Hong Kong riots, the banks, and Telstra

All of us are enjoying the rise in the sharemarket including the recovery of bank stocks. However, we should be aware that a good portion of this rise in equities is related to the fall in interest rates. When bank term deposit rates fall below 2 per cent it means the yield on shares, property and infrastructure assets becomes more attractive. That, of course, increases the value of those assets and the rise being reflected in both the sharemarket and in residential property. Philip Lowe, the Governor of the Reserve Bank of Australia, is telling us that interest rates are

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