Graph !!!!!! 2 - The next Generation

IveSeenTheLight

HankMcSpank wrote: »

Next month we'll see something more along these lines...

Your graph didn't change, only the background.
My prediction is that the rate of drop will level off at near 15%

IveSeenTheLight

ManAtHome wrote: »

Wow - 2.75% LIBOR to BoE gap - sha$$ed or what..?

I don't know if it is possible, but could the banks not borrow from the BoE as it is at the lower rate, thus potentially forcing the LIBOR to drop

ad9898_3

IveSeenTheLight wrote: »

I don't know if it is possible, but could the banks not borrow from the BoE as it is at the lower rate, thus potentially forcing the LIBOR to drop

They could already borrow from the BoE at 3.5% before yesterday (short term), the problem banks have at the moment is they don't want to lend people money on something that is crashing at 15% per year I guess.

Generali

IveSeenTheLight wrote: »

Another good one shows the interest rates and LIBOr rates

It is a good graph IveSeenTheLight but you are getting a little ahead of yourself. The LIBOR fix is taken in the morning and the base rate announcement wasn't until midday so yesterday's LIBOR is prior to the banks knowing what the new base rate is.

It'll still be a huge spread above the base rate but probably less than 200 bps.

Generali

IveSeenTheLight wrote: »

I don't know if it is possible, but could the banks not borrow from the BoE as it is at the lower rate, thus potentially forcing the LIBOR to drop

There are 2 separate things:

1. The Base Rate. This is the rate at which the Bank of England will enter into a 'repo agreement' (a type of secured loan where the security is a Gilt (UK Government bond)). This is an incredibly safe sort of loan as gilt prices usually don't move quickly and so the security is unlikely ever to be worth less than the amount of the loan.

2. LIBOR. This is a snapshot of the inter-bank money market rates of interest. This the average rate of interest at which banks lend to each other unsecured.

Banks can enter into repo agreements between themselves, not just with the central bank. One of the problems I believe we're facing in the banking system is that a stock loan (which allows someone to sell short*) can also be seen as a particular type of repo agreement.

Talking to mates who work in stock lending (I worked in stock lending for a while) the market has all but dried up as firms are having great difficulty unwinding stock loan agreements that were outstanding with Lehmans when they went bust. Stock loans have been a good source of funding for banks.

LIBOR will drop as a result of the base rate falling. The gap between LIBOR and the base rate will remain broadly the same I suspect. It is the gap that shows the lack of trust between banks as it is the difference between what they will lend secured and unsecured in effect. Normall the gap between base rate and LIBOR is under 50bps (0.5%) and usually more like 25-30bps (0.25-0.30%).

HankMcSpank

IveSeenTheLight wrote: »

Your graph didn't change, only the background.
My prediction is that the rate of drop will level off at near 15%

!!!!!!?

I magnified the 'Y' axis to make the slide look more precipitous & put "The Scream" behind thje graph to emphasise how bad it's likely to get.

Ultimately, it was a gag....& you're taking this all too seriously.

IveSeenTheLight

HankMcSpank wrote: »

!!!!!!?

I magnified the 'Y' axis to make the slide look more precipitous & put "The Scream" behind thje graph to emphasise how bad it's likely to get.

Ultimately, it was a gag....& you're taking this all too seriously.

Firstly I am not !!!!!!? :mad:
I did get the gag, but I wouldn't give up your job to be a comic;)

As for taking it seriusly, I do find some things on here humurous.
I'm sure I will find it humurous when the same graphs that have been loved for the past year i.e. YoY drops are suddenly discounted from next month and the move on to drop from peak graphs will come out.

statistics and graphs can always be manipulated an not just by stretching the graph axis and puting in a comic background

poppy10_2

IveSeenTheLight wrote: »

I did get the gag, but I wouldn't give up your job to be a comic;)

Well I thought it was funny. Don't be such a grumplestilskin.

Maybe this chart will cheer you up:

sabretoothtigger

false hope?

dopester

Dusting off this one to cheer me up against all the recent BTL-er euphoria.