Is there really a cease fire, or are the KiwiBank freedom fighters simply regrouping in anticipation of a strike from across the ditch by the Aussie Banks?
Maybe Peter Jacksons Chinese made Lancaster Bomber has been brought here to help the resistance with the next faze of the interest rate war, “the big one” the one that will end all interest rate wars. Or, has that last war already been fought, I guess only time will tell.
For now I think all of the Banks are licking their wounds and are hoping for a little time out from the interest wars so as they can rekindle their losses and yes there have been a few and still counting I dare say.
So where to from here, just like with the end of any war we are now looking at a rebuilding faze, and what you see is what you get.
I don’t think there will be too many smoking barrels for a while.
It’s going to take time for the wounds to heal so I think you will see both sides resting up in the shade of better margins for a little longer and to me that is fair, after all, they do have business to run.
Sorry to disillusion those that think banks are a charitable organisation, and there are quite a few out there that think that is the case, I can assure you they are not.
Expecting the banks to reduce interest rates every time the Governor of the Reserve Bank reduces the OCR is like thinking house prices always increase in value.
And there were some that believed that to be the case, and that we live in a perfect world. Some wealth creation companies have fantastic flashy presentations based on living in that perfect world, and just recently hundreds of millions of dollars have been lost in New Zealand alone based on those theories.
The harsh reality is, there is no such thing and it is very unlikely to ever be.
In all walks of life there are what we call market influences, and that is not to say they are to blame for what transpires in our lives, as it is not the influences, but rather how we react to the influences than bring about change.
That is going to be my advice this week, think how any change in the market would impact on your life as that is all there is to go by at present. My gut feeling and it is just that, if you can fix for six months at 1 percent below the floating rate, why wouldn’t you?
If I get wind that the Lancaster does take to the air with the resistance onboard I will do another update on their mission.
But if all stays quiet for another week, next week I will give you an insight into why some properties are increasing in value whilst others although similar in style, size, area, and price, will take a hit, until next week, keep an eye on the skies. . .
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