Timmy elsewhere

Back again at Seeking Alpha:

If Low Interest Rates Are Busting Banks And Pensions Then When Are We Going To Raise Them?

12 thoughts on “Timmy elsewhere”

  1. What parts of the economy are not fucked? Saving is. The tax and benefits bit is. Banks are not lending to business and businesses are hoarding cash. Something needs to reset. For 8 years fiscal policy has been tight and monetary policy loose and the combo has achieved stagnation. How about easing off VAT a touch and letting businesses earn a bit of interest?

  2. Banks are not lending to business? Then alternate lending options are used. Should banks be lending to business? Hell no, not unless the business does not need the money.
    Cannot think of anything riskier the banks could do.
    And I run a business myself.

  3. @Diogenes
    Because businesses not stupid. Banks charge less for money than investors, who would require compensation for risk. Banks pass on risk to the taxpayer via the deposit guarantee scheme & the “too-big-to-fail” arrangement they have with government.

  4. Banks are lending to businesses (from where I stand)?

    And yes, risk and return – hence, yes, the cost of debt is less than the cost of equity, as debt lenders get priority / security (on assets) and all that?

    Or perhaps I missed what you guys were getting at?

  5. Pf Bank lending to businesses has stagnated over the last few years and businesses have been building cash piles, as documented by BoE. Alternative sources do not seem to have stepped in. According to BoE stats. So banks have not been lending and businesses have manipulated cash flows. Both conclusions disputed by BIS and Martin without any sources

  6. Oh BIS, the home builder accounts show their land banks growing while their completions are static. A market opportunity for you.

  7. @ Diogenes
    Actually the accounts of the housebuilders show completions growing. Try reading them – free from Companies House!

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