Uncle Joe puckers up and blows the first dog whistle of the season

On the 3^rd January 2012 @JoeHockey tweeted that “I warned of this a year ago!!!”

I clicked on the link wondering what financial horror the federal shadow treasurer had uncovered.

The article merely confirmed the bleeding obvious; “Among banks trading in Australia, the major lenders account for 86.7 per cent of the home loan market.
Well, knock me down with a roo’s tail feather!

Now mortgage holders can switch between banks with no financial penalty for doing so, they are still sticking with the big banks.

I wonder why?

Could it possibly be that these aspirational borrowers believe that solid reputations built up over decades or centuries by the banks really matter in periods of global financial uncertainty?

Or did many of them approve of the big banks following the November 2011 example of the Reserve Bank rate cut? After all there was a surge in mortgage lending to first home buyers and investors right after that – mostly within the banking sector.

Were they cheered by the fact that in December all four of the big banks had passed on another rate cut to their borrowers?

Now Uncle Joe likes to blow his dog whistle loudly over Twitter, this time crying out that Teh Big Four are still big!
A few street mutts might even scamper his way. This old mongrel won't be one of them.
I may hail from a long gone time where you actually knew your bank manager and it was the price of our schooners which concerned us all, but for the life of me I can’t see that consumers exercising choice is a problem for the country. Specially those consumers taking out a new mortgage.

Why should they go and pay higher borrowing rates in the non-banking sector just to please Hockey’s notion of how the world should turn?

Running dogs from http://www.halhigdon.com/
Dog cartoon from http://www.webweaver.nu/

Australia may be down but it's not out

Only two more sleeps until the Federal Budget for 2009-10 is revealed.

With most people expecting the worst and mainstream media and Coalition heavies stoking this expectation, it's worthwhile looking at the nearest thing to an unbiased assessment available.

The Reserve Bank statement on 8 May 2009:

"Indicators of domestic activity, information from the Bank's liaison program and business surveys all suggest that the economy has been contracting since late 2008. A significant contraction in GDP is estimated for the first half of 2009, with the peak-to-trough contraction in GDP a little smaller than during the recession in the early 1990s. The economy is forecast to begin to grow from late 2009, although the recovery is expected to be gradual, partly reflecting the slow recovery in global demand (Table 16). In year-average terms, GDP is forecast to decline by ½ per cent in 2009/10 before growing by 2¼ per cent in 2010/11. Factors that would suggest a less severe recession here than in many other countries include the bigger decline in interest rates to end-borrowers, the healthier state of the financial sector, Australia's export mix (a relatively low share of exports of capital goods and high-value manufactures, where global trade has fallen most), the recent recovery in the Chinese economy, and the exchange rate depreciation in the second half of 2008."

Complete statement can be downloaded here.