Distortion Guaranteed?

While the Rudd government may have moved quickly to provide guarantees for the major Banks during a financial turmoil … the impact of doing so has been disastrous for borrowers.

Right now, these major Banks seem to account for virtually 80% of all owner-occupier loans for property.

As such, the margins they are charging have never been higher — despite the Banks’ protestations of being “squeezed”.

RBA's Dilemma

RBA's Dilemma


Therefore, overall borrowings borrowings have been slowly trending downward over the past six months — because the major Banks have effectively amplified the rate increases handed down by the RBA.
[Read more…]