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House Price Crash Forum

Jekyll

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About Jekyll

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  1. Guarantee £12bn total £600k max house price E.g. Covers loan from 80% to 95% LTV benefit per loan = £90k Split into scheme total = 133,333 loans So about a hundred and fifty thousand people will benefit. New build. Same sums. £3.5bn / (600k * 20%) = 29,167 new loans
  2. Has anyone seen any evidence to support this story? The FT article is very light on detail, as is the Telegraph. I have also heard from people who should know that while the capital ratios required in the short term have been relaxed by the FSA, there has been no suggestion that this is linked to the FLS. Banks are facing big changes to capital definitions fairly shortly. Without more flexibility on ratios the result would have been an effort to shrink balance sheets and raise capital. Flex on ratios takes the pressure off somewhat, but rating agencies and investors will still provide a constraint on banks going crazy (if they can find enough willing borrowers).
  3. I was at a stag do in Edinburgh at the weekend. THe company that organised the events put us in apartments in the Western Harbour development near the 24hour ASDA. Cheap as chips. The neighbours seemed delighted.
  4. The banks using the SLS are already on a "flight path" out ahead of the Jan 2012 formal end date. For some time the BOE has been making it a less and less attractive source of funds. The haircuts for pledged assets have been ratcheted up and the cost of funds also increased. There are now opportunities outside the SLS to fund some assets that are cheaper all-in. The problem for banks is that not all the SLS pledged collateral is getting an attactive bid in the private term repo market e.g. securitised self-cert mortgages. That said, as the clock ticks they will find themselves paying more and more to access the available funding. Some are calling it the "car parking problem". You drive into the multi-story on the ground floor knowing you want to go to the shops on the third floor. You drive past parking spaces hoping there will be one closer to the third floor exit. The problem is that there might not be another space until you get to the roof, and its raining. Same for the banks, do they take the first bid for the securitised self-cert, even if it's not great, or wait for a better one, or perhaps end up taking a bath later. The BOE is consulting on the Discount Window Facility. This has wider eligibility than the SLS, but it only offers short term funds that don't work so well under the new liquidity regime (which penalises short term funding). The banks are highly focussed on getting out the SLS and terming out their own funding right now -- the alternative is balance sheet reduction. That means asset disposals (at a loss?), and lower lending levels. Son of SLS = DWF, but either way lending is grinding lower for some time to come.
  5. Link Hot on the heels of CGT -- things are looking up (or should that be down)
  6. Pretty much all UK credit card receivables have been securitised via master trusts. Cap One run Sherwood Castle master trust. None benefit from interest rate swaps and all have wind down triggers occurring when Yield less Charge-offs less Expenses <0. Expenses includes funding costs. So increasing rates now would be a prudent thing to do if you were worried about higher charge-offs or short-term interest rates. Card providers have also been squeezed by Basel II as they no have to hold capital against credit limits (actually estimated "exposure at default"), not just drawn balances - this is also driving repricing, a general reduction in limits, and an effort to get people to use their cards more, maintain a balance or or give it up.
  7. Correct -the spv will enter into a basis swap to swap all interest flows into the basis of the the notes issued. Interesting features of these swaps: balance guaranteed average svr vs libor (for floating to floating) on arms length commercial terms the originator usually acts as counterparty
  8. You heard it hear first Can I claim royalties?
  9. Everytime anyone buys a share they are taking a bet aren't they? All the article really says is "politicians/ regulators/economists good, bankers bad". Is it that simple?
  10. But there isn't a single example of casino style speculation cited
  11. "You Can't Borrow Your Way Out Of This Mess" Yes you can -- Debt is Wealth, according to pretty much everyone in a position to do anything about it.
  12. I don't think Balance of Payments stats for Q2 have been released yet. In any case, one would expect the current account deficit to reduce as domestic demand is squeezed and exports benefit from sterling depreciation. The reduced current account deficit implies a reduced capital/financial account surplus -- balance of payments always balance (apart from change in central bank FX reserves). Identifying capital flight is tricky, but one could look at the the Direct Investment figures -- a sharp drop here would be indicative.
  13. One often sees this mom vs yoy mismatch where the mom is way different from the consensus but the yoy is bang on or visa versa. On e.g. fx-street fundamentals economic calendar. I reckon it's because the consensus forecast reported is a simple average of the forecasts and the mom and yoy consensus forecasts are not consistent from the start.
  14. No mention of the $8000 subsidy to FTBs to purchase houses or that it is scheduled to stop in November.
  15. I guess what I am saying is there is no point charging for the reserves held -- BOE only need to pay less than the alternative. I suppose if the negative spread didn't cause banks to withdraw reserves they could start charging, but that is jsut a more extreme version of the same isn't it?
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