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Markets Alert For Credit Crunch 2.0

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http://www.telegraph.co.uk/finance/comment/jeremy-warner/8118430/Markets-alert-for-credit-crunch-2.0.html

If you think this a stretch, just take a look at the equivalent figure for the world economy as a whole. According to the Bank of England's last Financial Stability Report, there is approximately $5trillion (£3 trillion) of refinancing to be done by major banks around the world over the next three years.

Banks in Greece, Portugal and Ireland again find markets for all but very short term funding effectively closed to them. What chance do UK banks have of raising the necessary amid such humongous global competition?

Currency wars will dominate debate when political leaders meet for the G20 summit in Seoul at the weekend, but this fast approaching funding gap is in fact of much more immediate threat to the financial system than the re-emergence of global trade imbalances.

The largest single element in the UK funding shortfall is accounted for by the "Special Liquidity Scheme" (SLS), a facility set up by the Bank of England at the height of the financial crisis to provide mortgage lenders with the finance they were being denied by wholesale markets. Some £57bn of this money has since been repaid, but there was still £128bn of it outstanding at the last count

Around £120bn of lending is also underwritten by the Government through the Credit Guarantee Scheme, while lenders can in extremis access short term funding through the Bank of England's "discount window".

For most major UK banks, withdrawal of the SLS – full closure is due to take place by January 2012 – shouldn't be too much of a problem. Use of the scheme was in any case de minimis for the likes of HSBC and Barclays.

But for the beleaguered HBOS (now part of Lloyds Banking Group), Royal Bank of Scotland, and much of the building society movement, it was a lifesaver. That's where the vast bulk of the exposure still remains. RBS has already whittled down its use of the scheme to below £20bn, and at the present rate of balance sheet shrinkage will have largely paid off the remainder within six months.

More problematic is Lloyds Banking Group, which has around £112bn of collateral still lodged with the Bank of England in lieu of absent wholesale funding. Most of this funding would once have been provided through securitisation of mortgage assets, a market most unlikely to return to former glories any time soon, if ever.

So it would appear the BoE will be printing in secret to fund the banks.

No wonder the worlds central banks are firing up the printing press in the name of the recovery. It would appear that this new printing is just another bank bailout but with a different name.

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I know that as of the start of this month central banks have lost control of the system, anything they do from now on is IRRELEVENT.

The whole fiat money system is coming down IMHO. The bankers have gamed the pants of it. The West isn't just broke, it's fooking broke.

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The whole fiat money system is coming down IMHO. The bankers have gamed the pants of it. The West isn't just broke, it's fooking broke.

They are such reptilian brained idiots they don't realise they've made themselves IRRELEVENT. HA

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imagine how bad it would be if these banks, having cleared the crap off their balance sheets, had to have the stuff actually valued at market rates.

lying is the ONLY way for them to survive, and thats in an industry that can only exist on trust.

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imagine how bad it would be if these banks, having cleared the crap off their balance sheets, had to have the stuff actually valued at market rates.

lying is the ONLY way for them to survive, and thats in an industry that can only exist on trust.

This is it, the big wake up call when we realise that oz is a withered old man behind a curtain. The psychology has changed.

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http://www.telegraph.co.uk/finance/comment/jeremy-warner/8118430/Markets-alert-for-credit-crunch-2.0.html

So it would appear the BoE will be printing in secret to fund the banks.

No wonder the worlds central banks are firing up the printing press in the name of the recovery. It would appear that this new printing is just another bank bailout but with a different name.

How is it in secret when printed in the telegraph?

Watch the other hand, not the one with the glove puppet on.

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imagine how bad it would be if these banks, having cleared the crap off their balance sheets, had to have the stuff actually valued at market rates.

lying is the ONLY way for them to survive, and thats in an industry that can only exist on trust.

Why would you need to value something at market value if the security was performing and you intended to hold for the full term?

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And a reminder that in the UK we haven't yet had our sub-prime crisis. We have sub-prime debt coming out of our ears in mortgages, credit cards etc... We just haven't had our crisis yet and when we do the BoE toxic debt guarantees are going to be woefully inadequate. The only thing keeping the wolf from the door is continued high house prices.

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And a reminder that in the UK we haven't yet had our sub-prime crisis. We have sub-prime debt coming out of our ears in mortgages, credit cards etc... We just haven't had our crisis yet and when we do the BoE toxic debt guarantees are going to be woefully inadequate. The only thing keeping the wolf from the door is continued high house prices.

The sub prime is a big lie there can't of been more than 150 billion in toxic depts, The central banks just used it as a problem, reaction, soulution, to get the money printing going to rob the public blind, but there so DUMB they have cut their own throat :lol:

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Why would you need to value something at market value if the security was performing and you intended to hold for the full term?

How do you know they are performing.

OUr banks were big buyers of MBS.

the LAW says banks have to have certain capital available in order to trade.

If a bank needs to be closed, there should be a rough balance between what gets paid out to savers, and what gets sold to the market.

indeed, you ask the question, so I ask, if I run over your kid and hide the body, is that OK?

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Why would you need to value something at market value if the security was performing and you intended to hold for the full term?

Did they revalue on the way up though?

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How do you know they are performing.

OUr banks were big buyers of MBS.

the LAW says banks have to have certain capital available in order to trade.

If a bank needs to be closed, there should be a rough balance between what gets paid out to savers, and what gets sold to the market.

indeed, you ask the question, so I ask, if I run over your kid and hide the body, is that OK?

How do you know they aren't?

Have you got any figures?

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Why would you need to value something at market value if the security was performing and you intended to hold for the full term?

Mark to market versus accrual accounting.

The impairments taken on an accrual accounting basis should be something similar the discount to par on a mark to market basis unless a bank can convince me that it is right and the whole market is wrong about the expected future performance of identical risk.

Rather than leaving banks room to wriggle, why don't they just abandon accrual accounting for part of their balance sheet and mark the entire thing to market?

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How do you know they aren't?

Have you got any figures?

clues...haircuts, nonliquidity, cant sell the damn things, off balance sheet....all the clues to a good honest system we can trust.

How can I have figures when they havent any themselves? Im sure thats the whole idea :lol:

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clues...haircuts, nonliquidity, cant sell the damn things, off balance sheet....all the clues to a good honest system we can trust.

How can I have figures when they havent any themselves? Im sure thats the whole idea :lol:

Then you're just blowing steam.

Edited by Alan B'Stard MP

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The sub prime is a big lie there can't of been more than 150 billion in toxic depts, The central banks just used it as a problem, reaction, soulution, to get the money printing going to rob the public blind, but there so DUMB they have cut their own throat :lol:

The real crisis is government debt, always was.

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  • 142 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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