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FED cuts by 0.5%
Comments
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My point you cant see past houses can you.
Any business with debts would hopefully see some benefit of a rates cut.
Belive what you like though, its going to happen 0.5% at least. Argue as much as you like about it, you aint going to change the fact they are going down and staying down for a long time.
Why do you think banks are pulling tracker rates?
Course it is coming down at least .5% !!!!!! knows it that Downey character knows it in fact they should all know it (or maybe not).'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Key bit is why banks are pulling trackers or increasing the margin - my guess is that they are sure that BoE rates will drop regardless of money supply and outstanding debt levels.
BoE rates mean BA to most borrowers - if a company loan becomes unprofitable, the banks just refuse to roll it over or increase the margin over base.
Yes, BoE rates will probably keep on going down, but the money markets aren't following them, so for the majority rates will stay the same or increase.
Only way out I can think of is for central banks to wind up the printing presses to give us another "cheap now, bust later" experience when they have to wind rates (and taxes) back up in a couple of years time (well, some time shortly after May 2010...).
They are, just slowly.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Yes, so maybe in a few years they'll track back to BoE plus a smidge - in the meantime banks will withdraw funding to a large number of small (and possibly big) businesses due to the ever-increasing gap in 'pretend/publicity rates' an real rates. A price worth paying eh?They are, just slowly.0 -
Yes, so maybe in a few years they'll track back to BoE plus a smidge - in the meantime banks will withdraw funding to a large number of small (and possibly big) businesses due to the ever-increasing gap in 'pretend/publicity rates' an real rates. A price worth paying eh?
And they go on about BTLers whingeing. They are coming down and it will be for the good of businesses across the UK.
Get over yourselves! yes your saving rate will not be so good but at least you may keep your job!
House price will still fall, If you are that insecure about it that you feel a rate drop will cause house prices to go up (which it won't) go out and buy now.
But stop wishing for rate increases as we all know it is for selfish reasons (savings) and not for the good of business stability.:rolleyes:0 -
Yes, so maybe in a few years they'll track back to BoE plus a smidge - in the meantime banks will withdraw funding to a large number of small (and possibly big) businesses due to the ever-increasing gap in 'pretend/publicity rates' an real rates. A price worth paying eh?
It begs the question, WHY? If you are saying that savers will not save with the banks, where is their money going?'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Steve and Realy - I never mentioned anything about savers not saving with the banks. Savers deposits are nowhere near enough to cover current loans which is why we're having to 'rescue' the banks. Unfortunately the 'rescue' is costing banks an interest premium and they're also having to pay well over base rate for wholesale/institutional funds.It begs the question, WHY? If you are saying that savers will not save with the banks, where is their money going?
They could reduce savings rates and pass on the cuts if they also severely rationed loans (eg if they didn't need as much wholesale or govt dosh) - that would wipe out most borrowers much faster.0 -
My point you cant see past houses can you.
Any business with debts would hopefully see some benefit of a rates cut.
Belive what you like though, its going to happen 0.5% at least. Argue as much as you like about it, you aint going to change the fact they are going down and staying down for a long time.
Why do you think banks are pulling tracker rates?
Gah! This isn't about housing - that market is doomed no matter what happens (except massive inflation) now.
The problem we have isn't too high interest rates - it's lack of cash to lend and lack of will to lend what cash is available.
We have had years where the banks have literally manufactured spurious credit through obscure 'new financial instruments'. These have turned out to be a crock of s**t as of course, money is meaningless without useful product to back it up.
The market is now telling us to use less credit and save more. The sooner we listen to the market and adjust, the sooner this mess will be over. There will be a lot of pain in the meantime but that will happen anyway. Desperately trying to 'create liquidity' is a completely pointless measure as that money needs to be backed by useful product.
That means returning to a credit system based on savings being leant out, not numbers magicked out of a mathematical formula.
Attempting to print money as a way out is just going to make the eventual crash all the bigger and more calamitous.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
The market is now telling us to use less credit and save more. The sooner we listen to the market and adjust, the sooner this mess will be over. There will be a lot of pain in the meantime but that will happen anyway. Desperately trying to 'create liquidity' is a completely pointless measure as that money needs to be backed by useful product.
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I Disagee the market is saying pay back the debt, not save.
If you have debt and it cost more to service than the saving rate, you pay back the debt, its a simple as that.
The markets want debt paid back, then they will be looking for people to save.
That will mean lower rates for a long time then being increased some time in the future but I cant imagine a rate increse for at least two years.0 -
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That means returning to a credit system based on savings being leant out, not numbers magicked out of a mathematical formula.
If you truly think that this is a solution - you should really go back and live in the 18th Century where this was the case.
Ratio-based banking, savings vs lending is over 400 years old - a one to one relationship based system would probably be even more dangerous and anyone thinking that this is required simply does not understand.
Your comeback will be that the current financial system isn't working but it is due to the lack of regulation and allowing banks to do as they wish has been the real cause.0
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