Wall Street to be Bailed Out

The global economy is still struggling although with the recent injection of funds from the US government Wall Street rose by a full 11pc from the opening bell. Will this have a profound effect on the overall economy? Yes, without doubt what the US is doing will have positive effects not only on the US economy but also the global economy.

The reason for this is that the world looks to the US for financial direction and with at least some signs of life now showing through the global impact is far greater than the average person realises.

The world leaders are now looking to work together to put in place a world wide financial architecture which helps smooth out road bumps along the globes financial journey. Not since the end of WWII have world leaders considered working together to form a more stable financial system and this can only be a good thing. For more information and a great read check out this blog.....

Unfortunately it is only in times like these that world leaders come together to achieve a common goal. Does this mean that demarcation lines will be crossed and the micro financial focus will become macro? One can only hope that this utopian ideal is realised, if this does come to fruition then I truly believe the world will move to an even more united front not only from a financial perspective but overall.

Does this mean we will have a global government one day? Yes, perhaps not in this lifetime but it certainly seems that we are heading that way and when the world comes together we may well see peace and prosperity of a different kind.

State of the Home Loan Market & the Australian Economy

It’s interesting to note that although home loan interest rates have recently been dropped by a quarter percent that the state of the property market is still poor. Why is this? It’s pretty simple really, not only have home loan interest rates increased substantially over the last several years but the cost of fuel and inflationary pressures have had an impact too.

When you combine these factors and the flow on effects of higher fuel prices which trickle down to the food we buy and other goods which require transport to reach the retail sector there is a considerable amount of strain placed on the household income.

What was once ‘disposable’ income has now become essential to simply maintain a reasonable lifestyle and in a lot of cases put food on the table.

So when will this all change? Not for a while yet, although the home loan interest rate has decreased for the first time in several years there is simply not enough income liberated from this to breath life into consumer confidence levels.

The market will bounce back as it always has done although this will take several months to occur, what we will see is the RBA (Reserve Bank of Australia www.rba.gov.au) cutting interest rates in the new calendar year two to three times. Once this happens there will be enough income liberated for people to start feeling confident in opening their wallets and spending again.

The flow on effect will be felt in the retail sector and in the property market, jobs will be created and money will start to flow within the economy again.

What this means for the home loan market is an increase in overall enquiries and home loan settlements. Time and time again I have seen this occur in the industry and with every downturn there is an eventual upturn, it is a matter of when not if and it all comes down to time and timing of economic factors which all have an impact.

Aussie Wise Finance Group has been through the ups and downs of fluctuating economies and will again be there when the market moves into positive territory. To find out about me and my organisation simply follow this link to www.aussiewisefg.com.au or you can give me a call to have a chat.

Bookmark this blog as I will be regularly updating it with market goings on and will run a special in a few weeks on the sub prime crash or as is known in the industry the current ‘liquidity crisis’…. More on that soon….