Thursday, Apr 17, 2008
Brown's attempt at alchemy
Telegraph: Gordon Brown: Banks must admit the truth
Important article this. The idea is to turn the base paper of mortgage securities into gilts. But - a big but - the taxpayer must not take on the risk. How they might achieve this I am not sure. If the banks know that all the others still carry this particular can, will it make any difference to confidence? Lots of other interesting snippets - Libor underestimates interbank lending rate; BTL lenders pulling our (Hurray); Halifax ups its 2 yr fix.... And our favourite politician quoted again.
Posted by letthemfall @ 09:56 AM (487 views) Add Comment
7 Comments
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1. it_is_going_with_a_bang said...
If there is no risk to the tax payer the risk surely is still with the bank that originally did the temporary swap?
Surely this is nothing other than trying to conceal bad debt? Which is exactly the opposite of what GB is saying he wants banks to do?
The risk would still in the end be with the banks and therefore they still won't trust each other. Hence a pointless exercise.
Not even worth the airfare to the US for GB.
Unless of course he is lying about the risk to the taxpayer.
2. Mken said...
I doubt whether GB wants the banks to reveal the truth.
It's just a show. Yesterday's bail out plans tell a "truer" story.
Anything to hide the truth.
3. tyrellcorporation said...
Almost as comical as him telling Mugabe that he's fiddling the elections and has no mandate - those in glass houses, etc, etc
4. cornishman said...
Telegraph: Gordon Brown: Banks must admit truth
That must be a typo, surely it should read:
Telegraph: Gordon Brown: must admit truth
5. sold 2 rent 1 said...
2Telegraph: Gordon Brown: must admit truth"
You beat me to it corno.
6. sold 2 rent 1 said...
it_is_going_with_a_bang,
"The risk would still in the end be with the banks"
Wrong. We are living in a bank bailout culture. This will not change.
The risk will always come back to the taxpayer. Period.
The time has come to realise that both homeowners and renters are stuffed alike.
Our currency is stuffed.
Our country is stuffed.
7. mark wadsworth said...
Cornishman - spot on!
I like this bit from the Telegraph article
"The market for buy-to-let mortgages suffered a blow as 16 lenders, including NatWest, were found to have pulled out of the market - including four in the past week"
Does anybody happen to know whether there BTLers can still get mortgages or even re-mortgages? BTLers up and down the land must be running scared...