Tuesday, July 29, 2008

Bank ups rate for hire purchase

3.9 per cent. EON Bank, in a circular, says it will charge 3.9 per cent for new car loans effective August 1, 2008, up from 2.7 per cent. This is the second increase in car loans interest rates in a month.

Expect other banks to do likewise. Also expect it to be harder to get your loan approved. In times of crises, our financial institutions have proven to be very shy in approving loans. Back in 1997, for example, Mahathir had to force the banks to stop acting like a pussy, and to start approving loans and, therefore, encouraging spending in order to revive the economy.

21 comments:

wakening said...

Yes back is 1997, we still remember what he did not only to push for approvals, but also to push down the theh killing interest rates.
Yes. Tun Dr. M is a godsend to us Malaysian.

Abi Ayyub said...

Well Rocky,

Banks will always be banks, and the best part of it all it doesn't matter to them how and what is the customer's situation.

All they care about is how can they charge you. Just check up any banks and you will surely realize that they are the real crooks. If Along is bad, banks are Along which the Government had authorised. So they are the legal Along. They will suck you dry.

I would say, if at all possible, make sure that we do not deal with this entity, unless it is of real necessity.

Have anyone realise that should you faulted on a loan, they will call you first, they'll send you reminders, then the lawyer will send you the reminder, then at every opportunity they will try to "lelong" your property, then if they got it and the price are lower from the loan, they'll go after you and so on ... and so on.

Remember, they'll charge for all the photostat, mails, out of office expenses, the lawyer and make profit out of it.

This "legal Along" makes ton's of money by sucking people dry.

BEWARE ... if not the consequence will be just HELL.

Rauff said...

yikes~ what next? Study loans? Home Loans? Bugger them~!

Anonymous said...

Yo Mr Bru! Cat got your tongue or what? No mention of the Saiful medical report and RPK's article... Why bro ?

Anonymous said...

Rocky,

Thanks for your update. Looks like it is just upward and there is no stopping.

Between just some digression, with all the hoohaa about the medical report stating Saiful was not sodomize, when are you going to run an article here about it? Lately it seems that your reporting have been somewhat skewed towards the powers of the day, have you turned to the dark side?

bogieman

GobloKing said...

yeah..Banks are like dat

When you need them, they won't give you the money

When you have plenty, they can't wait to give you more

But can't blame them either.

The problem in Msia is that we are so corrupted and SO MANY are OVEREXTENDED on credit - that Personal Credit Ratings/Credit Checks are still NOT in place.

Until and unless there is access to credit evaluation banks will continue to be scared and more risk averse.

Malaccan view said...

I may not be an expert in economy but to increase interest rate is not the way to address our country already dying economy.Gov especially banks in Malaysia should instead lower down the interest rate inorder to encourage more people to spend,this will eventually improve the consumers sentiments thus benefited to all industries.Dr M strategy way back in 98~2000 was a successful measure to counter inflation and economy slow down.

Kucing Siam said...

That pussy comment will rile-up lot of pussycats.

Sir Taek Boon said...

bank ups.. sounds like bankrupt!

pshychosis said...

yeh bru..when???saiful medical report bruu.wehn??cmon..ur changed bro

umnodu said...

Dear Rocky,

Here's the key difference.

In 97/98, Mahathir encouraged Malaysians to go out and spend.

In '08, Pak Lah asked us to adapt and save.

Basic Econs 101.

Kepimpinan Tidak Memahami Kami
www.suaradu.com

Ahmad said...

dear rocky,

BANK IS ONLY FOR THE RICH NOT FOR THE POOR. THIS POLICIES OR MIND OF THE BANK OFFICER

IF YOU ARE RICH THEY WILL LICK YOU UP, BUT IF YOU ARE NOT THE WONT EVEN LOOK AT YOUR FACE. IF YOU ARE BUMIPUTRA ENTRPRENUER THEY EVEN LOOK YOU AS A FAILURE EVEN BEFORE U SUBMIT YOUR PROPOSAL

THAT THE REALITY

Rozaimi Bin Mohd Said said...

When my housing loan under staff package, they charged me 3.5% but when I resigned, the Bank charged me 10.75% (because the LO provides for BLR+4%). I know they follow the agreement but my monthly instalment now is RM2500 (for a property value at RM250k. It is a real burden to me. I requested the Bank to restructure my loan twice and they turned it down for no apparent reason. I told them they can auction my house very soon and I hope they will be happy for that.

Quick Draw Botak said...

Bro Rocky,

You forgotten to mention that "foreign" banks are the worst lot. They are the first ones to pullout lines from companies at the scent of trouble. Local banks still have "a little heart" and more accomodating.

All these are facts from history... First hand knowledge bro!

//quickdrawbotak.blogspot.com

hancock said...

Gobloking wrote:
The problem in Msia is that we are so corrupted and SO MANY are OVEREXTENDED on credit - that Personal Credit Ratings/Credit Checks are still NOT in place.

Until and unless there is access to credit evaluation banks will continue to be scared and more risk averse
===============================
And how did you arrive with these statements?

tehsin "venom" begum said...

Pussy??...you MCP you...you should have said "not having the scrotal gumption"...pussy pulak...can't imagine TDM saying "pussy"..pussycat bolehla...heh heh

GobloKing said...

hancock
I know what I know!! :)

For banks to check on personal credit risks. they have access to

1. their own info ie existing & previous customers,

2. Bank Negara's "central" info ie bounced/dishonored cheques

3. 2 larger independent agencies which basically captures bankruptcy notices and high court cases if that person is a defendant/plaintiff

furthermore the credit risk evaluation process is ONLY getting started but thnks to some problems with "data integrity" ie info not linked by IC but by names and untimely updates, credit info companies have been sued

banks do not want to share their info with each other...in other words, technically speaking IF we are willing to lie, we can get many sources of credit - AS IS HAPPENING NOW - and banks aren't the wiser

Trust me on that. Ask any banking friends you have.

Anonymous said...

The Finance Ministry made a BLUNDER,,coz they are stupid,,!Stupid,,Stupid,,!!

Prior to 1997,,Our CAR interest rate is 7%,,and 30% down Payment with a maximum length of contract 60 months.

Konon-konon,,,1997 financial crises, Economic downturn,,the financial Institution turunkan to below 2% with a length of contract extended to 9 years,,ada 10 years to goverment servent,,,on top of that without down payment at all,,as can be seen today,,those purchased NAZA KIA cars,,with the collaboration of Financial Institution.

Maka ramai rakyat Malaysia dapat memiliki kereta,,,

The Malaysian Economy, makin lama makin terok,,,OR TENAT,rakyat starts default on their monthly instalment,,maka become a bad pay master,,ada yg kereta kena tarik,,NAMA pon blacklisted,,To apply for new loans jangan harap.

Lambakkan kereta di tepi-tepi jalan or Used Cars dealer bertaboran..Jadi ta'laku kereta tersebut,,coz NEW CARS without downpayment..MATI lah Tokey-Tokey Cina kerana terlampau banyak kereta dalam simpanan mereka...NO BUYERS AT ALL,,, TOKEY MELAYU da'lama MATI

DAHlah kereta terpakai ta'laku,,kereta BARU pon ta'jalan coz CUSTOMER SATURATED,,

Yang laku hanya kereta kancil and other small version,,yang murah,,itu pon PARENTS yang belikan kerana anak masuk UNIVERSITI...

PENDEK CERITA,,NEW and SECOND HAND CARS NO BUYERS..so,,

THE CAR INDUSTRY IN MALAYSIA is DEAD,,,MATI,,MATI,,,,MATI.

Kalu interest rate nak dinaikkan NAIKKAN LAH,,,tambahkan Beban mereka,,,!!!!

MOREOVER WE ELECT THE GOVERMENT,,nak salah siapa,,!!!!!Balasan yang kita terima,,!!!!

TO solve the problem,,kita BAKAR kereta kita and clain INSURAN or FORWARD the cars to BADAWI,,jadikan TUKUN IKAN DI LAUT,,!!!

FINANCE MINISTER,,,WAKE UP,!!!!

-BODO-

Anonymous said...

good job with higher interest rate, the bank owner will enjoy bigger allowance and dividen. If their company cannot afford to paid the loan, just write off. like Cahaya mata loan from RHB, just write off million and billion by the exec chairman who now our deputy minister of tourism

shah alam

Anonymous said...

Money as Debt

August 24, 2007
by Carolyn Baker

Anyone who hasn't watched "Money As Debt," an animated DVD by Paul Grignon, should consider purchasing this extraordinary explanation of money's origin in an economy totally dependent on debt. Almost everyone has seen footage of federal printing presses cranking out paper money, and some of us have even visited a government mint or two and have observed the process firsthand. But like so many other illusions with which the U.S. economy is replete, money is not created by government printing presses.

During the first few minutes of "Money As Debt" I began feeling my eyes glazing over in anticipation that I would soon begin viewing photo footage instead of animation. I then realized that I, like the masses of Americans who demand that every video experience provide them with entertainment, was unconsciously holding the same expectation. I then promptly hit the rewind button and started over, this time listening and watching attentively.

"Money As Debt" is not entertainment-far from it. The film offers amazingly elementary facts about the creation of money in the United States, narrated by a soothing voice, which could make for a bland presentation, yet the film's message is anything but vapid. In fact, if it doesn't leave your blood boiling, it behooves you to check your vital signs.

Beginning with the most fundamental question of all, Grignon asks: Where does money come from? The answer to this question will almost never be found in grammar school-or even college. What we aren't told in formal education is that money is created by central banks.

Banks create money, not from their own earnings or from the funds deposited by customers, but from the borrowers' promises to repay loans. Most importantly, borrowers not only promise to repay, but to repay with interest, and the bank writes the amount of money of both into the borrower's account.

Grignon opens with a story from antiquity. In the days before paper money, goldsmiths produced gold coins and kept them safe for the purchaser in the same way that banks hold deposits today. These goldsmiths soon noticed, however, that purchasers rarely came in for their actual gold and almost never all at the same time. So the gold merchants began issuing claim checks for the gold which made the exchange of gold in the marketplace easier and less cumbersome. Thus, paper money was born which made doing business much more convenient.

Eventually, goldsmiths began loaning money to customers and charging interest on the loans, and borrowers began asking for their loans in the form of claim checks. The goldsmith shared interest earnings with depositors, but since no one actually knew how much gold he was holding, he got the idea that he could lend out claim checks on gold that wasn't actually there and soon started becoming enormously wealthy from the interest paid on gold that didn't exist.

Thus began the power to create money out of nothing, but it wasn't long before bank runs began, and banking regulations evolved regarding how much money could be lent out. However, the regulations allowed a ratio of 9 to 1-that is, banks could lend out 9 times the amount of the deposits that were already there. This policy has come to be known as Fractional Reserve Banking. Regulation also arranged for central banks to support local banks with emergency infusions of gold, and only if there were many runs at once would the system crash.

Fast forward to 1913 when that so-called progressive president, Woodrow Wilson, signed into law the Federal Reserve Act which created the banking cartel now in charge of America's money system.


For those who have not seen Aaron Russo's DVD "Freedom To Fascism" - run, don't walk to see or purchase it. It is required viewing for understanding the Federal Reserve System and the power it has over the U.S economy and over our individual lives. Very few Americans know how money is created and even fewer know how the Fed originated and what it actually does. Does anyone really believe this is an "accident"? As the media guru Marshall McLuhan is reported to have said, "Only the small secrets need to be protected. The big ones are kept secret by public incredulity."

Whereas U.S. paper currency used to be backed by gold, that is no longer the case, and we have instead a fiat currency backed by nothing except the word of the Federal Reserve that the money is worth its stated value. Moreover, money today is created as debt, that is, money is created whenever anyone takes a loan from a bank. In fact, every deposit becomes a potential for a loan-a process which can be and is repeated many times, ultimately creating infinite amounts of money from debt.

Whereas the 9 to 1 ratio reigned at the beginning of banking regulation, today in some banks, ratios are as high as 20 to 1 or 30 to 1, and frighteningly, some banks have no reserves at all!

The bottom line is that banks can create as much money as we can borrow!

(Article Continues Below)

One wonders how individuals, banks, governments, and other entities can all be in debt at the same time, owing astronomical amounts of money. This question is answered when we consider that banks don't lend actual money; they create it from debt, and since debt is potentially unlimited, so is the supply of money.

But what is so wrong with this scheme? Hasn't it been working all these years? Actually, there are several things very wrong with it.

The first issue is that the people who produce the real wealth in the society are in debt to those who lend out the money in that society. Moreover, if there were no debt, there would be no money.

Most of us have been taught that paying our debts responsibly is good for ourselves and for the economy. We imagine that if all debts were paid off, the economy would improve. In terms of individual debt, that's true, but in terms of the overall economy, the exact opposite is true. We are continually dependent on bank credit for money to be in existence-bank credit which supplies loans. Loans and money supply are inextricably connected, and during the Great Depression, the supply of money plummeted as the supply of loans dried up.

Secondly, banks only create the amount of the principal of loan. So where does the money come from to pay the interest? From the general economy's money supply, most of which has been created in the same way.

A visual image is helpful. Imagine two pools of water-one full and one empty. The pool with water in it represents the amount of the principal of a loan; the empty pool represents principal plus interest. The pool of principal has only a certain amount of water in it, so that it can't possibly fill up the other pool of principal plus interest. The rest of the water needed to fill the pool doesn't actually exist and has to be acquired from somewhere.

The problem is that for long-term loans, the interest far exceeds the principal, so unless a lot of money is created to pay the interest, a lot of foreclosures will result. In order to maintain a functional society, the foreclosure rate must be low, so more and more debt must be created which means that more and more interest is created, resulting in a vicious and escalating spiral of indebtedness.

Furthermore, it is only the lag time between the time money is created to the time debt is repaid that keeps the overall shortage of money from catching up and bankrupting the entire system. It takes only a few second of reading the headlines of the financial pages during this month, August, 2007, to notice that foreclosure rates and lag time are threatening to meltdown the entire U.S. economy. The preferred method of the Federal Reserve and central banks addressing this calamity is, yes, you guessed it: to create more debt. The lowering of interest rates in recent years, the bombardment of credit card applications we find regularly in our mailboxes, the red ink in which the United States government is drowning are all an attempt to stave off the collapse of the entire system.

Can any sane human being believe that this situation can persist forever? What is the inevitable outcome of a fiduciary game of musical chairs? Monetary historian, Andrew Gause, answered this question:

One thing to realize about our fractional reserve banking system is that, like a child's game of musical chairs, as long as the music is playing, there are no losers.


And finally, a system based on fractional reserve banking is, to say the least, not sustainable because it is predicated on incessant growth. Perpetual growth requires perpetual use of resources and the constant conversion of precious resources into garbage just to keep the system from collapsing.

Grignon suggests that in order to begin addressing and resolving the nightmare of money as debt, we must ask four pivotal questions:


1) Why do governments choose to borrow money from private banks at interest when governments could create all the interest-free money they need themselves?

2) Why create money as debt at all? Why not create money that circulates permanently and doesn't have to be perpetually re-borrowed in interest?

3) How can a money system, dependent on perpetual growth, be used to build a sustainable economy? Perpetual growth and sustainability are fundamentally incompatible.

4) What is it about our current system that makes it totally dependent on perpetual growth? What needs to be changed to allow the creation of a sustainable economy?


A crucial assumption that must be questioned is the practice of usury or the charging of interest for lending money. Grignon asserts that it is a moral and a practical issue because it necessarily results in lenders ending up with all the money, particularly when foreclosures happen. Not only is debt deplorably profitable for lenders in terms of interest and service charges, but when borrowers cannot pay, as in the case of housing foreclosures, lenders walk away with the proceeds. In a recent article "Panic On Wall St.", Andrew Leonard explains how obscenely advantageous subprime and liar loans have been for lenders and provides damning evidence to support the long-time assertions by Catherine Austin Fitts that the housing bubble has been engineered by centralized financial systems.


In a transformed economy, which I do not anticipate happening in the twenty-first century, banks would exist as non-profit services to society-lending without charging interest at all. But, as Grignon says, if it's the fundamental nature of the system that's causing the problem, then tinkering with the system can't solve the problem. It must be replaced.


One solution might be the replacement of paper dollars with precious metals, which of course, could once again become cumbersome and inconvenient, unless the economic system had experienced collapse and digital and paper transactions were no longer possible.


Perhaps the best solution offered by "Money As Debt" is the creation of locally-based barter money systems in which debt is repaid by hours of work valued at a dollar figure. Additionally, government spending on infrastructure, not using borrowed money, would also create value locally and nationally.


The Federal Reserve banking cartel has been shrouded in secrecy and lack of information among the American people regarding its creation and functioning. One American president appeared to have understood it very well:


Whoever controls the volume of money in our country is absolute master of all industry and commerce...when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.


~James Garfield, 20th President

Assassinated, 1881


"Money As Debt" is not only a must-see for any American who wants to be politically and economically literate, but is particularly crucial for high school and college students to see in order for them to understand how the money works in the United States. Yet we should not assume that the film's simplicity of presentation ranks it as less than adult because most adults in this nation are clueless regarding the connection between money and debt.


I personally hold no hope of changing the money/debt system which is truly the eight-hundred-pound gorilla in the American economic landscape. What I do envision, and what must happen, in my opinion, is its total collapse, whether gradual or sudden, so that the transformation and relocalization of the nation's economic system will be possible, which it is not in the current milieu. However, what we are presently witnessing in the bursting housing bubble and credit crisis may well be the beginning of the end of "money as debt."

[annonymous305]

Perkasa said...

among banks, Citibank has the best service and the best "Along" ever!!