Just a quickie, this one.

As the housing market is about to head towards the sewers, RBS is launching a £4.7bn issue of securities backed by its mortgages. The FT opines:

‘The return of securitisation – the bundling of individual loans into new bonds backed by the loan repayments – is considered critical for the wider economic recovery because of the role it plays in taking loans off banks’ balance sheets, freeing them up to make fresh loans’.

With respect, o Pink One, bollocks. It’s another daft derivatives launch at precisely the wrong time…the U.K. housing-market gauge fell more than economists expected in August to the lowest since May 2009, as an increase in supply of homes for sale pushed down prices. Not only that from the Royal Institution of Chartered Surveyors, but also the reality of a Coalition Government introducing austerity measures, removing homeowner supports, and probably raising interest rates.

Still, these RBS derivative ‘assets’ might cancel out the vast numbers of toxic Russian mortgages the former Goodwin/Badloss insitution already owns. Hahahahahaha.

Talking of barking Russian loans, dig this: argey-bargey between the Moscow Government (part owner of Moscow Bank) and Putin among others has put the kai-bosh on yet more bond issuance from that source. The spread premium on Ruski bonds thus broadened versus US securities. This is entirely appropriate, as the RF is emerging as yet another dark horse when it comes to things about to go all funny and peculiar.

Related: Russian bond issuance accelerates.