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CBA announces $3.6B first half profit

Discussion in 'The Pub' started by spruce, Feb 15, 2012.

  1. Well,

    Having a mortgage with the CBA, I read the below article with interest.

    What are your thoughts?
    Are the banks in Australia overly greedy?
    Or do you think their record profits are good for their shareholders and the Australian economy?


  2. greedy is not the word!! I have a mortgage with them as well, used to work for them and as an employee you get sweet fark all in discount on mortgage, the only real benefit was m/card fees at 14% back then they were about 21% standard.
  3. No, it is the rent-seeking class who own them which is greedy.

    Good for their shareholders does not necessarily equate to good for the economy, unless you mean that the systematic expropriation of wealth from the poor to the rich is good for the economy.

    The question should be: What is good for society?
  4. I'm with them too. I find that they do provide a really good service. I called them up yesterday in an unrelated matter, and the guy noticed that if I went to a different mortgage I would save a fair bit of money. Looked it all through and no catches, lower rates, and less fees. In the process of changing it now.

    But yeah, the rate raises are always annoying. If there is a reserve bank increase then your worried hey will add more, no change and they will change anyway and decrease they wont pass it all on. An extra point here and there and the rates slowly get further and further away from the reserve bank.
  5. The banks always stated that their interest rates are not governed by the movements of the RBA. Well after what happened this week I believe everyone would agree.

    The RBA is basically a toothless tiger. I find it amusing they try and control the economy with interest rates anyway. I read a stat a while ago (can't remember where) that stated that only about 1/3 of the Australian population has a mortgage. So, moving interest rates is only really going to affect 1/3 of the population. In my view it is that 1/3 who are the most likely to have the least money anyway, so how does lowering rates stimulate the economy.
  6. Guess who are the major shareholders of the banks? .... yes its YOU through your superannuation funds.
  7. G'day everyone,...

    Though the high proffits made do irk me I cannot be reminded that they are buisness's and no longer a service.

    What dose infuriate me though is the insurance industry and the proffits it makes but when floods etc like we have had happen they get bailed out by puuting fee's and charges on to cover their proffits,....
    Why the fark are we haveing to pay flood leveys etc on other things to prop up them and let them keep their proffits,.. they should have to use all their resurves first before they get any help at all!

    But I apollogise if my rant was off topic,.....
    Just how much proffit is to much for a bank to make?

    Dr Who?
  8. I give them till the end of the week before they announce job cuts...
  9. There is no such thing as too much profit. The economy runs off corporations making profits, without profits, the wheels slow down, and continued losses will send share prices plummeting, which leads to lower investments, then people start to pull out, and before you know it the government will say "We'll save you!".. Then the government will seek to compensate and "bring the budget back to surplus" by slashing funding to .. oh I don't know.. education or health maybe... Failing that, they'll sell off something like NSW Cityrails Illawarra line - which ironically will probably end up being bailed out after x years by the government anyway since its an important infrastructure that the state cannot let fail - since they pushed so many people out of their cars through congesting traffic with cameras and lowered speed limits, and into public transport.. sigh..

    There is a class divide. Those who have the capital to play with tickers on the ASX.. and those who must play by the workers rules. If money is not making money, then you're stuck Just off Broke (JO8)
  10. This is true. But our forced and unwilling complicity doesn't mean it is in our objective interests. And this is so in a number respects:

    (1) perpetuates the system of capitalist expropriation.

    (2) it provides you with a minimal stake in the system, thereby providing it with a veneer (not vernier, thanks Pat!) of legitimacy, such that people are duped into loving their subjection to a system that exploits them.

    (3) (Even if you don't accept points 1 & 2 ), for most of us it is a system of compulsory taxation, by which our money is then given over to the financial sector (the same bunch of pricks) to manage in our name, but without our control, for a fee.

    (4) Control of the funds, so appropriated, has fuelled financial speculation, thus playing its part in the global economic depression we are currently experiencing.

    (5) The scale of the funds made available in this way (pt 4), and competition to seek a return on it, has lead to cheep loans, speculation by the rent-seeking class (aided and abetted by an egregious tax concessions through negative gearing), leading to greater completion for housing, and contributing to first-home buyers being squeezed out out of the market, forcing them back into rented accommodation. (It's not the only factor leading to this outcome, but is a significant factor, and an avoidable one.)

    (6) It tacitly legitimises the gradual degradation of the old age pension (which isn't linked to increases in CPI) into a residual system, thus mirroring similar patterns of degradation in pubic education and health systems.

    (7) Given that it is a system of privatised taxation, it diverts funds that should be used to invest in education, public infrastructure and strategic investment in new technologies, thereby sapping the conditions upon which relies the future prosperity of our society, (and the future pension dependent tax-base).

    Oh, and before you argue that Super is necessary to fund the retirement of an ageing national demographic, please remember that they will be the healthiest generation to meet retirement age thus far. Many of them will choose to postpone full retirement for this reason. Also, they tend to make their greatest demands on the public purse during the last 10 years of their lives (irrespective of individual life span), meaning the average age at which they will make the increased demands associated with decrepitude will also be pushed back. Most of them will have exhausted their superannuation by this point, and so superannuation will not solve this problem. So why divert funds away from public investment in education and public infrastructure now, when this will pay dividends later by promoting future prosperity and the tax base upon which the pension and health systems will rely?

    So who really benefits from compulsory superannuation? The same people who handle the funds and take their cut.
  11. I guess I'd rather a greedy bank in a strong financial position than a greedy, former bank, so to speak..

    In any case, I wouldn't be surprised in the least if they suddenly announce they need job cuts to survive...
  12. Agreed, especially that last point.

    This religious belief that keeping the economy healthy will keep healthy all the people it encompasses... I can't see how it can be right. A buggered economy will cause a great deal of damage and loss of quality of life, but a a productive, profitable economy does not necessarily mean a wealthy, healthy populace.

    There was a time when the British Empire was one of the biggest, fastest growing economies in the world, yet exploitative child labour was present -- even encouraged by it, one could argue. And that's just one of the most obvious problems that existed in that period.

    Wealth does usually improve quality of life, but if you have a vigorous economy where the average person sees very, very little of that wealth, it does them little good. Fortunately that is not the case in Australia; we're not spreading everything equally, but taxes and stuff do move a bit more of it back to the bottom of the pyramid.

    Lurking underneath all this is the deep flaw found throughout our current implementation of capitalism: it relies on growth.

    Even if wealth and economic productivity fix everything, it has to come from somewhere. I'm sure we all know how everything's limited, we can't even keep growing our population, blah blah blah, and it's too hot for my brain to keep going 8-[.
  13. You may want to run a rule over your spelling :wink:.
  14. Apparently, CBA is ruling out job cuts and redundancies etc.. however they will be seriously considering raising their rates even more <insert whatever reason they gave here>.. So instead of sending a couple of thousand people to the centrelink queues, they strain the budgets of tens of thousands of people, potentially leading to repossessions etc etc..

    So which is worse? Sacking people, or making life difficult for their customers? .. All this simply because they need to answer to their share holders, which by the way, is not necessarily pumping any of their gains back into the Australian economy (since they're foreign investors)
  15. I think you've managed to gauge the size of the hole in my credibility 8-[

    I'm not sure that the intrinsic problem with capitalism is that it relies on growth in wealth (however this is measured).

    Arguments for the necessity of a transition to a steady state economy is something that has emerged out of the green movement, and is premised on the idea that the imperative to maximise profit, when pursued without consideration for other social values, conflicts with our need to preserve natural resources and the health of our environment. But the relationship between these two imperatives is not simple, nor is wealth to be considered in purely (nor primarily) financial terms. The argument for a shift to a steady state economy is intended to moderate the imperative to maximise profit, however there is no reason why, properly managed, net social wealth could not increase indefinitely. It is the rate that is important. Proper management to ensure environmental degradations is prevented will moderate the rate at which wealth is increased. (Remember that indexes like GDP are just a means of approximating financial wealth, and this is a sub-set of general social wealth, which contains many things that are simply not tangible in financial terms.

    The two classical criticisms of capitalism received their most forceful expressions in Marx and Weber.

    For Marx capitalism is predicated on private property, conceived not as the individual possession of things, but as an exclusive control over the means of production within society, and which is exerted by capitalists in a structured way to ensure that the value of wages paid is less than the value of the labour exerted in transforming raw components into saleable product (this difference being the degree of exploitation). According to this definition it is necessarily exploitative, but the degree of exploitation depends on the bargaining power of the workers.

    Importantly, Marx didn't think that the creation of material wealth would cease with the overthrow of capitalism, but that socialism would remove the contradictions inherent in capitalism, and would allow material wealth, unfettered by capitalism, to be created at a greater rate. However for Marx, material wealth wasn't the primary goal of socialism. Wealth for Marx is defined by being rich in needs and able to fulfil them. Modernity is an era of wealth partly because its dynamism leads to the creation of new needs. Socialism is necessary to ensure equal capacity to fulfil them distribution.

    This anti-ascetic concern dovetails with Weber, who is usually interpreted as arguing against much of Marx's theorising about capitalism. Weber asks why capitalism (the behaviour patterns associated with which are as old as agriculture-based civilisation) only emerges as the dominant social form in northern Europe during the 17th century. Why not in Ancient Rome or Ming-Dynasty China? Weber argues that the behaviours and worldview associated with protestant forms of religious practice complemented those required by capitalist rationality: worldly asceticism as conducive to a purification of the soul, and success in worldly affairs as a sign of god's providence bestowed upon those worthy of salvation. Put these two things together an one has a powerful motive to safe and not spend, and to reinvest profits saved. Gradually these behaviour patterns associated with this particular religious ethic became autonomous and were de-coupled from religious interpretation, and so secularised into a purely economic rationality. Fore Weber, however, this rationality has the potential to become its own iron cage, for profit maximisation requires that the fruits of one's labour must be indefinitely postponed.

    This is one reason by neo-liberal and petit-borgeois capitalists are often such mealy mouthed bastards: they think a bit of austerity is good for the soul and are happy to impose it on others, especially if it will pay dividends after the next cycle of investment.
  16. I think I was saying that if one's method of improving lives/maintaining a society is to constantly increase monetary wealth, how can one sustain that forever, knowing that we now have boundaries?

    But yesterday was one of those days when I wasn't with it enough to realise I wasn't with it enough to be making posts regarding complex topics. Today's not much better, unfortunately, but I am seeing holes in what I said yesterday, so disregard it until I can figure out if there was a usable thread of thought in there 8-[.
  17. I've always believed that it's better to have banks making profits than hemorrhaging money.

    And Australia is hardly a one-bank, tin-pot little country; there is choice out there.

    (This said as a mortgage holder, but not with one of the 'big four'.)
  18. What? only $3.6 billion. Does that mean that they're going to have to sack 500 workers as well? Poor bastards.
  19. Maybe, but it means their interim dividend has gone up from $1.32 last year to a huge $1.37 this year. Fully franked, but pales by comparison to what they are making.