Banking on the arrows pointing down

Last updated 02:03 08/03/2009

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Pam Corkery

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AN embarrassing confession: deep down I believed that if we all ignored the recession it would go away.

It seems I'm wrong. I hate that. The past week has seen the value of my theory drop faster than the Kiwi dollar.

The nightly news bulletins are full of graphs with lots of different coloured lines. The arrows are all pointing down, dude, as we said in the 70s.

Maybe it's more media coverage bringing this realisation, but I don't think so. Most of us now know someone who's been laid off.  

People talk of being alright for the next six months then it's a fingers-crossed situation.

 The Reserve Bank seems irrelevant, despite slashing the official cash rate last week to its lowest-ever level of 3.5 percent.

 Bank Governor Dr Bollard said this was to stimulate the economy.

The OCR rate is zero in the States and Japan and it's not helping there.

 Granted, our banks took the message and will lower floating mortgage rates. But they've said a firm no to reducing penalties if people want to switch from their fixed rate right now.

 This is how I know the recession is happening. I support the bank's stance. I want my contract with my bank to be adhered to in good times and in bad.

And banks aren't charitable organisations. It wouldn't be natural.

So Finance Minister Bill English whining at them to drop the penalties is a waste of heartbeats and he knows it.

Banks need money invested too. Returns on savings have to be attractive so they can get dosh from people called savers who are these people? to be able to lend it to those of us who aren't.

 Bill English has also said Kiwis are pretty resilient about this recession.

Idiot.

 Young New Zealanders especially have never known a recession and it's only just begun!

 Sorry if I bummed you out with my late recession realisation and defence of banks.

 I hope you won the Lotto.

Only joking. I hope I did!

 

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