New Zealand Banks told not to reduce fixed mortgage break fees, I say think again

On Page 5 of this morning’s New Zealand Herald I read a story with the headline Stick to guns on fee, banks told. Now I’m the first to stand up and say I don’t understand the banking economy as well as the bankers and the politicians, the educators and maybe even Liam Dann, who says we are all behaving like whingers. No I have bumped into Liam many times over the years and the experiences have all been good, but in my mind something isn’t gelling for me. Maybe he or some others can explain where my thinking is going wrong.

First, we are in a global economic crisis and times are tough all over. I totally agree with Liam’s assertion that when I signed for a fixed rate, I signed a contract which is a legal document saying that I would pay the rate for the period on the contract and it would cost me to break it. The banks are saying that they can’t afford to subsidise the cost, but they quickly gobbled up the guarantees provided by the government to help move the economy.

Now I said at the start, that I don’t understand exactly how the banks work. I know that when I borrowed my $165,000 the National Bank didn’t rush out and borrow that sum, they would have signed contracts for millions at really good rates and my loan would have been part of a bundle which allowed them to hedge for a profit. Now I understand that the Official Cash Rate is a major influencer in mortgage and deposit rates, but a large part of the borrowing by the banks is in other countries where the rates are much lower than ours.

As to becoming whingers, I’d like to ask Liam if he thought (irrespective of the contract that was signed) we were also whingers when we saw the gap increasing between lowering oil prices and the retail price of petrol. It was public pressure that almost overnight reduced the retail price of petrol, people whinging that they thought the profits weren’t fair.

When I took out a new fixed loan of $165,000 I based my decision on the advice of bank staff, even though they were careful to say that I shouldn’t take their information as an official position by the bank, the decision had to be totally mine. But the thing is they did give me advice, and I do accept that no one saw the crash coming. On the other hand the banks also said after the problems in 1987 that they would tighten up their lending criteria, which they have obviously loosened as time went on.

So here’s the thing. While we were all struggling with how to afford our petrol, New York Times International Tribune told us that Shell Oil increase their profit by 33%! They said their profit rose to US$11.56 BILLION! Around the same time The Guardian reported that BP Oil increased their profit to 6.7 billion POUNDS. Liam did you whinge about the oil price?

Businesses have clout. In my world of business, contracts get broken when companies have the power to break them. They sign legal contracts all the time, but if they decide that their supplier is making too much profit, the implied threats come out, saying that they have a choice and even though they have a contract, often it is only as good as the money that a business wants to throw at it to defend it. This is something I do know about it. When you try to defend your contract, you use meet and discuss the situation explaining both parties points of view and try to find a common ground because you need that business relationship. This is called negotiation in my book, although some people might call it whinging.

Now I’m all for businesses making profit, it is essential for their survival and I want my bank to survive, but I want them to be fair too. The NZ Herald themselves reported that while ANZ – NATIONAL took a huge drop in profit, they still made almost $1 billion after tax. That means after all expenses were paid. The NZ Herald also reported TODAY that BNZ’s profit is up 15% on last year, so forgive me if I don’t stop and give them a minute’s silence in respect of their tough times.

So I’m trying to figure out why Liam has this perspective. Here are some things I have heard about or personally experienced about contracts in the last several years: before they

• A company agrees to buy products manufactured in New Zealand at an agreed fee for a contracted period of time and a contracted price and volume. The buyer then discovers they can buy equivalent product from a Chinese manufacturer and despite the contract and the money the Kiwi manufacturer has invested in staff and plant, breaks the contract and says I can’t continue this deal because the prices were too dear. Never mind that they were already making an extremely healthy retail profit prior to breaking the contrct.
• An overseas company buys a NZ company complete with its staff and operations and agrees to maintain all the contracts. They then go through the payroll on a spreadsheet and decree that all staff earning more than $X will be made redundant, but can reapply for new positions where the specification might be modified by 5% at a 3rd of what they used to do, irresepctive of their contribution. The good news for me is that they kept the people who weren’t contributing and areas where they made staff redundant and replaced them with people who were prepared to work for way less, reduced profit and revenue by in one case almost 80%. I think that strategy was illegal, but who wants to burn bridges or be seen as a trouble maker or a whinger.
• I’m sure if you are reading this you know of similar situations where businesses break contracts with other businesses all the time. They get away with it because one business has more power than the other and the losing party either can’t afford the cost or the consequences of fighting for what is right. If you know of cases like this, or indeed if you think I am wrong, please comment on this blog. As long as it isn’t spam or blatant advertising, I will publish your comment.

So here’s the thing. Banks used to be community organisations. You used to be able to walk into the bank and talk to the Bank Manager. They would know you buy name. They would give you advice and show an interest in you. They introduced technology that people said would turn them into machines, and in many cases it did, but the machines were of benefit to the consumer and business, such as EFTPOS (which I helped in a tiny way to introduce), ATM’s, Internet Banking and more. These investments saved them and their customers in time and money, but particularly made the banks more profitable by reducing overheads and staff.

When I first wanted to borrow my current fixed loan from my bank, with whom I had banked for almost 25 years, I actually got a better deal through Mike Pero Mortgages than I could from the bank directly. How’s that for 25 years of loyalty? I had to get a broker to get me a reasonable deal from my own bank!

So I’ve had my whinge Liam. It seems it ‘s ok for businesses to break contracts with each other and to fight for them, but it’s whinging if a consumer, a customer for many years of a bank that is making big fat profits out of their dealings with them, and gets a helping hand from the government which in many cases is as a consequence of imprudent lending, which after 1987 they said they wouldn’t do to expect a little help as well, well I’ll accept the title of whinger.

Just as a footnote, my local grocer is going back to India to look after his elderly parents after running his store here for 24 years. For all of that time, he has shown a real personal interest in every customer, he knows most of them by name. He has helped many of them out if they needed something and didn’t have the cash on them. I won’t go through all the little things he did for local people, but here’s the thing. The supermarket is much cheaper and for many people closer, but they still buy from him and he is selling a highly profitable business. Profitable not because it is a Four Square, or because of his location, but because he cares, because he is a person doing business with people and we as his customers want to do business with him.

If the National Bank doesn’t look after me, perhaps go halves on the contract difference or something that shows that they care about my business, my family and my future business (because I intend not only to be around for a long while, if the creek don’t rise, I won’t be whinging, I will be moving with my feet.

Now I am not wealthy, I live in a very average neighbourhood, far from affluent. Having been made redundant twice and suffered badly as a consequence and having little faith in the government to give me any sort of lifestyle when I retire I am being prudent. I have a small savings account (which has helped my kids from time to time with studies, with medical costs, holidays and other interests), I have a modest term deposit, suffient to cover 2-3 months of income should I be so unfortunate as to be made redundant again as is happening to many people right now. I have a mortgage on my home and a mortgage on my rental property which breaks even without paying a cent off the capital (and of course in recent times means that it is worth less than the loan (but this is for the long haul and it will come right.

Sorry, if I’m rambling, but this post is personal. If the National Bank doesn’t come to the party, I will go back to Mike Pero Mortgages who have looked after me so well in past. I will ask them to find me a new bank that will take over my term deposit, my checking accounts, my 2 mortgages, my Internet Banking, my EFTPOS account, my credit cards and will tell everyone who will listen. Liam, mate, I’m not being a whinger in my book, I believe that people do business with people. We have a choice and I will be looking very closely to see if one of the banks realises that a short term sacrifice will amply pay great dividends in the long run. I suspect that the bank that does this and continues to recognise that their profit comes from their customers will grow and thrive while the others wonder what happened.

Liam, this is starting to sound like I am having a go at you. Frankly I was annoyed to read your column in the Herald today. Factually you are on solid ground, a contract is a legal and binding document. But consumers do have power and if they don’t use it, the corporates or anyone that can will walk right over them. Over recent years Kiwis became so PC (politically correct) that they let everyone walk over them. They thought  people like Americans and Australians were rude if they complained about a dirty coffee cup in a cafe. The contract was for coffee, there was never discussion over the cleanliness of the cup.That made them whingers. Now more and more people are realising that it not just about the contract, it is about standing up for what is fair, ethical, moral and just. The laws of economics are changing and people have a choice.

If anyone is still reading this soap box and agree or don’t with me, please leave a comment and tell me what you think. I would also appreciate you telling other people about this blog if you think it is worthy. Let’s remind the banks and everyone else that those who recognise and respect their customers will in future grow and thrive, those that don’t might be sitting at home reading reading the situations vacant and wondering what happened and thinking how unfair life is.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

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Location Based Social Networking at School

Yesterday I was talking to a friend who has just started 6th Form at her college and asking her about her new form room and whether she had friends from previous years with her. She said they were all strangers and that she was expecting to find it more difficult to catch up with her group of mates, because they would have breaks at different times and wouldn’t know who was where and when.

I told her about the Location Innovation Awards and asked her what she would think of an application that would allow her and her friends to use SMS or a Java application that they could download into their mobiles and let each other know where they are, what their ststus is (e.g. lunch or study period) and be able to catch up in real time or schedule a meetup.

I think a lot of application companies forget about the 14-18 age group when they develop mobile based applications, even though telcos know that more than 50% of mobile phone data traffic comes from social networking applications (is that an example of disruptive technology?) such as Bebo and Facebook or in countries like The Netherlands, Hyves all of which already have networks for specific schools and colleges. These young people are almost physically attached to their mobiles and are all but neurally connected and would adopt an application like this without a momemnt’s hesitation.

So her response? “That would be awesome!”

So if you are thinking about still entering the Location Innovation Awards, get your thinking cap on and invent a new future for yourself, entries are free but you have to have your entry in by 16 February if you want to win one of the great prizes. Don’t forget, you don’t have to be capable of creating the application, but you do have to be capable of documenting the concept and understanding at least the principle of how it would work.

How would an application like this generate revenue? Sponsorship or branding would make a lot of sense. It could be sponsored by a brand such as Subway (just an example), who are already running SMS applications such as ordering your sub (Just a comment, I think it’s a little short sighted to only let people learn about the application by downloading a PDF) before you get to the store so you don’t have to stand in line. An application like this could be combined with the Customer Loyalty card, i.e. you have to register online with Subway to download the free application and you will also from time to time receive promotions such as electronic coupons that you can redeem instore either as an image of a bar code that the scanner can read or simply by showing it to the cashier.

Of course it doesn’t just have to be for high schools, but would also be just as popular with universities, where the institution can also participate by assigning short codes to identify different parts of the campus. This would be a great solution to launch on Orientation Week when all the first year students struggle to find teir way around campus.

The application could then also be used within the institution for games such as treasure hunts, or to advise students of events such as concerts, assemblies, sports events and other activities either en masse or by subscription to interest groups, mirroring application concepts as found on the social networking sites, using a location based concept which, with the shortcodes where the devices don’t even need GPS or triangulations to understand the location details.

I could go on with concepts such as short code translation into full location names, campus maps, opt-in and networking rules, other things the schools or universities could use this technology for, but then I would be completing the entire competition concept entry and you would have nothing left to do.

So, have these ideas got your thinking juices flowing? Do you have some great ideas? Well you only have 2 weeks to go before your entry has to be in. Sign up today at www.locationinnovation.co.nz and get your entry kit. You could be flying to the Where 2.0 Conference in San Jose, fully paid for by GeoSmart Maps Ltd, in May this year or winning one of the other great prizes.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

Cultural Differences and Global Peace

I consider myself to be really easy going and in New Zealand we live in a multicultural country which most of the time works really well. I have grown up with friends and family from a variety of races and backgrounds from all over the world.  Usually if I walk down the road I nod and say hello to people coming the other way and in NZ pretty much everyone returns the greeting without further thought.

Earlier this week I was in The Netherlands and there was a Muslim Cleric visiting Amsterdam who was quoted in the news as saying that no Muslims should be friends with any people in The Netherlands who were not also of the Muslim pursasion. I couldn’t understand if people want to feel that way, why they leave their homelands and go to other countries where the majority of people do not share their faith. I believe that all people are equal, but I also feel that all people deserve equal respect.

In New Zealand we generally celebrate other cultures and respect their religious beliefs. I have enjoyed occassions such as Diwali and Chinese New Year and take the opportunity to enjoy their cultural displays, their food, buy CD’s of their music and generally think viva la difference. It seems though that in some countries relations are different to what I have expected and changes that are happening are not imho for the good.

When my late grandmother was still alive, I used to visit her in her home in Oosterpark where she, (Elisabeth Augustin) as a respected and famous authoress was the curator of  and lived in the Witsen House (now also with graffiti in a foreign language), a museum which was once the home of Willem Witsen, a famous Dutch artist and member of the Tachitigers, a group of artists, poets and authors my grandmother worked hard to have recognised for their influence in the history of Amsterdam’s culture.  The last time I saw her, she was 98 and lived off liquid food and she asked me to get her some from a local chemist store. Her instructions were a little vague so I tried to ask a few local people for instructions. I couldn’t find anyone that spoke Dutch or English that could give me any assistance. Anyway……..

On Wednesday I flew from Munich to San Francisco (where with incongruity everyone was celebrating a new highlight in the history of racial equality) with Lufthansa and there were a large number of Muslims on the plane. The women were mostly covered from head to foot and with one exception, ignored everyone including myself with a determination. The German people on the plane were friendly (probably thinking I was also German given that I was flying from Germany and with my mother having been born in Germany, don’t look dissimilar to them).

As I watched the movie Traitor (I have a habit of reading books or watching movies that seem to associate with my situation) I felt very uncomfortable. The guy seated in front of me was reading a heavy duty edition of the Koran and was passing smaller paperback copies to other passengers. They didn’t seem to know each other, although I could be over dramatizing the situation, and it seemed odd to me that these guys walked around the aircraft handing out these books to other passengers. A number of people were walking around the plane talking to each other, looking up and down the plane and, while it was possibly simply people acknowledging others of the same belief, it was the way they studiously avoided anyone who looked caucasion, throughout the whole 12+ hour flight.

I guess it probably comes down to what you are used to, but my experience is that whether you share beliefs or not, you treat everyone with respect unless they do something that causes you to feel otherwise. Like many people I am concerned about peace in the Middle East and what the future will bring. I believe that the same conflicts that occur because of oil will soon begin over drinkable water and given that we don’t always need petrol or other oil based fuels, we can’t survive without water.

It seems that there are people and (as has been the case for thousands of years) who feel that they have more rights than others and will do what they can to take land or resources from those they perceive as having less rights than themselves. I believe as an idealist in world peace and when I am in New Zealand I feel as though it is possible, but when I have experiences like the one I had on the plane earlier this week, I wonder if it will ever be possible. I have always been and hopefully will always be an idealist, but am feeling a little more concerned. It reinforces the reasons why I chose to live and raise a family in New Zealand.

Through distance we in New Zealand are largely isolated from the rest of the world and the conflicts that abound. I’m not sure of that will remain the case when the water refugees start to come here, but hopefully we will be able to maintain our friendliness and acceptance of people of all colors, creeds and beliefs. But to some degree for that peace to exist, the new immigrants also have to assimilate to some degree. Of course they should continue their beliefs, maintain their language and teach their children their cultures, but they should also learn our language and as we are, be tolerant of others who may not share their beliefs.

People who want to set up their own settlements, and show disdain to our environment and feel that they have more rights than others, should seriously consider staying in their own countries and continue their intolerence of people from other parts of the world. If they can live in mutual respect, then they will be made welcome.

OK, now I will get off my soap boax, but I have to say I am pleased to be home:)

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)

The rest of the story, what can they find out about you on Facebook

Sorry about the wait, I’ve been meaning to do some more work on this blog, but I am on holiday you know. I can see that lots of people are interested in this so I am going to tell you a bit more about what I found.

The first thing is that when you are logged in to Facebook, at the top of your page you will see a button called Settings and in there one of the options is to edit your privacy settings. Some people obviously don’t know that or don’t know how.

If you set this to only allow your friends to see your records, you will be pretty safe, but if not, then you are pretty transparent.

I entered in a common name by way of a random search. I will not provide all the details, but this will give you an idea of what I found out about this random person who had not set their security settings appropriately, obviously not realising the implications.

This person is a 29 year old atheist. I could see how many friends they have and what their names are. I also found that I could see all the details of several of that persons friends Facebook accounts.

I saw that the person hda been in a relationship until November last year and that they are working in the armed forces and have been in that role for over 10 years.

I was able to see hundreds of photos and all the people in the photos, including some from overseas trips, were tagged with their names and in many cases I had access to their pages.

Reading the Wall to Wall messages I was able to find out about things like their favourite foods and what sort of material they like to read.

I found out what the persons favourite films, books and activities were and the list goes on.

Off course Facebook isn’t he only place where you can get lots of information about people, but it is one of the easiest and you don’t have to have any special skills.

My conclusion is that unless you want your life to be an open book, you really should be sure that you set your security levels carefully. The phenomenon of trust, where people share much more of themselves on facebook than virtually any other social networking application is something that we should all be concerned about.

What can people find out  about you on Facebook? Much more than most people think. It could very easily be abused. It would be very easy for example for unscrupulous advertising companies to find out about your interests and Spam you.

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)