Saturday, December 15, 2007

Fixed rate bonds still climbing

Fixed Rate Halifax Web Saver 7.05% 3month

This proves the banks are desperate for our money. It also proves beyond doubt that LIBOR will not come down in the near future and loans will either become alot more expensive or more scarce. Or I'll loose my money and/or my pound will be worth 100 turkish lira.

Posted by cheeky charlie @ 06:58 PM (1233 views)
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3 thoughts on “Fixed rate bonds still climbing

  • little professor says:

    But they can borrow from the central banks much cheaper than this?

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  • No they can’t because extensive portions of their loan book does not meet the central bank collateral requirements.
    So, do not give HBOS your money for 7% since that does not represent a fair price for the risk of them as a borrower

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  • who stole my pension? says:

    Well said confused76. HBOS need our money, but is it safe with them? I suspect not, they proberbly only have a small reserve (check there accounts before lending them your money). HBOS seem to be in a Catch 22 situation – they need to offer high interest rates to savers, thus reducing their dependace on the money markets, but this high interest rate shows that they are becoming desperate so savers will shy away. The main problem is that if they go bust, only the first 35,000 is “protected” under the FSA scheme. However, this protection is a bit weak as this scheme is itself bankrupt (if a member goes bust then the FSA ask all the banks to contribute to the cost of protecting depositors). Now this scheme may work in good times, bit in bad times it will proberbly fall apart – so it will take you years to get your money back. To me the risk is great for the reward – stick with gold.

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