Saturday, April 12, 2008

Who’s got who by the short and curlies?

Banks must pass on cuts - Darling

Chancellor Alistair Darling has urged mortgage lenders to pass recent interest rate cuts on to homeowners. Sounds like Crash & Co are attempting to point the finger of blame and play straight face poker with a busted flush!!

Posted by damocles vs sisyphus @ 09:11 PM (838 views)
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12 thoughts on “Who’s got who by the short and curlies?

  • mark wadsworth says:

    “Banks must pass on cuts”, well Dear Badger, banks don’t operate on the basis of what you think they should do, they operate on self-interest. So it you really meant it, how about threatening to withdraw all the cheap credit that you are giving them. Via the BoE, which is of course totally independent.

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  • theboltonfury says:

    they will be spitting out their campari with laughter when they hear his ‘threat’

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  • As far as I’m aware, most have cut their standard variable rates and it’s just the special short-term rates that have been rising/disappearing. Is he now going to be telling Sainsburys’s that they have to do BOGOF’s on the products he tells them to. Prize Idiot! It’s not as if they weren’t aware that the BoE rate cut would have no effect on mortgage availability and costs. Perhaps the BoE should now revert to their actual remit of keeping inflation down.

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  • I suppose banks could cut rates… and drop the maximum LTV to say 55% to compensate for the increased risk. Perhaps not quite what Darling had in mind. Much more sensible would be to encourage lenders to waive at least some element of penalties for overpayment or early redemption to reduce negative equity risks. Early (partial) redemption can upset the interest rate swap hedges put in place on the assumption of normal repayments for fixed mortgages, but capped rates might not lead to much loss on the swaption hedge if 3 month LIBOR would actually follow Bank rate down. Oh dear… 3 month LIBOR is indicating a lot of credit tightness so that won’t happen for a while. Still, swallowing some loss on the hedge may be preferable to the consequences of mortgage default.

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  • it_is_going_with_a_bang says:

    Why would they listen to him? They already know that one day soon this guy and his rather boring ‘master’ will be out of a job.

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  • damocles vs sisyphus says:

    I wonder if Badger and Co will be featuring in their tag-team short movies to the masses with their PsyOps (Pyschological Operations) when the CPI figures start to show more cracks appearing (Gordon we need more wall paper – NOW!!!)

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  • This is not a political issue and has nothing to do with Darling’s remit – it is a central banking issue.

    And they’re meant to be independent …

    Its for this reason that the article quite rightly says that

    “The government cannot forces banks to pass on the cuts, but it can make clear its frustration”
    (well in answer to that, the banks will turn to them and say we are frustrated too – give us more money!)

    In addition:
    “experts have predicted the cost of borrowing will continue to rise”

    So there we are then. Its all just bluster and posturing – neither Darling nor Brown can do a thing about it, however they’ll want to be sen to show ‘proactivity’ and ‘leadership’ so they trot out this nonsense.

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  • Brown and Darling are a serious cause of embarassment to this country

    God save the Pound!!

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  • planning4acrash says:

    Well, this proves one thing, the cuts are primarly for banks and mortgages!

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  • He sounded like a schoolteacher saying:

    …… “Must try harder”.

    I won’t knock him too much, he can’t force them to comply, all he can really do is encourage…. (and at the same time take the opportunity to distance himself).

    As mentioned above, the banks won’t comply – IMHO they see Darling as strictly short term.

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  • Darling owns a bank now, why doesn’t he drop interest rates and start offering cheap mortgages

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  • mrmickey said……Well said. Yes, Alistair my Darling, you set the tone then!

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