Written By:
Eddie - Date published:
10:43 am, April 19th, 2013 - 34 comments
Categories: economy, workers' rights -
Tags: debt, westpac
Bank profits are up again. A 10 per cent increase over the past three months it was announced yesterday.
What we don’t often hear though is how this profit is generated.
It basically goes like this. Bank staff are all under sales targets. They need to sell a certain level of debt to meet these targets.
That’s right – their job is to push as much debt on to New Zealand communities as they can, and they are pressured by management to achieve targets. This is big money we’re talking. Collectively the banks make several billion dollars profit each year and much of that goes back to Australia.
What if their customers have enough debt, thank you very much? Tough. If targets aren’t met the workers are subject to performance management to get them back on the straight and narrow to make sure they do.
It’s no wonder that the ‘Big Four’ banks, as they’re often called, have collectively been chosen as finalists for this year’s Roger Awards.
Now I’ve been told that there may be some staff at a Westpac branch in Wellington today that are going to take strike action over this.
They’ve had enough.
They want an end to these unfair targets that are making their work lives completely stressful.
My understanding is they’re considering walking off the job today. And who can blame them really?
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I grew up thinking banks were the place to keep our money safely. Yet these days they are less interested in us savers, than in people going into debt.
Good on the bank workers if they stand up and say, “Enough!”.
That’s because they get to print the money for the debt and then charge interest on it. It is, quite literally, money for nothing. This really needs the government to step in and stop allowing the banks to print our money. That right needs to be reserved solely to the government.
It requires people to believe that taking on debt is smart. It never was. Debt means paying twice, this is why so many families pass on assets so their kids don’t take on debt and so have more collective wealth.
These ads on TV getting grannies to sell their homes to take a holiday, or signing their estates over to the church, they increase the burden on their relatives.
The only policy Thatcher supporters can find to sanction her legacy is the selling state house policy, a socialist type policy! The world is mired in debt because Thatcher’s horde of zombies (who still can’t assess her legacy, deal with the effects, maybe due to there being no society for them to engage with to revisit her outcomes).
Its like a manager or CEO who is a pro-Thatcher staunch believer, they really deserve to get crucified by the failing markets, let them take on debt believing the market will rebound…
…the market and govt legislation of redistribution is chronically out of whack with the reality that cheap dense energy is now a limited resource, under Thatcher govt knew the oils was about ot flow out of the middle east, that coal mining was going to become less labour intensive, its not rocket science that deregulation of finance was need. The problem was the arrogant, lock step, militant revolutionary conservatism that is incapable, has been incapable of being revises as reality moves on.
Sorry, debt is no long king.
Do you want people to be renters – I guess from the state.
Fortunately that is not going to happen. Most people want to ultimately buy their own home and they will have to borrow to buy the house. And that is not going to change. If NZ is to deal with the housing shortage more houses will have to be built, and most will be bought by homeowners.
They will need to borrow from the banks!
No they don’t. They could borrow from the government at 0% interest and zero fees. That’s the reality that the banks don’t want people to realise because then people will also realise that the banks have been shafting them for centuries.
Jeez wayne – Not too clever on are ya!
Homework for you – NZ monetary Supply, and why its the most critical issue to sort out!
I realise anecdata isn’t worth much, but I’ve got first hand tales of banks pushing debt. A friend had their bank manager (BNZ I think) saying that they had too much equity in their house and they should use it to buy an investment property. Such horrendous, self-serving advice… Go on, increase the housing bubble and the non-productive part of the economy, the current account deficit, and most importantly, our bank’s profits!
Our friends said that on their income it was far too much risk to take on more debt, but the bank manager pushed them not to worry…. they rejected the advice, but I thought it was still really not the bank manager’s place to be advising that way (trying to get them to do something that was in the bank’s not their – or indeed NZ’s – interests…).
We’re going to need to start having watch out for your bank manager articles (like finance companies) at this rate…
But it *is* good advice (financially, if not morally – if you want moral advice, see a vicar, not a bank).
If you’d had a $200k house with a $100k mortgage at the turn of the century, borrowed as much as you could at every turn and bought rental property, you’d have made over a million by 2008 and would still be in seven figures. And you’d have paid zero tax.
If you’d paid down the mortgage at $24k a year until 2005, then saved the same once mortgage free, you’d have about $200k in the bank and a $500k house.
If you put your money in a stock market plan, you’d be about $15k worse off than that.
And Rich explains how housing bubbles work and why the banks printing money supports and encourages those bubbles.
There is an alternative in the NZ Home Loans bank for private individuals.
Their philosophy is to work for the individual to reduce their debt as fast as they can within their wider means.
Far different to the conventional bank style of mortgage.
I do everything I can to remain debt free. So far so good – no debt.
The value of each dollar is effectively going down as the banks expand credit and property prices increase. We are under the illusion that house values are increasing while the banks cream the interest paid on borrowing.
Yup, gotta agree with that. I pushed some spare cash across to Kiwibank in a fit of patriotic fervour a few years ago. It was enough for a deposit on a modest property. Interest has pushed it up by 10% and now it’s nowhere near enough for a deposit on a modest property.
Asset inflation is destroying the real value of our money, savers are being penalised bigtime and yet we kept being told that more domestic saving is important for the economy. Wankers the lot of ’em.
As always far better to borrow if you can to buy assets, rent them out, minimise your tax etc and wait for capital gains. That has been life in NZ for along time. Saving and earning after tax interest is a financial literacy con encouraged by the banks and promoted to our children.
Which is ACTUALLY the con? Borrow and get rich benefits the banksters and those who do, not the country as a whole.
Well we’re certainly being conned about savings and inflation. I don’t play the property market, got a moral repulsion with making unearned profits off the toil of others, but it is the economic signal that investors have been getting for over a decade.
I didn’t know that saving money in banks had been promoted for a long time. they are too busy promoting their mortgage rates. That’s a shift from when I grew up. When it started to switch to borrowing and spending is good for you, and good for the economy, I thought the world was going crazy.
The banks have to have 10% or now I think 20% of the equivalent funds they have borrowed on deposit, meaning if they have one thousand dollars borrowed they need by law to have one to two hundred dollars on deposit.
So if they are pushing money out, they must be taking a lot in, were is this money coming from, I’m not sure, but at the moment you can borrow money in some countries at almost 0% so why not deposit it here, if thats possible, also the US and Japan are flooding there economies with money, yes printing money as we speck, so if it’s possible to deposit that money in a NZ bank at even 4% then thats money for nothing, for those able to borrow at low interest at-least, the problem for the banks is they need to then lend that money out, or more importantly five times that money, as for every dollar they have on deposit they can lend five to ten times that out by law, and thats the scam my friends, you can bet they will be trying every trick in the book to lend that money out, great time to lend money, as I know, but for some it will be tragic.
For myself, I’m not into playing around with money. I have my savings in low interest accounts, in more than one bank. I have an aversion to the idea of trying to get every little bit more money possible with little effort.
I’m happy if I’ve got enough money to live fairly frugally, but with one or two luxuries.
I just feel bad for those people struggling to survive on very little, due to the context set up by the banksters and other capitalists.
And that’s one of the catches Karol, you just want a few percent on your savings, but because you have money in the bank you then allow the bank to then lend out 5 to 10 times the equivalent of that money from thin air, and so you are now part of the scam and have been corrupted in a sense.
Well, I guess, Mr Smith. But then if you have a little money, nothing you do with it will be innocent. What am I meant to do? Put it under the mattress?
I wasn’t having a crack at you Karol, what you do with your money is your business, just trying to educate the masses and find new ways of getting people to sit up and question the banking system as most people have no idea how the it works or how the banks make so much money in good times and bad doing basically nothing.
My understanding is that 97% of our foreign exchange transactions relate to speculation. Much of that is presumably related to our interest rates attracting foreign savers. Money for jam as Nz has interest rates consistently higher than the rest.
What is the carry trade?
“I sincerely believe that banking establishments are more dangerous than standing armies and that the principle of spending money to be paid by posterity, under the name of funding is but swindling futurity on a large scale”.
-Thomas Jefferson
“I’m living so far beyond my income that we are almost said to be living apart”.
-E.E cummings
“If you owe your bank a hundred, you have a problem, yet if you owe a million, it has”.
_John Maynard Keynes
“nature is an expert in cost-benefit analysis; Although she does her accounting a little differently, she collects in the long run.”
-Margaret Atwood : Payback; Debt and The Shadow Side of Wealth
“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.”
– Robert Frost
Yes, as through this world I’ve wandered
I’ve seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
And as through your life you travel,
Yes, as through your life you roam,
You won’t never see an outlaw
Drive a family from their home.
from Pretty Boy Floyd – Woody Guthrie
no, yet you would be surprised what an outlaw will do to feed the poor and leave the rich askew
(lol, enter askew in a google search box oll)
ollrotf
“Banks are the condom on the penis of progress”
Bob Jones, I think!
It’s not the first time Westpac staff would have complained about the pressure to push debt. Been going on for a while, since at least 2005.
Banned for life. Anti-Semitic crap is not welcome here.
Who the hell was that???? using MY Name?
a nemetic doppelganger