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

[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?

[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.

[Scrag Meister]

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

[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.

[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

[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

[Jeff Maginty]

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[TimberWolf]

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

[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

[Jeff Maginty]

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