Ok, great, we have a 100 Bps cut in official interest rates aimed at stimulating our ailing economy but how much of this is going to be passed on to home owners, and more importantly, businesses. I do not have the figures on hand, but to date, less than 100% of the rate cuts have been passed on to home owners, but the sad fact is that even less has been passed on to businesses as reduced borrowing rates as the Australian banks take advantage of a situation to feather their own nests. Sure, the Treasurer can huff and puff and threaten to blow the house down, but unfortunately these fat little bank running piggies did away with the house of bricks long ago and are currently untouchable.
So, what do we do about this?
Well, given that at last count, no Australian banks had been bailed out by anyone, exposure to the US was written off their balance sheets last year (not hard to do, just replace what you thought you had with a big fat zero!) and i continue to believe we have seen the low in the Australian Equity Markets, take 90% of the cash you have sitting in the bank and buy Australian Bank Shares! Lets face it, the shareholders come first, customers come last, we have to be customers because the mattress alternative is not all that safe, so why not become shareholders as well. Then, at least when you are being kicked by your bank, you will have the satisfaction of knowing that it is all for your own benefit!
