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

Merv Getting Worrried As Libor Breaches 6%

Recommended Posts

http://www.telegraph.co.uk/money/main.jhtm...7/cnmerv127.xml

Mervyn King pledges to help banks fight crisis

By Edmund Conway, Economics Editor

Last Updated: 7:57am GMT 27/03/2008

The Bank of England Governor has promised to work with banks to find a lasting solution for the credit crunch after London interbank borrowing rates broke the 6pc barrier for the first time since December.
The financial crisis in full
Comment: Risk-taking is in our veins, it must be allowed to flow
Hubris brought crisis, says Mervyn King
Mervyn King said the risk of banks' losses
should stay with shareholders
Mervyn King used his appearance before the Treasury Select Committee to warn that "the financial crisis has moved into a new and different phase", hinting that the return of the market turmoil in recent weeks may force the Bank both to cut its interest rates and economic forecasts more than expected.
It came as three-month Libor - the key benchmark rate in the money markets - rose to
6pc
, the first time it has hit this landmark figure since December, when the City was last faced with a resurgence of credit market instability.

Here are the Week-over-week IR hikes in the US in the wake of Ben's cuts:

Loan Type Today Last Week

30 Year Fixed 5.68% 5.66%

15 Year Fixed 5.20% 5.09%

1 Year ARM 5.46% 5.42%

30 Year Fixed Jumbo 7.21% 7.12%

The more he cuts the more expensive borrowing becomes. The Greenspan conundrum in its exact reverse. Merv may be thinking a couple of cuts at the BoE and our IR could soar to record levels! They got themselves into the mess and only the market will let them out--after some real pain.

Share this post


Link to post
Share on other sites

As far as I can tell the real gainers out of these interest rate cuts are the banks who greatfully reduce their costs (interest they pay on borrowings) but does not impact their revenues (the return they get on their assets stays the same and they don't change the rates they charge).

No wonder they are crying so much to get a cut. I really believe that the city is taking the rest of us for a ride and this needs to change.

This comes from a free market capitalist!

Share this post


Link to post
Share on other sites
As far as I can tell the real gainers out of these interest rate cuts are the banks who greatfully reduce their costs (interest they pay on borrowings) but does not impact their revenues (the return they get on their assets stays the same and they don't change the rates they charge).

Base rate: 5.25%

Online savings account: 6.25% (Northern Rock online tracker)

Doesn't seem to be playing out quite that way as the banks are still desperate for money.. I imagine if the BoE offer to cover enough of their risks for them this may change however.

Share this post


Link to post
Share on other sites

The bankers will probably raise their rates until the central banks agree to buy their mortgages that are worthless or not worth as much as they would like, with the taxpayer's money of course.

The mortgages (that should never have given) the bankers have had commissions and bonuses off.

Share this post


Link to post
Share on other sites
The bankers will probably raise their rates until the central banks agree to buy their mortgages that are worthless or not worth as much as they would like, with the taxpayer's money of course.

The mortgages (that should never have given) the bankers have had commissions and bonuses off.

Its already happening:

http://business.timesonline.co.uk/tol/busi...icle3628811.ece

Mervyn King signalled to MPs that ground-breaking action to buy up or swap the illiquid mortgage-backed securities blamed for the near-seizure of credit markets could be taken, in a decisive attempt by the Bank to quell resurgent financial strains.

The same exact action already taken by the Fed.

I suggested months ago that our banking system was insolvent. It is.

Share this post


Link to post
Share on other sites
Its already happening:

http://business.timesonline.co.uk/tol/busi...icle3628811.ece

Mervyn King signalled to MPs that ground-breaking action to buy up or swap the illiquid mortgage-backed securities blamed for the near-seizure of credit markets could be taken, in a decisive attempt by the Bank to quell resurgent financial strains.

The same exact action already taken by the Fed.

I suggested months ago that our banking system was insolvent. It is.

I wonder if the BOE will tell us what sort of crap it is accepting as security. I suppose it wouldn't be too bad if it stuck to just accepting UK mortgages that have say 30%+ equity in the property.

If they are willing to take the CDOs linked to US mortgages etc that our banks bought, that would be nasty!

Share this post


Link to post
Share on other sites
I wonder if the BOE will tell us what sort of crap it is accepting as security. I suppose it wouldn't be too bad if it stuck to just accepting UK mortgages that have say 30%+ equity in the property.

If they are willing to take the CDOs linked to US mortgages etc that our banks bought, that would be nasty!

Remember Northern Rock. First the Bankrupt of England said they were lending against prime assets then it wasn't, next thing you know the taxpayer is on the hook for the lot.

These crooks say one thing and do another. They have been hoodwinking the population over inflation and money supply for nearly a decade now, the are not going to stop worst thing I ever did to believe a word that came out of these weasels' mouths - they are liars to the last.

Share this post


Link to post
Share on other sites

Maybe we are heading towards comunisium where gov get to own all the property in return for soaking up all the worlds debt we find ourselves in.

People need only say no en-mass to stop this madness

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.

  • 292 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%



×
×
  • 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.