Investors are losing confidence in Prime Minister Gordon Brown’s economy.

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Things are really going to hot up once Merv stops buying all our debt, IR's will probably have to rise to attract investors, whether our economy or housing market like it or not. The question is will they continue to print after the £150 billion has been used ? They are going down a very dangerous road to play out their fantasy to the British public that everything is getting back to 'normal'.

The emperor still has no clothes, I wonder when the majority are likely to start noticing ?

July 9 (Bloomberg) -- The biggest gilt investors say U.K. government securities provide little value even though the Bank of England probably will extend its bond-purchase program.
The U.K.’s growing budget deficit and the central bank’s reluctance to say when and by how much it will expand so-called quantitative easing are keeping Pacific Investment Management Co., which runs the world’s biggest bond fund, and BlackRock Inc. from increasing their holdings of the securities.
Guessing which gilts the central bank is going to buy is like “playing Russian roulette,” said Philip Laing, the Edinburgh-based director of government bonds at Standard Life Investments, which has about 118 billion pounds ($191 billion) under management. “While they’ll probably extend it, we are focused on the end of quantitative easing.”
Investors are losing confidence in Prime Minister Gordon Brown’s economy.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4sov75Ek..s

purch

Prime Minister Gordon Brown’s economy

It's not his economy............it's ours !!!

Pretending it's someone else's problem, and not all of ours won't make it any better !!!

Graham_Devon

ad9898 wrote: »

Things are really going to hot up once Merv stops buying all our debt, IR's will probably have to rise to attract investors, whether our economy or housing market like it or not. The question is will they continue to print after the £150 billion has been used ? They are going down a very dangerous road to play out their fantasy to the British public that everything is getting back to 'normal'.

The emperor still has no clothes, I wonder when the majority are likely to start noticing ?

Well, lets see.

We are now using the last 25bn, which will be spent in a single month and nothing will come from it, based on what we have already seen from the 125bn.

We will then have 9-10 months until an election in which Gordon Brown is adamant he will win.

Hmmmm, 9-10 months of the tap turned off when we are most likely still in decline with it turned on full pelt?

Me no thinky so!!

It will either continue, or some other policy will take place. it will of course, be blamed on America, or indeed, blamed on the big bad IMF when they come to bail us out

Thrugelmir

Graham_Devon wrote: »

Well, lets see.

We are now using the last 25bn, which will be spent in a single month and nothing will come from it, based on what we have already seen from the 125bn.

What did you expect to see? The banking system is operating normally due to improved liquidity levels although still in a fragile state.

If you meet the lending criteria then money is available. Whether your a company or a consumer.

lemonjelly

Thrugelmir wrote: »

What did you expect to see? The banking system is operating normally due to improved liquidity levels although still in a fragile state.

If you meet the lending criteria then money is available. Whether your a company or a consumer.

I think some business', particularly small business' are still reporting access to credit is too restricted. However personal finance appears to be available again - though rates are higher than in recent history.

Interestingly, I have started to recieve the occasional bit of junk mail again, with me being pre-approved for loans/cards etc...

Wookster

Thrugelmir wrote: »

What did you expect to see? The banking system is operating normally due to improved liquidity levels although still in a fragile state.

I'd hardly say that at all. the Federal Reserve and he Bank of England have taken the role of international money markets!

Its a position that isn't tenable indefinitely.

Thrugelmir

Wookster wrote: »

I'd hardly say that at all. the Federal Reserve and he Bank of England have taken the role of international money markets!

Its a position that isn't tenable indefinitely.

Low LIBOR rates suggest that wholesale markets are working currently. On the weekend of the crash last October the banks in trouble were technically insolvent due to their inability to balance their books with wholesale deposits. QE has enable the banks to trade "normally" and in the case of RBS start the process of shrinking their balance sheet.

Longer term the BOE is foreseeing a problem with lack of wholesale money for the banks to lend against. This was brought up at the Select Treasury Committee the other week but got little coverage. Suggests that the banks will continue to contract their lending books.

Thrugelmir

lemonjelly wrote: »

I think some business', particularly small business' are still reporting access to credit is too restricted. However personal finance appears to be available again - though rates are higher than in recent history.

Interestingly, I have started to recieve the occasional bit of junk mail again, with me being pre-approved for loans/cards etc...

I've worked with a number of SME's over the years, including those with private equity/venture capital funding. The thing I've learnt about the best business people is that they minimise their own risk.

Rather like BTL investors, my opinion would be that a considerable number of smaller companies have become accustomed to easy credit. They are quick to complain about the banks but are unwilling to change their own personal lifestyles. As this is a reflection of their business success. Why should the banks shoulder all the risk?

Growing a business should come from reinvesting the profit after drawing a reasonable salary. Not expanding but borrowing ever increasing amounts of money.

Wookster

Thrugelmir wrote: »

Longer term the BOE is foreseeing a problem with lack of wholesale money for the banks to lend against. This was brought up at the Select Treasury Committee the other week but got little coverage. Suggests that the banks will continue to contract their lending books.

That is hardly normal operation is it?

Thrugelmir

Wookster wrote: »

That is hardly normal operation is it?

Different issue. Something which QE wouldn't fix.

The reason for the issue with wholesale funding is that the banks will in competition with the Government for the same overseas funds.

Mortgage rationing together with a net mortgage repayment situation will be with us for some years.

Rochdale_Pioneers

Graham_Devon wrote: »

We are now using the last 25bn, which will be spent in a single month and nothing will come from it, based on what we have already seen from the 125bn.

I think you are looking in the wrong direction. QE providing a magic bluuet to quickly kill the recession and bring back the good times was never going to happen, nor was this the reason given for pursuing the policy.

QE to stop Britain sliding into the kind of pit that Germany, Spain, Ireland etc are in? Yes. Its not what did we gain as what did we avoid suffering.