Double-dip!

[SWP's back]

Bond yields will go up and we will have to pay more to borrow money

It's funny how the GDP figures are always wrong when they are negative.

I never said they were wrong, I said June's were estimated 100%, the figures could be up or down. You have to remember that the figures the other day are the estimates rather than final figures.

Can you explain why the UK bond yields would go up as I am confused by your bazooka statement.

 

[twinkletoes]

Bond yields will go up and we will have to pay more to borrow money

It's funny how the GDP figures are always wrong when they are negative.

I never said they were wrong, I said June's were estimated 100%, the figures could be up or down. You have to remember that the figures the other day are the estimates rather than final figures.

Can you explain why the UK bond yields would go up as I am confused by your bazooka statement.

If Draghi can start buying eurozone debt then all the spare money will move from places like the US and UK back to the eurzone so our debt will go up and the eurozone debt will be cheaper.

 

[SWP's back]

Bond yields will go up and we will have to pay more to borrow money

It's funny how the GDP figures are always wrong when they are negative.

I never said they were wrong, I said June's were estimated 100%, the figures could be up or down. You have to remember that the figures the other day are the estimates rather than final figures.

Can you explain why the UK bond yields would go up as I am confused by your bazooka statement.

If Draghi can start buying eurozone debt then all the spare money will move from places like the US and UK back to the eurzone so our debt will go up and the eurozone debt will be cheaper.

Not sure I follow your logic there. As it doesn't make any sense.

Our borrowing costs depend on our likelihood of being able to pay it back. We never have had a problem selling our Gilts. They are always over subscribed. If eurozone debt can be purchased it will help lower our bond yield as it reduces the fear that we stagnate (as our trading partners now have less worries) as opposed to raise it.

Unless I am getting something so wrong I need to wobble my head.

 

[twinkletoes]

I never said they were wrong, I said June's were estimated 100%, the figures could be up or down. You have to remember that the figures the other day are the estimates rather than final figures.

Can you explain why the UK bond yields would go up as I am confused by your bazooka statement.

If Draghi can start buying eurozone debt then all the spare money will move from places like the US and UK back to the eurzone so our debt will go up and the eurozone debt will be cheaper.

Not sure I follow your logic there. As it doesn't make any sense.

Our borrowing costs depend on our likelihood of being able to pay it back. We never have had a problem selling our Gilts. They are always over subscribed. If eurozone debt can be purchased it will help lower our bond yield as it reduces the fear that we stagnate (as our trading partners now have less worries) as opposed to raise it.

Unless I am getting something so wrong I need to wobble my head.

At the moment the eurozone is seen as a basket case so bond yields for the PIIGS (Spain etc) are high.

If Draghi is seen by the markets to have sorted things out their yields will come down as more people will have confidence to invest in the PIIGS and
not be so enthusiastic about safe havens such as the UK or Germany.

 

[BoyBlue_1985]

If Draghi can start buying eurozone debt then all the spare money will move from places like the US and UK back to the eurzone so our debt will go up and the eurozone debt will be cheaper.

Not sure I follow your logic there. As it doesn't make any sense.

Our borrowing costs depend on our likelihood of being able to pay it back. We never have had a problem selling our Gilts. They are always over subscribed. If eurozone debt can be purchased it will help lower our bond yield as it reduces the fear that we stagnate (as our trading partners now have less worries) as opposed to raise it.

Unless I am getting something so wrong I need to wobble my head.

At the moment the eurozone is seen as a basket case so bond yields for the PIIGS (Spain etc) are high.

If Draghi is seen by the markets to have sorted things out their yields will come down as more people will have confidence to invest in the PIIGS and
not be so enthusiastic about safe havens such as the UK or Germany.

This makes no sense at all

 

[SWP's back]

If Draghi can start buying eurozone debt then all the spare money will move from places like the US and UK back to the eurzone so our debt will go up and the eurozone debt will be cheaper.

Not sure I follow your logic there. As it doesn't make any sense.

Our borrowing costs depend on our likelihood of being able to pay it back. We never have had a problem selling our Gilts. They are always over subscribed. If eurozone debt can be purchased it will help lower our bond yield as it reduces the fear that we stagnate (as our trading partners now have less worries) as opposed to raise it.

Unless I am getting something so wrong I need to wobble my head.

At the moment the eurozone is seen as a basket case so bond yields for the PIIGS (Spain etc) are high.

If Draghi is seen by the markets to have sorted things out their yields will come down as more people will have confidence to invest in the PIIGS and
not be so enthusiastic about safe havens such as the UK or Germany.

No you've got your logic wrong there sorry.

We will never have a problem selling our debt and our gilt yields are more likely to drop rather than rise. You've totally misunderstood the way the gilt markets work.

 

[twinkletoes]

Not sure I follow your logic there. As it doesn't make any sense.

Our borrowing costs depend on our likelihood of being able to pay it back. We never have had a problem selling our Gilts. They are always over subscribed. If eurozone debt can be purchased it will help lower our bond yield as it reduces the fear that we stagnate (as our trading partners now have less worries) as opposed to raise it.

Unless I am getting something so wrong I need to wobble my head.

At the moment the eurozone is seen as a basket case so bond yields for the PIIGS (Spain etc) are high.

If Draghi is seen by the markets to have sorted things out their yields will come down as more people will have confidence to invest in the PIIGS and
not be so enthusiastic about safe havens such as the UK or Germany.

No you've got your logic wrong there sorry.

We will never have a problem selling our debt and our gilt yields are more likely to drop rather than rise. You've totally misunderstood the way the gilt markets work.

So our yields will drop when the eurozone starts to pick up while we are struggling?

 

[SWP's back]

If we continue struggling (another quarter of falling GDP and possible loss of AAA status) then our yields will rise but that's down to us rather than anything in Europe.

A strong consensus from Thursdays meeting is good news for us though rather than bad. I can see where you are coming from but it's the wrong end of the stick. Yields are based on ability to pay (just like someone earning 150k is more likely to be offered a low rate in the bank than someone on DSS) rather than on anything else and Britains prospects improve if our trading partners are in a better position.

There's only a finite supply of gilts and they are always over subscribed. Also different investors want different risks/yields so theres always a demand.

 

[twinkletoes]

If we continue struggling (another quarter of falling GDP and possible loss of AAA status) then our yields will rise but that's down to us rather than anything in Europe.

A strong consensus from Thursdays meeting is good news for us though rather than bad. I can see where you are coming from but it's the wrong end of the stick. Yields are based on ability to pay (just like someone earning 150k is more likely to be offered a low rate in the bank than someone on DSS) rather than on anything else.

There's only a finite supply of gilts and they are always over subscribed. Also different investors want different risks/yields so theres always a demand.

We'll see wont we.

The UK's status as a safe haven for investors has cut the cost of borrowing by the Treasury to a 300-year low.

The UK yields are artificially low because of QE and safe haven status which wont last forever.

If the eurozone picks up then the foriegn investors will look to them to invest and will not see the UK as a safe haven anymore.

Only one way for UK bonds to go and that is up.

 

[SWP's back]

Well I've tried to explain it to you but you won't listen.

The UK wants the meeting to go well on Thursday. The UK and US markets want it to go well (up 1.5% since his words), only you could try and make it a negative.