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

Chart Of The Day: Boe Statistical Release Lpmvsus

Recommended Posts

unused_credit.PNG

Monthly changes of UK resident banks' (excl. Central Bank) sterling unused facilities total (in sterling millions) not seasonally adjusted

it seems its falling at the fastest rate since records began...

unused_credit.PNG

post-2251-1216470378_thumb.png

Share this post


Link to post
Share on other sites

- UK-resident banks; all UK-resident banks report data directly to the Bank of England on the form BT on a quarterly basis. Around 150 banks with eligible liabilities (BT£46) in excess of £400mn (positive or negative), or private sector holdings (BT items £2H and £3H or £29D) in excess of £1bn report data on a monthly basis. For those banks who do not report monthly, data are grossed up to provide a full population figure. Prior to September 1997, balance sheet data were reported on the BS form.

Sterling unused credit facilities

Coverage is incomplete - notably, the unused portion of credit card holders’ limits is not included. Some banks report no unused facilities (although requests by borrowers to increase the credit limits are often met, and borrowers would probably expect them to be met). On the other hand, borrowers may have facilities with several institutions without intending to draw on them all simultaneously. Where a facility may be drawn in either sterling or foreign currency at the borrower’s option, it is reported in foreign currency facilities - so that potential sterling facilities may be larger than the sterling facilities figures suggest.

the data is basically credit agreed but not yet drawn.... think of it as an agregate credit faclity for the whole UK

you get an agreement for an overdaft that is credit agreed... you go overdrawn... that is credit drawn or used...

what you can see is the credit crunch feeding through to the real economy via the withdrawal / destruction/drawing down of credit facilities..

Share this post


Link to post
Share on other sites
Credit deflation, monetary inflation.

Joy.

sorry your totally wrong there that was just chart of the day this is chart of the decade...scratch that this is freaking chart of the century...... DEFLATION is here right hear right now... the keynesian model is about to be exposed as a total and utter lie. a 20th century con trick that will lead to an incredible collapse. I have complete faith that what your about to see here is I kid you not 'peak money' it happened 2 months ago...

deflation_begins.PNG

enjoy...

BOE statistical release LPMVWYAfor those interested....!

post-2251-1216476247_thumb.png

Edited by jonpo

Share this post


Link to post
Share on other sites
What is M1 money?

M1 is narrow money... its the money that you or I have in our pockets.. in our wallets... in the bank..its the sum of all the current accounts... it is demand deposits.. money that can be spent today right now at will on debit cards as cash etc. etc. and its falling ....

Edited by jonpo

Share this post


Link to post
Share on other sites
Credit isn't money.

The use of credit is itself deflationary.

never said it was money.

agree credit is long term deflationary but short term inflationary.. its jam today at the cost of jam tommorow

Share this post


Link to post
Share on other sites
So M1 liabilities falling ?

Is the cash going overseas?

Paying off debt?

yes. well I don't know where your money is going ? but mine stays in the bank (as my M1 asset and an RBS M1 liability) untill I spend it.. If I had to take a wild guess though i'd say some people might be tempted to pay off some debt... I don't have any of that though....

Edited by jonpo

Share this post


Link to post
Share on other sites
M1 is narrow money... its the money that you or I have in our pockets.. in our wallets... in the bank..its the sum of all the current accounts... it is demand deposits.. money that can be spent today right now at will on debit cards as cash etc. etc. and its falling ....

Do banks write loans against narrow money ?

Share this post


Link to post
Share on other sites
Do banks write loans against narrow money ?

when the bank writes the loan it becomes

for the banks perspective

M1 - liability - the bank pays you the money to your currnet account

M4 - asset - the bank thinks you will pay back the money but it might not know when.... (depends on the loan)

Share this post


Link to post
Share on other sites
M1 is narrow money... its the money that you or I have in our pockets.. in our wallets... in the bank..its the sum of all the current accounts... it is demand deposits.. money that can be spent today right now at will on debit cards as cash etc. etc. and its falling ....

The graph appears to show that M1 liabilities have turned negative. What does this mean? I presume you are in the deflationist camp along with Mish et al. He does make a powerful case. Thanks for expanding on your original post - this forum has some very clever people posting and sharing knowledge and I for one appreciate it greatly.

http://globaleconomicanalysis.blogspot.com...s-in-cards.html

Share this post


Link to post
Share on other sites
unused_credit.PNG

Monthly changes of UK resident banks' (excl. Central Bank) sterling unused facilities total (in sterling millions) not seasonally adjusted

it seems its falling at the fastest rate since records began...

It doesn't look that bad to me.

Share this post


Link to post
Share on other sites

Jonpo, what am I missing... I'd love for these charts to show deflation (in the sense that it confirms my hunch) but I don't follow to your conclusions from the data.

Chart 1: Monthly changes of UK resident banks sterling unused facilities.

It looks to me as if the unused facilities are expanding at rate of about 80,000 units... which might mean that:

1. New facilities are being arranged at about the same rate as since 2003 (much faster than 1993-2000, when almost no net new facilities were agreed.)

2. People are depending upon their overdrafts less than they were because they are reigning in spending in anticipation of a mortgage shock.

Neither of these seem to correlate with your conclusion...

Chart 2: Rolling 3 month mean change in M1 bank liabilities.

This chart is dramatic... and, IMHO, far more interesting than chart 1.

It requires an understanding of the somewhat under-discussed M1 measure - something I'd not previously researched.

As a contrary idea, might the decline in M1 demand deposits be a consequence of investors shifting money into term accounts in order to benefit from improved interest rates? Essentially, how do we know that this will actually affect spending power? Is it possible to refute the possibility that the drop in M1 isn't matched my an equivalent expansion in "M*" - whichever one relates to savings accounts?

Edited by A.steve

Share this post


Link to post
Share on other sites
scratch that this is freaking chart of the century...... DEFLATION is here right hear right now...I kid you not 'peak money' it happened 2 months ago...

Totally agree ... totally agree and totally agree !

You look at the fed (z1) reports and it's the same thing in the us. The banks' balance sheets started shrinking in the last qaurter, albeit on a small scale.

Pretty shocking. Still trying to get my head round this.

Share this post


Link to post
Share on other sites
Jonpo, what am I missing... I'd love for these charts to show deflation (in the sense that it confirms my hunch) but I don't follow to your conclusions from the data.

Chart 1: Monthly changes of UK resident banks sterling unused facilities.

It looks to me as if the unused facilities are expanding at rate of about 80,000 units... which might mean that:

1. New facilities are being arranged at about the same rate as since 2003 (much faster than 1993-2000, when almost no net new facilities were agreed.)

2. People are depending upon their overdrafts less than they were because they are reigning in spending in anticipation of a mortgage shock.

sorry I should have provided more of a comentary to explain em a bit better. perhaps its that I don't feel 100% explaining some of the BOE statistical releases they deal with some difficult data... a layman may ask "how much money is there in the economy?" to which we could reply what is money ? we certainly spend enough time on here arguing about what is and isn't money for it to be a valid question... I know what I know. I know some things I don't know. BOE statistical releases fall somewhere in the middle... I'll try and explain them as best I can but like anyone I can only speculate as to the reasons behind some of these numbers... I don't want to spin you all a whole load of narrative fallacy about why M1 is falling... or why unused credit is apparently contracting.

The monthly changes release is difficult to read its just a series of deltas some positive and some negative.... the chart I showed you was cumulative count of credit deltas since the mid 90's what it shows you is a huge boom in agreed and unused credit from 2000 2004 then a sort of volatile plateau and finaly what looks to be the start of a new downward trend.....

the units are millions sterling.... so 80 000 000 000 bil in unused credit

Share this post


Link to post
Share on other sites
I'll try and explain them as best I can but like anyone I can only speculate as to the reasons behind some of these numbers... I don't want to spin you all a whole load of narrative fallacy about why M1 is falling... or why unused credit is apparently contracting.

I feel as if I'm in a very similar situation to yourself... I understand, I think, a little more than the average person in the street... and I am interested... but I am sure that I only understand the tip of the iceberg - at the very best. Discussing such topics is extremely useful, I think, as ideas bounced off another interested party can often either help to corroborate an interpretation - or prompt a re-evaluation.

Most of my understanding of money supply comes from here... which suggests that we only have official figures for M0 and M4 in the UK... but M1 and M2 certainly seem to be highly relevant - assuming they convey the same meaning when published by the BoE as the terms mean abroad.

The wildest question that I guess needs to be asked is this: do we know the meaning of the M1 data - if we do, why isn't it an official statistic? Is there some UK specific reason that M1,M2 & M3 don't make sense for us? Is the Wikipedia article a load of tosh?

The monthly changes release is difficult to read its just a series of deltas some positive and some negative.... the chart I showed you was cumulative count of credit deltas since the mid 90's what it shows you is a huge boom in agreed and unused credit from 2000 2004 then a sort of volatile plateau and finaly what looks to be the start of a new downward trend.....

the units are millions sterling....

Thanks... the first chart starts to make more sense now - I'd assumed non-cumulative figures. I think I can see what you refer to as being the decline - but (not wanting to replicate my heated discussions about Chartist techniques, causality and predictability, that's raged recently in the Financial markets sub-forum) I think it difficult to determine a clear trend from that graph. Smaller than last year - yes. Significant? I'm still not sure. £80bn in unsecured credit (which is a lower bound, since this is only the net increase) might be a worry... conversely, it might not. If someone were, for example, to have a £20K term-access savings balance, offering an overdraft facility poses little risk assuming the customer is honest... and we've no way of knowing if these unused credit facilities are offered to the clearly solvent (who do not depend upon them) or to the cash-strapped whose solvency depends upon them.

I still think the M1 graph is the most interesting. ;)

Edited by A.steve

Share this post


Link to post
Share on other sites
As a contrary idea, might the decline in M1 demand deposits be a consequence of investors shifting money into term accounts in order to benefit from improved interest rates? Essentially, how do we know that this will actually affect spending power? Is it possible to refute the possibility that the drop in M1 isn't matched my an equivalent expansion in "M*" - whichever one relates to savings accounts?

well it could be... term accounts though are exactly that and cannot be spent in the economy... broad money M4 though is so messy and there may well be distortions due to the types pf things mentioned in the credit conditions report...

when I think of M1 I think of people I see on the DLR I wonder how much money they are holding in their hands in coins and notes... how much they have in the bank in the current account (M1) but I also wonder about...what overdaft they have agreed. in the savings account (not M1) in the house, in the pension, in the cellar, in pawnable goods, I wonder how many credit cards they have and what the limits are on those cards. I wonder about their balance sheet what assets they have and what liabilities.. I'm constantly wondering about the facinating hidden world of which we see only a thin sliver...

the stats are telling me that the people I see today have less than they had 6 months ago... If that starts to take hold then things could start to get real slow in the economy... demand could collapse... people will race to pay down debt.... god knows we have a lot of it... could take a long time to pay off

Share this post


Link to post
Share on other sites
sorry your totally wrong there that was just chart of the day this is chart of the decade...scratch that this is freaking chart of the century...... DEFLATION is here right hear right now... the keynesian model is about to be exposed as a total and utter lie. a 20th century con trick that will lead to an incredible collapse. I have complete faith that what your about to see here is I kid you not 'peak money' it happened 2 months ago...

deflation_begins.PNG

enjoy...

BOE statistical release LPMVWYAfor those interested....!

Taking account of all that why does the M1 go negative. People still have money in the bank. What is it offset against?

Share this post


Link to post
Share on other sites
I'd assumed non-cumulative figures. I think I can see what you refer to as being the decline - but (not wanting to replicate my heated discussions about Chartist techniques, causality and predictability, that's raged recently in the Financial markets sub-forum)

haha yes I read that thread.... im not going to try to wade into that one... ill only piss you all off ;) while I can see both points of view... I thnk im on the practitioner. side of the fence on that one...

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.

  • 401 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.