http://www.theage.com.au/business/banks-now-less-desperate-for-deposits-20110126-1a5d2.html Apparently banks don't need our money any more Looks like pulling it all out and buying PMs was the right thing to do in their eyes :lol:
... Yet they will continue to raise their mortgage interest rates in excess of the official rate, due to increased costs of overseas credit.
From memory, most of the online accounts haven't passed on anywhere near the full amount if the last several interest rate raises... Or if they have, they've put stupid conditions or made them introductory rates for a few months for new customers only. It seems to me that they've not been all that desperate for our money for a while now.
For a while the banks seemed willing to grant the "introductory" rate on existing accounts for a few months. All you had to do was turn up at the branch and ask them for it. At the end of the few months, you could turn up again and ask for it again. I managed to get it going a few times, but the last time I tried it they declined and advised "too many people were doing it now" (there was an article about it in The Age at one point). So I suppose the financial crisis is over and it's time to sell all of my PMs and pick up a shiny new investment property on an interest-only loan?
Once the housing market starts to really drop, they will be needing every cent they can get. I bet that the bosses of the big 4 banks are already planning their escape strategy. They have a playbook already written out for them by Wall St.
If you look at the pay packets the bosses of the big 4 took home last year, I would say not only have they planned their escape, but they have already executed a large part of it.
This has been a long standing battle between debtors and savers. Sheesh, I've been talking about this for ages and been seen as a whinging loony by debtors. This is just facts on the table as far as I am concerned. The big boys at the bank have no choice. They answer to the shareholders, not the savers. They approve big payouts for those willing to max short term profits at any cost so they do. This means selling debt and screwing savers. The long term means death of the system, but I don't think shareholders give a rats' arse about that, do they? Sooner or later, people WILL wake up to the scam that is debtor ideology and understand that Keynesian economic principles will KILL the host in the end. It'll just be too late when they do.
Auspm, if only the management of banks were working for their shareholders. They are working to line their own pockets at the expense of all others including borrowers, savers, taxpayers, and shareholders. Just look in the U.S. how much money the executives of Lehman Brothers and other failing or bailed out banks made despite shareholders taking massive haircuts (or even total wipeout). When Goldman sachs reported profits reounded strongly in recent times the executives took home bonuses that were larger than the size of the profit left for shareholders who only recieved the crumbs. One of the most fundamental problems with the stock market and why incompetent dishonest and greedy manegment is tolerated far more than in private unlisted companies all goes back to incentives and government intervention. Fundamentally compulsory savings mechanisms like superannuation means that ownersip of savings is to a large extent divorced from direct management of it, as large industry and retail super funds manage a lot of people's money rather than them managing it themselves (i.e. self managed super funds). Fat cat fund managers who consistently underperfrom the stock market and charge through the nose for it try not to stick there neck out for outperformance but rather hug the index so they don't underperfom too much and risk getting fired. Naturally people are less careful with other people's money than they are with their own, often in private many fund managers who are perputally bullish in public and buy any crap they get their hands on are bearish in private and wouldn't touch the stuff they buy for their clients. Since they still get paid big whether they perform well or not they don't want to upset the applecart and kick up a big stink about the fat cats managing publicly listed companies. This would be akin to the pot calling the kettle black hence why excessive pay packets are rarely voted down, and why underperfoprming directors are rarely voted off. Many of the overpriced acquisitions occur in large companies where management and directors own few shares and wish to expand their managerial domain and pay packets irrespective of the cost to shareholders (think Rio's acquisition of Alcan or Wesfarmers acquisition of Coles). If these directors and managers owned 100% of the business, i gaurantee you they would not make these overpriced acquisitons. Adam Smith originally correctly pointed out the conflicts of interest and flaws in the system of joint stock companies (i.e. publicly listed companies) hypothesized the system would eventually dissolve. He was right on the first point, but so far he was way off in his predictions.
I say that the next bank that needs a bail out or a guarantee gets nationalised and to hell with the rest who will have to enjoy actually becoming customer focus. That and the introduction of a law whereby any employee can request to be paid in physical cash so that the banks have to offer an incentive to attract deposits.
As far as I know the best "regular" savings account is with RaboDirect who are offering 6% on the first $200,000 with none of those annoying restrictions. They also have term deposits paying 6.4% for 6 or 9 months. And if you're a deflationist you can always tie up your money for 5 years at 7% with Westpac right now.
