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Why 27 bps?

Discussion in 'Property Finance' started by Arashi87, 25th Jul, 2015.

  1. Arashi87

    Arashi87 Well-Known Member

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    A quick question on why ...... 25,26,"27",28 ......points? :eek:

    Lucky number?
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Specific increased cost of funding perhaps arising from the cost of needing to hold additional capital.

    But buggered if I know............. you might be right : ), just some random number plucked out of the air at the latest surviveability meeting of the Adjustment Burea

    ta

    rolf
     
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  3. twobobsworth

    twobobsworth Well-Known Member

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    27 is the only positive integer that is 3 times the sum of its digits.
     
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  4. Tim86

    Tim86 Well-Known Member

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    27 is also the only number that is 27...
     
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  5. DanW

    DanW Well-Known Member

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    Because if it was 25, people would in their mind link it to the RBA changes. Some would say that they are taking back the last rate cut etc.

    27 says that it's independent of the rate cuts and has nothing to do with changed in the cash rate.

    Just an opinion, until they tell us the real reason..
     
  6. Be Developer

    Be Developer Property Developer Business Member

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    Taking a wide guess here,

    If RBA cuts a rate by .25 , Banks sill get .02bps for their own pockets.;)
     
  7. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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    When the RBA cuts 25bps it doesn't mean their cost of funds also goes down by 25bps.

    The RBA does not lend money to the banks to lend to us. People have this weird notion that the banks can "pocket" any difference between what the RBA says and what the banks do.

    The banks' costs of fund depends on their cost of deposits, debt instruments and securitisation. So even if the RBA cuts 25bps, it doesn't mean the banks' cost of funds also go down 25bps. It depends entirely on the market.

    Here's a reading for you common folks who don't bother to study a bit of finance and economics: http://www.rba.gov.au/publications/bulletin/2015/mar/6.html
     
    Last edited: 26th Jul, 2015
  8. Tim86

    Tim86 Well-Known Member

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    And the reason you are talking down to people here is...?
     
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  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It was probably the figure that enabled them to make another $1bil in profit.
     
  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I have a couple of theories:
    1. ANZ's SVR was 5.38%. Raising 27 points makes it a nice round number.
    2. I read a comment somewhere that suggested the banks would have to increase the cost of funding by between 10-25 points. The extra 2 points is them taking the opportunity to make some extra profit.
    3. I haven't got a clue.
     
  11. Darren A

    Darren A Well-Known Member

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    It sounds to me that you like to think of yourself as a sophisticated investor. If that is the case then why don't you enlighten us. Please tell all us common folk here what you have achieved, what is your game equities, real estate,bonds,fx or do you just go around bagging greedy real estate investors.
     
  12. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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    Because it's just so appalling how malinformed the masses are. ;)
    (and because i'm a biatch lol)
     
  13. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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    Nah, it's not about me. I won't talk about myself here in any shape or form.
    It's about you, common people! :p
     
  14. Tim86

    Tim86 Well-Known Member

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    Seems you think talking to people like a "biatch" is a good thing? Why do you think that is?
     
  15. Darren A

    Darren A Well-Known Member

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    Tim86 I wouldn't waste my time on this "biatch" any longer just let him crawl back into his hole.
     
  16. rhinsor

    rhinsor Well-Known Member

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    I would say because it is .02% over .25%.
    I wonder if banks will drop IP interest rates if the RBA drop rates.
     
  17. DanW

    DanW Well-Known Member

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    Maybe he's an economist like Steve Keen, they always get their predictions correct :)
     
  18. jaybean

    jaybean Well-Known Member

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    Because he's so bitter he didn't buy more.
     
  19. Tim86

    Tim86 Well-Known Member

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    It does seem strange though. This forum is a pretty respectful place. Why would someone that's never had any of us disrespect him, come here and disrespect us?

    Don't see that attitude very much around here.
     
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  20. Till Kingdom Come

    Till Kingdom Come Well-Known Member

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