@BH: Can we ask these "economists" why they see what they see?

My impression is the global economy is like a man thrown in the deep end. The world has been treading water, Govns continually blowing air into a leaky kiddie life ring....hoping we will hit a shore or a decent log will sail past...all the time his clothing is getting more waterlogged...employers have retained staff expecting a recovery and knowing full well without staff they wont be able to take advantage of the hoped for upturn...

Take the US, the state of the US states is quite ugly....unless they get billions in handouts from the Federal Govn within 3 months their budgets will collapse, its feed in billions of $ in or feed out 10s of thousands of jobs (like teachers, so no more schooling)....so many of the central states around the great lakes have already lost huge numbers of engineering jobs, now the second round of losses looms...this isnt a view that says recovery in the USA...best case they continue to borrow. Then we see the loonies like Congressman Ryan with a tax plan that is mind bogglingly stupid and disastrous....this from the right..uh so far right that it makes our ACT here look like a bunch of wimpy Commies....but anyway its insane...yet they could be in power come the next elections, which is two years.

EU, the PIGS are bad enough but the UK is looking almost if not more stuffed....and its likely that the new Govn will be unable to Govern...

Japan, ug....they have been face down for 20 years....lungs full...

Basically the OECD, the consumer is now exhausted...this means the rest have no where to send their goods.....and the good news is?

regards

shorts - thanks for the reply. I agree that the finance companies wouldn't be able to survive without the GG. Therefore why are they being backstopped by the taxpayer? If they need the GG they shouldn't be operating. Why didn't the Government guarantee LWR & Firestone in ChCh before they went under. What's the difference between a private finance company and a private manufacturing company? It seems to me that the Gov't is picking and choosing which companies to save.

Jacko - I couldn't agree more. I have the utmost sympathy for the hard working former employees of those two (and other) NZ companies. Whereas all that the finance companies did was lend money to their property developer mates with no strings attached.

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