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View Full Version : Reserve Bank hits a six



Davidflude
07-10-2008, 04:12 PM
The Reserve Bank certainly decided it was a case of Sydney or the Bush today with a one per cent cut in tax rates.

These guys mean business.

Rincewind
07-10-2008, 04:30 PM
The Reserve Bank certainly decided it was a case of Sydney or the Bush today with a one per cent cut in tax rates.

I thought it was the treasurer who determined the tax rate.

Capablanca-Fan
07-10-2008, 06:32 PM
How much of the interest rate cut will the banks pass on though?

bergil
07-10-2008, 07:15 PM
How much of the interest rate cut will the banks pass on though?80 points or .8 of 1%

Garvinator
07-10-2008, 11:25 PM
I think the RBA had had a gutful of banks not passing on interest rate cuts and so cut rates by 1 per cent to guarantee that about .75 is actually passed on to mortgage holders.

As the banks get to decide how much they put up/take down interest rates after the RBA makes a decision, the RBA is rather irrelevant and so the RBA decided to go 'all in' today with their decision, forcing the banks to give a proper rate cut.

pax
08-10-2008, 11:22 AM
How much of the interest rate cut will the banks pass on though?

It's interesting that now it's the Liberals telling banks they should be passing on 100% of the cut, while Labor is the one dampening expectations by referring to the banks' increased costs.

Capablanca-Fan
08-10-2008, 11:24 AM
It's interesting that now it's the Liberals telling banks they should be passing on 100% of the cut, while Labor is the one dampening expectations by referring to the banks' increased costs.
It is. So which policy do you prefer?

pax
08-10-2008, 11:26 AM
I think the RBA had had a gutful of banks not passing on interest rate cuts and so cut rates by 1 per cent to guarantee that about .75 is actually passed on to mortgage holders.

I don't think the RBA cares one way or the other. They set the base rate and the banks do whatever they see fit to do. A significant proportion of banks' credit costs are not linked with the base interest rate, so it is reasonable to expect rates to move not entirely in sync with the official rate.

pax
08-10-2008, 11:28 AM
It is. So which policy do you prefer?

Well it certainly isn't up to the Government to tell banks how to set their prices, and I very much doubt that it has any real effect. A certain amount of "pressure" is expected politically, but on the whole it's a bit of a pointless game.

Desmond
08-10-2008, 11:44 AM
Well it certainly isn't up to the Government to tell banks how to set their prices, and I very much doubt that it has any real effect. A certain amount of "pressure" is expected politically, but on the whole it's a bit of a pointless game.Even if it made no difference, it would be nice if Swan at least pretended to be trying to do something.

Capablanca-Fan
08-10-2008, 11:53 AM
Well it certainly isn't up to the Government to tell banks how to set their prices, and I very much doubt that it has any real effect. A certain amount of "pressure" is expected politically, but on the whole it's a bit of a pointless game.
Agreed.

Southpaw Jim
08-10-2008, 11:57 AM
It's more shameless populist posturing on the part of the Liberal opposition is what it is. The leader's changed, the politicking hasn't. It's an easy call for any politician to demand 100% pass-through, knowing full well that the banks will do what they are legally required to in the interests of their shareholders.

They might as well be telling grocers how much to charge for their apples.

Capablanca-Fan
08-10-2008, 12:43 PM
It's more shameless populist posturing on the part of the Liberal opposition is what it is. The leader's changed, the politicking hasn't.
Turnbull is really a Labor politician at heart anyway.


It's an easy call for any politician to demand 100% pass-through, knowing full well that the banks will do what they are legally required to in the interests of their shareholders.
And among the biggest shareholders are the superannuation funds that help fund the retirements of ordinary Australians.


They might as well be telling grocers how much to charge for their apples.
True enough.

Terry McCrann slams Turnbull (http://www.news.com.au/heraldsun/story/0,21985,24462931-36281,00.html), and points out that the RBA cut 1% with the intention that banks would cut by 0.75%, and they actually cut by 0.8%.

Southpaw Jim
08-10-2008, 01:01 PM
Turnbull is really a Labor politician at heart anyway.
Labor was too politically astute to let him join. The Liberals, however...


Terry McCrann slams Turnbull (http://www.news.com.au/heraldsun/story/0,21985,24462931-36281,00.html), and points out that the RBA cut 1% with the intention that banks would cut by 0.75%, and they actually cut by 0.8%.
And the guy used to be a merchant banker. He must think Australians are quite stupid and greedy to be running such a line. Unfortunately, in general he's quite possibly right...

pax
08-10-2008, 04:04 PM
Even if it made no difference, it would be nice if Swan at least pretended to be trying to do something.

I actually don't think it is a good thing when politicians run around pretending to be able to control thing's that they can't.

Capablanca-Fan
08-10-2008, 04:08 PM
I actually don't think it is a good thing when politicians run around pretending to be able to control thing's that they can't.
True. Just look at Foolwatch and the equally moronic Grocery Choices website. Same goes for keeping interest rates low, which the other lot made too much of.

pax
08-10-2008, 05:01 PM
True. Just look at Foolwatch and the equally moronic Grocery Choices website. Same goes for keeping interest rates low, which the other lot made too much of.

Put it this way. I don't think government should claim (or allow the perception) that they are in control of petrol prices, or grocery prices, or interest rates. It just isn't true, and such claims will only damage them in the long term. There is some merit in schemes such as fuelwatch and grocery choice, but it is from the point of view of giving consumers access to useful (how useful is debatable) information rather than any expectation that prices will be directly affected.

Igor_Goldenberg
10-10-2008, 12:47 PM
Put it this way. I don't think government should claim (or allow the perception) that they are in control of petrol prices, or grocery prices, or interest rates. It just isn't true, and such claims will only damage them in the long term. There is some merit in schemes such as fuelwatch and grocery choice, but it is from the point of view of giving consumers access to useful (how useful is debatable) information rather than any expectation that prices will be directly affected.
Agree. It would be much worse, though, if they actually were in control of petrol prices, or grocery prices, or interest rates.