ga('send', 'pageview');
John Passant

Site menu:

November 2010
M T W T F S S
« Oct   Dec »
1234567
891011121314
15161718192021
22232425262728
2930  

Tags

Archives

RSS Oz House

Share

Authors

Subscribe to us

Get new blog posts delivered to your inbox.


RSS Blog RSS

Site search

Miniposts

Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

Advertisement

Links:

The banks are telling porkies

I know it may surprise you, but our dear sweet banks aren’t telling us the whole truth when it comes to home loan rate rises.

The Commonwealth Bank increased home loan rates 45 points, 20 points above the Reserve Bank increase of 25 points. The head of the bank, Ralph Norris, argued that borrowing costs had gone up and so justified this increase.

He also said that in the last few years their mortgage borrowing costs had gone up 1.35 percentage points above th RBA cash rate, but they have been able to recoup only 1.04 percentage points.

The reality is more complex. The truth is out there. Actually it’s on the Reserve Bank website.

What Ralph didn’t mention, but what the RBA figures show, is that since 2004 the net interest margins of the banks have oscillated in a fairly narrow range between 2.25 and 2.50 percentage points.

In fact the RBA figures show that the banks in Australia have recouped the increase in funding costs caused by the Global Financial Crisis and the gap is actually a little higher than before the GFC. 

Where the banks have really made their money is on credit card debt, personal loans and loans to small business. The net interest rate margins on these three areas ahs ballooned massively in favour of the banks.

Something else happened during the GFC in Australia. Competitors to the 4 major banks dropped out almost completely of the home lending business. The 4 majors’ share of the home loan market went up from around 60 percent to almost 80 percent.

So now they are trying to gouge more money out of home borrowers just as they are gouging more money out of credit card debtors, personal loan holders and small businesses.

This has the Opposition, and now the Government, bleating about more competition being the answer. This won’t address the structural reasons for Australia’s higher interest rates – the minerals boom, which a resource super profits tax might have slowed down a bit, the wider ongoing economic recovery tied to Chinese and other nations desperate for our minerals, the shortage of skilled workers, the increased demand for high paid workers in the mining industry and the like.

Indeed, the idea that competition is the saviour fundamentally misunderstand later day capitalism. Competition leads to monopoly, or int eh case of the big 4 banks in Australia, oligopoly. It is th logic of competition to produce more and more concentrations of capital.

There can be no turning back the clock on this. No matter what the Australian Government does the end result of the capital accumulation process in Australia will be fewer banks.

In the meantime Australian banks are taking us for  a ride and cutting our living standards. The obvious response? Industrial action to restore our real wages. What about a super profits tax on the banks? Then let’s consider nationalising the banks under workers’ control.  Any chance anything will happen under this Labor Government and its lapdogs at the Australian Council of Trade Unions? None, zero, zilch.

Only we rank and file unionists can address the erosion of our living standards that mortgage rate rises produce.  Strike for real pay increases.

Advertisement

Comments

Comment from Nookn
Time November 8, 2010 at 8:52 am

If Gillard and Swan really had the public interest at heart they would have introduced reforms in 2007 for portable bank account numbers – to facilitate account-switching like telephone numbers and accounts and enacted legislative restrictions on unreasonable exit fees, set reasonable salary caps on bank CEOs, regulated prohibitions on bank takeovers, banned foreign bank takeovers and given government agency support to community banks and credit unions to boost non-bank sector competition. Instead they have have spoken empty words about feeling our anger, yet their bluff about their delays points to no action now or likely any time soon. Why so? They are happy to meekly serve the wishes of big 4 banks, lest they tarnish their image as solid backers of solid blue chip corporates in a dangerous world of financial chaos.

Comment from Walter
Time November 8, 2010 at 7:02 pm

I note with some irony that your website is full of advertising for banks and financial corporations. I don’t understand how anyone can accept and promote advertising from corporations that are ‘taking us for a ride’ and at the same time deride them as bastions of capitalism.

Am I missing something here or is this what is called a double standard?

Comment from Arjay
Time November 8, 2010 at 7:14 pm

Competition does not lead to monopoly.Lack of it does.

The fractional reserve system of banking must end.Private banks own our increases in GDP and inflation by virtue of creating money in their computers to equal it.Banks can make $1000+ on a deposit of $100.This is why banks ars the most powerful institutions on the planet,yet produce nothing of tangible worth.

We need to initiate a new Govt Bank.This can be done instantly via Australia Post.The infrastructure already exists.

We never had true democracy in the West.At least Russia and China are more honest about their totalitariarn Govts.Our Corporate media have us living under the illusion that we are free.

We live in debt slavery. http://secretofoz.com/

Comment from John
Time November 8, 2010 at 7:55 pm

Gee Walter, it is such an original and intellectually dazzling comment. Guess what. I sell my labour power to survive too. Does that make me a capitalist? Grow up. If you can’t do that spend some time finding previous responses to this type of nonsense. And way not try to address the substance of the arguments instead of, once again, carping from the sidelines?

Comment from Tom
Time November 8, 2010 at 7:56 pm

Australia is no longer a democratic country. The Australia Act of 1986 which illegally replaced our Constitution of 1901, will allow for more of our inalienable rights be taken from us. State elections are coming up so the major parties are using a lot of spin to win votes by making a lot of noise about the big 4 banks. After the elections and a result is determined they will do zilch about the big 4 banks. The big 4 banks are a Corporate Cartel and take it in turns to raise interest well above the Reserve Banks interests rises. The only chance of returning to any form of Democracy is for the people to unite and send a loud and clear message to Parliament, banks, and the Cartels of foreign Corporations who have taken control of our utilities, trains, trams, water ect. that we will no longer tolerate it.

Comment from Arjay
Time November 8, 2010 at 8:16 pm

Totally agree Tom.The first step is to reverse the Keating treachery of selling off the Commonwealth Bank.While Joe Hockey makes noises about bank skull duggery,neither party will give them real competition.

We must end the capacity of private banks to create money from nothing.They must only loan out what they have on their books.

New money to equal increases in productivity and inflation must be created by our Govts as a tax credit ,rather than debt to private banks.

Bill Still makes the point in http://secretofoz.com/ that eventually under this banking system,the total amount of money in our economy will equal the total amount of debt.ie the banks will own everything.

Comment from Walter
Time November 8, 2010 at 8:53 pm

So if the banks are nationalized who will sponsor this site? Surely once these cartels Tom rants against are taken over by the State, there won’t be the type of commercial sponsorship which keeps afloat not just small business but the millions of websites such as this wonderful forum for frank and intellectual exchanges.

I like the big banks. They protected us from the GFC and lent me money to buy a flat.

Comment from John
Time November 9, 2010 at 6:21 pm

Apparently according to Walter I have to live completely divorced from capitalist society. Strange logic since the system envelopes us all. Where’s my island with no manufactured products…Talk about pre-historic.

Comment from Arjay
Time November 9, 2010 at 7:04 pm

Walter ,the big banks were guaranteed by us the tax payer to the tune of $ 750 billion .They saved no one.The US Federal Reserve is responsible for this depression just like the 1930’s and before that the 1890’s depression.

It works like this.First they create too much money causing too much inflation,then they pull the rug via very high interest rates,crashing our economies and buy up assets for cents on the $.

They keep doing it Walter and people like you praise them when they shaft you.

Comment from Walter
Time November 10, 2010 at 1:35 pm

Arjay, you may well be correct that the US Fed created the depression, but here in Australia we would also have experienced a recession and/or depression if we didn’t have a strong banking and financial sector.

Sure they shaft us, but I also recognise, as John has pointed out above, that capitalism is entrenched and we must accept certain aspects of this system, even if we don’t like it.

I cannot blame the banks for big profits while at the same time feel safe because these same institutions were big enought to protect our economy.

I also note that many socialist countries have fallen into recession. I don’t know if this is because of the same factors as you mention re: money circulation and interest rates, but I do know I’d rather be here with rich nasty bankers than in a country under economic collapse and a friendly, socialist banking system.