King Boosts New Stimulus Package to £300bn

michaels

Banks like to grouse that it is the regulators forcing them to hold all this cash but it could equally be the markets - I know I wouldn't invest in a bank that appeared to be playing fast and lose with its balance sheet.

I guess we will see whether the banks are really being constrained by the capital rules or whether monetary policy continues to be an attempt to push on a bit of string?

myhouse_2

Despite all the talk of "not kicking the can down the road", that's exactly what the Bank and Government are doing. Does this solve the underlying issues - I think not. It simply exposes the Govt and the various banks to more debt risk.

sabretoothtigger

held in assets that had little or no actual value as it turned out.

Imagine how bad the Greek banks look with their incredibly worthless Greek government debt
The best thing they got is the Euro cash and that is being withdrawn by their own people


The funny thing (or not) would be this is going to be true of every bank in the world that holds government debt where that government is way too close to 100% GDP debt now or by future dynamics (ie GDP is part of government spending, feedback loop)
Thats the majority of them I reckon, today we are all Greek :money:

grizzly1911

myhouse wrote: »

Despite all the talk of "not kicking the can down the road", that's exactly what the Bank and Government are doing. Does this solve the underlying issues - I think not. It simply exposes the Govt and the various banks to more debt risk.

If they are acceptable risks that isn't an issue if they take on stupid risk just for the sake to hit some ill thought out targets be that commercial or political that is a concern.

Also how they price that risk will impact take up and real appetite. No different to comtractors pricing high for work they don't want.

Time for the inflation jock strap and box?

HAMISH_MCTAVISH

michaels wrote: »

I guess we will see whether the banks are really being constrained by the capital rules or whether monetary policy continues to be an attempt to push on a bit of string?

I don't think there's any question of pushing on string.

There is absolutely massive pent-up demand in the market for mortgages. Over a million people prevented form buying in the last few years, and this number increasing by hundreds of thousands of people a year.

The real question is will the enforcement be strong enough to ensure banks actually try and lend this money, or will they be allowed to continue to peddle products with record high bank margins and absurd deposit requirements while paying lip service to the government to get the cash.

ILW

I cannot understand why banks are not controlling demand via pricing, just like any other product or service.

sabretoothtigger

You cannot control a free market I believe. If you ever achieve that you likely destroy its worth and that system becomes replaced anyway.
I'd say the whole point is all parties are chasing their own tails if trying to know exactly what it will do.
The idea we can set a price and that works for society seems like building castles in the sky to me

If the people buy the land, buy materials and build the house I'll agree. If they are competing to buy houses potentially with funds from all over the world its not a closed system it will give way to whichever element is strongest

million people prevented form buying

prevented by not having money. Thats a good reason not to buy usually


What does your avatar say Grizzly

michaels

I mostly agree but if someone wants to buy and they currently pay considerably more than a mortgage costs to rent then I would say there was something 'wrong' with the market.

sabretoothtigger wrote: »

You cannot control a free market I believe. If you ever achieve that you likely destroy its worth and that system becomes replaced anyway.
I'd say the whole point is all parties are chasing their own tails if trying to know exactly what it will do.
The idea we can set a price and that works for society seems like building castles in the sky to me

If the people buy the land, buy materials and build the house I'll agree. If they are competing to buy houses potentially with funds from all over the world its not a closed system it will give way to whichever element is strongest



prevented by not having money. Thats a good reason not to buy usually


What does your avatar say Grizzly

sabretoothtigger

Yea I agree on the surface. If I could I'd buy a fixed rate mortgage today, its great no downsides for me and it'll be much cheaper then rent in sum total.
Or the more ordinary base rate mortgage appears to work nicely at present also.
What Im refering to is the system as a whole, apparently we've completely lost which way is up and what works or not like a kid with a new credit card it works till it doesnt I guess.

It does appear silly to rent when you could buy now, I disagree with each time we force things to enable buyers because it is a fake market and it is subject to collapse which we really should be trying to avoid but we do the opposite every time now.
Its going to end badly, if they dont have the cash sorry that really is for the best. They must save capital to buy.

As a consumer, I love the idea of free or cheap anything of course

Generali wrote: »

Basle III would be a dead duck

I never thought he'd make it either

grizzly1911

sabretoothtigger wrote: »

What does your avatar say Grizzly

What do you mean I am not a bear....

I have all the koalifications....