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NWR: Financial chaos
- Thread starter SFJoe
- Start date
originally posted by Jay Miller:
So, anyone know how the credit markets are today? Interbank lending rates down?
The stock market is certainly exuberant.
No move on the Ted Spread - the banks are being just as cautions (tight) today as Friday. The Asian markets are up so far today (Oct 14, 2008). It is too soon to tell.
Which ties interestingly back to my first post.originally posted by SFJoe:
Once you've nationalized the banks and insurance companies, you're on the hook.
Even if you did so with great reluctance and vividly expressed regret.
Zachary Ross
Zachary Ross
originally posted by David M. Bueker:
originally posted by Zachary Ross:
As part of his slate of conservative tax cuts, Sarkozy in France proposed a mortgage-interest tax deduction, but the Constitutional Council, the highest court in France, ruled it unconstitutional on the grounds that it would give property owners an unfair tax advantage.
Of course we need the socialists to tell us what to do.
Wouldn't hurt to listen.
U
Unknown
Guest
originally posted by Zachary Ross:
originally posted by David M. Bueker:
originally posted by Zachary Ross:
As part of his slate of conservative tax cuts, Sarkozy in France proposed a mortgage-interest tax deduction, but the Constitutional Council, the highest court in France, ruled it unconstitutional on the grounds that it would give property owners an unfair tax advantage.
Of course we need the socialists to tell us what to do.
Wouldn't hurt to listen.
thankfully justice Breyer is not running the treasury
Jay Miller
Jay Miller
Of course a complicating/mitigating factor in the regressiveness of the mortgage interest rate deduction is the existence of property tax.
originally posted by VLM:
Um, I'm pretty sure we're all socialists now.
Better a fashionista, like the Latin Liquidator, than a socialista, imho.
David M. Bueker
David M. Bueker
originally posted by Jay Miller:
Of course a complicating/mitigating factor in the regressiveness of the mortgage interest rate deduction is the existence of property tax.
Precisely. I pay 2X more in property taxes than I get in mortgage deductions. Even back at the beginning it was never much more than a wash.
Of course property taxes are deductable as well, but the insane increases (ours went up 40% in one year then 25% the next) pretty much make that a hollow victory. The money is used to build soccer fields which are never used.
Cole Kendall
Cole Kendall
While I hate to pull out my economist card, there is a difference between who writes the check for a tax and who "pays" the tax. Just because property owners receive the tax deduction for mortgage interest does not mean that some of the benefits of the deduction do not accrue to renters (assuming the market for renting property is somewhat competitive).
As an example, assume that the sales tax on wine went to zero. Would wine prices change? There is a lot going on in how prices are set in markets and the incidence of the tax does not correspond precisely to the person who cuts the check.
As an example, assume that the sales tax on wine went to zero. Would wine prices change? There is a lot going on in how prices are set in markets and the incidence of the tax does not correspond precisely to the person who cuts the check.
No need to be shy. Expertise welcomed, by me at least.originally posted by Cole Kendall:
While I hate to pull out my economist card
David M. Bueker
David M. Bueker
As an example, assume that the sales tax on wine went to zero.
What do you mean? It is zero. Right Thor?
U
Unknown
Guest
might there be a process of natural selection involved here? it seems the tendency towards ownership is synonymous with certain ambitions which may ultimately benefit all, and should therefore be encouraged ( a much better word than subsidized imo )
but what do I know, I am just a parasite immigrant
but what do I know, I am just a parasite immigrant
Jay Miller
Jay Miller
originally posted by Cole Kendall:
While I hate to pull out my economist card, there is a difference between who writes the check for a tax and who "pays" the tax. Just because property owners receive the tax deduction for mortgage interest does not mean that some of the benefits of the deduction do not accrue to renters (assuming the market for renting property is somewhat competitive).
Good point. Since the owner of the building is benefitting from the deduction he can and in a competitive market (unlike for instance NYC) will pass that savings on to the renters.
Meanwhile I can answer my own question above.
"The interbank lending rate for three-month euro loans, known as the Euro Interbank Offered Rate, or Euribor, fell 0.08 percentage points to 5.24 percent from 5.32 percent the day before. Rates had fallen on Monday as well, but by a more modest 0.06 percentage points.
The equivalent dollar rate fell 0.12 percent to 4.64 percent, while pound rates are 0.02 percent down at 6.25 percent.
Though the rates are falling, the differential between the rate at which banks lend to each other and official central bank lending rates remain high, signalling a strong degree of mistrust still exists. In the U.S. the base central bank rate is 1.5 percent, in the euro area it is 3.75 percent and 4.50 percent in Britain."
So better but still not there yet.
Though the rates are falling, the differential between the rate at which banks lend to each other and official central bank lending rates remain high, signalling a strong degree of mistrust still exists. In the U.S. the base central bank rate is 1.5 percent, in the euro area it is 3.75 percent and 4.50 percent in Britain."
So better but still not there yet.
This is in essence the "Ted Spread" and in "good" or "normal" times the Ted Spread should be less than 1% - effectively a transaction fee. We are now sitting at well over four percent, which is basically unheard of.
Cole Kendall
Cole Kendall
Libor, like a lot of other things that are tracked carefully, is not what is once was. While I am only an observer, the word I have heard is that the Libor you see on the screens is not the same for all banks. But I would appreciate any information from those who actually are in these markets.
originally posted by .sasha:
NWR: mortgage interest deductionsmight there be a process of natural selection involved here? it seems the tendency towards ownership is synonymous with certain ambitions which may ultimately benefit all, and should therefore be encouraged ( a much better word than subsidized imo )
but what do I know, I am just a parasite immigrant
Social engineering?
I'm not sure that the acquisitiveness gene is a good thing.
Fucking parasite immigrant. Give us your tax dollars then fuck off!
I think you'd have a really hard time defining that one in a measurable way, but it isn't impossible. It would just take some really good social scientists with time and money. Neither of which people tend to want to give to social scientists.
originally posted by Cole Kendall:
Libor, like a lot of other things that are tracked carefully, is not what is once was. While I am only an observer, the word I have heard is that the Libor you see on the screens is not the same for all banks. But I would appreciate any information from those who actually are in these markets.
You've mentioned something like this before.
It makes total sense to me that Libor would be tiered. I'd like to know exactly how this stuff is modeled.
For obvious reasons, I really can't go with "someone really smart figured it out" as a reason.
In certain instances, I think that the folks who put out indices that shape markets should have to publish their formulas and have them subjected to peer review.
For example, anyone think that "the market" does a good job of credit-rating?
Cole Kendall
Cole Kendall
From the FT a few months ago:
Libor has become increasingly volatile. The overnight rate typically traded at just 12 basis points above the OIS before last summer, but this gap widened to more than 100bp on one occasion this year.
Officials at the BBA say this simply reflects the volatile nature of markets in the current crisis. However, some bankers fear Libor may be distorted because it is compiled from quotes that bankers submit - and there is little way of checking whether trades are conducted at these levels.
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us.ft.com
Libor has become increasingly volatile. The overnight rate typically traded at just 12 basis points above the OIS before last summer, but this gap widened to more than 100bp on one occasion this year.
Officials at the BBA say this simply reflects the volatile nature of markets in the current crisis. However, some bankers fear Libor may be distorted because it is compiled from quotes that bankers submit - and there is little way of checking whether trades are conducted at these levels.