Demand is screwed, says the head of the IMF

OptionARMAGEDDON

No i agree. But LIBOR is a good indication of where the market is expecting rates to be. There are of course no guarantees that base rate will match LIBOR, but they are a good measure of current thinking.

Pimperne1

OptionARMAGEDDON wrote: »

http://www.independent.co.uk/news/business/news/the-world-prays-for-an-economic-miracle-2360072.html

I posted a long time ago and clearly stated that with the large amount of leverage out in the system, this crisis was LOOONG from over, not least the crisis caused in the states as a result of subprime and prime lending products. Well, it looks as if all that global debt, much of it weighted against property, is on the edge of writedown and with much of it taken on by national governments, is going to start to take down whole states and perhaps split the eurozone. 6 weeks, either to write off the debt (splitting the eurozone) or to do something equally as drastic.

When I talked about Option ARMAGEDDON, this was exactly the sort of thing I was talking about. With inflation still above where we could do with it, can the BOE pump more cash into the system? Its going to be more difficult than in 08/09. With prices of resources crashing globally, its pretty plain to see the deflationary camp were probably right. Will commodities fall like they did in 08? Probably not. But fall significantly they have been, and will continue to do.


I think it sensible if individuals prepared for the worst now. Its pretty obvious with various national states about to fall under their weight of debt (not their problem really) and a large number of banks with obscene exposure to these soon to be third world states, that lending is about to dry up pretty fast.

IMHO, this is going to be the big one, that finally clears a lot of the crap from the system. QE a few billion is like putting a sticking plaster onto an arterial bleed. Unfortunately, if we want to save the global economy, someone is going to have to tornequet a few nations and cut them off!


Long term interest rate prospects? Good job I got that tracker!:beer:

Edit: has anyone seen the latest LIBOR rates? They are obscene! Base rate below 2.5% for the NEXT TEN YEARS!

http://markets.ft.com/RESEARCH/markets/DataArchiveFetchReport?Category=BR&Type=ICAP&Date=09/23/2011


http://www.youtube.com/results?search_query=alphaville+big+in+japan&aq=1&oq=Alphaville+ pretty much sums up the mood!

As a matter of interest where did you post it a long time ago?

ILW

TruckerT wrote: »

Actually, mother nature's only requirement of us all is that we should continue to reproduce!

Anything else is a matter of choice

TruckerT

That does assume that humans are non-reasoning animals incapable of dong anything beyond natural instinct. I like to think that we have progressed a little beyond that stage. (But I am probably wrong).

OptionARMAGEDDON

Pimperne1 wrote: »

As a matter of interest where did you post it a long time ago?

https://forums.moneysavingexpert.com/discussion/1692639

geneer

OptionARMAGEDDON wrote: »

https://forums.moneysavingexpert.com/discussion/1692639

TruckerT

ILW wrote: »

That does assume that humans are non-reasoning animals incapable of dong anything beyond natural instinct. I like to think that we have progressed a little beyond that stage. (But I am probably wrong).

Reproduction rates are linked mainly to mortality rates rather than intellect - it was the same in Victorian Britain

TruckerT

Thrugelmir

OptionARMAGEDDON wrote: »

But LIBOR is a good indication of where the market is expecting rates to be.

LIBOR is actually a mechanism that allows banks to retain necessary levels of liquidity.

1984ReturnsForReal_2

Thrugelmir wrote: »

LIBOR is actually a mechanism that allows banks to retain necessary levels of liquidity.

Retain "necessary" levels of liquidity based on a proven failed business model which leads me to believe it is only a benefit to those making money out of it.

Its so last century

purch

But LIBOR is a good indication of where the market is expecting rates to be. There are of course no guarantees that base rate will match LIBOR, but they are a good measure of current thinking.

The London Interbank Offered Rate is not an indication of where the market expects anything, or a measure of current thinking.

It is where the rate is today.

Where a Bank can borrow from another Bank for a set period.

It has nothing to do with Base Rate, nor is an indication of where Base rate will be at any given time.

gagahouse

OptionARMAGEDDON wrote: »

No i agree. But LIBOR is a good indication of where the market is expecting rates to be. There are of course no guarantees that base rate will match LIBOR, but they are a good measure of current thinking.

You weren't showing Libor though were you? What you were actually showing was the fixed side of the swap, not the floating Libor part, which is obviously unknowable 10 years hence.

So they tell you nothing about where the market expects short term rates to be 10 years forward. Short term interest rate futures are where you need to look for market expectations of the base rate and those only go out to 2 years.