Talking to John Schroy

As many of you know, when I like a person’s ideas or research I’ll generally try to call them and talk about whatever the topic is that they are expert on. John Schroy is no different, he is a man whom I first came across via his excellent site ‘Capital Flow Analysis‘ which has tutorials on how to examine the Federal Reserves Capital Flow statistics.

He is also a really experienced practitioner – I have a soft spot for people who have been in the trade with lots of experience – who was in the trade across several continents and with a divergent mix of developed and developing markets at the same time.

I spoke to him in his Florida home last week….

KD: Hi John, so, what exactly is the ‘flow of funds analysis’

JS: Flow of funds analysis is a technique of interpreting capital market trends, using flow of funds accounts. The most useful set of these accounts internationally is published in the US by the Fed, but …

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30 year Irish bonds: What it means for the mortgage market

In the USA the 30yr Treasury is often called the ‘long bond’ and it is watched (the yields) very closely as it is the indication on long term rate expectations from within the market. If the NTMA issue 30 year bonds as suggested by today’s Independent it could bring about an important development that we have been advocates of for some time, namely, that of long term fixed rate mortgages.

Banks have a certain level of ‘zero rated funds’, this is money that is not incurring cost in terms of interest payments to the customer, they generally tend to come about in current accounts. Many people keep a certain amount of money in a current account from month to month, when you add all of this together across the institution there is normally a certain foundation or base level of funds constantly there. The zero rated funds are generally where the funding area where fixed rates come from, and the fixed rate mortgage prices are based upon a comparable (normally a sovereign …

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