Just heard on the news that the CBA is about to shred a whole lot of jobs and close some branches !!

It's strange behaviour for a bank in an enviable economy !!

Why?

Banks are a lot like retail.  More and more people are online.

Sadly these workers are also victims for the ever changing electronic world.

What was it you have been saying all along about bricks and mortar stores?

It's not all that strange if you believe that we are coming into a deep recession/depression.

It's ok though, as long as the CEO gets his bonus increased.

Its also not strange when you realise they are just doing what westpac did and others before them and going offshore to get more profit.

SOB

Banks are funny things, they lend out millions and millions. Do they have that money to lend out? Not on your nellie.

All it is, is the Government saying they are O.K. for it and then they can issue bits of paper or electronic transactions that say they are good for It.

For this, we get the privilege of paying the value of our loan for a house for instance over and over and over again over the course of the loan.

Funny system we've got isn't it?

That's why we have the very rich and the very poor, because the workers pay the fat cats over and over and over again for loans taken out.

It has the quaint name of Capitalism.

Mind you Communism is just as bad and most probably worse.

At least you may finally get to own your little patch before your final reward.

Verge wrote on Sep 24^th, 2012 at 11:19am:

Why? Banks are a lot like retail.  More and more people are online. Sadly these workers are also victims for the ever changing electronic world. What was it you have been saying all along about bricks and mortar stores?

They have been online for years so why did the CBA spend squillions decking out all of their branches with yuppy furniture and coffee machines ??

and what about the Australian property bubble that could never burst ??

what's the problem with it now ??

red baron wrote on Sep 24^th, 2012 at 1:25pm:

Banks are funny things, they lend out millions and millions. Do they have that money to lend out? Not on your nellie. All it is, is the Government saying they are O.K. for it and then they can issue bits of paper or electronic transactions that say they are good for It. For this, we get the privilege of paying the value of our loan for a house for instance over and over and over again over the course of the loan. Funny system we've got isn't it? That's why we have the very rich and the very poor, because the workers pay the fat cats over and over and over again for loans taken out. It has the quaint name of Capitalism. Mind you Communism is just as bad and most probably worse. At least you may finally get to own your little patch before your final reward.

The fractional banking system means that banks can create money out of thin air as long as they can they find enough suckers to stitch up to bank loans for money that they don't actually have. To create money they just need a signature from a fool on an IOU and the money magically appears in the banks database ready to lend to some other sucker ;)

Ex Dame Pansi wrote on Sep 24^th, 2012 at 11:23am:

It's not all that strange if you believe that we are coming into a deep recession/depression. It's ok though, as long as the CEO gets his bonus increased.

don't worry pansi. The jews will save us by starting a war in the middle east !!

Nothing like a good war to reset the banking system and make lots of money for weapons suppliers ;)

Sir lastnail wrote on Sep 24^th, 2012 at 3:35pm:

red baron wrote on Sep 24th, 2012 at 1:25pm: Banks are funny things, they lend out millions and millions. Do they have that money to lend out? Not on your nellie. All it is, is the Government saying they are O.K. for it and then they can issue bits of paper or electronic transactions that say they are good for It. For this, we get the privilege of paying the value of our loan for a house for instance over and over and over again over the course of the loan. Funny system we've got isn't it? That's why we have the very rich and the very poor, because the workers pay the fat cats over and over and over again for loans taken out. It has the quaint name of Capitalism. Mind you Communism is just as bad and most probably worse. At least you may finally get to own your little patch before your final reward. The fractional banking system means that banks can create money out of thin air as long as they can they find enough suckers to stitch up to bank loans for money that they don't actually have. To create money they just need a signature from a fool on an IOU and the money magically appears in the banks database ready to lend to some other sucker ;)

Lastnail is correct, it is actually called a Fractional-reserve banking system.

Fractional-reserve banking is a form of banking where a bank maintains "reserves" (of currency and deposits at the central bank) that are a fraction of the total amount of its customers' deposits. Funds deposited at a bank are mostly lent out; the bank keeps only a fraction (called the reserve ratio) of those funds as reserves to cover its customer deposit liabilities
http://en.wikipedia.org/wiki/Fractional_reserve_banking

This system has worked just fine, but one of its main negative issues is that it requires exponential Growth, otherwise it could be exposed by system wide declines in values and that may well find the period we have already entered, which mostly still lays ahead, very difficult indeed!   

And that, is the main reason for Central Bank interventions, including the Fed's Quantitative Easing programs. These are designed to support banks and the systemic risks raised, should growth go negative. 

That said, I suggest negative growth is inevitable, given the existing Demographic & Energy factors now in play!

CBA has just announced a record $3.8 billion profit for the half-year to December 31 after cutting 1200 jobs in 2011-12. This represents fully franked return of around 6% to shareholders.

While housing loans represent a large proportion of bank assets and there has long been debate about whether the country is experiencing a housing bubble, the bank's average loan to valuation ratio (LVR) is 48%. In additiion, individual loans with a LVR of more than 80% carry insurance that protects the bank's position. Property prices would have to fall a long way before the bank incurred asset losses.

red baron wrote on Sep 24^th, 2012 at 1:25pm:

Banks are funny things, they lend out millions and millions. Do they have that money to lend out? Not on your nellie. All it is, is the Government saying they are O.K. for it and then they can issue bits of paper or electronic transactions that say they are good for It. For this, we get the privilege of paying the value of our loan for a house for instance over and over and over again over the course of the loan. Funny system we've got isn't it? That's why we have the very rich and the very poor, because the workers pay the fat cats over and over and over again for loans taken out. It has the quaint name of Capitalism. Mind you Communism is just as bad and most probably worse. At least you may finally get to own your little patch before your final reward.

Spot on Baron; the trouble with Communism is, that everybody seems to think that, it is a system from heaven, and everybody forgets to work.
It suits the Capitalists, because since Communism collapsed, they have never had it so good.
Heard recently that the CBA is capitalised higher than all the German banks combined, therefore the German economy must be rather piddling.