Downturn points to cut in rates

Realy

neverdespairgirl wrote: »

Iceland - 18%
Hungary - 11.5%
Australia - 6%
Denmark - 5.5%
Norway - 4.75%
South Korea - 4.25%

Perhaps it should have been said against the other major currencys,

The Yen, Euro and $ ?

StevieJ

Realy wrote: »

Perhaps it should have been said against the other major currencys,

The Yen, Euro and $ ?

Yes, badly worded by me.

neverdespairgirl

Realy wrote: »

I think you are wrong there, China and the world presumed that china had de-coupled from the west last year. (Their economy could be held up by their own middle class's)

I didn't say that the recession wasn't a factor, rather that the healthy and safety issues were also very relevant.

For example, here is a toy factory closing with the loss of 5,000 jobs in August last year for this reason:

http://news.bbc.co.uk/1/hi/business/6948274.stm

From a few days ago, and article on the BBC which states:
A Chinese toymaker which supplied firms including US giant Mattel has gone out of business with the loss of up to 7,000 jobs.
.......................

More than half of China's toy exporters have gone bust so far this year.

......................

The Chinese news agency Xinhua said 52.7% of the country's 3,631 companies making toys for export went out of business in the first seven months of the year.
It blamed rising production costs, the stronger yuan and tightened toy safety standards.

http://news.bbc.co.uk/1/hi/business/7675552.stm

And, also from the BBC in the last month:

More than half of China's toy exporters have been forced out of business this year, according to official figures.
China is the world's largest exporter of toys but officials say the industry is experiencing its most difficult time in decades.
Weaker demand from the US, a stronger Chinese currency and tougher safety standards are thought to be behind the rise in business failures.

Last year there were several large-scale product recalls as Chinese toys failed to meet international safety standards.
In response, the Chinese authorities closed hundreds of factories and forced others to comply with regulations.

http://news.bbc.co.uk/1/hi/world/asia-pacific/7670351.stm

StevieJ

Generali wrote: »

AIUI (and I spent 4-5 years working in Treasury markets) 3 month LIBOR is falling to reflect exepcted falling base rates. As the date of the fall in base rates approaches, we would expect to see LIBOR come down another couple of basis points as more of the 3 months of the money market contracts it is based on are at a lower expected rate (IYSWIM).

As far as I'm concerned, as long as LIBOR is more than say 50bps above the base rate the money markets are far from normal and they need to be.

PS Letters of credit seem to be causing the next big problem in the world economy. Shippers won't take on a cargo without a letter of credit as they don't know when they'll get paid. Apparently the cost of these has doubled in the past few months.

Yes , I agree - It must be affecting banks profitability when they are handing out mortgages at base rate + 1.69%.

Realy

neverdespairgirl wrote: »

I didn't say that the recession wasn't a factor, rather that the healthy and safety issues were also very relevant.

For example, here is a toy factory closing with the loss of 5,000 jobs in August last year for this reason:

http://news.bbc.co.uk/1/hi/business/6948274.stm

From a few days ago, and article on the BBC which states:
A Chinese toymaker which supplied firms including US giant Mattel has gone out of business with the loss of up to 7,000 jobs.
.......................

More than half of China's toy exporters have gone bust so far this year.

......................

The Chinese news agency Xinhua said 52.7% of the country's 3,631 companies making toys for export went out of business in the first seven months of the year.
It blamed rising production costs, the stronger yuan and tightened toy safety standards.

http://news.bbc.co.uk/1/hi/business/7675552.stm

And, also from the BBC in the last month:

More than half of China's toy exporters have been forced out of business this year, according to official figures.
China is the world's largest exporter of toys but officials say the industry is experiencing its most difficult time in decades.
Weaker demand from the US, a stronger Chinese currency and tougher safety standards are thought to be behind the rise in business failures.

Last year there were several large-scale product recalls as Chinese toys failed to meet international safety standards.
In response, the Chinese authorities closed hundreds of factories and forced others to comply with regulations.

http://news.bbc.co.uk/1/hi/world/asia-pacific/7670351.stm

I was using toy manufacturing as an extrem example but still nearly all childrens toy etc are still made in China.

purch

So why will thw TED spread prove his point?

I dunno really..............I lost interest after I read the 2nd page of this thread, so I have no idea what's going on, and who is saying what.

I get riled when I see stuff like LIBOR and US Base Rate bandied about without anyone apparantly understanding what they are referring to.

http://www.fullermoney.com/content/2008-11-03/ted.png

The TED spread ( for those who don't know ) was the spread between 3 Month US Treasuries Futures contract (the T) and the 3 month EuroDollar Futures contract (the ED)

Nowadays it is calculated from the 3 month US Treasuries and the 3m LIBOR (which as we all now know is EuroDollar...not Domestic Dollar)

The TED under normal conditions is around 25/35 basis points. It reached somewhere around 470 bp in October.

The TED bascially shows the "perceived" Credit Risk of the whole economy, and is one of the best indicators of the path of Equities over the short term.

Anyway I am sure the TED spread will prove someone's point, somewhere along the line :T


P.S. I spent 16 years on trading floors, and I set LIBORs (usually Cutty Sarks) for the BBA for many years during that time, and I traded the TED when I was on a propriety trading desk, so I have a small clue on these subjects

StevieJ

purch wrote: »

I dunno really..............I lost interest after I read the 2nd page of this thread, so I have no idea what's going on, and who is saying what.

I get riled when I see stuff like LIBOR and US Base Rate bandied about without anyone apparantly understanding what they are referring to.

http://www.fullermoney.com/content/2008-11-03/ted.png

The TED spread ( for those who don't know ) was the spread between 3 Month US Treasuries Futures contract (the T) and the 3 month EuroDollar Futures contract (the ED)

Nowadays it is calculated from the 3 month US Treasuries and the 3m LIBOR (which as we all now know is EuroDollar...not Domestic Dollar)

The TED under normal conditions is around 25/35 basis points. It reached somewhere around 470 bp in October.

The TED bascially shows the "perceived" Credit Risk of the whole economy, and is one of the best indicators of the path of Equities over the short term.

Anyway I am sure the TED spread will prove someone's point, somewhere along the line :T


P.S. I spent 16 years on trading floors, and I set LIBORs (usually Cutty Sarks) for the BBA for many years during that time, and I traded the TED when I was on a propriety trading desk, so I have a small clue on these subjects

I lost interest after I read the 2nd page of this thread :rotfl::rotfl::rotfl::rotfl:

I don't doubt you have a clue on the subject, you just confused me. I have to say that chart really does show the Lehman effect.
Are you a member of Fullermoney? I quite like reading that daily update (the freeby of course).

WTF?_2

StevieJ wrote: »

I lost interest after I read the 2nd page of this thread :rotfl::rotfl::rotfl::rotfl:

I don't doubt you have a clue on the subject, you just confused me. I have to say that chart really does show the Lehman effect.
Are you a member of Fullermoney? I quite like reading that daily update (the freeby of course).

You claimed that LIBOR was converging almost back to normalilty before Lehman - that chart shows that it wasn't.

Lehman made things worse but LIBOR got out of whack a while back and had stayed as such - it was about 100bps out before Lehman which is nowhere near normal.

StevieJ

!!!!!!? wrote: »

You claimed that LIBOR was converging almost back to normalilty before Lehman - that chart shows that it wasn't.

Lehman made things worse but LIBOR got out of whack a while back and had stayed as such - it was about 100bps out before Lehman which is nowhere near normal.

Don't you nderstand the diference between converging and converged? It was 100 before Lehman and 300 after and 50 is normal, I think we should let the audience decide.

StevieJ

Someone please get me off that horrible number.

Thanks Neverdespairgirl.