how 'bout those fuÇking banks?

[phishtaper]

'Outrage' greets banks' failure to match rate cut

Facebook group urges consumers to speak up to lower borrowing costs

Dec 11, 2008 04:30 AM

Rita Trichur

Ann Perry

Business Reporters

Patrick Novak says it is time for normally "apathetic" Canadians to speak out against a decision by the Big Six banks not to fully match a big interest rate cut by the Bank of Canada.

The 32-year-old homeowner started a Facebook group called "Pass on Rate Cuts Canadian Banks" Tuesday night hours after the chartered banks lowered their prime rates by 50 basis points. The central bank had earlier cut its trend-setting rate by 75 points.

As a bank shareholder, Novak stands to profit from the decision not to implement the full rate cut. But as a consumer with a five-year, variable rate mortgage, he worries it will stymie the central bank's efforts to jump-start the economy.

"It seems that the system is failing in some respect," he said in a phone interview from Vancouver.

Panagiotis (Pete) Korogonas, 31, lives in Calgary and joined the Facebook group shortly after it was set up. As a financial analyst, he understands banks are facing higher funding costs, but said "it is hard for a little guy like myself to feel sorry for a big bank." Consumers, he said, are more embittered than they were in early October when only two big banks declined to pass on the full savings to their clients.

"Why should we have to kick and scream for rates that we should be given right away?"

Novak and Korogonas are not alone in their anger. The Consumers' Association of Canada has received "hundreds of calls" from across the country. Spokesperson Bruce Cran said consumers are "absolutely outraged."

Their criticism appears two-pronged. Consumers are upset the banks are blunting the impact of the Bank of Canada's monetary policy and that they're doing so at a time when they are tapping taxpayer-funded programs to bolster lending. Among those initiatives, Finance Minister Jim Flaherty has tripled Ottawa's mortgage purchase program to $75 billion and backstopped more than $200 billion in interbank loans.

Liberal MP Dan McTeague said he is also getting an earful from his constituents. He suggested Flaherty take more action to ensure consumers and businesses have sufficient access to credit at a time when Ottawa is shoring up the banks' lending capacity.

In a statement, Flaherty's spokesperson said Canada has "an open, competitive banking system" and the federal government "does not dictate business decisions" to the banks. He noted the objective of both the mortgage purchase program and the lenders assurance facility is to "further improve credit availability and affordability" for consumers and businesses.

"We're closely monitoring the effectiveness of both programs to ensure that objective continues to be met," Chisholm Pothier said.

"Any decision to keep both programs in place would have to be based on their effectiveness in meeting that objective." He did not specify what criteria the government would use to assess their effectiveness, or any timelines.

Laurence Booth, professor of finance at the Rotman School of Management at the University of Toronto, said "there's no direct relationship between the overnight rate and the rates the banks charge. So, there's no economic reason why it should be one-to-one in the first place." He said banks tap a variety of sources to fund loans, including equity capital, long-term debt, medium-term funds, their deposit networks and the money market and ``not all of them vary in lockstep with the overnight rate."

In an email, a spokesperson for the Toronto Dominion Bank wrote that a number of factors go into the bank's decision to move its prime rate, including "the competitive landscape," the Bank of Canada's overnight rate, market conditions and the bank's costs, and called its decision to lower its prime rate 50 basis points "balanced."

But Jim Stanford, an economist with the Canadian Auto Workers union, said it's "a problem that the full degree of stimulus intended by the Bank of Canada isn't filtering through the banking system. That is frustrating the Bank (of Canada's) efforts to try to stimulate spending."

Stanford said it is important to stabilize the banks. "But part of that plan has to be firm commitments by the banks to both increase the amount of their lending and reduce the cost of their lending."

[SaggyBalls]

Instead of stocks and bonds, Grow Ops are easily the best return on the dollar.

Screw the banks.

[SmoothedShredder]

I got stocks in grow-ops. The money I make, I take to the bank.

[Thorgnor]

"We can't all be saints." - John Dillinger

[can-o-phish]

Now they're saying to the Ontario government to reduce corporate taxes or jobs will be lost...holy fack, this is just disgusting...they're not worried about jobs being lost, they're worried about themselves and possibly being reduced to a few million dollars rather than a few billion... :crazy:

[Kanada Kev]

Yup, 14% cut down to 10% !

WTF?

[Davey Boy 2.0]

A Vancouver woman is selling a business idea billed tantalizingly on Craigslist as "Truly 100% Recession Proof." The 140-page, "A to Z" plan being pitched online targets those looking for a foolproof money-making operation during the economic downturn and covers everything from how to set up an office to marketing and promotions.

And then there's the part about hiring escorts.

"If [you're] tired of this changing economy . . . maybe this is for you. What does your financial future hold for you? Are you going to be able to pay off your home and retire early realistically or is it all just a pipe dream?" read the Craigslist posting, which advertises an "escort agency kit." "It sounds like a sales pitch but it's not," says Bianca, who promises to reveal all the secrets of running an escort agency and make those who buy the kit flush with cash.

The 41-year-old former escort-agency owner, who asked that her real name not be used, has been selling the kit "off and on" for five years. But last month, with the economy worsening, she said she decided to ramp up efforts. She created a website, TheEscortAgencyKit.com and posted on Craigslist.

At the Vancouver Taboo Naughty But Nice Sex Show earlier this month, interest in the kit was "phenomenal," Bianca says. After returning home from the show, she says, she received 95 inquiries about the kit.

Operating an escort agency is not illegal, she says. "Whatever two consenting adults do behind closed doors is strictly up to themselves.

You're only an agency booking time." Of course, not everyone will jump at the chance to run an escort agency.

"There's a lot of preconceived notions out there," Bianca says.

However, she says the kit appeals to a broad range of people, especially those considering the opportunity to, as the Craigslist posting puts it, "Start Your Year Off making some serious money!" Indeed, an escort agency will always be a money-making machine, Bianca says. But they are especially profitable in an economy such as this one.

"The more frustrated men get, the more sex they have to have," she says. "When the boys can't come home to their wives and tell their wives they're losing everything by the seat of their pants, some of these men get escorts."

[Hal Johnson]

Sweet, escorts will be dropping in price.

[Thorgnor]

I love Capitalist price-competition... until the whores start gabbing to each other about how much they charge... fucking whores.

[Thorgnor]

was that in bad taste? ^^

[Davey Boy 2.0]

not from my perspective TB

[Thorgnor]

Thanks DBizzle... I was beginning to think maybe I had answered my own question.