Bank of England abandons part of QE program after traders make bonds too expensive

[AtW]

They aren't afraid of anyone. That's the problem these days. Personally I would look at introducing laws forbidding some forms of secondary trading of government bonds. Minimum holding period, no naked shorting, stuff like that. Essentially keep the speculators out of the market so that it functions properly.

***k! Wrong login!!!

[doodab]

Good point.

It is a sign of times however - traders are not afraid to bed against BoE and The Feds (FRS).

They aren't afraid of anyone. That's the problem these days. Personally I would look at introducing laws forbidding some forms of secondary trading of government bonds. Minimum holding period, no naked shorting, stuff like that. Essentially keep the speculators out of the market so that it functions properly.

[AtW]

The coupon is 8.75%, the yield is substantially lower.

Good point.

It is a sign of times however - traders are not afraid to bed against BoE and The Feds (FRS).

[doodab]

What this means is that BoE thinks that yield of 8.75% on Govt AAAAAAAA quality bonds isn't good enough to tolerate inflation that will hit us until 2017

The coupon is 8.75%, the yield is substantially lower.

[doodab]

Unlikely - probably tried to sell stuff they don't have at spekulatively high price, if they had got the deal they would have bought same bonds on cheap.

The only loser in this is a taxpayer.

HTH

For the price to go up like that someone had to be buying.

[Jeff Maginty]

..

[AtW]

This is excellent news! I really hope some traders got badly stung on this. :-)

Unlikely - probably tried to sell stuff they don't have at spekulatively high price, if they had got the deal they would have bought same bonds on cheap.

The only loser in this is a taxpayer.

HTH

[TimberWolf]

Trader sympathy seems to be hovering at about the zero mark in this thread

[Jeff Maginty]

..

[AtW]

What this means is that BoE thinks that yield of 8.75% on Govt AAAAAAAA quality bonds isn't good enough to tolerate inflation that will hit us until 2017

[TimCaprica]

High yield

I didn't realise the yield on these bonds was so much. Sounds like a good deal to me. What was it before the traders brought it down?

They must be pricing in a lot of future inflation. Does it mean coupon rather than yield?

Problem with buying corporate bonds instead of gilts is that it doesn't push down government borrowing costs. Though would certainly be good for big businesses.

@TimCaprica

[DimPrawn]

I think it's a ruse by the BoE, to switch from buying gilts to directly buying corporate bonds instead. In doing so they fund large companies directly, bypassing the banks.

[Scrag Meister]

Good move by the government, hope some traders got burnt by this dodgy manouver.

[Churchill]

No idea what this is about, but comments suggest some traders got a haircut, while other comments suggest they didn't.

Bank of England abandons part of QE program after traders make bonds too expensive - Telegraph

QE to resume later?

Laughing my bollocks off, the Traders are trying to rape "the Old Lady of Threadneedle Street" up the arse and she fought back.

[TimberWolf]

No idea what this is about, but comments suggest some traders got a haircut, while other comments suggest they didn't.

http://www.telegraph.co.uk/finance/e...expensive.html

QE to resume later?