Mike's Minute: The vibe of the economy is turning

As we end the week can I proffer the idea that there is an intangible starting to bubble as a result of Adrian Orr's big move last week. 

As far as I can work out every bank has dropped some of their interest rates again. In fact, some have done it multiple times.     

They have done so, they say, because of the Reserve Bank and because of the wholesale rate. 

They also said something about being super cool guys who want to help us get head in life. Or words to that effect. 

They also gave the game away a bit by saying it's really competitive out there, and that’s the real story. 

Banks need to lend money and in a recession that’s a fairly hard trick to pull off. 

Might I once again suggest they look at their margin on lending and compare it to the margin their big brothers in Australia charge? And then ask themselves why it is that the number here is larger than the number there? 

Although to be fair, Antonia Watson from the ANZ put forward a pretty reasonable defence on that this week. But next time you're in, ask them for yourself and see if you find it convincing.   

Anyway, the good news is things are moving. Not much, but a bit. 

I am convinced, through data and a bit of anecdotal evidence, housing is moving too. Once again, not much, but a good spring will help. I know of a good number of campaigns ready and set to go in September. 

So what is this intangible? It's the vibe. The vibe is important and in this case, it's driven by a desire to see better days, the same way we talked ourselves into a funk these past couple of years. And why wouldn’t we? There was a lot to be in a funk about, and there still is. 

But human nature generally wants us to be happy, to have hope. 

So we look for indicators - the Reserve Bank and headlines like "light at the end of the tunnel", your mate that says, "what the hell, let's go out for dinner tonight" or "what the hell let's go away for the weekend any way". That's the vibe. 

It doesn’t take a lot, and no, it doesn’t happen overnight. It happens gradually. But we are herd-like. You see one, then another, then you want to be part of it. 

If you mark this day as the start, by early December remember this day and compare it to then. You'll be surprised at the transformation. 

Because I am convinced the transformation is underway. 

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Episode Transcript

Speaker 1 (00:00):
Does we end this week? Can I proffer an idea
that there is an intangible, an intangible starting to bubble
as a result of Adrian's big move last week. As
far as I can work out, every bank this week
has dropped some of their interest rates again, if in
fact not multiple times. They have done so. They say
because of the Reserve Bank and because of the wholesale rate.
They've also said something about being super coal guys who
want to help us get ahead in life, all words

(00:21):
to that effect. They also gave the game away a
little bit by saying it's really competitive out there and
that's the real story. Of course, banks need to lend money,
and in a recession that's a fairly hard trick to
pull off. Might I once again suggest they look at
their margin on lending compared to the margin on lending
to the big brothers in Australia and ask themselves wide
as the number here is larger than the number there. Although,
to be fair and Tony Up from A and Z

(00:42):
came on the program this week and put forward a
pretty reasonable defense this week by by the you know,
maybe next time you're in though, ask them for yourself
and see if you find it convincing anyway. The good
news is things are moving, not much, but a bit
housing I'm convinced through data and a little bit of
anecdotal is moving as well. Once again, not much, but
a good spring will help. And I know of a
good number of campaigns ready and set to go in September.

(01:05):
So what is this intangible, Well, it's the vibe. The
vibe is important, and in this case, it's driven by
a desire to see better days, the same way we
talked ourselves into a funk these past couple of years,
and why wouldn't we. There's still a lot to be
in a funk about. But human nature generally wants us
to be happy, to have hope, and so we look
for indicators the Reserve Bank headlines like light at the

(01:26):
end of the tunnel, your mate that says, Ah, what
the hell, let's go out for dinner tonight, what the hell,
let's go away for the weekend. Anyway, the vibe doesn't
take a lot, and now it doesn't happen overnight. It
happens gradually, but we are heard like you see one
then another and then you want to be a part
of it. So if you mark this day, this late
day of August as the start. By early December, remember
this day and compare it to the end. You will

(01:47):
be surprised at the transformation. Here's my pick, because the transformation,
I am convinced is underway. For more from the Mic
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