Oil

[Freamon]

So where does the extra money end up? BoE must be buying the gilts with this "printed" money so who's selling them and getting the wonga?

Banks. But they're not borrowing anything.

[DimPrawn]

Banks. But they're not borrowing anything.

They must have bought the gilts and then sold them back to the BoE?

So it's a sneaky way of giving free money to banks?

Who then pay it out to bankers in salary and bonuses.

And that's supposed to help the 2.5 million people unemployed how exactly?

[EternalOptimist]

They must have bought the gilts and then sold them back to the BoE?

So it's a sneaky way of giving free money to banks?

Who then pay it out to bankers in salary and bonuses.

And that's supposed to help the 2.5 million people unemployed how exactly?

banks keep it, to help their liquidity

[SantaClaus]

US Oil

US oil and Brent crude both look like a down channel to me. You would have made money a lot less painfully on the sharp "elevator down" moves, than the slow "stair-steps" up.

US Oil:
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[DimPrawn]

US oil and Brent crude both look like a down channel to me. You would have made money a lot less painfully on the sharp "elevator down" moves, than the slow "stair-steps" up.

US Oil:
Free image hosting for your screenshots + free screen capture tool

I can assure you there was no pain involved in buying at 99 and selling at 112 at £10 a pip.



It's going to fall from here down to the mid 90's in about a months time.

As soon as it starts the turn I'll be shorting.



It's like shooting tax free fish in a barrel.

[AtW]

Banks. But they're not borrowing anything.

No of course they are not borrowing anything - they are selling corporate "AAA" bonds to BoE at (probably) face value for real cash that they can use as leverage to loan up 10 times the money (probably from BoE as well) to put into highly leveraged commodities products designed to drive up price of basic goods into stratosphere - and nobody else gets hurt!!!

I mean FFS - if banks are doing it then there must be big ****ing profit involved in it, otherwise they would simply not do it.

[SantaClaus]

I can assure you there was no pain involved in buying at 99 and selling at 112 at £10 a pip.



It's going to fall from here down to the mid 90's in about a months time.

As soon as it starts the turn I'll be shorting.



It's like shooting tax free fish in a barrel.

It pains me to say that I actually agree with Dim on the fall (Brent crude) back to 90 or even 82.

[Freamon]

They must have bought the gilts and then sold them back to the BoE?

So it's a sneaky way of giving free money to banks?

Who then pay it out to bankers in salary and bonuses.

And that's supposed to help the 2.5 million people unemployed how exactly?

It's not free money, it's cash in return for gilts. Effectively the BoE is allowing the banks to swap their gilts for cash, permanently.

The idea is that instead of banks keeping gilts as part of their capital, they instead have cash which they can use to lend. Lending allows people to buy things they cant afford and therefore gives a temporary boost to the economy, bringing forward future growth at the expense of bigger personal/corporate debt and another bigger debt crisis further down the line.

The flaw is that banks are scared they have too little capital (nobody has defined how much is enough, and the penalty for guessing too low is nationalisation and the sacking of the board), so they're not lending any of the QE money, it's just sitting in their reserves, having no effect on the economy at all. Another reason is that virtually no solvent investable businesses are borrowing to expand, so there is nowhere for the banks to lend the money to.

[Freamon]

No of course they are not borrowing anything - they are selling corporate "AAA" bonds to BoE at (probably) face value for real cash that they can use as leverage to loan up 10 times the money (probably from BoE as well) to put into highly leveraged commodities products designed to drive up price of basic goods into stratosphere - and nobody else gets hurt!!!

The BoE has not bought any corporate bonds since the very start of QE1, and even then they only bought a miniscule amount. All current QE will be banks selling gilts to the BoE.

The money created under QE has largely sat in bank reserves. Exactly what "highly leveraged commodities products" do you think banks are piling into with QE money?

I mean FFS - if banks are doing it then there must be big ****ing profit involved in it, otherwise they would simply not do it.

Banks obviously only ever do things that would make a profit, as banks never make losses.

[AtW]

Banks obviously only ever do things that would make a profit, as banks never make losses.

Banks might lose money but they certainly won't be doing things that they won't think would make big $$$.

When was the last time no serious bonuses were paid? Bank losses seem to have little to do with it - essentially banks seem to be run by their staff as they see fit, rather than actual owners (shareholders) of the bank making sure that there are no rewards for failure.