ECB cuts interest rates by 0.5 points

MikeLavelle said:
not after the expected rate reduction in the second quarter of this year. which is expected to be 0.25% bringing the ECB rate to 1.75% come the summer.
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Market analysts are suggesting the rate could drop to as little as 1% by June or September.
 
Mike, Did you still sell mortgages to people over the last couple of years knowing what you know?
0.25% reduction in the second quarter of this year followed by 0.25% increase after that.... sure you dont know that. nobody does, its just a wild guess
 
efm said:
Market analysts are suggesting the rate could drop to as little as 1% by June or September.
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They may well do efm. If they do then all the better as that means more money available in everyones wage packets.
I hope they do.
 
efm said:
Market analysts are suggesting the rate could drop to as little as 1% by June or September.
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+ 1. Anyone who thinks this global economic downturn will have bottomed in 6 to 9 months a) doesn't know a whole lot about Economics and economic cycles or b) needs an MRI scan.
 
venice said:
Mike, Did you still sell mortgages to people over the last couple of years knowing what you know?
0.25% reduction in the second quarter of this year followed by 0.25% increase after that.... sure you dont know that. nobody does, its just a wild guess
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over the past year i have not sold one fixed rate to anyone apart from to myself would you believe, as that is what i wanted for me. Any Clients who have come off a fixed rate previous to that are on a 0.95% tracker. I know a small number of brokers have given the entire sector a shocking name and to be honest i thought that too when i was an accountant. I do a financial review that is totally free from start to finish. on the basis that if i do a good job that the client, they will recommend me to a friend. If a broker does not think of the long term for the client then they may as well not be a broker.
High Moral ground and all that it may be but that is my opinion.
 
MikeLavelle said:
I'm not going to split hairs on that one Sunny.
The banking system can not operate for a long period with rates under 2% without further government bailouts. that is why the reduction today brought the ECB to a record low. there comes a point where it does not become profitable for the ECB and banks to lend. we are extremely close to that at the moment.
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The banking system can work fine at rates under 2%. Its Central banks who don't want low rates as they are afraid they will get stuck in a liquidity trap. Trichet said that while rates were at the same level as the historical low after today, 2% is by no means a floor with regard to rates.

You are right that rates will go up quickly when the cycle turns but it won't be this year.
 
Sunny said:
The banking system can work fine at rates under 2%. Its Central banks who don't want low rates as they are afraid they will get stuck in a liquidity trap. Trichet said that while rates were at the same level as the historical low after today, 2% is by no means a floor with regard to rates.

You are right that rates will go up quickly when the cycle turns but it won't be this year.
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thank you Sunny. I hope you are right we need low rates for 2009 and beyond.
 
Mike, you say earlier that if people listened this was coming 3 years ago etc. and then say that over the past year you have not sold one fixed rate to anyone, so you must have fixed people in for the privous 2 years. I get the impresion that you are like the vast majority of us and did not see this coming, the same way knowbody knows what the future holds..
 
VOR said:
I am sure the gov will come knocking soon to take it some way or another.
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Just thinking though is the rate cut not good news for the government as well. I mean prior to these cuts I was my annual qualifying for maximum relief on the interest. Now I'm only somewhere close to 60% (with partner as well) so the government is up about €1000 between the two of us in TRS.
 
I was an accountant this time two years ago Venice and only did 5 fixed cases in all of 2007 and none of them after July07 and none longer than 2 years, all with a tracker role over not variable.
I agree with you not only the vast majority but 99% of us. If i had seen this coming I would have sold everything and rented.
 
Mike, would be interested in your opinion. on a fixed rate 4.85% until june 2010. With rate cuts I would be over €200 a month better off if I went with variable/tracker. BOI quoted me 10K yesterday to change. am very peeved!
 
pinkie123 said:
Mike, would be interested in your opinion. on a fixed rate 4.85% until june 2010. With rate cuts I would be over €200 a month better off if I went with variable/tracker. BOI quoted me 10K yesterday to change. am very peeved!
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Its never nice but you chose to fix the rate. It could have gone the other way and you would have been laughing. Its just better not to think about it!
 
Who cares who saw what coming, predictions will never be 100% accurate and those making them will be wrong more often than right. If anyone takes massive gambles they need to be aware that the penny can drop either way. I agree with those saying we need to focus on what positives we have because people are fearing the worst at the moment on every front and that does not make for a healthy society or for one that can get back on its feets.
 
pinkie123 said:
Mike, would be interested in your opinion. on a fixed rate 4.85% until june 2010. With rate cuts I would be over €200 a month better off if I went with variable/tracker. BOI quoted me 10K yesterday to change. am very peeved!
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Look at it this way you have been on a winner for most of 2008 as that rate has not been around since late 07 early 08. That is the only thing i would say. The banks will get you on the get out clause but that is the way they do business.
Sorry to say but there is nothing you can do. but as i said above you did benefit for most of 2008. Look on the bright side over half the fixed rate products on the market at the moment are still at a higher than 4.85% (just checked there now).
 
MrMan said:
Who cares who saw what coming, predictions will never be 100% accurate and those making them will be wrong more often than right. If anyone takes massive gambles they need to be aware that the penny can drop either way. I agree with those saying we need to focus on what positives we have because people are fearing the worst at the moment on every front and that does not make for a healthy society or for one that can get back on its feets.
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Agree with you to an extent but we still need to examine where we went wrong so as not to make the same mistakes again.

Plus those responsible for getting us into this mess would like nothing better than for everyone to just focus on the "positives" now
 
MikeLavelle said:
that is why the reduction today brought the ECB to a record low. there comes a point where it does not become profitable for the ECB and banks to lend. we are extremely close to that at the moment.
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Not a record low - ECB was 2% in 2005.
 
polaris said:
Agree with you to an extent but we still need to examine where we went wrong so as not to make the same mistakes again.

Plus those responsible for getting us into this mess would like nothing better than for everyone to just focus on the "positives" now
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We should also individually accept responsibility for any mistakes or gambles we took otherwise what lessons will we really learn? We can blame the usual suspects until the cows come home but it changes nothing and when they are all gone to the wall who will we have left to blame?
 
MrMan said:
Who cares who saw what coming, predictions will never be 100% accurate and those making them will be wrong more often than right. If anyone takes massive gambles they need to be aware that the penny can drop either way. I agree with those saying we need to focus on what positives we have because people are fearing the worst at the moment on every front and that does not make for a healthy society or for one that can get back on its feets.
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Currently in a position where my company has no option but to make 300 redunancies. I'll tell you how positive they will feel when its done should I?

These are "normal" people who's only gamble was not say NO to the 6X salary X 30 year mortgage because every one was doing it, they didn't want to miss the boat, property can only go up......

People need to fear for thier jobs and change thier lifestyles accordingly. We are one of the most indebted nations in the world. Goverment debt has been past on to individuals. We need to start to save and invest for the future, not blow it on the over valued property pryamid scheme.

BY Mr DT (friend of george)
 
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