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We Don't Understand The Markets, Bank Of England Admits

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No shit!

Post the 2005 panic rate cut lending criteria, loan mutliples, application checking quality went out of the window.

The Central Bank itself injected Moral Hazard INTO the system twisting the arms of depserate people who were told they wold be fianncially imporverished if they did not act NOW.

They did act, they borrowed as much as they could, sometimes legitimiately, sometimes not and the Bankrupt of England sat there, and watched, and watched and watched.

http://www.telegraph.co.uk/money/main.jhtm...4/cnbank124.xml

We don't understand the markets, Bank of England admits following crisis at Northern Rock

By Jonathan Sibun

Last Updated: 1:22am BST 24/09/2007

The Bank of England is looking at improving the way it monitors UK credit conditions after admitting that the growing sophistication of the financial markets has made it more difficult to manage monetary policy.

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Confirming what we suspected all along then....comforting to know your financial future is in such safe hands don't you think? :blink:

No shit!

Post the 2005 panic rate cut lending criteria, loan mutliples, application checking quality went out of the window.

The Central Bank itself injected Moral Hazard INTO the system twisting the arms of depserate people who were told they wold be fianncially imporverished if they did not act NOW.

They did act, they borrowed as much as they could, sometimes legitimiately, sometimes not and the Bankrupt of England sat there, and watched, and watched and watched.

http://www.telegraph.co.uk/money/main.jhtm...4/cnbank124.xml

We don't understand the markets, Bank of England admits following crisis at Northern Rock

By Jonathan Sibun

Last Updated: 1:22am BST 24/09/2007

The Bank of England is looking at improving the way it monitors UK credit conditions after admitting that the growing sophistication of the financial markets has made it more difficult to manage monetary policy.

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From the Bank of England's Q3 Quarterly Bulletin released today (page 386):

Over recent months, credit conditions are likely to have tightened in light of global financial market turbulence. It is too early to judge if these effects will persist, which could lead to a slowdown in bank lending and potentially lower spending and inflation.

Translation: There's a big, bad, deflationary bear loose in the woods, and he may be coming our way.

Note the phrasing (my italics): 'lower spending and inflation'. This is giving fair warning that if the Bank believes that a lockup in credit markets is leading to a demand slump in the economy, then interest rates will almost certainly be cut.

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The Bankrupt of England has created (along with other CB's) a banking and hedge fund monster which it neither understands nor can control.

It has taken years to build this festering tower of crap, it took £100bn's of easy money which all parties used to their own ends. Hardly any of it ended up in worthwhile investment, nearly all of it ended up driving speculative excess, creaming off £billions in fees and commission in the process for the active participants.

Just like the film, in the last scenes the monster turns on its master and creator in an orgy of destruction.

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