Slap in the face from the Big Four

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

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.

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

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

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!

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.

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

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

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.

Attached Images

	xjo.png (29.2 KB, 9 views)
	xfj.png (26.9 KB, 8 views)

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..

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