Bank of England cuts key interest rate by a greater-than-forecast 150 basis points

[Tex S. Hedge]

Quote from Gringinho:


The UK has no manufacturing, exports or anything to fall back on - unlike most of the Eurozone countries... the UK was the worst bubble in Europe

False

 

[Gringinho]

Quote from Tex S. Hedge:

False

Hehe, what comparatively exports, manufacturing has the UK compared to the other large EU economies?

Also, the housing bubble was very bad in the UK and Spain.


Rumours that Trichet might step down -- that would give some impulse to EURUSD no doubt.

 

[Kap]

Quote from Gringinho:

The US and UK economy are down and counting...

The UK has no manufacturing, exports or anything to fall back on - unlike most of the Eurozone countries. More skilled workers in Germany than in the UK, so it is inherently much stronger than the UK. Also, there was not a housing bubble in Germany, but actually a housing price decrease the last few years, while the UK was the worst bubble in Europe, and heavily linked to the US with financial markets and services.

indeed, Long DAX , short FTSE ... enjoy the spread

 

[Aaron Copland]

Quote from dont:

What happens when Japan goes to zero and The Fed is at .25% The ECB at 1% ?

The bears gain complete control.

 

[Ivanovich]

Trichet is going on about price stability. Doesn't he get it? Rome is burning, and he's worried about prices.

 

[Daal]

Quote from Ivanovich:

Trichet is going on about price stability. Doesn't he get it? Rome is burning, and he's worried about prices.

I dont think he will stop when inflation prints -1% he will have to sing the same song

 

[MohdSalleh]

the UK-A nation of Honkys and Pakis waiting to stab each other to death

 

[zdreg]

Quote from Ivanovich:

Trichet is going on about price stability. Doesn't he get it? Rome is burning, and he's worried about prices.

trichet is exactly right.
cutting interest rates is not a cure. it is making a drunk or a junkie feel better for the moment.
the over leveraged financial system will not become healthy until failure is accepted as a natural phenomena.
bailouts will only delay the recovery. the weak will continue to sap the strength of the strong. we will surely end up like japan in the lost decade because we didn't do the structural reforms necessary for a healthy economic system. (if lowering interest rate to near zero was the cure japan would never have lost a decade.}

 

[makloda]

Quote from zdreg:(if lowering interest rate to near zero was the cure japan would never have lost a decade.}

The Japanese banking system had structural problems in the 80s and 90s that are in no way comparable to the European or US banking system.

Japanese rates were taken to 0% but Japanese banks still lost money on outstanding loans because they were unable and unwilling to increase interest rates to their longstanding corporate customers. Also banks refrained from writing off non-performing loans and tried to hide them in their balance sheets. A bunch of big banks and failed in 1997 due to these hidden toxic assets that were rotting in their basement since 1989/1990.

I keep reading on ET and elsewhere about "Look at Japan in the 1990s, 0% rates didn't help." Yes it didn't help. But maybe it's comparing apples to oranges?

 

[zdreg]

Quote from makloda:

The Japanese banking system had structural problems in the 80s and 90s that are in no way comparable to the European or US banking system.

Japanese rates were taken to 0% but Japanese banks still lost money on outstanding loans because they were unable and unwilling to increase interest rates to their longstanding corporate customers. Also banks refrained from writing off non-performing loans and tried to hide them in their balance sheets. A bunch of big banks and failed in 1997 due to these hidden toxic assets that were rotting in their basement since 1989/1990.

I keep reading on ET and elsewhere about "Look at Japan in the 1990s, 0% rates didn't help." Yes it didn't help. But maybe it's comparing apples to oranges?

apples to apples.
your description is a picture of US banks. not a perfect reproduction but a good approximation with likely the same results.