BoE: Approvals up 5% to 60,518

Rinoa

HAMISH_MCTAVISH wrote: »

Generali is one of the good guys here, Rinoa.

More concerned with debating facts than bull or bear positioning.

Thanks Hamish.

I clearly misinterpreted his post.

chucky

Thrugelmir wrote: »

The building societies have suffered 9 months of net cash out flow. So are hardly in a position to fund lending growth.

The Government with its funding to NR , £9 billion war chest in 2010 for net new lending, is certainly adding an artifical prop to the mortgage markets. Though NR hasn't achieved the £5 billion target set for 2009. So one wonders if the underlying demand is actually there.

LloydsHBOS has been targeted to reduce its market share by the EU. Currently has around £350 billion exposure through all its operations. So again will reduce its exposure by lending less than it is receiving in capital redemptions.

that's all very nice but the building societies business models have never been the most recession resistant due to their reliance on cash flow...

Northern Rock is a case in itself, so I'm not sure if you can determine the market demand by looking at one single firm that hasn't got the best credibility and image for consumers.

cherry picking a lender isn't a great example unfortunately...

do you really think residential lending will be less in 2010 than it was in 2009?

stueyhants

What is going to happen to lending once the new banking regulations come in to force? Can lending increase at a time when the banks are going to be forced in to safer/longer term assets such as Gilts ?

chucky

stueyhants wrote: »

What is going to happen to lending once the new banking regulations come in to force?

when is this going to happen?

stueyhants wrote: »

Can lending increase at a time when the banks are going to be forced in to safer/longer term assets such as Gilts ?

when are banks going to be forced into buying guilts?

stueyhants

chucky wrote: »

when is this going to happen?


when are banks going to be forced into buying guilts?

I don't think it's clear at present what the regulations will deem tier one captial, so the banks might be able to use other assets instead of Gilts to comply.

That said, who is going to be buying the £200bn of Gilts this year. If we assume that foreign buyers buy there share (think it's around 28% of total gilts) then who will be buying the other 72%.

If you assume it's pension compaines or other UK instutions then what have they been doing in 2009 with their investments if the BoE have been using QE money to buy 100%+ of gilts this year. Pumping the stock market ?

Which ever way you look at it, £200bn without further QE is going to be sucked from the market. This is going to have an impact.

Thrugelmir

stueyhants wrote: »

I don't think it's clear at present what the regulations will deem tier one captial, so the banks might be able to use other assets instead of Gilts to comply.

US Treasuries, German Bonds, first phase this coming June.

The major UK banks (other than LloydsHBOS)are internationally based so restricting to Sterling demoninated investments has no logic.

Around 75% of RBS assets are not held in sterling.

Thrugelmir

chucky wrote: »

that's all very nice but the building societies business models have never been the most recession resistant due to their reliance on cash flow...

Northern Rock is a case in itself, so I'm not sure if you can determine the market demand by looking at one single firm that hasn't got the best credibility and image for consumers.

cherry picking a lender isn't a great example unfortunately...

do you really think residential lending will be less in 2010 than it was in 2009?

Building societies are struggling to attract deposits, as are unable to access wholesale markets. Which the major banks are able to do. National Savings rates have been hitting the building societies hard as well.

Building societies, the traditional model, are fundamentally sound. For them the playing field isn't level.

I choose NR as it has the ability to increase net lending.

Overall, I expect a fall in consumer debt in 2010. People are tackling their unsecured debt while mortgage rates are low. So mortgage lending itself may show a slight increase.

mbga9pgf

Thrugelmir wrote: »

US Treasuries, German Bonds, first phase this coming June.

The major UK banks (other than LloydsHBOS)are internationally based so restricting to Sterling demoninated investments has no logic.

Around 75% of RBS assets are not held in sterling.

I heard they were going to gradually increase capital requirements rather than increase the teir one capital requirements in a onner?

Thrugelmir

mbga9pgf wrote: »

I heard they were going to gradually increase capital requirements rather than increase the teir one capital requirements in a onner?

First step in June. Though far tighter regulations are due to be implemented from 2012 on a global basis.

Arch-Angel

Rinoa wrote: »

You're assuming that the current 60,000 is static. It isn't.

Approvals have increased 100% this last 12 months and continue to rise month after month after month.

Again, you can't fill a glass to the top before you fill it to half way first. We'll be back to normal transaction numbers soon enough.

I guess the $64,000 question is "when will we see normal transactions?" You're correct in saying that the figures are rising - and any rise from the bottom is bound to look impressive.

Eventually these figures will plateau. As I've commented elsewhere, the next 4 months are going to provide a lot of information for the housing market for the next 6-24 months.