Most interest rates actually dropped a couple of weeks ago - reflecting the near certainty that big drop would occur today. (and the aussie banks buy a lot of their money on overseas markets so the OCR isn't the whole story)

Yup, noticed that. Our floating mortgage rate was 10.2% up until a couple of weeks back. It's been 10.2% for a loooong time.

I disagree David. When interest rates dropped a couple of weeks ago, was the first time for many banks, in spite of the 1% drop in the OCR 4 weeks prior.

What we actually saw was a drop 4 weeks after the last OCR decrease. Rises in the bank mortgage rates occurred within days of each successive rise in the OCR over the last 3 years, but not at all or slowly when it finally dropped.

David is quite right. Our locally owned banks which fund 100% of their borrowing locally dropped their rates within minutes of the announcement. The majors fund at least three quarters of their borrowing overseas so you should expect only minor changes from them until their costs of borrowing too come down, which they will.

The closest analogy I can see is the people who were accusing petrol companies of profiteering when the price of crude oil dropped suddenly. But hang on, she cried. Most of our fuel is imported as refined product, not crude and the cost of refined product did not come down for quite some time.

Well, I wasn't trying to make a case that the banks where all magnanimous institutions that wish, just wish, they could pass the interest rate cuts on to their mortgage holders. I'm not quite that contrarian.

Lucyna asked why floating rates haven't dropped and some of the reason appears to be that the wholesale rate included at least some of today's cut. (and I think a bunch of banks have cut their rates a bit more today)

Most interest rates actually dropped a couple of weeks ago - reflecting the near certainty that big drop would occur today.

I stand by my point. The interest rate cuts from a couple of weeks ago had nothing to do with today's cut. It was a delayed reaction to the previous cut of 1 percent.

And my Bank only cut by 75 points, not the full amount.

I seriously doubt a bank would EVER cut rates weeks in advance of an *anticipated* RBNZ rate cut - and Bollard has proven in the past to not always cut or rise by the *predicted amount.

JUst as if not more interesting is the oh-so-rational "pricing in the expected change" of securities. Isn't it 'fun' to watch the NYSE respond to news you assume it had already "priced in"? Like the small matter of "recession".

ie. some indicator or report confirms (yet again) USA is in a recession, market plunges 500 (again) on "news". Next day market rises 400 on no news (again). Plunges 500 on nothing (again) on Wednesday etc.
Is that efficiency or 'rational' pricing, or is it gaming?
Hope noone bought Google at 750 in January!

As to the NZSE, sorry NZX, wonder how those Burgerfuel shares are going? Diligent anyone?