Q3 gdp +0.8%

chewmylegoff

Fella wrote: »

Got to love the unbiased coverage by the BBC. Best economic figures in years & who do they lead their flagship 5Live news story with? The Prime Minister? The Chancellor?? The Shadow Chancellor??? Even Clegg????

Nope, they lead with Ed Balls spinning Labours latest & ever more desparate line about how living standards aren't going up (surely one of the dumbest arguments there has ever been, they really are losing their touch).

So we get the best economic news story this decade, & the BBC turn it into a party political broadcast for the labour party.

Hot on the heels of Labour's nonsense over energy too. If this carries on by the time we get to the election their manifesto will be "vote Labour if you hate people with more money than you, it must be their fault somehow".

Going back to the BBC, high time the licence fee was scrapped & they were forced to fend for themselves. No sane reason on earth why the rest of us should be forced to fund a TV channel, especially one with it's own misguided political agenda.

Not sure what you're reading. You may well be referring to the telly which I haven't seen but on t'website they are leading with the news that Grangemouth has been saved from whim of the unions. The second story is about the GDP figures which seems postive to me rather than an ed balls love in.

Loughton_Monkey

chewmylegoff wrote: »

Not sure what you're reading. You may well be referring to the telly which I haven't seen but on t'website they are leading with the news that Grangemouth has been saved from whim of the unions. The second story is about the GDP figures which seems postive to me rather than an ed balls love in.

Just as positive, their third story currently is Jack Straw standing down at the next election.

chucky

Fella wrote: »

Got to love the unbiased coverage by the BBC. Best economic figures in years & who do they lead their flagship 5Live news story with? The Prime Minister? The Chancellor?? The Shadow Chancellor??? Even Clegg????

Nope, they lead with Ed Balls spinning Labours latest & ever more desparate line about how living standards aren't going up (surely one of the dumbest arguments there has ever been, they really are losing their touch).

So we get the best economic news story this decade, & the BBC turn it into a party political broadcast for the labour party.

Hot on the heels of Labour's nonsense over energy too. If this carries on by the time we get to the election their manifesto will be "vote Labour if you hate people with more money than you, it must be their fault somehow".

Going back to the BBC, high time the licence fee was scrapped & they were forced to fend for themselves. No sane reason on earth why the rest of us should be forced to fund a TV channel, especially one with it's own misguided political agenda.

Some people support political parties like football teams where their 'team' can do no wrong.

Thrugelmir

michaels wrote: »

How much of the extra spread is down to new (Basel) rules imposing a wedge between market fundng costs and the ratre at which banks can lend money out?

Basel rules don't regulate banks margins. Less leveraging of bank balance sheets will cause spreads to widen. As retail banks no longer have the benefit of PPI income (etc) to subsidise consumer lending rates. Finance is deglobalising as banks sell off shore operations and return to home shores. Announced EU stress testing will no doubt cause further pressure to bear down on the sector.

Generali

michaels wrote: »

How much of the extra spread is down to new (Basel) rules imposing a wedge between market fundng costs and the ratre at which banks can lend money out?

On the relationship between base rates and consumer borrowing rates, McHamish and I had a disagreement, he was arguing both that sensitivity to rates would make any increases small and slow and also that as rates increased margins would fall. I suggest that one or other of these can be true but not both smultaneously - if falling margins result in changes in base rates fail to take spending power out of the economy then base rates will rise more.

Savings rates - no idea, will Basel rules and a row back of funding for lending and the EU equivalent mean these will increase with the base rate or are banks so flush with capital from other sources that they will stay stuck at little or nothing long term?!

Spread compression has been going on all year for corporates:



Our fixed income team at work has been making money all year on this trade.

Spread compression effectively means that lenders (mostly banks) want less additional compensation for taking on more risk. In the end that will filter through to consumer lending and my feeling is that end is fast approaching.

Then complicated bit then is what policy response does the BoE come up with. The fact that output is still below previous highs coupled with relatively high unemployment suggests that there is still an output gap. How much of that 'spare' GDP is a genuine output gap and how much reflects the fact that there are some bits of GDP generation that are no longer demanded is murky IMHO and very little discussed.

For example, the production of CDOs etc was a very lucrative business for a while and will have added something to GDP. That is some of the GDP that is missing between where we were and where we are that probably isn't coming back any time soon.

If the output gap is lower than assumed, inflationary pressures will kick in sooner than expected. If inflation is rising quickly as a result of increasing money supply then the Bank of England will have to step in with a policy response of some sort.

michaels

Thrugelmir wrote: »

Basel rules don't regulate banks margins. Less leveraging of bank balance sheets will cause spreads to widen. As retail banks no longer have the benefit of PPI income (etc) to subsidise consumer lending rates. Finance is de-globalising as banks sell off shore operations and return to home shores. Announced EU stress testing will no doubt cause further pressure to bear down on the sector.

Thanks, sorry if what I said wasn't clear enough for you but I think we are both agreed that additional capital requirements will increase banks funding costs and thus increase lending margins?

Thrugelmir

michaels wrote: »

Thanks, sorry if what I said wasn't clear enough for you but I think we are both agreed that additional capital requirements will increase banks funding costs and thus increase lending margins?

Misread your post. :beer:

michaels

Generali wrote: »

For example, the production of CDOs etc was a very lucrative business for a while and will have added something to GDP. That is some of the GDP that is missing between where we were and where we are that probably isn't coming back any time soon.

I think a lot of the financial activity brought forward a stream of profit that would have accrued over a number of years into just one or two. This was obviously great for the bankers, great for the revenue (see Gordon Brown spending spree qv) and bumped up GDP well above trend...at the expense of below trend growth going forward.

michaels

Thrugelmir wrote: »

Misread your post. :beer:

Not that surprising, half my sentences don't make sense to me later and that is before the typos...

THE_MASKED_TURNIP

This is the news the goons hated to hear. We have growth we have jobs we have house prices and incomes on the up. Unemployment in free fall, repos flatlining, food banks shiiting up shop. Why any single person can hate positive news like this all their life is beyond us.