Why 27 bps?

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

Lucky number?

 

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

 

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

 

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..

 

Taking a wide guess here,

If RBA cuts a rate by .25 , Banks sill get .02bps for their own pockets.

 

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

 

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

 

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

 

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.

 

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.

 

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

 

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

 

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

 

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

 

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

 

Maybe he's an economist like Steve Keen, they always get their predictions correct

 

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

 

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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