Wednesday, 8 October 2008

Alice's rate cut bubble wrap

Sterling interbank lending rates ease after UK bank plan

"The cost of borrowing sterling funds on interbank money markets eased slightly on Wednesday after UK authorities unveiled sweeping new measures aimed at recapitalising UK banks and unclogging frozen money markets."

FTSE falls 2.6 percent

Surprise rate cuts, there not what they used to be...

Balance sheet of the Federal Reserve

I know it is sad, but I find this stuff interesting.

Coordinated Central Bank Action Fails to Relieve Money Markets

Thats about the size of it.

German News Update......Hypo Real Estate Bailout

I had quite forgotten about Hypo.

Global Coordinated Rate Cuts Won't Solve Economic Crisis

There is a lot of skepticism about this rate cut.


A new blog on the big issue of 2008.


Anonymous said...

The rate cut was dead on arrival.

Anonymous said...

Easing interbank rates, that is interesting.....

Mark Wadsworth said...

Re balance sheet of the Fed, what would be much more interesting is a comparison between the amounts that the BoE/Treasury is lending to UK banks and the amounts that they in turn are depositing with the BoE/Treasury.

AFAIAA, the BoE/Treasury makes a handsome turn on the interest rate margin. What good commercial reason is there for the BoE/Treasury to cut the interest rate that they charge the banks by 0.5%?

It's not like the banks will pass on the cut - the market rate for household or business borrowing is what it is, the cost of funding is irrelevant, unless the cost of funding exceeds the interest rate that households and businesses will pay, in which case lending stops stone dead in its tracks.

"Pushing a piece of string" is what this is called, which was vote for by 1% of people in the fun online poll in your sidebar (I've already called the result on my 'blog).

Anonymous said...

Fed, ECB, BOE, PR China and others - central banks rate cuts in unison. Wheeee! This is more exciting than co-ordinated muff diving.

How long before we get a single currency for our one world? So much easier darling.

A David

Anonymous said...

Clearly the current system is busted. Isn't THE problem, the consumer? We need to scale down what we do, what we consume, and rebuild the system in a more sustainable model.