Does anyone else think the reserve bank thing is becoming a bad joke.

I did not approve Bernie Fraser, when he started pushing Labor from his reserve bank position. A no no surely. However I think his management of the bank was pretty good.

The current bunch are far too close to the bankers. A number of their statements have indicated they see at least part of their job as maintaining bank profits.

Even this now looks like it is redundant.

Having been ignored by the banks with their last rate adjustment, I think the reserve now sees its main function is to maintain it's own prestige.

I think it is quite obvious that a rate cut is essential right now. The trouble is, the reserve knows that if it does cut rated, the private banks will ignore it, & go their own merry way.

The management of the private banks could never be accused of having Oz interests at heart. Fat chance of that.

Profit is all they see, & those huge bonuses slipping if profits are not maintained, & increased.

Our reserve bank is now just a joke, with no more effect on private interest bank interest rates, than I have. I wonder how much it costs us to perpetuate this particular joke.

Reform that long ago, put this country on the road it now runs on.
Include the reserve bank being independent.
No government could or should, tell it what to do.
With the world investing in the value of our currency indeed all of them,the issue is complex.
We take the gains we must take the pain.

That sounds more like a "grumpy old man" post to me, Hasbeen. I think
that the RBA, all things considered, are doing quite a reasonable
job. They have in fact implied that they will probably cut rates
in May, after twice cutting rates late last year.

The last thing that we need is cheap interest rates. The punters
would all be out there, bidding up house prices again, when they
are already hugely overvalued.

The thing is, our economy needs to restructure and it won't happen
without a bit of pain. Retail needs to restructure, to accept
the changing reality. People need to move where the jobs are,
learn the skills required, etc.

I was recently diagnosed to have a worn out back with arthritis
setting in, so I have to give up heavy farm work. I asked around
if there was anyone around who could give me a hand to do some of
it, until I restructure things. Nobody around at 50$
an hour, anyone who can work has gone to the mines

My sympathy yabby.
And I understand.
From a different side of the fence than you My thoughts are we make it too easy not to work.
For every one trying to get on the fly in fly out pay roll some are avoiding work.
Tried very hard to get 25 year olds and school leavers a job when working,walk up start with free training, but not many took it up.
My illness stops me bull dogging it,but I just must do it myself, dole is more welcoming to some than work.
That just has to be wrong.
Not sure but think things are not as bad as some say.

*My thoughts are we make it too easy not to work.*

Belly, I quite agree with you. I know a whole lot of young fellas
who have gone out, work and thrive. Then there is another whole
bunch, especially living in some country areas, who have no intention
of working. They have cheap living costs in terms of housing or
a Govt house, then various social security payments plus a bit of
cash, they have no need to work and don't want to work. The
system provides it all for them.

Posted by Hasbeen, Tuesday, 3 April 2012 3:12:40 PM

" ... The management of the private banks could never be accused of having Oz interests at heart. Fat chance of that. .. Profit is all they see, & those huge bonuses slipping if profits are not maintained, & increased. ... "

Already I am told the likes of NAB outsource our depositing related work to places like India and once the NBN is up, I suspect that that will increase by virtue of the increased bandwidth and the time and the costs it can save. Of course, the reason they can do this is due to the nature of the legal framework which encapsulates the economy. This in turn is a construct of mainstream politicians, thus, if you want something different, you perhaps out consider placing your vote elsewhere.

..

Posted by Yabby, Wednesday, 4 April 2012 9:08:08 AM

" ... The last thing that we need is cheap interest rates. The punters
would all be out there, bidding up house prices again, when they
are already hugely overvalued. ... "

Bravo *Yabby* and well said!

" ... I was recently diagnosed to have a worn out back with arthritis
setting in ... "

Sorry to hear that mate and I won't probe as to which type of arthritis it is. Beware the risk of psychologically induced depression upon the advent of your body no longer being able to conform to your will. Easier said than done no doubt, however, best of luck in your management strategies ... You too *Belly* as it is the first I have heard you refer to personal illness.

Posted by Yabby, Wednesday, 4 April 2012 2:18:29 PM

" ... *My thoughts are we make it too easy not to work.* ... "

" ... Belly, I quite agree with you. I know a whole lot of young fellas who have gone out, work and thrive. Then there is another whole
bunch, especially living in some country areas, who have no intention of working. ... "

It often surprises me when I read posters here refer to "dole bludgers" shall we say for want of better term. I have some experience with administrative law and my understanding of the conditions on "NewStart" payments is that not only must individuals actively search for jobs, but if available, they must take them or be cut off.

There may be another way to sk!n that cat *Yabby* and that would be by you registering as a prospective employer for your area on the "JobSearch" network. There used to be a program to take on Centrelink workers where they continued to receive their benefit, with a modest top up from their employee on an initial trial basis. You'd have to look up the regs on their website to ascertain the current state of play as there is a lot of ongoing change in this area above and beyond a reshuffling of the chairs and a renaming of the department.

..

http://www.centrelink.gov.au/internet/internet.nsf/payments/newstart_rates.htm

..

Payment amounts:

If you are Maximum fortnightly payment
single, no children $489.70

single, with a dependent child or children $529.80

single, aged 60 or over,
after 9 continuous months on payment $529.80

partnered (each) $442.00

single principal carer granted exemption
for foster caring/relative (non-parent)
caring under a court order/home schooling/
distance education/large family $648.50

Note: Pharmaceutical Allowance may be paid.

Yeah, in here *Yabby*

http://www.centrelink.gov.au/internet/internet.nsf/businesses/job_network.htm

Dream on let me tell you in Aussies peak I must have offended a China man.
Q fever 30 years ago, type 2 sugar 20 years ago, now Barma Forrest virus, that leaves arthritic for life.
And open heart to come.
But I have an advantage, never drop the ball, head down and charge.
I remain a unionist till death,and ALP activist.
At my age and from such a big family have seen real hardship.
But fraud too, if today an honest report, and honest work for the value of the dole you get, was introduced.
At fair going rate wages, I truly think 10% would drop off the dole.
I can point to cash in the hand employers who find such to work below fair wages tax free.
No person need go hungry today.
Yes housing is too hard rents worse.
But we need to keep welfare for the needy not the greedy.
As an ALP true believer I refuse to ignore free loaders who bludge on the true poor.
The we don't eat much mob from around here will not work, three generations, and vote Conservative in any case.

Posted by Belly, Wednesday, 4 April 2012 5:45:28 PM

" ... I must have offended a China man. ... "

That's quite a swag bag of nasties to deal with. I had never heard of "Q Fever" before and trust that you have long since killed it with an appropriate regime of antibiotics?

..

http://en.wikipedia.org/wiki/Barmah_Forest_Virus

" ... Barmah Forest virus is a virus currently found only in Australia. Although there is no specific treatment for infection with the Barmah Forest virus, the disease is non-fatal and all infected people recover. ... "

My biological mother has this one. Excruciating joint pain she claims, but even though she had a recent flair up, it did go into remission for a number of years. Perhaps a regime designed to keep the immune system up and limit stress levels could assist in limiting relapse?

..

http://en.wikipedia.org/wiki/Type_2_diabetes

" ... Obesity is thought to be the primary cause of type 2 diabetes in people who are genetically predisposed to the disease. .. Long-term complications from high blood sugar can include heart disease, ...

Jesus! Don't envy you on this one. Would like to ask how's your weight, how do you sleep, how much exercise aren't you doing and hope you limit the wooblah but feel that medical issues should be kept private subject to the discretion of the inflicted. Of course, it would also be somewhat off topic though a dollop of off topic can be good though.

..

I largely support the Unions in principle, and perhaps were it not for their efforts, the conditions of employment of the average worker would be highly unlikely to have reached their present standard.

..

As for the safety net, without it, there are considerable consequences in terms of crime etc as I am sure you are aware. In the absence of guidance, I strongly support a system that concurrently educates people visa vi the system as they struggle to break traction and work there way up into a "Living Wage" situation.

..

Here's to hoping that *Yabby* can get some raw grunt labour for his requirements.

I see in a speech, Phil Chronican, the operations manager of the ANZ has just stated that the supposed link between interest rates set by Australia's central bank and the rates set by the commercial banks is a myth that needs to be busted.

He said that since the global financial crisis, the cost of funds for banks had gone up and the interest rate set by the Reserve bank of Australia (RBA) had become disconnected from the commercial banks' funding costs.

Evidently I'm not the only one who thinks the reserve bank setting of rates is a self indulgence, of no interest in the real world.

Not just a grumpy old sod Yabby, but up with the facts. That's one of the worst things about having 3 heart attacks, all when working hard in the heat, you have to slow down. That gives you too much time to keep up with the goings on in the world, & time to get grumpy at the stupidity. Fortunately interest rates have no direct effect on me these days.

Yabby you must be living in the wrong area. Having slowed down as directed, I have to get help. My 1.5 acre of house paddock has 150 yards of large tree windbreak, which takes a lot of pruning & chipping/dumping, plus hundreds of trees & shrubs. Fortunately I have an old gully down by the river, where I can dump the big stuff. These days that requires labour.

I have no trouble getting fit young year 12 high school & uni students, who want to earn some cash, & only require a safety watch be kept on them. There are quite a few part time yardmen at schools, golf clubs etc, knowledgeable blokes who want more work, & give good value.

Contact the schools in your area, their yard men are often underemployed.

Hasbeen, there is a difference between a link and no link, which is
what the banks are trying to highlight and for good reasons. People
think that if the RBA drops th cash rate by 0.25%, then the banks
must be greedy buggers to not do likewise. Whichever bank dares to
not adjust by that amount first, has its head chopped off by the
media frenzy, through no fault of their own. So the banks need to
do something about it.

Fact is that the banks only source about half their deposits locally
and those deposits are becoming more expensive, as people shop around
for the best deals. So yes, the RBA rate matters, but so does
the overseas cost of funds. Given the EU crisis and with many
European banks pulling out of Australia, higher costs due to the new
Basel 3 reserves required etc, the big risk is in fact a credit
squeeze, as banks simply don't have the funds to lend.

WA has 65 major new resource projects happening. There is good and
bad in that. Its keeping Australia going, but its also sucked the
labour market dry of anyone who wants to work in non mining areas.

I can't put schoolkids onto an ATV to round up livestock. According
to Worksafe, they would first have to do an accredited course and
one farmer in NSW was fined 200k$ when an accident happened. So
I need somebody with at least half a brain. At the moment I'm
trying to do a deal with the neighbours, but I hate to lean on them,
as they are flat out as it is.

The RBA was always a bad joke.Prof Michael Hudson in 2009 visited our RBA and asked them the big question.Why don't they create from nothing the money to equal our productivity + inflation just like the other Central Banks? The silence was deafening.

Back in 1911 our Commonwealth Bank for the first 11yrs of it's life created from nothing a lot of the money that kept our economy debt free.In other words we the people paid less tax.Income tax came in in 1915 supposedly to pay for the BS WW1.Billy Highes in 1922 scuttled the money creation powers of the Commonwealth Bank and Paul Keating sold off it's carcass.

In 1913 Pres Woodrow Wilson gave away the right of money creation to the US Federal Reserve,a private group of banks.Ever since this time,we've had nothing but contrived wars,recessions and depressions.

The RBA is nothing but a tool of the US Federal Reserve.

Do not want to continue with my troubles but need to inform.
Q fever was the meat workers and farmers illness.
I got it out of my area drinking from a cattle trough after mustering cattle,
You can get inoculations now, not then.
Leaves symptoms including every one of BFV and not good.
BFV, was not aware, look it up, is said to be the biggest single cause of, yes unbelievable! Arthritic in this country.
Both leave a weakness beyond belief, but in the later only for some.
66 years and weight not good , but try weight loss if walking 50 meters leaves you in pain for an hour.
Look I just wanted to flesh it out BFV is mozzy born, we all should have a mozzy zapping plan.
Still have good days.

Sorry Yabby, some of that is garbage, particularly the bit about cost of local funds. Our lovely banks are trying to squeeze local depositors, to grab even more profit/bonus.

I have a couple of offset accounts on my cheque account, a few thousand of ready access safety money. The interest on those accounts had dropped in the last 18 months, by 2%. That can hardly be called an increase in cost of local funds for the bank.

If overseas funds have become so expensive, why aren't they maximising their acquisition of local funds? This 2+2 adds up to something like 5.

When I took it up with them, they suggested term deposits. If I wanted this money in term deposits it would all ready be there. Even then, their best term deposit rate is still 3/4% less than my offsets were earning 18 months ago.

This is not an isolated action. None of the other large banks are offering any more, although will up the anti a bit to snaffle a new account. Surely there couldn't be collusion on the interest rates our banks offer, could there?

All this is only a side issue, but highlights my original post, that the reserve bank is a joke. All the garbage about it controlling inflation with interest rates has been window dressing. All the reserve bank governors pontificating has about as much effect as a window pane, rattling in the wind, & is about as much use, just more expensive

Belly we did have a mozzie zapping plan, it was called DDT, & saved millions around the world from malaria, & thousands of others from dengue, & things like your problem.

Of course some greenie rat bag decided to make a name for themselves, & concocted a pile of "evidence" to "prove" it was harmful to bird eggs & other stuff, totally disproven now.

When I went to New Guinea there were no mozzies. Houses did not even have screens. A few years later everyone was back to mosquito nets to be able to sleep, let alone stay healthy. I'm not fond of greenies.

Do remember this example of green hysteria, next time you think about their current scam, global warming.

*When I took it up with them, they suggested term deposits. If I wanted this money in term deposits it would all ready be there. Even then, their best term deposit rate is still 3/4% less than my offsets were earning 18 months ago.*

Well yes, the market keeps changing. At one point, with the GFC
happening, funding was a disaster for banks and they overpaid and
would be losing money on some of those deposits now. If you pay
8% for 5 years and lend it out as a housing loan at 6.5%, you are
doing dough. But yes, competition is increasing. You now have Ubank,
Rabobank etc snapping at the heels of the big four. I never accept
the advertised rate and bargain every time I renew a deposit.
Sometimes they pay me extra, sometimes not, depending on their need
for funds. If banks stopped using overseas funds, we'd all be losers,because
Australia simply does not have enough wealth to cover all our borrowings, we don't save enough.

Banks need more term deposits and less switch accounts according to
Basel 3, as part of their reserve structure, so that is where they
will be paying higher rates. I suggest you buy a few bank shares,
then you'll get the annaul report sent to you, which explains their
funding costs and problems.

At the end of the day, after costs, banks are left with around 1%
of assets as actual profit. So a very small % in what they pay can
make a huge difference to their bottom line. That is hardly a rip off.

My impression is that we have a huge volume of super funds, sloshing around, looking for a home.

In view of the lousy, or actually negative, returns the super funds have produced for some time now, perhaps they should be cutting the banks out of the housing market, & at least earning some return in that market.

Sure this would involve some costs, but they would be minimal compared to the cost of watching share prices disappear down the plug hole.

The banks become almost as incompetent as government, as they get bigger. Perhaps that's why they become rip off merchants. I had accounts, insurances, some investments, & even loans a long while ago with the Metropolitan Building Society. They were great. Metway bank as they became were less good to do business with, but when they merged with Suncorp the rot really set in.

The only thing I have left with them now is a couple of auto 3Rd party policies, & that's only because I'll probably get rid of those cars before the rego is due again.

To pinch pennies they have tried a "one size fits all" system. I am not sure what pennies it's saved, but it will need to be quite a lot, just to make up for my business, & that of friends, that they have lost.

*The banks become almost as incompetent as government, as they get bigger. Perhaps that's why they become rip off merchants.*

Well Hasbeen, that is just your experience. Looking back over time,
I think that banks have become far better then they ever were. In
my case, I have a great relationship with my Westpac bank manager,
a woman who has been there for years. If I have a problem, I ring
her, its fixed. But I accept that not all bank branches are the same.

Banks used to pay no interest on liquid deposits, now with switch
accounts, the return is quite reasonable. The electonic payment
systems which the banks developed, make paying bills and all the rest,
so much easier. I hardly ever need to write and post a cheque these
days.

I lived through the days when I had to pay 18% interest, so I know
what pain is. It seems to me that what has happened is that in the
2000s, people bid up houses to unsustainable price levels, massively
overpaid and are now trying to blame banks for their misery.That
is just a case of shooting the messenger.

The banks today work on a gross spread of around 2.2%. That is a
little over half what the CBA used to work on in the 60s and 70s.
The reason why bank profits are large is because such huge sums
have been borrowed, as Australians lived it up for 20 years. Now
finally people are starting to save again, which has to be a good
thing. Fact is that most bank profits will eventually land up in
peoples super funds. But few understand the system enough to
acknowledge that

I find this laughable. See, the big men and women of this likable situation has the fundamentalism's view of a kindergarten's horrific nightmare.

Power does corrupt what we are.

Adolf Hitler

Smile