NEWSFLASH! In September I will join The Conversation as its Business and Economy Editor. I have been honoured to work at The Age for the past ten years, originally alongside the legendry Tim Colebatch, and for the past four years as economics editor in my own right.

At The Conversation, my job will be to make the best thinking from Australia's 40 univerisites accessible to the widest possible audience. That means you. From the new year I will also write a weekly column.

On this site are most of the important things I have written for Fairfax and the ABC over the past few decades. I recommend the Search function. The site is a record for you, as well as me.

I'll continue to post great things from The Conversation and other places here, and also on Twitter and Facebook. Enjoy.

Saturday, August 16, 2008

Will the banks pass on the rate cut in full?

I'd thought so. But Ian Verrender in today's Herald thinks not.

An extract:

"You've probably heard all the complex explanations about the higher cost of funds in offshore markets because of the global credit squeeze and been dazzled by talk of "spreads blowing out to 100 basis points".

It sounds impressive and there is no doubt it contains a grain of truth, because costs certainly have risen.

However, the technical term used by most economists for this argument is "crap".

The real reason they won't be passing the cuts on to you is simply that they don't want to, and they don't have to. And if you don't like it, see if you can get your loan elsewhere. Bet you can't."