5 Comments

1. Niall

   September 5, 2007

   Actually the market as been raising rates non-stop since 22 August. Bank Bill rates are now 40 basis points above what are usually considered 'norm'.

   You forgot the link, Nicholas

2. Chris Lloyd

   September 5, 2007

   You're surely correct about RBA never raising in consecutive months. Looks like (http://www.rba.gov.au/Statistics/Bulletin/A02hist.xls) they did it in May and June 02, as well as Nov and Dec 03.

   As for the second part of the assertion, it is less clear. There were no changes prior to the 2004 election, two drops prior to 2001 election and no changes in 1998. That doesn't prove anything of course. But are you saying that the reserve is completely blind to politics? I know they are supposed to be 'independent'. But when interest rates have been made a core electoral issue by Howard, every rate rise is (interpreted as) a public assault in his credibility.

   Governors wouldn't like to be seen that way. Not that I think Glenn Stevens would fall for this argument.

3. Jc

   September 5, 2007

   Maybe he should talk to Glenn Stevens. I really think people are underestimating just what a hard nut (not silly) this guy is turning out to be.

   He was recently offering unsolicited advice to the japanese that they need to normalise rates quickly!

   Stevens would raise rates on election day if he had to by the sounds of things.

   My impression is that he is the hardest currency man in the west at the present time.

4. Nicholas Gruen

   September 5, 2007

   Chris,

   the statement is the typical type of bullshitting we get from so many in the media day in day out. (I'm not sure if the author is a journo or a money market man, but the style is unmistakble).

   My comment was made in ignorance of the precise record, though I thought there were examples of double rate rises. I reacted to the swagger in the pronouncement. Even if the Bank had never raised rates twice in a row, what kind of evidence is this that they never would? It depends on the circumstances.

   Similar claims are things like "The time for Howard to hand over to Costello is past." Well maybe, but I doubt it very much. But of course if he doesn't we'll never know. Even if he does and Costello loses we'll still never know the counterfactual. But we'll be reassured by the media about it with all the confidence in the world - just like we've been told about fifteen times "One thing's for sure. Kevin Rudd's honeymoon is over".

   So my position is not the opposite of the swaggering idiocy I've quoted. I wasn't arguing for instance that the Bank always raises rates two at a time. Nor was I arguing that they take no notice of politics (though that seems to be the essence of Glenn Steven's latest utterances. As he said, if there was a case to raise rates he doesn't know how he'd explain why he didn't do it).

   I was arguing that the statement - and indeed both claims it made were absurd on their face. Perhaps it's true that the RBA wouldn't raise rates twice in an election year. I think they've never raised rates by 0.75%. Does that mean they never will? Perhaps it's true (though I doubt it very much), but asserting it with all that journalistic swagger is - well complete bullshit. I wouldn't even bother to check out the facts. I'd just read on.

   Indeed that's what I did. But the first comment above contained a link to the full article - and I couldn't help myself. Now I see the author capped it all off with a worthy final line. "If it goes on for much longer, it is only a matter of time."

   Still I'm being a bit unfair to the actual person who said these things. I think what he's said is ungarded nonsense, but I'm reacting to it more as something that reminds me of a genre. It's not even a particularly egregious example. But, as you can see, it is not something I look at fondly.

   While I've been writing this, it has occurred to me that there are only a few journos who I think I could rely on not to say things like this. Tim Colebatch is one. Margaret Simons is another. Journos without swagger.

5. david tiley

   September 6, 2007

   The commmon swagger is tricky - the ascription of underhand and often political motives to public acts. One going the rounds at the moment is that the ABC is destroying the noble institution of the Natural History Unit for some kind of base motive, with several to pick from.

   No-one does the analysis to find out how the unit is performing, how the market place has changed, whether it is still possible to make the kinds of films it was set up to do.. too complicated. Too much detailed analysis. Far better to just asume some cut-rate soapie motive and come over all agitated.

   Mind you, I often wondered about the quality of the leaks about the Nine shenanigans, and the use of the crass drama model to explain it. But Gerald Stone's book quotes chapter and verse on all of it. A huge case in which searching for the basest of motives is on the money.