Jump to content
House Price Crash Forum
Sign in to follow this  
Ash4781

Uk Inverted Yield Curve

Recommended Posts

This yield curve is set by the market participants. The price at which buying and selling occurs. Lets not assume that the BoE follows the markets. Lets not assume that Libor and bank mortgage rates are have a 100% positive correlation. It would be worth while looking at the Libor/Mortgage rate spread over history. Perhaps you might notice something unsavoury to the Bulls ;)

Share this post


Link to post
Share on other sites

Wow i had no idea we still had an inverted yield curve. Should mean we avoid reccession until ininversion occurrs (which is when we will get rate cuts), whilst US goes into reccession by the end of this year cos its curve uninverted

Share this post


Link to post
Share on other sites

Very odd bringing a thread back from Nov 2007 (oh remember those days hpc'ers just a month before Applegarth resigned),

but the reason to resurrect the dead is that the yield curve is inverted again

http://www.yieldcurve.com/marketyieldcurve.asp

some link, the UK yield curve drops down 1 year out! Why is that? Is is a dire prognostication regarding sterling? Is it a sense that things are going to get seriously worse for a few months, are the markets really suggesting that rates will go lower still? Is it based on a feeling that no one at all in the UK will want to borrow money in 12 months time (and why not?) so there is no need to pay anything beyond 0.5%?

All very odd, maybe someone can explain?

Share this post


Link to post
Share on other sites

All very odd, maybe someone can explain?

Maybe start by explaining what a yield curve is in the first place?

Share this post


Link to post
Share on other sites

Very odd bringing a thread back from Nov 2007 (oh remember those days hpc'ers just a month before Applegarth resigned),

but the reason to resurrect the dead is that the yield curve is inverted again

http://www.yieldcurve.com/marketyieldcurve.asp

some link, the UK yield curve drops down 1 year out! Why is that? Is is a dire prognostication regarding sterling? Is it a sense that things are going to get seriously worse for a few months, are the markets really suggesting that rates will go lower still? Is it based on a feeling that no one at all in the UK will want to borrow money in 12 months time (and why not?) so there is no need to pay anything beyond 0.5%?

All very odd, maybe someone can explain?

Is it because the shortest-dated gilts are now rising, and this has yet to feed through to the 1 year ones (the animation shows the near-dated end rising rather than the 1yr falling). Are the markets pricing in rates rises to 1% in the near future?

Share this post


Link to post
Share on other sites

Very odd bringing a thread back from Nov 2007 (oh remember those days hpc'ers just a month before Applegarth resigned),

but the reason to resurrect the dead is that the yield curve is inverted again

http://www.yieldcurve.com/marketyieldcurve.asp

some link, the UK yield curve drops down 1 year out! Why is that? Is is a dire prognostication regarding sterling? Is it a sense that things are going to get seriously worse for a few months, are the markets really suggesting that rates will go lower still? Is it based on a feeling that no one at all in the UK will want to borrow money in 12 months time (and why not?) so there is no need to pay anything beyond 0.5%?

All very odd, maybe someone can explain?

i think its pricing in another deflation similar to 07/8, but seeing as ive gone on record that i think 11 through 13 will be deflationary im rather bias, still nice to have the curve catching up with my projection. On the plus side theres not alot further for rates to drop this time so just like the USD i think sterling will do quite well over the next 2-3 years against most other currencies its tanked against, including commodities, cant see it doing much for stuart law though

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

Maybe start by explaining what a yield curve is in the first place?

http://en.wikipedia.org/wiki/Yield_curve

My understanding is that it is the markets instantaneous view on the likely course of future interest rates. It is derived from prices of UK gilts. Normally savers expect a higher return for tieing money up for longer (because of concerns around inflation and uncertainties over future rates). The current inverted yield curve means that depositors are willing to accept lower returns for investing for 1 year compared to 6 months - which is odd.

Looking at yield curves is generally a good plan because they can predict recessions (although don't always) and give a guide to what the markets think will happen to interest rates - which directly affect mortgages - so are worth viewing.

The UK went seriously inverted before 2007 - signalling that the markets could see the crash coming... why it should invert now is the question?

Share this post


Link to post
Share on other sites

Is it because the shortest-dated gilts are now rising, and this has yet to feed through to the 1 year ones (the animation shows the near-dated end rising rather than the 1yr falling). Are the markets pricing in rates rises to 1% in the near future?

As a STR I'd like to see some upward action!

Share this post


Link to post
Share on other sites

I think I see now; an inverted yield curve signals that this thread is going to be moved to the Gold and precious metals forum soon.

Share this post


Link to post
Share on other sites

I think I see now; an inverted yield curve signals that this thread is going to be moved to the Gold and precious metals forum soon.

surely that needs General Congreve to turn up advocating people pish half their savings away first*

*possibly

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

i think its pricing in another deflation similar to 07/8, but seeing as ive gone on record that i think 11 through 13 will be deflationary im rather bias, still nice to have the curve catching up with my projection. On the plus side theres not alot further for rates to drop this time so just like the USD i think sterling will do quite well over the next 2-3 years against most other currencies its tanked against, including commodities, cant see it doing much for stuart law though

You don't think other countries raising rates and the UK doing more QE as a negative for sterling then?

Share this post


Link to post
Share on other sites

You don't think other countries raising rates and the UK doing more QE as a negative for sterling then?

they wont be raising rates if there is another global recession which i think is coming, uk rates up a bit in H2 and then back down in Q112, thats what i reckon, i dont thin there will be any more QE either from anyone until 2013. There needs to be another bout of credit money destruction, i think its coming

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

they wont be raising rates if there is another global recession which i think is coming, uk rates up a bit in H2 and then back down in Q112, thats what i reckon, i dont thin there will be any more QE either from anyone until 2013. There needs to be another bout of credit money destruction, i think its coming

So anyone with an STR fund in sterling is OK until midnight on Dec 31st 2012?

Edited by Redhat Sly

Share this post


Link to post
Share on other sites

So anyone with an STR fund in sterling is OK until midnight on Dec 31st 2012?

i dunno, but id rather hold sterling than most things personally, if it makes you feel better im putting my money where my mouth is and putting about 15% (see im not that sure) into a sterling account sometime this month and thats quite big for me coz weve not had any since back in the heady heights of the end of 2006.

Share this post


Link to post
Share on other sites

i dunno, but id rather hold sterling than most things personally, if it makes you feel better im putting my money where my mouth is and putting about 15% (see im not that sure) into a sterling account sometime this month and thats quite big for me coz weve not had any since back in the heady heights of the end of 2006.

Halifax House Price Index?

End 2011

End 2012

End 2013

Share this post


Link to post
Share on other sites

i dunno, but id rather hold sterling than most things personally, if it makes you feel better im putting my money where my mouth is and putting about 15% (see im not that sure) into a sterling account sometime this month and thats quite big for me coz weve not had any since back in the heady heights of the end of 2006.

That is rather like the prescribed 10% in shiny metal as insurance. A small insurance policy doesnt exactly show a great deal of confidence.

Just out of interest, since you arent in sterling or metal, what is the remaining 85% sat in?

Share this post


Link to post
Share on other sites

Daddy or Chips?

I had to google that.....

daddy or chips

a game played in chat rooms in which choices are made between pairs of alternatives. The name derives from a UK TV ad for Mccain chips in which a little girl is asked to choose between her daddy or chips.

Share this post


Link to post
Share on other sites

That is rather like the prescribed 10% in shiny metal as insurance. A small insurance policy doesnt exactly show a great deal of confidence.

Just out of interest, since you arent in sterling or metal, what is the remaining 85% sat in?

.

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

I had to google that.....

daddy or chips

a game played in chat rooms in which choices are made between pairs of alternatives. The name derives from a UK TV ad for Mccain chips in which a little girl is asked to choose between her daddy or chips.

i always come a poor second when asked in the okeeffe household

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 354 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.