Wednesday, Jun 13, 2007
More evidence cost of borrowing is beyond MPC's control
Times: Dollar soars on fears of rate rise
"Yield on 10-year UK gilts above 5.5 per cent for the first time since May 2000 as UK bonds following US bond sell-off" Here we go... add to this the very likely, long-awaited repricing of credit risk and you won't find any mortgage for less than 7% this summer.
Posted by confused76 @ 07:13 PM (214 views) Add Comment
14 Comments
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1. Pr said...
And, inflation will go up here, with higher cost imports from the US, and other places that are experiencing a rout in bond rates and higher currency value, thus raising our short and long term interest rates, and so the cycle goes, till it goes POP! This is what happens if you let inflation stay above 2% for a couple of years. If our domestic inflation was under control, we could absorb this shock with a little adjustment. Shame.
2. enuii said...
Two interesting comments tucked away at the bottom from Mr Greenspan.
The global liquidity boom that he traced back to the end of the Cold War could not last for ever. “Enjoy it while it lasts,” and that some present world share price valuations looked unrealistic, with the ratio of share prices to corporate earnings seemingly “discounting nirvana”.
Trouble is most people recognise these facts but carry on partying like the drunk who knows he's had too much but has another anyway cos' everyone else is still drinking.
3. Philld said...
Problem is it won't be the banks or the brokers that end up paying for this mess, it will be the pension funds and ordinary people who see their lives smashed while the rich just have to take less options on their new Porsche.
4. Scott said...
I went out with this girl who works at a top estate agent firm in London last week. Amongst other things we did, we spoke about the upcoming crash. She agreed. Let's just say I enjoyed getting it out of her almost as much I did putting in first!
5. Orwell said...
Speak for your self Enuii ... All my friends have c. £30k in the bank...
Quite where the 167% of the GDP we are in debt is I don't know...
6. Orwell said...
Should Swervyn really get the blame for this though? He made a mistake keeping IR's as low as he has for so long but the alternative may have been recession much earlier?
I begin to worry - I wouldn't like to be in his shoes!
7. paul said...
"Let's just say I enjoyed getting it out of her almost as much I did putting in first!"
You dirty beggar! We don't want to know the finer details of your lewd and unsavoury afterdark antics.
(still I suppose they've been shafting the rest of us for long enough. Badum-tisssh ... )
8. bidin'matime said...
Rates are rising - Alliance & Leicester are paying 6.1% gross if you don't make withdrawals (no interest paid in any month you make a withdrawal, so if you leave a lump sum there for a year, then draw it all out on the 1st day of any month, you win!)
ICICI paying 6.05% gross with no strings.
The borrowers' days are numbered - it's time for savers to celebrate at last.
9. Scott said...
How dare you make that comment against me Paul. It was not after dark, it was during my lunch hour at the Imperial.
10. enuii said...
Orwell it's nice to know that all your mates have 30K in the bank, up here in the North most of us don't talk about what other folks have in the bank. Mind you if its mortgage equity they have tucked away you can't really call it savings as its more like stored debt which probably accounts for some of the 167% GDP! Just remember that debt is something that most people don't admit to or generally talk about until they are in deep doo-doo, if you're neighbour has a nice shiny new BMW/Merc/Etc on the drive of his house you will have no clue about his interest only mortgage, the size of his credit card debt or how big the loans is on his car.
We can look at each other possessions as displays of wealth but we can't generally see inside each others bank accounts!
11. Matt_the_hat said...
Its time for the BOE to decide either on high inflation or high interest rates. If it chooses the 1st option I would advocate everyone going to the bank for the cheap money cos it will pay itself back (eroded by time) whilst the Government bodge the inflation statistics.
12. Orwell said...
Enuii
Sorry, my apologies.... You are right of course!
You are quite right - and i am not overly materialistic and above all the Northern lifestyle is more attractive than coping with the bullshitters down here (spent some time up there, like the people much more).
The point I was making was merely that we have been saving, so where is the debt?
anybody?
13. Orwell said...
You are right about the drunk analogy though.
And in case you wonder I would rather have a more pleasant society than money in the bank!
14. Utterlee said...
"All my friends have c. £30k in the bank..."
Blimey, I can't say I know the ins and outs of all my friends' savings accounts, but I'm pretty certain that most of them have barely got any savings. Most late twenty-somethings in London I know can't afford to actually live and put any big savings away at the same time. My rent and bills and travelling costs account for well over 60% of my take-home salary. Really don't see how people are supposed to save for the future/pensions/house deposits and enjoy their lives. Frankly even if I sat at home every night and ate Value beans on toast, it would stil take years and years for me to save up anywhere near £30k!