Posts Tagged ‘interest rates’

The Thieves Gather

Posted: November 12, 2010 in Uncategorized
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First up, a correction.

In my wrath the other day, I incorrectly stated that the Commonwealth Bank had raised its base variable interest rate by 0.45% more than the recent Reserve Bank increase. In point of fact, the CBA’s total increase was 0.45%. But that is still a long way over the actual RBA increase.

All of the Big Four Thieves have now increased their base rates considerably more than the recent RBA increase. They continue to argue that this is a result of the cost of raising funds to lend out.

Give me a damn break. The F.B.T. are all making literally multi-billion dollar profits. They are purely and simply profit-gouging.

Blubberguts Joe Hockey, Shadow Treasurer, is naturally blaming the Gillard government for this, claiming it to be proof that they are useless, pathetic etc etc. OK Joe – just exactly what do you expect them to do? The Gillard goverment is operating under the same conditions that your lot did. So you would not have been any more successful than Gillard and co. And don’t forget that in your time as a junior finance minister, you were no more successful in pulling banks into order despite your public ‘putting them on notice’.

It is interesting to note that of comparable economies, Germany is the only one that similarly allows banks to have variable interest contracts ie charge what they want, when they want. The US, Japan, Korea, Canada, Spain, France and Holland – those countries do not allow banks to engage in this variable rate profit gouging. The Brits only allow it to happen in certain circumstances.

The reality is that both main political flavours have failed the Australian society at large by creating this monster and refusing to do anything to pull it back into line.

With the mining industry making massive profits as a result of high commodity prices, the Labour government wanted to introduce a super-profits tax on the miners. How about penalising the banks for their making excessive profits that are being taken straight out of the pockets of ordinary Australian consumers, not taken from foreign multinationals who are purchasing minerals etc. Of course this would need to be done with care to avoid them simply passing that straight on to consumers.

How about a massive fine per basis point above rate increases that the banks institute? Make it non-tax deductible. And give the ACCC or another authority the power to monitor and implement further retrospective major fines for any increases in charges beyond reasonable CPI-related increases in fees. Then another whacking great fine for every basis point that banks fail to pass on when prime rates are reduced by the RBA.

These thieving bastards MUST be brought into line. This profit-gouging CANNOT be allowed to continue.

I reiterate a statement I have made before: the objective of de-regulating the banking industry was not intended as a free ride for profit gouging.

C’mon Ms Gillard – give us something positive in response to this unconscionable behaviour. And you too, Blubberguts Hockey – quit grandstanding and offer up some positive suggestions.

And that’s my rant.

The Chief Thief Speaks!

Posted: November 9, 2010 in Uncategorized
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From the front page of today’s Daily Telegraph:

Commonwealth Bank CEO Ralph Norris has conceded his bank’s mammoth 0.45 per cent interest rate rise will cost some of his customers their homes, a reality he says causes him immense angst.

But in defence of his bank’s Melbourne Cup Day rise, Sir Ralph said it was better to see “a few” foreclosures than have an economy hamstrung by a low-profit banking system.

In an exclusive interview yesterday, the $16.2 million a year man also urged customers feeling mortgage stress to contact the bank and seek temporary relief from their monthly payments.

On what planet did the CBA find this dipshit? Let us review a few facts:
1. A bank is admitting that its actions will be forcing people out of their homes;
2. Since when is making multi-billion dollar profits, a low-profit banking system?
3. Since when would failing to increase rates 0.45% more than the last Reserve Bank increase, hamstring the Australian economy?
4. What the fuck does someone on $16.5 million a year know about the reality of making ends meet?
5. What ‘temporary relief’ will the CBA be giving? One thing is sure as shit after breakfast – they will be making sure mortgagees catch up any payments and don’t forget that any slackening on making your mortgage payment just increases the amount of interest being generated on the balance, to the bank’s benefit of course.

How much more is it going to take before our piss-weak governments will act on these thieving bastards?

Bastard Banks – again

Posted: April 6, 2010 in Uncategorized
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In my experience, there are three particularly unprincipled industry groups in Australia: the banks, insurance companies and oil companies. Being an ex-banker who worked in the industry through the madness of the 1980s, I know who I think is the worst. I have previously blogged on the subject.

An ongoing matter for a couple of years now is the fact that when the Reserve Bank changes interest rates, there is no compulsion on any of the banks on what they may or may not pass on to the consumer. In fact we now have a standard practice in the banking industry. When the Reserve Bank lowers interest rates, the banks refuse to pass on all of this rate cut, protesting the cost of raising funds as the cause. But when the Reserve Bank increases rates, the banks all but fall over themselves in passing on 100% of that increase.

Now back in late 2008, when the banks passed on 80% of an interest rate reduction, after earlier generally expressing the view that they would only pass on less than that, we were subjected to then Leader of the Opposition, Chief Turning Bull (Malcolm Turnball), claiming the credit. His justification? He claimed the Opposition drew a ‘line in the sand’ which somehow forced the Banks into line. Does that mean they have to also carry the can for when the banks pass 100% of a rate increase after shortchanging their customers on rate reductions?

Ironically, dear Ex-Chief Turning Bull has just announced he will be standing down from politics at the end of his current term. Oh how the mighty have fallen. After failing to talk the former Labour government into handing him a seat, he suddenly became a true believer in the Liberal Party (for my friends outside of Australia, replace ‘liberal’ with ‘conservative’) cause. And now as the banks continue their bastard practices, Turning Bull is cowering away, his tail well between his legs.

A reality check – despite the arrogance of Turning Bull (and his then mate, Blubberguts Joe Hockey, although TB is still walking around with Fatboy’s knives in his back), the banks are not in fear of the Liberal-National coalition. Or the government for that matter. They are in fact a law unto themselves.

Enough is enough. Deregulation of the financial sector has plenty of things going for it. But this was never intended to be a free pass for the banks to blatantly engage in price gouging.