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Downturn points to cut in rates
Comments
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Tell you what, I know you you don't like it but lets introduce some facts.
Lehmans was allowed to collapse on the weekend between 12th and 15th Sept.
3mth LIBOR
8thSept 5.737
11thSept 5.704
15thSept 5.715
16thSept 5.791
17thSept 5.871
18thSept 5.978 and onwards
By the was the interest rate at this rime was 5%. indeed 10s of bps apart.
Bump previous.'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 -
Now the graph isn't detailed and doesn't define exactly what on the rates (overnight, 3 month, 12 month) they are plotting
Which is why is useless.
Plotting an Overnight instrument against a LIBOR which no doubt is the 3 month one is a waste of time
Look at the TED spread, it gives a much better picture, and will prove your point in a much better and more accurate way.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
Yes & No
As there is not a Base Rate in the U.S. how can anyone chart it against the Eurodollar LIBOR ?
This mythical "Base Rate".............is it the Funds rate or the Discount rate ?, or something "made up" between the two ??
Also the Funds rate, and Discount rate are for Domestic USD, wheras the Eurodollar LIBOR is for Euro USD which is a different thing altogether.
I would guess that the 'US Base Rate' that the Skipton Building Soc. are plotting is the headline 'Key Funds rate' - the one that most people refer to as the US interest rate.
We were discussing 'interest rates' of the kind that we see mentioned in the news when they are raised or lower so it seems appropriate.
Guess it might not be though, since they aren't defining LIBOR very well. You are pick-pick-picking away at everything I wrote in this thread of late, so what's your expert view?--
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 -
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Yet that Skipton Graph would seem to say otherwise.
Are you saying the figures are wrong?'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 -
Which is why is useless.
Plotting an Overnight instrument against a LIBOR which no doubt is the 3 month one is a waste of time
Look at the TED spread, it gives a much better picture, and will prove your point in a much better and more accurate way.
Cheers - but why didn't you just say that in the first place?
I said from the start that the Skipton graph wasn't ideal.--
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 -
Thanks for the thanks dopster.
Do you understand this question as I seem to have a problem with others understanding it? I think it relevant to the current climate and the argument by !!!!!!.
I know my written English s poor but I will give it a go.
7th time to !!!!!!
Still have not answered the question!!!!!!!
If interest rates were 15% (during the last 5 years) and the money was still lent to people with no job at 130% do you think we would not be in the same mess?
PS not trying to get brownie points off you.:D
PPS !!!!!! the graph will get destorted the lower the rates are if the banks have to make 1% profit and interest rates are 1% that is a 50% difference.
PPPS Dops, see you answered the thanks before doh!0 -
Are you saying the figures are wrong?
I'm saying that your claim that LIBOR was narrowing almost back to normal levels of divergence just prior to Lehmans doesn't seem to tally with what the Skipton graph is saying.--
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 -
I'm saying that your claim that LIBOR was narrowing almost back to normal levels of divergence just prior to Lehmans doesn't seem to tally with what the Skipton graph is saying.
Possible reason.
The graph will get destorted the lower the rates are if the banks have to make 1% profit and interest rates are 1% that is a 50% difference.0 -
Which is why is useless.
Plotting an Overnight instrument against a LIBOR which no doubt is the 3 month one is a waste of time
Look at the TED spread, it gives a much better picture, and will prove your point
The TED and OIS spreads are contracting nicely....(2.4 and 2.2 roughly) not back to normality (pre Lehman levels ) but still coming down quickly which is a good indicator.
When they do get back to normality it will be a sign that maybe the bottom has been reached.
Where the market actually is at that time is anyone's guess in a much better and more accurate way.
Purch, an earlier post by you mentioning the TED spread, I note you mention normality and Lehmans in the same line, which is a similar to the point I am making.
So why will thw TED spread prove his point?'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
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