Bastard Banks

So the Government, the Opposition, the media, various blowhards in the commentariat, and those poor old mortgagors have lambasted the banks for their most recent act of bastardry.

How dare they increase their rates by more than the Reserve Bank increase? Well people the reason they did is simply because they can.

Where else in the commercial world do we have contracts between a buyer and a seller where one side (the seller) can change the price of the contact at their whim - at anytime during the term of the contract? That is the issue folks - you want a mortgage in Australia then you will be captive to the form of mortgage contract that is used by Australian banks. So get over it or move elsewhere.

The truth is that the Australian housing market has been seriously skewed in favour of the lenders and the builders and developers and the state governments and everyone else who earns a living from exploiting the poor old *buyers*. And if they ever find out - then the place will go belly up faster than a Roger Bannister mile.

And adding more competition will not change that fact Virginia. The truth is that various Governments State and Federal, Liberal and Labor have encouraged allowed this nice little risk free earner for the banks to continue for eons. How else do you think they got to be so profitable?

Ahh - free enterprise is a wonderful thing isn't it? Especially when it is built around a sanctioned scam of young naive and innocent home buyers ;-)

And there is some thinking that suggests the banks are getting a bit tetchy about the number of mortgages that are starting to look a little shaky - and they are using some of these *extra* rate rises as a bit of insurance.

So it looks like their risk management processes are putting the price of mortgages up - does that suggest anything to anyone?

No I didn't think so.