Reply to: IMF: UK faces credit rationing

[BrilloPad]

no problem, short of money?......just print some more.

Like Zimbabwe.

[Menelaus]

Can anyone explain what real-life implications this would have?

It costs more for the UK to borrow money and thus the interest rate we have to pay to gilt holders increases ... meaning increased taxes.

[Menelaus]

One of my testers is working on securitisations right now; coming from a techie background he didn't understand anything about it, so I arranged for him to have some coaching sessions from the head of securitisation. Unfortunately, he doesn't understand much of it either and now I have the bank's securitisation department phoning my tester every day asking him questions about it. Does anybody really grasp securitisation?

Yes. Feel free to PM me

[ThomasSoerensen]

Can anyone explain what real-life implications this would have?

BoE bonds would have to pay a higher interest rate.
In general bond issuers or other lenders in the UK would have to pay more interest in order to get funding.

If it gets really bad you get cut off from normal international lending markets.

That will force the government to spend less than they bring in - quickly! That is painful for normal citizens as unemployment benefits and healcare is cut away.
Think Zimbabwe.

[Mich the Tester]

Can anyone explain what real-life implications this would have?

Well, international banks use complicated risk models to calculate the credit risk and necessary reserves when lending to businesses and one of the variables is the home country of the particular business. There are lots of other variables too, but this is quite a big one. It´s more difficult for a Nigerian business to raise money from international banks than, say, a German business. So what happens is that those businesses who need credit move their head office to a country with a good credit rating, like Holland. Theoretically. So theoretically, contractors working in Dutch banks get rich.
BOOMED, theoretically, for me

ps, actually I don´t have a clue as all I do know is that these credit risk programs are actually in many cases more like an automated Mystic Meg and not even the designers or developers have a bleeding clue what they do.

[d000hg]

I'd be astonished if we didn't get a ratings downgrade.

Can anyone explain what real-life implications this would have?

[ThomasSoerensen]

Is that all - I could even dispense with the walk as I could make my own 'gold'

this is complex for the banker boys. It has more steps than their old product.

• Sell a share from the seller to the buyer

don't dis them

[BoredBloke]

I'll explain it:

• You take a steaming turd.
• You but it in a gold coloured box.
• You put a red ribbon outside the box.
• You attach a card where you write "Precious golden gift".
• You sell this precious thing to an idiot who intends to sell it on to another idiot for a profit, so your customer does not look into the box to verify that he has bought a "Precious Golden Gift".
• You pocket the money from your customer and spend it on bonus for the seller of the product (yourself) and on buying more boxed, ribbons and cards.
• Then you take a walk in the park in search of more "gold".

Is that all - I could even dispense with the walk as I could make my own 'gold'

[ThomasSoerensen]

One of my testers is working on securitisations right now; coming from a techie background he didn't understand anything about it, so I arranged for him to have some coaching sessions from the head of securitisation. Unfortunately, he doesn't understand much of it either and now I have the bank's securitisation department phoning my tester every day asking him questions about it. Does anybody really grasp securitisation?

I'll explain it:

• You take a steaming turd.
• You but it in a gold coloured box.
• You put a red ribbon outside the box.
• You attach a card where you write "Precious golden gift".
• You sell this precious thing to an idiot who intends to sell it on to another idiot for a profit, so your customer does not look into the box to verify that he has bought a "Precious Golden Gift".
• You pocket the money from your customer and spend it on bonus for the seller of the product (yourself) and on buying more boxed, ribbons and cards.
• Then you take a walk in the park in search of more "gold".

[Moscow Mule]

Does anybody really grasp securitisation?

Not well enough to explain it to anybody else, so I guess that's a no...

[Mich the Tester]

Good point, although they're reasonably good at country risk (just sh!t at securitisations)

One of my testers is working on securitisations right now; coming from a techie background he didn't understand anything about it, so I arranged for him to have some coaching sessions from the head of securitisation. Unfortunately, he doesn't understand much of it either and now I have the bank's securitisation department phoning my tester every day asking him questions about it. Does anybody really grasp securitisation?

[DiscoStu]

I've had a genius idea. We just print enough money to pay off all our debts

[ThomasSoerensen]

Bend over fellas. Shaft is coming to town and guess what he is going to do to you.

[sunnysan]

Gb

So much for Brown's claim that the UK is "best placed" for recovery ..

You dont actually believe anythign that comes out of his mouth now ... do you?

[BlasterBates]

no problem, short of money?......just print some more.