Freki Posted June 10, 2019 Share Posted June 10, 2019 (edited) This important piece was missed here I guess. The world keeps spinning, but one would wonder if it really does. https://www.bloomberg.com/news/articles/2019-05-23/bankers-stunned-as-negative-rates-sweep-across-danish-mortgages Effectively people are getting paid to borrow. This is nuts. Completely bonkers. In France: rates are through the floor How long can the plates keep spinning? Are we going back to Germany 1930s with Zimbabwean hyper inflation due to the trust in currencies being eroded with those nutjobs called Carney, Draghi and Bernanke/Yellen? Or are we first gonna see a massive deflation? Goodness it is so insane, and as so many here, I don't know what to do. If I buy now: Case 1 I win big, Case 2 I lose big Edited June 10, 2019 by Freki Quote Link to comment Share on other sites More sharing options...
hurlerontheditch Posted June 10, 2019 Share Posted June 10, 2019 bonkers i am n the same boat, i sold in 2015 and want to get back to the market but with games like these being played its hard to know Quote Link to comment Share on other sites More sharing options...
spyguy Posted June 10, 2019 Share Posted June 10, 2019 The record-low mortgage rates, which don’t take into account the fees that homeowners pay their banks, are the latest reflection of the global shift in the monetary environment as central banks delay plans to remove stimulus amid concerns about economic growth. There's more to mortgages than the bond auction. Put simply, if a bank has to pay the mortgagee money then the bank wont lend. I dont follow Denmark. I know the HP are astronomically high in relation to earnings. Do you see a flood of money going into mortgages? Or do you see a countries banking system not lendign and falling to bits? Quote Link to comment Share on other sites More sharing options...
winkie Posted June 10, 2019 Share Posted June 10, 2019 What better proof to show property is overpriced.....we will pay you money to borrow to buy something that is clearly not worth it........ Quote Link to comment Share on other sites More sharing options...
Locke Posted June 10, 2019 Share Posted June 10, 2019 4 minutes ago, winkie said: What better proof to show property is overpriced.....we will pay you money to borrow to buy something that is clearly not worth it........ A whole new angle on "my house makes more than I do" 28 minutes ago, spyguy said: Or do you see a countries banking system not lendign and falling to bits? Apparently, people really are getting negative rates loans, not sure about mortgages. Quote Link to comment Share on other sites More sharing options...
Freki Posted June 10, 2019 Author Share Posted June 10, 2019 44 minutes ago, spyguy said: The record-low mortgage rates, which don’t take into account the fees that homeowners pay their banks, are the latest reflection of the global shift in the monetary environment as central banks delay plans to remove stimulus amid concerns about economic growth. There's more to mortgages than the bond auction. Put simply, if a bank has to pay the mortgagee money then the bank wont lend. I dont follow Denmark. I know the HP are astronomically high in relation to earnings. Do you see a flood of money going into mortgages? Or do you see a countries banking system not lendign and falling to bits? My conviction is that what those rates are doing is eroding confidence in central banks. They (Central Bankers) don't realise that, and think the MMT ( Modern Monetary Theory or Magic Money Tree) is not diluting confidence. If confidence in the Central Bank goes, 1929 could be mild compared to what awaits us ( yes this starts being doom porn territory) Anyway, here I am, not knowing whether to sit on my hands or buy inflated assets. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 10, 2019 Share Posted June 10, 2019 Nurse! Quote Link to comment Share on other sites More sharing options...
the_duke_of_hazzard Posted June 10, 2019 Share Posted June 10, 2019 6 hours ago, Locke said: A whole new angle on "my house makes more than I do" Apparently, people really are getting negative rates loans, not sure about mortgages. Huh? I'll have a billion pounds, please... Quote Link to comment Share on other sites More sharing options...
longgone Posted June 10, 2019 Share Posted June 10, 2019 7 hours ago, winkie said: What better proof to show property is overpriced.....we will pay you money to borrow to buy something that is clearly not worth it........ LOL that`s all i`m saying and where do i sign up for the free cash. Quote Link to comment Share on other sites More sharing options...
Bluestone59 Posted June 10, 2019 Share Posted June 10, 2019 1 hour ago, longgone said: LOL that`s all i`m saying and where do i sign up for the free cash. For me the question is whether or not tge worldwide property mania, sparked off by Britain, is sustainable. Recently I came to believe that the bankers and politicians had found a way to continue the madness eternally and get away with it. I no longer believe that they can. This rubbish is not sustainable but what the consequences will be one can only guess. One certainty, the wealthy will come out on top. Somehow. Quote Link to comment Share on other sites More sharing options...
longgone Posted June 10, 2019 Share Posted June 10, 2019 3 hours ago, Bluestone59 said: One certainty, the wealthy will come out on top. Somehow. i guess that entirely depends on what "wealthy" actually means. Quote Link to comment Share on other sites More sharing options...
adarmo Posted June 10, 2019 Share Posted June 10, 2019 We got an interest bill from the Danish bank for our Danish subsidiary. 40k DK Because we have a lot of money deposited! Quote Link to comment Share on other sites More sharing options...
btd1981 Posted June 11, 2019 Share Posted June 11, 2019 8 hours ago, adarmo said: We got an interest bill from the Danish bank for our Danish subsidiary. 40k DK Because we have a lot of money deposited! That's insane! Put it in my bank account and I'll charge you only 20k. Winner winner, chicken dinner? Quote Link to comment Share on other sites More sharing options...
hotblack42 Posted June 11, 2019 Share Posted June 11, 2019 Why is this happening? Does lending at a negative rate offset a cost elsewhere? Mitigate a risk? If its inflated fees and charges then borrowers will soon see through that and regulators will intervene. Are these literally negative or just below base? I don't understand why a lender would do this. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 11, 2019 Share Posted June 11, 2019 I would like to understand, as I don't plan to buy in Denmark, how likely is this, or it's like, to become a UK issue? Quote Link to comment Share on other sites More sharing options...
Locke Posted June 11, 2019 Share Posted June 11, 2019 12 hours ago, adarmo said: We got an interest bill from the Danish bank for our Danish subsidiary. 40k DK Because we have a lot of money deposited! 3 hours ago, btd1981 said: That's insane! Put it in my bank account and I'll charge you only 20k. Winner winner, chicken dinner? Why? Imagine we only had physical gold and silver bullion as money. If you were to store someone's cash at your house (i.e. act as their bank), you would charge them to cover the cost of installing a safe, hiring security and for the increased risk of being robbed. Electronic banks still have to cover the cost of compliance with regulatory burden, the cost of access to the worldwide banking system, insurance against fraud or computer failure and the loss incurred when grannies hand their cash over to fraudsters and the bank has to reimburse them or face backlash from the consumer. The idea you deserve a return on your savings just for having them is childish. You get a return if the bank takes a risk with your money and lends it out, but then you are taking on the risk that the loan will fail and you will lose some of your savings. I imagine most of you will go apoplectic at this though... Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 11, 2019 Share Posted June 11, 2019 16 minutes ago, Locke said: I imagine most of you will go apoplectic at this though... Isn't the things you state just one of the costs of doing business? Quote Link to comment Share on other sites More sharing options...
Errol Posted June 11, 2019 Share Posted June 11, 2019 21 minutes ago, Locke said: Why? Imagine we only had physical gold and silver bullion as money. If you were to store someone's cash at your house (i.e. act as their bank), you would charge them to cover the cost of installing a safe, hiring security and for the increased risk of being robbed. Electronic banks still have to cover the cost of compliance with regulatory burden, the cost of access to the worldwide banking system, insurance against fraud or computer failure and the loss incurred when grannies hand their cash over to fraudsters and the bank has to reimburse them or face backlash from the consumer. The idea you deserve a return on your savings just for having them is childish. You get a return if the bank takes a risk with your money and lends it out, but then you are taking on the risk that the loan will fail and you will lose some of your savings. I imagine most of you will go apoplectic at this though... The whole point is that the bank you deposit with has the benefit and use of your money. They make money off of your deposits and pay interest for that right. If they are going to start charging for the right to given them your money, then people will just opt out and keep it in cash outside the system. Quote Link to comment Share on other sites More sharing options...
btd1981 Posted June 11, 2019 Share Posted June 11, 2019 2 hours ago, Locke said: The idea you deserve a return on your savings just for having them is childish. Well that's about the only phase of my life when that sort of action happened, so, yeah... Quote Link to comment Share on other sites More sharing options...
Pebbles Posted June 11, 2019 Share Posted June 11, 2019 2 hours ago, Errol said: The whole point is that the bank you deposit with has the benefit and use of your money. They make money off of your deposits and pay interest for that right. If they are going to start charging for the right to given them your money, then people will just opt out and keep it in cash outside the system. Quite but they will have the costs of installing the safe buying a big dog feeding it installing CCTV and the worry of being broken into. Quote Link to comment Share on other sites More sharing options...
nightowl Posted June 11, 2019 Share Posted June 11, 2019 3 hours ago, Errol said: The whole point is that the bank you deposit with has the benefit and use of your money. They make money off of your deposits and pay interest for that right. 3 hours ago, Locke said: Imagine we only had physical gold and silver bullion as money. If you were to store someone's cash at your house (i.e. act as their bank), you would charge them to cover the cost of installing a safe, hiring security and for the increased risk of being robbed. Electronic banks still have to cover the cost of compliance with regulatory burden, the cost of access to the worldwide banking system, insurance against fraud or computer failure and the loss incurred when grannies hand their cash over to fraudsters and the bank has to reimburse them or face backlash from the consumer. Also on top, if you deposit money in a bank it isn't just kept in a vault safely for your protection but lent out and if those lending decisions go wrong the immediate risk is to the depositors, so interest is a also payment for that risk . Not too an apoplectic comment I hope! Quote Link to comment Share on other sites More sharing options...
Locke Posted June 11, 2019 Share Posted June 11, 2019 3 hours ago, Boo Hoo May said: Isn't the things you state just one of the costs of doing business? Which can exceed the return. 3 hours ago, Errol said: The whole point is that the bank you deposit with has the benefit and use of your money. They make money off of your deposits and pay interest for that right. If they are going to start charging for the right to given them your money, then people will just opt out and keep it in cash outside the system. A bank could conceivably not lend money and simply offer secure storage as a chargeable service, which is effectively negative interest. 4 minutes ago, nightowl said: Also on top, if you deposit money in a bank it isn't just kept in a vault safely for your protection but lent out and if those lending decisions go wrong the immediate risk is to the depositors, so interest is a also payment for that risk . Not too an apoplectic comment I hope! Well yeah, If they lend out at 10%, you're only going to get like 5% and the difference covers insurance, running costs and profit. The old risk vs. reward comes in. If you take no risk (your cash is fully secured) you get no reward and in fact have to pay for the service. If you want more interest, you have to accept a higher risk that you lose your investment. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 11, 2019 Share Posted June 11, 2019 1 hour ago, Locke said: If you want more interest, you have to accept a higher risk that you lose your investment. Isn’t the points you make bl00dy obvious, or am I missing something? (I say that as someone who bets on the gee-gees everyday) Quote Link to comment Share on other sites More sharing options...
Orb Posted June 11, 2019 Share Posted June 11, 2019 6 hours ago, Locke said: Imagine we only had physical gold and silver bullion as money. If you were to store someone's cash at your house (i.e. act as their bank), you would charge them to cover the cost of installing a safe, hiring security and for the increased risk of being robbed. Call me naive, but if friend A asked me to store their gold, I'd simply lend it to friend B, charge friend B a fee for that, and give friend A a small cut of that fee, keeping the fat of it for myself. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted June 11, 2019 Share Posted June 11, 2019 52 minutes ago, Orb said: Call me naive, but if friend A asked me to store their gold, I'd simply lend it to friend B, charge friend B a fee for that, and give friend A a small cut of that fee, keeping the fat of it for myself. Why, when you could charge both of them?? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.