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Slap in the face from the Big Four

Discussion in 'The Economy' started by Mark Laszczuk, 12th Aug, 2008.

  1. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    Why a rates cut may pass you by | smh.com.au

    So it's virtually guaranteed that the RBA is going to drop rates next month (maybe). A good indication of this is that the Big Four are now lining up to slap customers in the face - customers they clearly think are complete idiots, as evidenced by this quote from Gail Kelly:

    "Clearly , we would love to pass through the full 25 basis points drop if that were to occur … but we'll need to factor in all of those issues at that time."

    Who does she think she's fooling? Does she really actually expect intelligent, rational people to believe that the banks 'want' to reduce the rate? What an insult.

    Mark
     
  2. crc_error

    crc_error The Rule of 72

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    I don't even understand what the RBA rates are supposed to achieve. Seems like they are only there to increase rates, as rate drops are affected by 'global money markets'.

    Banks didn't think twice about increasing rates, money markets didn't play a role here, but when there are drops, the banks don't want to budge.
     
  3. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    I don't believe it's a matter of if they want to - they don't (and fair enough, too, they are there to make as much money as possible for shareholders) - it's a matter of they won't do it and them wringing their hands and saying 'Geez, ya know, we'd really love to do it, but ya know... credit is so expensive these days...'

    What a crock.

    Mark
     
  4. AsxBroker

    AsxBroker Well-Known Member

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    Hi Mark,

    I totally agree with you, interest rates for term deposits are dropping but we haven't seen any drops in interest rates for loans...

    The spreads which banks are making are obviously increasing with the above happening.

    Cheers,

    Dan
     
  5. crc_error

    crc_error The Rule of 72

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    thats a interesting point, term deposit rates have plummeted at the first HINT of a rate reduction, but as far as home loan rates, well we have to wait and see on this one!
     
  6. ffc1883_1996

    ffc1883_1996 Active Member

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    Investors complaining about banks it about as useful as tenants complaining about landlords.

    Property investors raise rents because the market dictates that they can.
    Banks raise rates because the market dictates that they can.

    If a tenant were to buy a house then they would no longer be subject to rent increases.
    If an investor wants to be on the plus side of a rate increase – buy a bank! They're on special at the moment.
     
  7. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    Not complaining about interest rates - I could care less about rates. I can pay my monthly interest with both hands tied behind my back. Interest rates are part and parcel of investing. That's not the issue. What annoys me is bank executives telling bare faced lies and expecting the public to believe them like we're a bunch of idiots.

    Mark
     
  8. Billv

    Billv Getting there

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    I agree and although CBA lost value today it generally seems to be on the way up.
    I'd love to buy some bank shares but I am too scared to make a move.
    Something is telling me that this recovery is temporary.

    Cheers
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm not even sure you could call it a recovery yet - not exactly setting new highs at the moment.

    See attached charts for XJO and XFJ (financials)

    I think it is likely we will continue to see more sideways movement for a while.
     

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  10. crc_error

    crc_error The Rule of 72

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    so how about buying up in small parcels? Thats what I'm doing.. and I'm not using gearing so at worst I just continue to hold without interest payments.

    I have noticed international funds are kicking..

    Platinum Asset Management
     
  11. ffc1883_1996

    ffc1883_1996 Active Member

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    Fair enough. Good point.

    But I think the lies banks tell are merely a reflection of what’s expected of them. With everyone from the janitor to the treasurer watching their every step and complaining that the ways they do business are not charitable enough, it’s no wonder that their PR is shrouded in spin.

    It feels very strange to be standing up for banks (given that I’m currently in dispute with one large Ausie investment bank), but I liken their public BS to the sort of crap that politicians speak. Pollies lie ‘cos that’s what the masses want to hear. It’s much easier to stay away from negative publicity if they toe the party line.
     
  12. Billv

    Billv Getting there

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    CRC

    I've thought about it but I am highly leveraged and the high interest rates have started to hurt so unless I see the market really turning around I will be leaving my money in my offset account.

    However, I've been watching the stock market for a long time and in recent times although it's unpredictable there are certain repeating patterns and if you follow them you could make money.

    For example COH had a fantastic run today, it went up by 8.5% but because of the way the market works today, shares that had a very good run for 1 day they generally drift down for 1 or 2 days and then have another good run and so on.

    Banks went down today so if there are no bad financial news overnight I'd be buying them. DJS, BKN & UGL should go up as well.
    This is not investing though, it reminds me of gambling...:eek:

    Cheers
     
  13. crc_error

    crc_error The Rule of 72

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    certainly if your highly leveraged, I wouldn't consider extending yourself futher, but if you have some spare cash, then investing progressively could be a good idea. I'm re-building my portfolio now, ungeared, and not using borrowed money.
     
  14. Tropo

    Tropo Well-Known Member

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    “...... and although CBA lost value today it generally seems to be on the way up”

    BV,

    No it is not on the way up...
    Currently it is ‘cruising’ sideways between $46.70 & $36.98.
     
  15. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    That will just be the falling AUD - down over 10% in recent weeks.
     
  16. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    Yes, an excellent point. My biggest pet peeve is having my intelligence questioned. As you stated though, it's easier to just say these things because (unfortunately, sad but true) it's what most people want to hear. Appealing to the lowest common denominator and all that.

    Mark