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Hedge Clippings | Friday 04 October, 2019
A predictable week that was.
If Hedge Clippings ever placed a bet on the week's news, this would have been the one to make a motza from the bookies. After all, everything that occurred over the past week was pretty predictable.
Firstly, the RBA cut rates by 25bps as expected. OK, that was pretty easy, and we only came across one person (no names, but they'll know) who thought they wouldn't. Not only had the RBA's governor hinted strongly that they would, but all the economic indicators, both here and overseas, were pointing in that direction.
Next, the big four banks elected not to pass on the full 25bps to borrowers. Then both the Treasurer and the PM got stuck into them for not doing so, while the opposition jumped on the bandwagon to criticise the government. Three out of three, we could have taken out that trifecta with our eyes (and ears) closed.
However, spare a thought for the banks for a moment (we know, that's not always easy, and not predictable). Not passing the full cut on when rates are 1% was never going to happen simply because only a portion of their funding is tied to the RBA's cash rate. According to the AFR, 60 - 70% comes from deposits, including some on which the term is fixed. And for that portion which is in non-interest-bearing transaction accounts, their margins are being squeezed further.
Offshore was just as predictable. China put on a show of military goose-stepping force not seen for 75 years to celebrate the 70th anniversary of their "glorious" revolution, while the protesters in Hong Kong carried on protesting regardless.
Trump continued to tweet against the injustices of the Democrats and others, claiming he should be impeached or worse, while Boris continued to defy Europe, Jeremy Corbyn, and a fair section of his own party (plus the Speaker) - all of whom he couldn't give a toss about.
Finally, to the sporting field. Richmond flogged the Giants to such an extent that spectators should have asked for a refund on the price of their tickets. We might be biased, but that was mighty predictable as well.
The Wallabies made life difficult for themselves (something they've become experts at over the past few years) by selecting a goal kicker with a success rate this season of just 56% and losing a winnable match against Wales. While not totally predictable, sadly very familiar!
But then, against all the odds, we would have blown all our winnings backing Ireland against lowly Japan, who were inspirational, producing some of the most entertaining rugby seen for a while. Just as well we hadn't placed our bets - or collected our winnings - from the other un-losable wagers.
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