Aug 072008

Is the mainstream media deliberately spreading doom and gloom in reporting statistics such as those in this article or is it simply reporting the news of the day?

Judging from some of the comments to the article online, some readers are assuming the former. Disturbingly for me though, as someone who works in the finance industry and comes across these attitudes daily, is the obvious ignorance on the part of the general public of the finance industry’s functionality.

People, the banks are scamming you. When you signed your loan agreement with the bank, there was a clause in there for what the variable rate is, and the formula for how it would change. This formula was based off the prime rate. When the prime rate went up, your rate went up according to this formula. When the prime rate goes down, your rate should go down according to this formula. If the banks do not take your rate down, they are breaking their contract. This is a legal case, not a government case. Their should be mass law suites by all the borrowers against any bank that does not reduce the rate in the same formula (and time frame) that it increased the rates. The banks would have the lawyers, but they wouldn’t have a legal leg to stand on.

Posted by: Steve of Brisbane 8:27am today

Can I borrow off the reserve bank? If not , why not?

Posted by: Morrissey of bris 7:25am today

Now we will see how much pull the Swan has. Not much i would guess.

Posted by: Esra Star of Nundah 7:10am today

The banks are greedy. Just goes to show who really controls Australia. Man what an evil system.

Posted by: The dark knight of rip of Brisbane 6:47am today

Scaremongering at its best. The quote ‘home loans in the first half of 2008 have recorded their weakest start to the year in almost two decades’ should place most people at ease. The big banks can’t afford not to pass the cuts on as they know this will encourage new business. Whether the ‘full’ rate cut is passed on is probably more the issue.

Posted by: Shane of Brisbane 6:41am today

Why do we have a Reserve Bank, if the "real" banks are free to ignore the rates set by it?

Posted by: Andrew R of Deception Bay 6:41am today

The major banks aren’t interested in the needs of their customers and are just money hungry businesses. They forget that customers do have a choice to either stay with them or take their money elsewhere. The Federal Government has warned the banks but; are they really listening to both the Prime Minister/Treasurer? The government is attempting to shift the blame onto the Opposition but history also shows that ALP governments have and always will, get it wrong. The government needs to get more tougher with the banks if they’re not prepared to do their bit.

Posted by: News_Watcher of Brisbane. 6:33am today

Andrew R doesn’t think much of the RBA’s position in the grand scheme. Morrissey thinks the RBA is a bank, is a bank, is a bank. Steve obviously hasn’t read very many mortgage or loan contract terms and conditions documents. News_Watcher has the impression that government really has the power to force Banks to toe a political line. Well, I guess it does, but de-regulation effectively locked, bolted and hermetically sealed off the Nationalisation avenue in the eighties. Besides, isn’t our economy supposedly better off functioning in a global capitalistic market place where market forces hold sway? Where competition protects and benefits consumers? Ignorance of the realities in finance are abundantly evident in the general community, yet it’s that community which is hurting and complaining about the hurt.

Getting back to the issue of what function news reporting ought to play in society, I believe the reporting we see, as per the above article, is valid to a point. It’s reporting the base issue. That the economy is stalling, as indicated by a wide variety of statistical data. What it’s not reporting is why. Why is employment stagnating? Why is consumer confidence diminishing? Why have new owner-occupier home loan approvals dropped away? Why are major financial institutions claiming ongoing instability in global financial markets, when we see, hear and read daily from politicians of varying stripes that the worst is apparently over? The realities are out there, but I’m not sure that anyone is really reporting on them. Probably more to the point, the realities are known to a few who don’t want to make them known publicly on the grounds that doing so may make those few appear to be the villains of the piece. Shouldn’t news agencies, per se, be adopting an educational role more prominently in these times of uncertainty? Not as any form of mouthpiece for government, and certainly not as apologists for major financial institutions, but as educators of the populace.

Still, there’s no point in writing about the realities without recognizing the reality upon which the news reporting agencies are built, and that’s sensationalism, celebrity and yes, doom and gloom. How often do we see, hear or read news which is buoyant, uplifting and educational? Hardly ever when you stop to think about it. 95% of all news is bad news. Why? Because we human beings are essentially wrapped in a veil of pessimism and expect everyone else to be wrapped similarly. If we had nothing to worry about, there’d be no impetus to strive for improvement. My view, anyway. Knowledge, however, is the counter to that pessimism and I firmly believe that news reporting agents have an obligation to society to not just report the news, be it good, bad or indifferent, but also to educate. It’s a pity that sensationalism and celebrity seem more attractive to us, in general, than learning.

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