[Jester]

Just when I don't think I can lose anymore faith in society...

The bank of Canada lowered the prime rate by .75 to help the Canadian economy... so TD and CIBC have decided not to pass on the benefits to the public, and are only dropping their rates by .50 and will pocket the rest of the benefits that come from that difference in interest rates.

http://www.reuters.com/article/marketsN ... 0720081209
TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) was the first Canadian bank to lower its prime lending rate on Tuesday after the Bank of Canada delivered a surprisingly large 75 basis point cut to its key overnight rate, but TD only went so far as to chop 50 basis points off its prime rate.

The bank's retail unit, TD Canada Trust, said its prime rate will fall to 3.5 percent from 4.0 percent, effective Wednesday.

Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz) also said it would cut its prime rate by half a percentage point to 3.5 percent.

The prime rate determines rates that banks charge on a host of loans and credit products, including some mortgages.

Earlier on Tuesday, the Bank of Canada cut its overnight rate target by a steeper than expected 75 basis points, to 1.5 percent, citing significant deterioration in the outlook for the world economy. Most analysts had expected to see only a 50 basis point point cut by the central bank.

[Snowrunner]

What I found funny was on the radio this morning the tenor was: "Now we're all saving money because all the rates are set to prime."

Funny, you'd figure after they pulled the same stunt a few months ago people would have clued in that prime really means squat for your own bank rate.

[Jester]

And looks like all the big banks in Canada will stick together on this.

http://www.theglobeandmail.com/servlet/ ... y/Business

All 6 of the major banks have done the same thing. So they pocketed .25 from the first big rate drop a few months back, and another .25 on this one. So from the 1.25 rate drop the BOC has given to help the situation, the banks have only passed along .75 worth to the public.

Nancy Hughes Anthony, head of the Canadian Bankers Association, noted Tuesday that, “The cost of borrowing for banks has obviously come down somewhat, but it's still higher than it was before this crisis began.”

Yeah, it is a higher cost for the banks than before, and it SHOULD BE. These banks were raping us and pulling in record numbers all the time it seemed. They've stolen a half percent from every person who borrows with them now... and want to justify it.

[Snowrunner]

Yeah, it is a higher cost for the banks than before, and it SHOULD BE. These banks were raping us and pulling in record numbers all the time it seemed. They've stolen a half percent from every person who borrows with them now... and want to justify it.

The irony in this is that you have to wonder / question why the banks hat do borrow money in the first place to give to you. In the common understanding they are the ones who HAVE the money.

Ah, the moment the majority of people will start to clue in the fun will really start.

[ki11ercane]

Just when I don't think I can lose anymore faith in society...

The bank of Canada lowered the prime rate by .75 to help the Canadian economy... so TD and CIBC have decided not to pass on the benefits to the public, and are only dropping their rates by .50 and will pocket the rest of the benefits that come from that difference in interest rates.

http://www.reuters.com/article/marketsN ... 0720081209
TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) was the first Canadian bank to lower its prime lending rate on Tuesday after the Bank of Canada delivered a surprisingly large 75 basis point cut to its key overnight rate, but TD only went so far as to chop 50 basis points off its prime rate.

The bank's retail unit, TD Canada Trust, said its prime rate will fall to 3.5 percent from 4.0 percent, effective Wednesday.

Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz) also said it would cut its prime rate by half a percentage point to 3.5 percent.

The prime rate determines rates that banks charge on a host of loans and credit products, including some mortgages.

Earlier on Tuesday, the Bank of Canada cut its overnight rate target by a steeper than expected 75 basis points, to 1.5 percent, citing significant deterioration in the outlook for the world economy. Most analysts had expected to see only a 50 basis point point cut by the central bank.

False.

Bank of Canada Prime Rate is the rate banks use to borrow money between banks including the Bank of Canada, not Johnny Canuck. The banks are under no obligation to follow the Fed rate, and typically when the economy is soft they hold off matching the Fed rate until they can liquidate their positions on money they have on had at a higher rate borrowed from the Fed.

You don't seem to understand that a drop from 2.25 to 1.5 is not a 0.75% drop, it's a 33% LOSS in interest revenue for the banks on their current liquid stock of cash. If they borrowed a billion dollars each from the Fed at the higher rate, they will lose tens of millions if they decided to sell that inventory of cash tomorrow at the lower rate. They instead choose to increase their spread of profit loss over a less intrusive rate on the cash they have on hand until it gone. Usually what happens is when one of the Big Five can move on their rate because of their inventory of more expensive money is gone, they get more cash from the Fed at the new rate and the rest of the banks follow to remain competitive, even if it means the other 4 Big Banks will lose money.

These arseholes are just like the gas stations here. You have to actually wonder why they bother putting different names on the banks. They all sell money at the same rate. Imagine what would happen if <god forbid> one of the banks sold their cash for one basis point less than the rest. ZOMG!

[strider3700]

Everyone is worried about the housing market, the news each night is brutal, the housing sales are in the tank... Take a quick look at mortgage rates and you'll see they're actually higher now then they were three months ago.

My preapproval just expired. It was 5.55 for 10 years. Today the best I could get is 6.45 for the same thing. The banks could care less about what happens to the markets.

[Jester]

Just when I don't think I can lose anymore faith in society...

The bank of Canada lowered the prime rate by .75 to help the Canadian economy... so TD and CIBC have decided not to pass on the benefits to the public, and are only dropping their rates by .50 and will pocket the rest of the benefits that come from that difference in interest rates.

http://www.reuters.com/article/marketsN ... 0720081209
TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) was the first Canadian bank to lower its prime lending rate on Tuesday after the Bank of Canada delivered a surprisingly large 75 basis point cut to its key overnight rate, but TD only went so far as to chop 50 basis points off its prime rate.

The bank's retail unit, TD Canada Trust, said its prime rate will fall to 3.5 percent from 4.0 percent, effective Wednesday.

Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz) also said it would cut its prime rate by half a percentage point to 3.5 percent.

The prime rate determines rates that banks charge on a host of loans and credit products, including some mortgages.

Earlier on Tuesday, the Bank of Canada cut its overnight rate target by a steeper than expected 75 basis points, to 1.5 percent, citing significant deterioration in the outlook for the world economy. Most analysts had expected to see only a 50 basis point point cut by the central bank.

False.

Bank of Canada Prime Rate is the rate banks use to borrow money between banks including the Bank of Canada, not Johnny Canuck. The banks are under no obligation to follow the Fed rate, and typically when the economy is soft they hold off matching the Fed rate until they can liquidate their positions on money they have on had at a higher rate borrowed from the Fed.

You don't seem to understand that a drop from 2.25 to 1.5 is not a 0.75% drop, it's a 33% LOSS in interest revenue for the banks on their current liquid stock of cash. If they borrowed a billion dollars each from the Fed at the higher rate, they will lose tens of millions if they decided to sell that inventory of cash tomorrow at the lower rate. They instead choose to increase their spread of profit loss over a less intrusive rate on the cash they have on hand until it gone. Usually what happens is when one of the Big Five can move on their rate because of their inventory of more expensive money is gone, they get more cash from the Fed at the new rate and the rest of the banks follow to remain competitive, even if it means the other 4 Big Banks will lose money.

These arseholes are just like the gas stations here. You have to actually wonder why they bother putting different names on the banks. They all sell money at the same rate. Imagine what would happen if <god forbid> one of the banks sold their cash for one basis point less than the rest. ZOMG!

They've had a couple months to liquidate, but instead, lending has slowed. They aren't trying to liquidate squat. They will be more than happy to borrow at the new lower rate, and lend it out without extending the same change to the public.

This is done by the BOC to stimulate lending, but what the banks are doing is not. The banks are eliminating the beneficial effect that could have come.

[Nickel]

The bank of Canada lowered the prime rate by .75 to help the Canadian economy... so TD and CIBC have decided not to pass on the benefits to the public, and are only dropping their rates by .50 and will pocket the rest of the benefits that come from that difference in interest rates.

Actually, it provides a good excuse for people to shop around and transfer their mortgages to the banks who aren't doing stuff like that. I know somebody who transferred her mortgage from TD to another bank just a couple of months ago, as a matter of fact (ING, if I'm not mistaken). There's give and take in such a situation.

[some_math_guy]

Hmmmm...I had been wondering why my mortgage was going down so fast over the past year or so....this latest round of rate-cutting by Royal Bank brings my mortage rate down to only 2.90%.

Come to think of it, if you happen to have a secure (eg. government) job, massive loans (as I do with a mortgage and student loans), and very few investments, then a continuing recession may actually be a good thing for you:

1. Falling interest rates designed to stimulate the economy mean more of your loan payments go to pay back principal instead of interest.

2. Deflation and economic slowdown is bringing down the cost of living for many basics like food and fuel, as well as consumables (look at the for-sale listings and you'll see that you can now get lots of stuff for a drop in the bucket as people less fortunate start to liquidate to remain solvent).

3. Eventual inflation as Bailout Bucks (tm) from around the world flood the market will decrease the real value of your loans and debts, while wages are (somewhat) protected through inflation adjustments upwards.

Something for the average 25 to 35 year-old to think about.

[Jester]

Hmmmm...I had been wondering why my mortgage was going down so fast over the past year or so....this latest round of rate-cutting by Royal Bank brings my mortage rate down to only 2.90%.

Come to think of it, if you happen to have a secure (eg. government) job, massive loans (as I do with a mortgage and student loans), and very few investments, then a continuing recession may actually be a good thing for you:

1. Falling interest rates designed to stimulate the economy mean more of your loan payments go to pay back principal instead of interest.

2. Deflation and economic slowdown is bringing down the cost of living for many basics like food and fuel, as well as consumables (look at the for-sale listings and you'll see that you can now get lots of stuff for a drop in the bucket as people less fortunate start to liquidate to remain solvent).

3. Eventual inflation as Bailout Bucks (tm) from around the world flood the market will decrease the real value of your loans and debts, while wages are (somewhat) protected through inflation adjustments upwards.

Something for the average 25 to 35 year-old to think about.

1. Lots of people have fixed mortgages, and aren't going to see any change until time to renew.

2. Fuel is down, food isn't. I do the shopping for a household of four, and I've seen prices of practically everything go up in the last year.

3. There have already been wage changes, raises taken back, and even some cases of decrease of salary in some places in the states. Not seeing that in Canada yet as far as I know, but doesn't mean it can't happen. I switched jobs about 6 months ago, that employer (a successful business) had stated there would be no wage increases in the coming year.

Personally, I don't believe this is going to be favorable for anyone but the bank execs I guess...