Informed Debate
Bank bashing has become very confusing lately {Click on Links}. (Business Day) reckons "Australia's big four banks have fattened their margins while complaining about being squeezed, new figures suggest." (The Australian) reports "the RBA said it expected [increases in mortgage rates] because of rising funding costs and had taken them into account in its monetary policy settings."
Logic tells you that either the RBA or the "new figures" are wrong. Faith in central bankers is never well placed, so let's look at who came up with the contradicting figures. Oh look, it's APRA, the Australian Prudential Regulatory Authority (potentially one step worse than the central bank).
Australian Institute director Richard Denniss explains the APRA figures: "It's like making hamburgers. If meat accounts for a third of your costs and the price of meat goes up 10 per cent, you shouldn't be expected to put up the price of the hamburgers by 10 per cent."
The man who first explained APRA to your editor used to say "the Labor party couldn't run a hot dog stand". It seems the RBA couldn't run a hamburger stand. This is where it gets really funny: "The Australian Bankers Association confirmed the [APRA] calculations were correct. But it said they didn't reflect banks' actual cost of funds."
"To be honest we can't work this out," said chief executive Steven Munchenberg. "Performing the same calculation we get the same result, but I know it is not right because if it was we would have been being beaten to a pulp with this by the government and the opposition."
Bankers who can't calculate their margins, but regulators who can?
Foreign Investment
How's (this) for a chart?
Bank bashing has become very confusing lately {Click on Links}. (Business Day) reckons "Australia's big four banks have fattened their margins while complaining about being squeezed, new figures suggest." (The Australian) reports "the RBA said it expected [increases in mortgage rates] because of rising funding costs and had taken them into account in its monetary policy settings."
Logic tells you that either the RBA or the "new figures" are wrong. Faith in central bankers is never well placed, so let's look at who came up with the contradicting figures. Oh look, it's APRA, the Australian Prudential Regulatory Authority (potentially one step worse than the central bank).
Australian Institute director Richard Denniss explains the APRA figures: "It's like making hamburgers. If meat accounts for a third of your costs and the price of meat goes up 10 per cent, you shouldn't be expected to put up the price of the hamburgers by 10 per cent."
The man who first explained APRA to your editor used to say "the Labor party couldn't run a hot dog stand". It seems the RBA couldn't run a hamburger stand. This is where it gets really funny: "The Australian Bankers Association confirmed the [APRA] calculations were correct. But it said they didn't reflect banks' actual cost of funds."
"To be honest we can't work this out," said chief executive Steven Munchenberg. "Performing the same calculation we get the same result, but I know it is not right because if it was we would have been being beaten to a pulp with this by the government and the opposition."
Bankers who can't calculate their margins, but regulators who can?
Foreign Investment
How's (this) for a chart?
Source: FIRB
The concert goers in Mullumbimby may have cheered around us back in 2007 as Kevin of Eumundi got elected. Few of them read the Daily Reckoning between smoking various substances and so few of them knew what was to come. It wasn't a great time to be elected to say the least.
Now, several years on, Julia is stuck with the impressive jump in foreign investment depicted above. Not that it's her fault. But how will voters see it?
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