Interest rates to come down fast - top economist

Inflation is set to fall faster than it has risen and will be back in the South African Reserve Bank's (Sarb) 3-6% target range by the time players kick off the 2010 soccer tournament in South Africa.

That in turn, means, you can expect interest rates to start dropping fast from later this year - putting some purchasing power back into the pockets of cash-strapped consumers.

That's the cheerful expectation of FNB's chief economist Cees Bruggemans, who was speaking at the annual Rode conference on property in South Africa: 2008 in Stellenbosch on Monday.

The FNB economist is not alone in his view that the worst seems to be over for interest rates. Last week Brian Kantor, investment strategist for Investec Securities, said the R157 (a government bond) was giving important clues that the worst could be over for interest rates.

Bruggemans believes it is possible that Sarb Governor Tito Mboweni will press the pause button at the next Monetary Policy Committee meeting.

Interest rates are the primary tool Mboweni has to manoeuvre interest rates towards the target band.

Bruggemans' analysis suggests that we might get the first interest rate cut in December, meaning a prime interest rate of 15% by year end and a prime interest rate of 13% by the end of next year.

However, he emphasised that this view is dependent on a number of factors, not least of all the oil price not producing some terrible shocks.

Since June, oil prices and agricultural prices have come down and the rand has been stable.

Lower-than-expected economic growth, with growth sacrifice in large parts of the economy being already very advanced, is also a factor.

However, the current account deficit - at a "big and ugly" 9% of Gross Domestic Product - is still a worrying factor as it means South Africa is a higher risk country from the perspective of foreign investors, who can easily withdraw their funds.

"We are running a high interest rate defence policy and it has worked to this day," said Bruggemans of how higher interest rates have worked in favour of the rand's value.

"The nice folks at StatsSA are making a few imaginative changes...that is really knocking inflation down," said Bruggemans, referring to changes to national inflation measures.

"We are suddenly looking at an inflation projection that goes down faster than the rise ever was. That starts between now and November," he said.

Meanwhile at the IPD/SAPOA Property Investment Conference 2008 last week, Brian Kantor, an investment strategist for Investec Securities, reminded property industry players that the government bond market has given vital clues about what's next for interest rates.

The R157 was trading at a yield of 10,9% in June and more recently has been trading around 9,3%.

These figures are in "recognition" that the South African Reserve Bank won't push interest rates ever higher. The bond market's reaction, said Kantor, was to the notion that the Sarb has reached the end of its interest rate hiking.

Dries du Toit, of Dries du Toit Consult CC, agreed, saying that the bond yields "act like a barometer and have been falling over the past five weeks".

"People price listed property on the back of bonds. Since November it (listed property) fell by 35% up to the first week in July. Already it has turned around and increased by 15%," Du Toit said at the Rode conference.

"If we are successful in getting interest rates down," said Du Toit, "the future will exceed all our expectations. I'm not talking about house prices, but commercial, direct and listed property."

"No-one rings a bell at the bottom. Ding-a-ling-a-ling - we have already seen the bottom in listed property prices," he said.

Listed property is not a "super buy" now, but is still a buy, said Du Toit, who believes there is worse still to come for the residential property market.

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"No-one rings a bell at the bottom. Ding-a-ling-a-ling - we have already seen the bottom in listed property prices,"

Dries du Toit, independent investment consultant

 

Related links

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Bottom of the market in sight - property heavyweight »

Interest rates - "the worst is over" »

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*Home loan shocker: FNB pulls plug on property credit  »

Comments

 

responses to this article

Oopsy Daisy Bears Sentiment is Sentiment !! The bears are sweating - They're probably praying Zim doesn't get sorted out, otherwise they'll really be clutching at straws for some negativity. by Wayne on August 11 2008, 11:06 Find this comment inappropriate? Report it

Ha Ha!!!! Where is CJ???? This must be very negative for property? by Big Bull. on August 11 2008, 11:16 Find this comment inappropriate? Report it

CJ's scrambling His too busy finding friends to get some courage and cash to buy something before he misses the next boom. by Wayne on August 11 2008, 11:28 Find this comment inappropriate? Report it

and where is bubble boy? probably busy changing the name of his blog site to no-bubble by What bubble? on August 11 2008, 11:48 Find this comment inappropriate? Report it

It's time to buy I encourage all specuvestors to buy now, there are too many of you still around punting property, if the last of you has filed for bankruptcy and vows never to touch property again, I will know the time is right to buy again. by John on August 11 2008, 12:02 Find this comment inappropriate? Report it

Cees couldnt predict his birthday!!!!! Cees couldnt predict his birthday let alone the state of the economy. this guy works for a bank and has a very tainted opinion. Why would he say otherwise even if its the truth? People like Wayne are living in a fools paradise if they think the . .more worst of the economic slump is past us. Prices are down big in the US, UK, Spain, Australia and now New Zealand. What makes you think that it would be different in this third world cesspool when you have so much crime, grime and corruption not to mention a fraudster for a president. And no soccer world cup will save us. And when Mccain wins the US election and decides to stay in Iraq indefinately and then attacks Iran and the oil price spikes yet again, then we'll see who has the last laugh. . .less by WTF on August 11 2008, 12:09 Find this comment inappropriate? Report it

And stop posting multiple names...Wayne(ker) Nobody is fooled by your antics, you dunce!!! by WTF on August 11 2008, 12:10 Find this comment inappropriate? Report it

Aren't these the same guys... ...who kept on telling you that interest rates were not going to go up only to have Tito raise the rates every 3 months for the past two years? http://capetownbubble.blogspot.com by CT Bubble on August 11 2008, 12:11 Find this comment inappropriate? Report it

Long wait You are in for a very long wait John. The time to buy is NOW !! by Netek on August 11 2008, 12:20 Find this comment inappropriate? Report it

Enjoy the bull trap while it lasts guys In the mid 80's when conditions had similarities to what is happening now, the housing market only improved 2 years after rates dropped. So even if rates do drop (and frankly I don't see it happening so soon), don't count on seeing a house price move up . .more for a couple of years. At the risk of repeating myself, there are two things to remember - 1/ Crashes don't finish after only a year - the norm is 4 to 6 years. 2/ Houses are unaffordable - only when the rent / price and salary / price ratios return to norms can we say the correction is over. The usual suspects are saying we are about to return to "normal" - lets see our chart to see where that is in the bubble / crash cycle http://people.hofstra.edu/jean-paul_rodrigue/images/Manias%20Bubbles.pdf Hang on, almost missed the footnote by Dries du Toit - "the worse still to come for the residential property market." ... sounds like he also knows about bull traps. . .less by CJ Says on August 11 2008, 12:28 Find this comment inappropriate? Report it

You sound stressed CJ!!! Relax or buy a house my boy, good times are here again. by panic attttack on August 11 2008, 13:04 Find this comment inappropriate? Report it

No Bulls, you are wrong!! Interest rates are gonna shoot up to 20% and house prices are gonna crash. Expect to buy a home for R360k in the suburbs and only pay R6000 per month because thats all the renters can afford. Ok I got a entire property portfolio to sell and then . .more I am moving to cape town to rent. Anyone (BULL) want to buy it ? All cash with no monthly shortfalls. I have been advised my my fellow BEARS that 2008 was the peak in the property market so I will get the most money now for my portfolio if I sell now. I wish I had figured this out earlier.. The profits I make now I am gonna put in the bank (where is that BOB-T account I had with FNB as a kid?) then when the bell rings on the 1 April 2012 I am gonna withdraw it and start all over again and buy property. Whos with me? I advise everyone to join because it makes so much sense. . .less by Brennan on August 11 2008, 13:53 Find this comment inappropriate? Report it

I am with you Brenan Why by a house for R6000pm when you can rent for R6000pm? I am selling everything. by panic attttack on August 11 2008, 14:05 Find this comment inappropriate? Report it

I'm out Just finished selling the last of my spec properties. Clearly bankrupt. I will never touch property as an asset class ever again. by Dylan on August 11 2008, 14:11 Find this comment inappropriate? Report it

So it's that simple! Inflation was always just a figemnt of Tito's imagination. Just reweight the index, and voila no more inflation problem! Wow. If only I could use the same technique for all my other problems. by Cheeky Chimp on August 11 2008, 14:12 Find this comment inappropriate? Report it

Investec can do all "imaginative" inflation fudging.. ......but with oil above $100 pb you can kiss the 3-6% target goodbye. The only hope is relaxation of monetary policy discipline, i.e. change the target to 10-20%? With JZ and Blade in the driver'seat, it is not a question of "if" but "when"! by Mute Fool on August 11 2008, 14:20 Find this comment inappropriate? Report it

Jackie Cameron Jackie is obsessed with the property bulls. Has anyone else noticed how upset she gets when there are too many "bear" replies to one of her articles. Shen then feels the need to post a rebuttal, but funny enough, this only happens when the BEARS are out . .more in force. So, the inclusion is that she is a property bull and is unable to keep the bias out of her reporting. Jackie, my dear, I know you are probably sweating to pay your bond every month, but please be realistic about the situation. Trying to talk the market up is not going to help now. A major correction has to take place. In the long run, this will be good for you. . .less by Cheeky Chimp on August 11 2008, 14:22 Find this comment inappropriate? Report it

Prof Joseph Stiglitz 2001 Nobel prize in economics Seems the wolf as caught a few other countries as well : http://www.guardian.co.uk/commentisfree/2008/may/09/psthefailureofinflationta by the wolf on August 11 2008, 14:22 Find this comment inappropriate? Report it

Repeat Oh dear. Here we go again.same idiots who "predicted" denial to the property crash is at it again. by Vox on August 11 2008, 14:26 Find this comment inappropriate? Report it

Agree with Brennan Just sold my buy to rent house for fat profit and will put money in bank at 10% first R18000 tax exempt. and later overseas. ANC Land racisit issues make it just too risky. Big crash is still to come. by ?? on August 11 2008, 14:33 Find this comment inappropriate? Report it

Dylan, why... you did it all right...! Dylan you say "I'm out. Just finished selling the last of my spec properties. Clearly bankrupt. I will never touch property as an asset class ever again." Why you have clearly sold at the right time when prices where at their highest. Thats what . .more i have figured out today from the property market experts. You surely could not have lost as you sold when prices where at their peak... My advice is to take those profits but it in a bank account and wait and then when houses are R360k then you buy again. Given the money you made by selling now in 2008 at the peak you will be able to buy at least 2 average homes in the future maybe more. Its very very important to buy property when the growth is at the highest and EVERYONE is jumping on the train. 2004 was the perfect buying year as rates where also very low then. . .less by Brennan on August 11 2008, 14:33 Find this comment inappropriate? Report it

to Dylan Where did you find a buyer to pay those astronomical prices? Everybody knows that NOBODY can AFFORD those sky high prices? They spent all their money on bread and petrol. by panic attttack on August 11 2008, 14:46 Find this comment inappropriate? Report it

NOW WILL SOMEONE PLEASE RECORD WHAT THIS AND THEN BRING IT BACK AND RUB HIS by Kays Breakmans on August 11 2008, 15:19 Find this comment inappropriate? Report it

My guess... ... is that Mr Bruggemans is probably wrong. If he is correct and banks expect a sharp reduction in interest rates soon why have they (FNB included) today announced the withdrawal of thousands of APPROVED mortgage applications? by Plutarch on August 11 2008, 15:29 Find this comment inappropriate? Report it

Just wondering Was this not the same argument the Fed had for lowering interest rates in the USA?! Drop interest rates so that property prices can climb again!, and how did this turnout! I would also like to see what happens to the rand should they start . .more lowering intterest rates, taken into account our already high negative current account. . .less by Jaco on August 11 2008, 15:33 Find this comment inappropriate? Report it

Top economist? Hahahaha...this guy is bottom of the pile. Never fails to get it wrong. by amused on August 11 2008, 15:43 Find this comment inappropriate? Report it

Strong vs Weak rand depends do you want a strong or weak rand? by the wolf on August 11 2008, 15:50 Find this comment inappropriate? Report it

FROM MY ASPECT First of all cees is talking utter tripe we here in Europe are experiencing a massive turndown in the housing market with interest rates on hold to steady the ship before its inevitable demise.cees , tito and the sorry state of a bank investec will die . .more guessing about the financial haulocast about to hit the world.I t would appear to me cees writes these missives whilst under the heavy influnce of tik better known as skunk.In a Daily Mail article published today inflation in Britain is running at 20% so how the hell can those three previously mentioned idiots claim inflation in s a is below or will be below 10% within a year.Dream on. Stupid lot of blithering twats. Get real and stop dwanging the public. . .less by RUS on August 11 2008, 15:50 Find this comment inappropriate? Report it

What about political risk With the bandits running the place? by SAM on August 11 2008, 15:51 Find this comment inappropriate? Report it

Can't have your bread buttered both sides Ok so let me get this traight. the bears want inflation to keep rising. Which would mean mortage payments will go up and property investors will try their best to get this back from their renters. They are licking their lips for property . .more investors to go bust, but they are staying in property investors' homes. Do they think they'll just cary on living there if their landlors goes bust? They are saying everybody must sell but somehow there is still over supply even though rental availability is at all time lows and the builders have stopped builiding. The property buble has to burst but inflation and interest rates will defy gravity and track upwards forever How does all of this ad up? . .less by aj on August 11 2008, 16:00 Find this comment inappropriate? Report it

Crash????? With replacement cost at R4000 a square metre.And scarce urban land. Not much hope of big crash prices. Bulding inflation is also way ahead of CPI. Dream on the bears, in fact hibernate. by Lord Ha Ha on August 11 2008, 16:01 Find this comment inappropriate? Report it

Rich Dad, Poor Dad This is the type of environment in which vultures like Robert Kyosaki thrive. Our economists' crystal balls are very obviously cloudy so they turned to fish entrails. Soothsayers should be limited to country fairs and not be given exposure in the media. by Quidditas on August 11 2008, 16:03 Find this comment inappropriate? Report it

FNB Economists are confused If they really believed what they were saying then they would put the money where their mouth is and loosen their lending belts a bit. Instead they are "re-assessing" loan which were already approved meaning their mid to long term view is . .more negative. My question is why would FNB blatantly want to mis-guide the public? Saying one thing and doing something different. At a time like this everyone needs to be honest coz we cannot afford another stupid boom in property if it means our people will be debt slaves for the rest of their lives. People who believe in Boom economics are short term minded, it only lasts for a while and the looses are greater than the gains. . .less by Mthoko on August 11 2008, 16:19 Find this comment inappropriate? Report it

How am I doing as a BEAR? Replacement costs are irrelevant because houses are way overpriced and are not affordable. Replacement costs will come down as soon as the house prices crash because labour and building materials will become cheap in the future. Everything is cheaper in . .more the future, I have seen the future so I know, besides "our average priced graph of houses says so" Never show disrespect for the all seeing graph as it is unwise and will result in punishment. Robert Kiyosaki, teaches financial education and that you must educate yourself financially, this is wrong and yes he is only thinking of himself because if feeds on the blood of the dead like a vulture. Dont educate yourself it is wrong and only follow the way of the graph because it knows.. Interest rates must go up, its the SA way to have 20% interest rates anything less is cheap money and is believed to be wrong. History supports it dont argue its the apartheid way. anything less than 20% is called sub prime in SA . .less by Brennan on August 11 2008, 16:30 Find this comment inappropriate? Report it

The harsh reality of being an inner city "buy to let investor" This appeared in last week's press - "Darryn Aberman (25) an estate agent and property developer visited the apartment of his tenant in Braamfontein last week Wednesday. The Nigerian tenant was in arrears with the rent. After ducking by CJ Says on August 11 2008, 16:44 Find this comment inappropriate? Report it

Sorry WTF That's my name and I only write in my name. You curse me and yet you use initials. Don't waste time - Focus on the ball bud. You are fooled I don't write under two names. As for your negative perception about our country - Did you . .more read last weeks letters. Did you miss something ? It asked you to leave if you haven't already. If you haven't, you need a roof - Looking for a place to RENT ? . .less by Wayne on August 11 2008, 16:52 Find this comment inappropriate? Report it

Hmmm, which online news site did you get that snippet CJ? Be careful of propaganda from unverified sources. by Hmmmmmmm on August 11 2008, 16:52 Find this comment inappropriate? Report it

What do the economists know? Interest rates will not come down substantially any time soon. The worst is still to come largely because the ANC are not performing and it does look as if the SA version of the Zimbabwe war vets have taken over the (mis)management of the country in the . .more absence of any solid ANC leadership. This means plenty of trouble for any investor in South Africa as they say they will nationalise the mines the farms business in general and the risk is not worth the return. SA will need at least 50 years of utter poverty before it will be able to elect democratic leaders. . .less by Buffett on August 11 2008, 16:59 Find this comment inappropriate? Report it

the harsh reality of "having money in a SA bank" The brutality and violence which have accompanied recent cash-in-transit heists have heightened public awareness of the issue. However it is not a new problem but one that continues to escalate. 500 million rand was spent in combating bank . .more robberies, half of which was spent for the transport and protection of cash. A challenge for the banks is to secure the transit of cash without provoking an increase in the violence of an attack. More guards and more weapons is not considered to be the answer, as the attackers will continue to have more people and more firepower. . .less by monkey see monkey do on August 11 2008, 17:09 Find this comment inappropriate? Report it

Still too early The next batch of 30 or so imminent bank repos from Big Four bank no. 1 hit the auction floor on 2 Sep, CT. Go and buy now you 'Bulls'. Exhaust your appetite (if any) on the first 100 and us 'Bears' will wait until for the rest of the Big Four start . .more offloading the remaining 44,900 later this and next year. . .less by Propertyxchanja on August 11 2008, 17:10 Find this comment inappropriate? Report it

need a place to stay Do you think the banks will rent me one of their 50 000 houses until such time as the market hits the bottom then I will buy it from them cheap cheap? by Homeless on August 11 2008, 17:20 Find this comment inappropriate? Report it

Economists, FNB, Withdrawal of Approved Bonds, etc. FNB by withdrawing approved bonds has seriously damaged their reputation. Marketing FNB banking services will be akin to marketing Skunk cologne. Good luck with that one FNB. As for Moneywebs favorite FNB greatest living economist, within any organization . .more there is always internal politics, IMO he is distancing himself from the side that made the withdrawal of approved bonds blunder with his rosy interest rate cut thoughts. Its probably culling time at FNB. As for money in an SA Bank being safe- there is still no article from Moneyweb or comments from commentator's if SA Bank deposits in various types of accounts are insured? and if so by whom? and to what amount? None are IMO, the bank goes bust you become a creditor and accept cents on the Rand. If you are a Banker feel free to correct with me with examples and references. As for next crop of properties at auction on 2-Sep-2008...so what? Buy selectively, not everything. As for Rich Dad Poor Dad- so what? he sells books. Not my cup of tea at all. Time lines are important. . .less by Tuscanite on August 11 2008, 17:33 Find this comment inappropriate? Report it

rates People must not forget, Cees works for a bank. Banks don't do well in times if high rates. Kantor, in addtion to being in Investec, has property interests too! So we must expect this "sunny skies" view, just dont take it too seriously! Cees is, . .more however, cautious:"believes it is possible that Sarb Governor Tito Mboweni will press the pause button ...". Note "possible". He's also fairly honest :"The nice folks at StatsSA are making a few imaginative changes...that is really knocking inflation down," said Bruggemans, referring to changes to national inflation measures." Emphasis being on "imaginative". In fact, how StatsSA can even even consider going ahead with lower basket weightings for fuel and food, given recent events is mindblowing! Their 2005/6 survey data has been OBSOLETED by whats happened in 2008. It would be like SAWS sticking to a sunny weather forecast while a hurricane is approaching Durbs! No, SA economic indicators, as well as a weakening EU economy and a US that will not see the end of subprime for another year indicate that times are tough. The JSE is 20pc down, and 2nd round inflation is rampant. Crude could spike again tomorrow. No way 2009 is going to be good, and high rates will stay for a long time. Could even rise a lot more if oil spikes again. Sorry Cees. . .less by Jack on August 11 2008, 17:47 Find this comment inappropriate? Report it

rates - Jack Inflation targeting does not work, the source of the problem needs to be fixed. by blindly increasing interest rates in SA is not gonna fix the international fuel and food hikes we having. Perhaps if interest rates where raised in the USA and . .more not in the developing countries like SA Inflation targeting would help but using it as a blunt instrument in SA which is a developing country facing imported inflation from fuel and food is gonna do nothing except create a weaker economy and higher unemployment rate as we are now seeing. . .less by Brennan on August 11 2008, 18:29 Find this comment inappropriate? Report it

Deposit insurance. Yip good question Tuscanite. Are deposits insured in SA and up to what amount? I believe that in the US they are between $100k by Hans on August 11 2008, 18:42 Find this comment inappropriate? Report it

Widen your reading. Bulls... please try widening your reading globally after you have done so in this article by reading the last line. by Bulls... on August 11 2008, 18:44 Find this comment inappropriate? Report it

You mean its a "still a buy" part? Listed property is not a "super buy" now, but it's still a buy, said Du Toit, who believes there is worse still to come for the residential property market. by Bears... on August 11 2008, 18:54 Find this comment inappropriate? Report it

Ho hum, another talker upper. Ho hu.....yawn. Ok chaps lets talk up the market again....then people will start spending and propery will rise...yawn....get real, watch the number of auction boards, now there's the "real" story. by Dave on August 11 2008, 19:08 Find this comment inappropriate? Report it

The harsh reality of being an inner city "buy to let investor" (repeated) My post above seems to have been cut short so here it is again - the report was from a blog based on a news article in The Mercury (I mention this for "Hmmmmm" who wondered about its source) http://tinyurl.com/6qzq6k "Darryn Aberman (25) . .more an estate agent and property developer visited the apartment of his tenant in Braamfontein last week Wednesday. The Nigerian tenant was in arrears with the rent. After ducking . .less by CJ Says on August 11 2008, 19:27 Find this comment inappropriate? Report it

Uppers are better than downers Dave Amount of auction boards, houses with or without curtains/blinds, for sale boards density all meaningless... as to some extent are generalized prices meaningless unless put in context and extrapolated out of their narrow data set..But with no reliable . .more indices in SA, choose your own upper or downer and enjoy the trip. . .less by Kingpin on August 11 2008, 19:31 Find this comment inappropriate? Report it

That's interesting - cut short again- am I being censored Jackie ? Let's try again - The harsh reality of being an inner city "buy to let investor" (repeated) My post above seems to have been cut short so here it is again - the report was from a blog based on a news article in The Mercury (I mention . .more this for "Hmmmmm" who wondered about its source) "Darryn Aberman (25) an estate agent and property developer visited the apartment of his tenant in Braamfontein last week Wednesday. The Nigerian tenant was in arrears with the rent. After ducking . .less by CJ Says on August 11 2008, 19:41 Find this comment inappropriate? Report it

You get a bit more with each post (very strange) Here's the rest: " ... The Nigerian tenant was in arrears with the rent. After ducking by CJ Says on August 11 2008, 19:48 Find this comment inappropriate? Report it

Is "after ducking" the problem Let's experiment - will my post end after I say the magic words -- when I wrote after ducking in the 3 last posts you couldn't read anything afterwards - if you can read this then that is not the problem. by CJ Says on August 11 2008, 19:56 Find this comment inappropriate? Report it

The problem on the post CJ is probably AND Whenever the symbol for AND is used the comment is cut. It has been mentioned multiple times on Moneyweb over the past months and still not fixed. Show ho wmuch they value the readership. Maybe Bulls and Bears should just go away and stay away. Lets . .more repeat that last sentence but withe symbol for AND. Maybe Bulls . .less by Quack on August 11 2008, 20:08 Find this comment inappropriate? Report it

This whole article is based on wishful thinking This whole article is based on wishful thinking by This whole article is based on wishful thinking on August 11 2008, 20:23 Find this comment inappropriate? Report it

Nigerians, ducks, bulls, bears and SA banks Luckly I sold my property at the peak huh in 2008..? I would have hate to been involved with a Nigerian, they from Africa aren't they? bad guys all of them surely? Now I am off the bank tomorrow to deposit my earnings into my account, hope I . .more dont get shot or bombed at the ATM. Tell me who pays for that R500 million required for transport and protection of the money? cant be the customers can it? No ..bank service fees are so low in SA so it cant be the customers. Also as Tuscanite mentioned is all my money going to be insured for banks going bust and for what? because thats what is gonna happen because what happens in USA happens in SA so its a sure thing. What do we do? . .less by Brennan on August 11 2008, 20:54 Find this comment inappropriate? Report it

Why wait for cycles? There is no such thing as a bad investment. There is however such a thing as a bad investor. If you are a good property investor, you will still find great bargains whether the cycle is up or down. Same for stocks, commodities etc. etc. etc. The . .more more I self-study economics and financial markets, the more I realise this. There is always a bargain to be had somewhere. You must just learn how to spot it. You must be neither bull nor bear, but a hybrid who can profit in all situations. . .less by Freemarketman on August 11 2008, 20:57 Find this comment inappropriate? Report it

Can we trust SA banks? So can we trust the SA banks with our money? We all agree clearly that the banks highly paid economists dont have a clue what they are doing as they cant call the market so is it safe that we invest or money in the same institutions? I dont feel . .more safe investing in our banks they dont know what they doing. Perhaps I should buy a new car instead? or go on a overseas holiday before the rand crashes? decisions ... I just dont know any help from the experts would be appreciated.. . .less by Brennan on August 11 2008, 21:03 Find this comment inappropriate? Report it

Freemarket man : Impossible I used to believe that too, but I have come to realise that its not about what you do as an investor. The market decides for you, if not the market its your Nigerian tenant, or the society of the rental code which nationally governs rental prices and . .more determines fair market value of property prices. Its beyond your control. tenants set the market rules in property deny it at your peril. I used to believe that the property bargain of the century came around once a week if I knew where to look. Now I realise thats not the case. . .less by Brennan on August 11 2008, 21:14 Find this comment inappropriate? Report it

please stop hogging the forum with your nonsense "CJ says" Please stop hogging the forum with nonsense mutterings. Is it that important to know about Nigerian tenants throwing their landlords of the building that you need to post it a 100 times? by the architect on August 11 2008, 21:20 Find this comment inappropriate? Report it

Eish, He is only posting multiple times because.... The Moneyweb website she is BROKEN, as stated many times over months... by Quacker on August 11 2008, 21:45 Find this comment inappropriate? Report it

The harsh reality of being an inner city "buy to let investor" (without the bug) Sorry about the repeats - thanks "Quack", it is the short "and" causing problems - As I was saying, this report was from a blog based on a news article in The Mercury (I mention this for "Hmmmmm" who wondered about its . .more source) http://tinyurl.com/6qzq6k "Darryn Aberman (25) an estate agent and property developer visited the apartment of his tenant in Braamfontein last week Wednesday. The Nigerian tenant was in arrears with the rent. After ducking and diving Aberman for weeks, the determined landlord went to the flat to confront his tenant. This proved to be extremely unwise. The Nigerian let Aberman into the apartment, pulled out a knife and mercilessly slashed him to death. Next, he threw the bleeding Aberman off the balcony of his 10th floor flat." A few months back I read of a developer doing a cash property deal getting murdered. In the Cape Town press recently they highlighted a landlord who had tried for 4 years to get rid of a non paying tenant. Buy-to-let in SA seems a dangerous investment ... for now,13% in a reliable bank looks to me like a rather attractive, much safer alternative. . .less by CJ Says (one final time) on August 11 2008, 22:07 Find this comment inappropriate? Report it

Im not an economist but.................... In case nobody else has noticed next year is an election year. To allow their VERY short sighted supporters access to increased supplies of bling the "independant" reserve bank will be dropping interest rates (see new cpi cpix basket of "fudged" figures . .more for details of how this will work). The dropped interest rates will put more money in everyones pockets to encourage better feelings towards the anc government, (crime, health and education not withstanding). After the anc has won yet another resounding victory interest rates will rise again. Me? Im buying more property and FIXING my rates next year. I look forward to reading others responses. . .less by andrewa on August 11 2008, 22:22 Find this comment inappropriate? Report it

Brennan.... Yes, I'm afraid that argument doesn't quite cut it. Sure, the crude price is an exogenous variable, but the trouble comes because of the widespread inflationary effects it causes. Everything goes up, some things unjustifiably. I understand transport . .more of all goods is affected, but many suppliers make a meal out of it! For example, Nescafe raised the prices of its coffees by 30pc in one step. So steep crude rises cause 2nd round inflationary effects to occur very quickly, thats the nub of it. There comes a time when inflation, per se, has to be stopped, regardless of cause. Inflation is an economy killer and an impoverisher in the longer term! Its like a person needing surgery for a problem. The surgery hurts, but its quickly over once the underlying problem is addressed. What needs to happen is for consumers to budget less for other items in order to compensate. They cant just maintain consumption regardless,because that causes all prices to rise. Suppliers will only stop raising prices when consumers reduce demand. We have a problem here with dumb consumers who stubbornly spend money they don't have. Its been like that for a long time. Only high rates stop them.....eventually. SA is a suppliers heaven. . .less by Jack on August 11 2008, 23:06 Find this comment inappropriate? Report it

What election Andrewa? There are no elections in SA just a procedure every couple of years that reinstates the ANC. This is a one party state and may god or the tokoloshe help you if you don't vote for the ANC. Just as in Zimbabwe, you have to vote in a certain way no matter . .more what but that does not make it an election where you elect to vote for whom you wish. Agreed? . .less by Eric on August 11 2008, 23:25 Find this comment inappropriate? Report it

It is impossible Brennan If that is what you believe. People like you create opportunities for people like me. by Freemarketman on August 12 2008, 07:48 Find this comment inappropriate? Report it

And it seems like everyone is forgetting... ...the fact that Eskom is going to double electricity prices over the next five years. That's an annual 20% increase in electricity tarriffs on average every year. I'm sure that will have absolutely no effect on inflation.... by CT Bubble on August 12 2008, 08:27 Find this comment inappropriate? Report it

Eric Says All you doomsayers are really gonna run out of options to compare us to when Zim makes peace. It astounds me when people like Eric make such ignorant comments about our govt. by Wayne on August 12 2008, 10:05 Find this comment inappropriate? Report it

My morning Humor Always funny to read what FNB economists have to say. Makes my day humerous by Ellie on August 12 2008, 11:01 Find this comment inappropriate? Report it

Crude instrument- inflation targeting Jack so do you expect people to stop eating ? People need to buy food, they need to drive to work and they need electricity. Inflation targeting is a blunt instrument, its like going to the doctor with a painful tooth and him hitting you in the . .more mouth with a hammer, it will work but there will be trauma. A sharp instrument is needed to cut out the infection and inflation targeting is not that instrument for developing countries who have imported inflation. . .less by Brennan on August 12 2008, 11:44 Find this comment inappropriate? Report it

Economists wisdom "I believe that an accurate understanding of economists and their work begins with this all-important link, which leads to a brief but masterful presentation. Once you view it, you will possess a permanent advantage over most . .more investors." http://www.andyfoulds.co.uk/amusement/economists.htm quote from http://www.garynorth.com/ . .less by Dewald on August 12 2008, 14:37 Find this comment inappropriate? Report it

Mute Fool "but with oil above $100 pb you can kiss the 3-6% target goodbye. ..........." . Clearly a comment by an amateur. Inflation is the difference between the base cost of goods measured against a timeline, irrespective of the oil price as long as the oil . .more price is stable or declining. Inflation can decline even with a stabilised high oil price. . .less by Luigi on August 12 2008, 17:41 Find this comment inappropriate? Report it

Brennan You seem to be plagiarising someone else's work. Please in future, don't make statements that appear to be frlect your own original thought, when these have obviously been lifted from another article. I also read it dude. by Dirty Harry on August 12 2008, 18:48 Find this comment inappropriate? Report it

Dirty Harry- slow on the draw Yes indeed my thoughts do come from a famous Prof in economics who wrote about the subject of Inflation targeting as a failed concept. I just happen to agree with him and have said so, In the above post I am just repeating it and explaining in my terms so . .more you guys can "get it" but in my previous post I refered to the url of the author. So hello.... you read it before from me posting it here... duh . .less by Brennan on August 12 2008, 21:21 Find this comment inappropriate? Report it

Brennan I repeat, please don't plagiarise! No excuses dude. As CJ Says already stated, you ain't the sharpest pencil in the box and this just proves it. by Dirty Harry on August 12 2008, 22:36 Find this comment inappropriate? Report it

so who exactly is the "top economist" in this article??? you don't mean Bruggemans, do you? bwahahahahaha by mwahahahaha on August 13 2008, 10:48 Find this comment inappropriate? Report it

Prof Joseph Stiglitz nobel prize winner economics 2001 Dirty Harry, do you wanna contribute on the Prof article considering that you ARE one of the sharp pencils around here? Or you gonna continue shooting blanks? I repeat... the Great Prof believes that Inflation targeting is a blunt tool as . .more developing countries face imported inflation. agree dont agree lets hear your thoughts sharp pencils? http://www.guardian.co.uk/commentisfree/2008/may/09/psthefailureofinflationta . .less by Brennan on August 13 2008, 11:20 Find this comment inappropriate? Report it

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