Last month we reported on the ANZ’s decision to break away from the RBA and start setting lending rates independently.
Today ANZ has decided to put interest rates up, raising the standard variable rate from 7.3 to 7.36 percent. While the 6bps move is a drop it the ocean, it could be a sign the ANZ is testing the waters to see what backlash raising rates will bring. Should we be expecting larger moves next month?
And when will the other banks follow suit?
The move follows UBS research released earlier this week suggesting banks could be losing money on new mortgages due to rising funding costs. This “dangerous situation” provides banks little incentive to offer mortgages and could cause them to simply stop lending.
[ Westpac has followed suit, raising its standard variable rate 10bps to 7.36 percent. ]
» First time buyers could be hit by lending drought – Mozo, 7th February 2012.
I knew it…!
Just commenting on my comment in the post previous to this. Sorry I just had to.
Love the headline “first homebuyers could be hit by lending drought”. What first time home buyers! This should seal the deal as no more new entrants into the ponzi. The banks have realised and now they will start to reduce their.risk and exposure to all these.bad loans
I hope the banks keep making profits otherwise there will be a crisis that no one will be left unscathed.
Nice one BotRot – any other predictions? Is Gold a bubble? Will the AUS$ finally weaken against sterling? 😉
Australia is going to face it demons and go through the GFC like everyone else had. Bring it on. Hate that alot of people will lose their houses and jobs but KRudd should have let the economy go through its pain. Now there is talk of voting that idiot back in mind you Gillard is even dumber than Rudd. Oh and I thought the Aussie banks were the envy of the world and Swan was voted the best Treasurer in the World. The thing is Australia points the finger at Europe and the US about maintaining financial stability when in fact it is worse than them. Makes me bloody laugh.
I salute ANZ & Westpac, I just hope the others follow suit.
I love the “Greedy banks slug you another $240 a year” title to the HeraldSun article, then they crap on “Is this the last straw?”, then there are all the hundreds of cry-baby reader comments about changing banks.
It’s interesting really, laws were introduced to prevent me posting rumors relating to ASX listed companies in an attempt to manipulate stock prices, yet the media can bullcrap on to the point of whipping the (moronic) public into some psychotic frenzy without any problems.
@LBS, the issues you speak of we were going to face anyway, it was pure luck the first time round we avoided it, but sooner or later we will pay and being the apathetic pitiless bastard that I am, I’m rooting for Greece to default, should they do so I’ll do very nicely out of the economic fallout that follows over here. I decided years ago to be different and try to profit by attempting to actually understand what is going on rather than living like a “little aussie battler”
I went to an auction today in Melbourne’s inner city north and was surprised that I was the only attendee (with a neighbour or two). Auction cancelled of course. Problem is that there is a similar home a street away that is selling for $150K less. That home has gone through the agony of auction failure and has now been on private sale for months.
One week ago, went to a private sale and the owner was present. She explained that she was desperate to sell and was willing to bargain.
A real estate agent knocked on my door, revealed that prices have dropped 15% in the region and likely to far a further 15% this year.
Went searching for some houses last week, 4 within 1km radius; none of which had ‘for sale’ signs on them.
I think it will only take a few forced sales in each suburb to lower the benchmark prices and then the havoc will spread.
In the meantime, I’m buying for lifestyle reasons, but good luck to those that hold out.
@Romsey “I
@fhb dreamdog Yeah, I loved that last line too
Only a matter of time to the Greek default folks:
http://www.reuters.com/article/2012/02/10/markets-britain-stocks-idUSL5E8DA3KY20120210
http://www.longislandpress.com/2012/02/11/greeces-grim-choice-deep-budget-cuts-or-default-3/
The troika are unwilling to accept any reasonable, workable offers from the Technical Leader, and even these offers have incited popular uprisings in Athens and Thessaloniki. The magnitude of “austerity” and asset confiscation (whilst the wealthy are left unaffected – as usual – remember the 47 BILLION Euros held by tax-avoiding Greeks in Swiss Accounts), will just not be accepted by the Greek equivalent of the “99%”.
Once Greece goes, the dominoes will start to fall, and this WILL affect EVERYWHERE, including “we missed the GFC ’cause we were so smart” Australia.
Don’t expect brilliance from any Political Party – they will be far too busy looking after their “friends” and feathering their own nests.
We are on our own now. Do not look for federal or state governments to help us they have turn there back on the people of Australia. Shop local in your own town or suburb. I can see the falling house prices are the least of our worries. GFC 2.0 You are right phil the dominoes will start to fall.
G’Day Rupert, unfortunately no other predictions. I came to that prediction in the following order;
– RBA left interest as is.
– Banks didn’t want to here this (if they didn’t already know it before us).
– I was then hit by a deep gut feeling.
– Then a deduction only logical in my head exclaimed, they’re going to lift interest rates.
Oh I fib a little, I do have another prediction, can’t help out on Gold prices nor AUD vs (USD, GBP, EUR, YEN) but, many Australians are about to experience reality. Like the reality of the situation they’re in personally too.
As Phil states (above), the dominoes will start falling. I’m sure the power of denial will overcome many Australians (with a little help from their cantankerous, adversarial media) blaming Greece, Portugal, Spain, Ireland (Ireland, now there is one sad story), the US, and then the world. Blaming everyone but themselves. Australians are responsible for the mess they are in.
I think Australians thought the RBA is their to save them. Have any idea how many people don’t know anything regarding Australians foreign borrowing by the Banks and RBA? They can still be thinking we punched the GFC off.
What is the difference between a clothing shop putting up their prices because it is costing them more to import product from overseas and the banks putting up interest rate because it is costing them more to obtain funding so they can lend it to people who want a mortgage? Absolutely nothing !!!! Bank’s are business just like clothing shops, only difference is that there is less media hype when clothing shops put their prices up.
Mick
http://www.pa-international.com.au
Mick – good observation there. Any discretionary purchase has some degree of immediate gratification, and this is certainly the case with housing, where many who are now complaining about a VERY SLIGHT raise in Interest rates, from already historically very low levels. The moaners had no problems getting a Mad Max loan to “outdo the Joneses”, and many were guilty of added financial commitments via “withdrawal of equity” to fund extravagant lifestyles. These financial transactions were all by choice – no-one was forced at gunpoint (or similar!) to take out a huge loan, but many did, on the very flawed assumptions that a) the housing market could continue it’s meteoric rise in asset value (as seen over the past decade), and b) inflation in salaries and wages might somehow “inflate away” the consequences of financial excess.
Shelter is a Human Need, but Conspicuous Consumption isn’t. Seems the concept of “living within one’s means” is about to be relearned by a sizeable chunk of our population.
@ Mick,
Whilst what you have describes sounds like a fair comparison it really is not.
The Big 4 (and probably the rest) are protected and are ‘too big to fail’. So even if they completely F*!# up (and a number overseas have in recent years) they are going to be ‘saved’. Imagine running a business that can’t fail! Even if they do the guy running the show on his $10-20 million salary walks away WITH his performance bonus as has been proven at RBS, Wachovia, BOA etc. and of course the dumb tax payer picks up the tab and the show goes on. Now if the guy running the the clothing store goes bust after taking a second mortgage and a business loan (from those same protected animals) he fires his staff (they lose too) and he ends up in a whole lot of pain (no bonus i’m afraid), loses his home, bankrupt and can’t get a loan for anything for the better part of a decade!
No competition – There is NO competition in our banking sector to speak of. The quadopoloy (yes I made that word up – CBA,Westpac, ANZ, NAB) do what ever they want. This CARTEL likely meets at regular intervals to decide who and what sectors they are going to doll out money to and on what terms. A somewhat different working environment to the clothing store owner. I’m sure the CEO of ANZ is really loses sleep about ‘beating’ the other …. 3 players in his “market”.
Something from nothing – Banks don’t produce anything! Money is created from thin air based on the fractional reserve system. Numbers in a computer. When things get bad they “print”.
Banks are not like a clothing shop or any other kind of business. They are unique and they are protected. You cannot possibly compare a bank to any other kind of business.
right on FreeWilly.
Today the media ask Julia Gillard if banks start struggling will do the same as US and say the 4big banks are two big to fail she just spin some crap. In 2008 Benkwest was on the drip getting money from RBA getting $29 million in August 08 then rising to $3.75 Billion in December of 08 then CAB settled a deal.
So what is going to happen when it all comes crashing down they going bail out banks and screw the people.
Continuing on from Mad Max. So here’s the picture of our “strong banking system” amidst our “sound economic fundamentals”, just to quote our Politicians, media finance spokes people, and dumb Aussies.
NAB – $3.6 Billion (FED 2008-2009)
Westpac – $1.0 Billion (FED 2008-2009)
UBank – $29 Million + $3.75 Billion ~ $3.78 Billion (RBA)
CBA – ?
ANZ – ?
RBA – $53 Billion (FED 2008-2009)
You know who will be paying that back over a few generation, don’t you?
I wonder if Aussies will know or realise when their faces are being slapped down with austerity like many Americans, Euros, Greeks,… can see it.
Few people are going to become even more richer over the next few years. I’m neither backing the debt-slaves nor the banks in this one. What a situation!
@ freeWilly
Add to that the covert events of two major banks accepting a bailout in 2008 Westpac being one of them from the U.S. Fed, it shows the fragility of the banking system
http://www.moneymorning.com.au/20101203/nab-and-westpacs-secret-bailout-revealed.html
The privately owned federal reserve system will certainly come out smelling the roses, perIpheral Banks may well fall by the wayside.
Spent some time searching “Great depression banks not lending” things don’t change much.
Austerity is the new buzz word in Europe and the U.S. But that can never happen here we’re different.
Free Will and Mad Max, I agree with all that you say. If only more people would see what is really going on and stop listening to mainstream media, economists, banks, politicians etc. When you look at the facts one can see that things are very very wrong. The financial system is based on a fraudulent ponzu scheme that is designed to transfer more wealth from the people to the banks.
This article titled ‘New American dream is renting to get rich is very interesting’. My guess is that in time you coul replace American to Australian.