In my article Has the Bubble Burst on the 7th August I raised the issue of lenders splitting the pricing with branches offering better products or prices than the brokers network.  Today's Broker News reports that of the last 200 basis point reduction in the cash rate, NAB have reduced their branch rates by 187 points however their Homeside broker products by 167 points.

I wonder if CBA will follow suit using Colonial? Meanwhile it's my opinion that Westpac will do the same with RAMS once they re-establish some track record with RAMS and brokers.  In fact I wouldn't be surprised to see Westpac withdraw broker initiated deals entirely and use RAMS as their exclusive broker arm.  This will then allow them to offer highly differentiated pricing and screw brokers to the wall.  .

It staggers me that so many brokers that I speak continue to send deals to Westpac and NAB.  Hey guys, you are just digging our graves for us.  Stop taking the easy option and selling the major's offerings, do a bit of homework and use some gentle persuasion and you can send business to Heritage or AMP. Your clients will get good service a good product and you will get full commission!

I read with great interest an article today by Rory Robertson, Interest Rate Strategist at Macquarie, who says "Some observers now see the RBA as one of the few central banks in the world that "gets it", that understands the severity of the alarming financial stresses building globally, and is responding accordingly.  They wish the Big Three central banks - the Fed, ECB and BOE - had followed the RBA's lead this week, with synchronised moves of 100bp rather than just the 50bp cuts that had become long overdue."

He go on to predict another 1bp cut within 2 months and a cash rate as low as 4.25 per cent within 6 months.  But it's not doom and gloom as he says " the sharp decline in the A$ - currently near 67 US cents - is very good news, given the ongoing slide in global commodity prices.  Indeed, the weak A$ is Australia's new best friend. Suddenly, some of our tradeable sectors are back in business."

 Of course the bleak prospect of unemployment (not just for brokers) and low consumer demand on top of plummeting share values leaves little scope for optimism.  But at least those of us who can afford a mortgage will be happier about the interest rates.