This is a very significant and deeply troubling warning from the US. Not at all clear whether the government yet understands the scale of the crisis nor whether there are any grown ups left, after successive purges, to whom Britain can turn to get a grip. https://twitter.com/LHSummers/status/1574586690869641216
It’s going to be fascinating watching the irresistible force of significantly higher borrowing costs (and the fiscal consequences) meet the immovable object of right wing ideology, in the context of dire poll ratings.
Their playbook dictates that they will now react by slashing the state. But can they get away with it?
I’d love to be a fly in the wall in 55 Tufton St.
The plan looks to me to be no action on public sector budgets at a time of 10% inflation. That squeeze will be in real terms much worse than any austerity period since the war. Right wing dogma met.
I am seriously looking at bringing forward my retirement, just doing the sums at to when the timing is most opportune.
That's the sort of thing that is really going to bugger public services. Not so much strikes as unfillable staffing gaps.
I would guess that the next stage of the amateur 'neoliberal shock therapy' we are being subject to is an 'urgent spending review', but its hard to see anything they can cut without dire political consequences. Interesting times.
No need for a spending review, just let inflation do its work on existing budgets.
And the bond market will do its work on the cost of that borrowing if we are letting inflation run wild.
Up well over 1% pa in the last 3 days alone. That'll cost more in the long run than a lot of these tax cuts. That is an unprecedented size and speed of the increase in the cost of borrowing this century.
I said we we're potentially facing a sovereign debt crisis at the weekend. Well we're now one step closer after yesterday.
One Tory MP tells me this morning that Liz Truss only has “weeks” for markets to settle before backbenchers make a move. But first step would be demanding the sacking of the Chancellor, they say. MPs watching markets closely to see if this passes, otherwise there’ll be trouble. https://twitter.com/PaulBrandITV/status/1574646133884063744
One Tory MP tells me this morning that Liz Truss only has “weeks” for markets to settle before backbenchers make a move. But first step would be demanding the sacking of the Chancellor, they say. MPs watching markets closely to see if this passes, otherwise there’ll be trouble. https://twitter.com/PaulBrandITV/status/1574646133884063744
They should have forced her to sack the Chancellor this week at the latest.
Financial crisis in Britain will affect London’s viability as a global financial center so there is the risk of a vicious cycle where volatility hurts the fundamentals, which in turn raises volatility.
A currency crisis in a reserve currency could well have global consequences. I am surprised that we have heard nothing from the IMF.
The YouGov poll is all the more remarkable because the fieldwork dates of 23rd-25th Sept reveal a 9% swing to Labour in just 2.5 days (Lab +5, Con -4 compared to 21st-22nd Sept on the previous YouGov poll).
R&W found a 3% swing between the 21st and 25th.
Those are the only two polls so far that straddle the launch date of Kwarteng's Special Fiscal Operation. Clearly it's going down about as well as its Russian equivalent.
And I doubt whether either poll fully reflects the impact of the financial market meltdown and associated discussion of emergency interest rate and mortgage rate hikes of the last couple of days.
I would guess that the next stage of the amateur 'neoliberal shock therapy' we are being subject to is an 'urgent spending review', but its hard to see anything they can cut without dire political consequences. Interesting times.
No need for a spending review, just let inflation do its work on existing budgets.
That will probably happen, with all sorts of disastrous consequences; but I suspect they will probably want/need to cut 'deeper and further'.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
With surging corporate bond yields I think we may see some big names fall. Morrisons and Asda are ones to watch. Very highly leveraged and junk bond ratings on the latter. Wouldn't be surprised if they weren't able to meet their servicing costs next year because the economy will be in the shit, inflation rampant and interest rates surging. People won't be spending money and they have a mountain of debt and will be facing annual servicing costs in excess of £1bn per year.
In general we could see a lot of those leveraged buyouts by PE fall apart soon and a lot of jobs lost as a result of perfectly healthy companies being loaded up with debt when money was cheap.
Yep: there's a lot of PE-backed firms that could find themselves in real trouble, real quickly.
I’ve seen a couple fall already
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
Good morning
The conservatives need Sunak more than ever as either COE or PM
For the first time I have concluded Truss will not survive 2023
She needs to be gone well before then. As a Labour supporter, I should be in good heart given these poll leads. I'm anything but given that as a country we're facing financial Armageddon unless your lot get rid of her without delay.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
Where would we be today? Mrs Thatcher's magic money trees would still have been there: North Sea Oil and privatisation receipts. Perhaps she'd have been spent the money on something more useful than cushioning mass unemployment.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
With surging corporate bond yields I think we may see some big names fall. Morrisons and Asda are ones to watch. Very highly leveraged and junk bond ratings on the latter. Wouldn't be surprised if they weren't able to meet their servicing costs next year because the economy will be in the shit, inflation rampant and interest rates surging. People won't be spending money and they have a mountain of debt and will be facing annual servicing costs in excess of £1bn per year.
In general we could see a lot of those leveraged buyouts by PE fall apart soon and a lot of jobs lost as a result of perfectly healthy companies being loaded up with debt when money was cheap.
Yep: there's a lot of PE-backed firms that could find themselves in real trouble, real quickly.
I’ve seen a couple fall already
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
Very near sighted. In the early 90s the largest number of defaults happened when the market was recovering giving banks maximum opportunity to recoup losses.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
Good morning
The conservatives need Sunak more than ever as either COE or PM
For the first time I have concluded Truss will not survive 2023
She needs to be gone well before then. As a Labour supporter, I should be in good heart given these poll leads. I'm anything but given that as a country we're facing financial Armageddon unless your lot get rid of her without delay.
That is a matter for the conservatives mps and for clarification I am not a member of the conservative party though do despair at the tin ear politics of last Friday
It must be also said that bond markets across the world are struggling with rising interest rates at attempts to reduce inflation generally
I realise @Dynamo has an obsession with Nazis, so I thought I would put together a simple chart that we can all agree on to distinguish Governments with authoritarian/Nazi tendencies:
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
No, I think she is not after personal glory, she is not a needy airhead craving attention like Johnson, she actually believes this stuff.
but she has shown willing to ditch things. The regional pay policy for example. I am sure she believed in that, but it would stop her being PM so it went. The CoS employment deal. She saw nothing wrong with that, until she did.
If keeping Kwasi means rebellion, I think he is gone
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
As you can imagine - this was causing great excitement at Labour conference last night. Shadow cabinet ministers insisting no complacency but clearly think this is a game changer now. Someone who’d been to conferences since early 90s said the last time felt like this was 1996… https://twitter.com/steven_swinford/status/1574497783410835459
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
Yes I got what you were trying to say but it violated several PB analogy rules.
A few MPs voiced concern in the chamber on Friday but Sunak backers, so far, have stayed out of this. As one put it to me, they wanted to give new team a clear run at delicate time. But @HuwMerriman speaks out this morninghttps://twitter.com/HuwMerriman/status/1574517207702200321
With surging corporate bond yields I think we may see some big names fall. Morrisons and Asda are ones to watch. Very highly leveraged and junk bond ratings on the latter. Wouldn't be surprised if they weren't able to meet their servicing costs next year because the economy will be in the shit, inflation rampant and interest rates surging. People won't be spending money and they have a mountain of debt and will be facing annual servicing costs in excess of £1bn per year.
In general we could see a lot of those leveraged buyouts by PE fall apart soon and a lot of jobs lost as a result of perfectly healthy companies being loaded up with debt when money was cheap.
Yep: there's a lot of PE-backed firms that could find themselves in real trouble, real quickly.
I’ve seen a couple fall already
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
Very near sighted. In the early 90s the largest number of defaults happened when the market was recovering giving banks maximum opportunity to recoup losses.
This was an odd situation - they never even discussed with the PE firm, just took the company at a board meeting. I suspect there is something I don’t know going on.
Labour’s Wes Streeting tells R4: “The risk isn’t change with Labour, it’s continuity with the Conservatives.” As some lenders withdraw mortgages and the pound plummets: “This isn’t a serious chancellor, but there are serious consequences to the choices he made.” https://twitter.com/REWearmouth/status/1574653525430345728
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
Maybe we'd not be in a country where millions of kids are getting fed by food banks?
A genuine I'm still blaming Fatch post.
Bravo.
In response to a post ascribing current economic conditions to Thatcher's 1981 economic policies it seems reasonable.
Hmmm I think it's possible to ascribe to someone (her) a structural transformation of our society while allowing subsequent governments over the course of their 13 year term to knock off the rough edges and tidy up.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
I think there is a need for bond yields and interest rates to return to historic norms, but there does need to be time for individuals, business and government to adapt. Doing that reversion by Christmas rather than 2025 is a problem.
A “small but growing” number of MPs have submitted letters of no confidence to Sir Graham Brady, the chairman of the 1922 Committee.
One former minister said: “The moment it becomes serious is when mortgage rates go up for homeowners. That’s a Rubicon-crossing moment. And if it happens before conference then it’ll dominate and you can’t predict how the party will respond. Her leadership was on an unstable platform and it’s becoming more unstable.”
One Tory strategist said that MPs were in a state of “deep unease” at how quickly the budget had unravelled, adding: “The general view when Liz won was, ‘We’ve got to make this work’. That has changed over the weekend. It’s now, ‘What do we do? This is a shit show.”
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
Maybe we'd not be in a country where millions of kids are getting fed by food banks?
A genuine I'm still blaming Fatch post.
Bravo.
In response to a post ascribing current economic conditions to Thatcher's 1981 economic policies it seems reasonable.
Hmmm I think it's possible to ascribe to someone (her) a structural transformation of our society while allowing subsequent governments over the course of their 13 year term to ensure the rough edges are knocked off
Ah so everything good is down to Thatcher, nothing bad is. Got it! The fact is that the Gini coefficient (measuring income inequality) went up massively in the early years of her government and never really went down again. That structural transformation has had long term consequences, good for some (including me), bad for many.
1. We begin with our new leader, Margarine Thatcher, who in only 3 weeks has become PM, finished off The Queen, taken 2 weeks away from work, ruined our relations with the US, crashed the economy, and started backbench rebellion to remove her from office
@RussInCheshire Margarine Thatcher or, as the Tory members who voted for her are starting to call her, I Can't Believe She's Not Better.
Reminder: Ukraine is under martial law, operates military conscription, and has banned all men aged between 18 and 60 from leaving the country.
Because they are in a war for existential survival. Not conscripting young men to prolong a losing war of unprovoked aggression so that an inferior dictator can survive politically.
Thank goodness nobody is conscripting elderly women to shorten an almost already-won defensive war they were provoked into so that a terribly superior dictator with a cut-glass accent could defenestrate himself economically.
You probably believe that most people in the five territories want where they live to be in the Ukraine. Because you have to.
What's your position, out of interest, regarding the many Ukrainian men aged between 18 and 60 who have illegally fled the country?
I doubt morale is that great right now in the Ukrainian army, except in the Azov Regiment maybe.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
No, I think she is not after personal glory, she is not a needy airhead craving attention like Johnson, she actually believes this stuff.
If there's one thing we've learned about Liz Truss it's that she's adept at changing her mind when it not longer suits her.
If Kwasi becomes a problem for he she will certainly junk him.
That won't solve the problem for 2 reasons
1) she was party to all the decisions in the budget so needs to go down with it. 2) who in their right minds wants to be Chancellor and responsible for fixing this mess - it's something that is going to destroy your reputation not build it...
The only easy way out of this is for the Tories to bin Truss and Co immediately, bring someone sane in and remove any say members have in electing leaders...
With surging corporate bond yields I think we may see some big names fall. Morrisons and Asda are ones to watch. Very highly leveraged and junk bond ratings on the latter. Wouldn't be surprised if they weren't able to meet their servicing costs next year because the economy will be in the shit, inflation rampant and interest rates surging. People won't be spending money and they have a mountain of debt and will be facing annual servicing costs in excess of £1bn per year.
In general we could see a lot of those leveraged buyouts by PE fall apart soon and a lot of jobs lost as a result of perfectly healthy companies being loaded up with debt when money was cheap.
Yep: there's a lot of PE-backed firms that could find themselves in real trouble, real quickly.
I’ve seen a couple fall already
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
Very near sighted. In the early 90s the largest number of defaults happened when the market was recovering giving banks maximum opportunity to recoup losses.
This was an odd situation - they never even discussed with the PE firm, just took the company at a board meeting. I suspect there is something I don’t know going on.
You would expect Morrisons and Asda to be highly profitable if they defaulted. Probably more so, in fact, given the stupid over-extension of their debt levels.
A bank might even be tempted just to own them for a bit and try to get their money back that way.
If, on the other hand, either did cease trading, the UK supermarket would immediately be a shambles with just two major retailers and a few more medium sized ones dominating it. Sure, you would expect Aldi and Lidl to hoover up more market share, but it would have a nasty distorting effect.
About the only positive would be if these vulture fund owners went bankrupt themselves, but somehow I suspect they would find a way to avoid that.
A “small but growing” number of MPs have submitted letters of no confidence to Sir Graham Brady, the chairman of the 1922 Committee.
One former minister said: “The moment it becomes serious is when mortgage rates go up for homeowners. That’s a Rubicon-crossing moment. And if it happens before conference then it’ll dominate and you can’t predict how the party will respond. Her leadership was on an unstable platform and it’s becoming more unstable.”
One Tory strategist said that MPs were in a state of “deep unease” at how quickly the budget had unravelled, adding: “The general view when Liz won was, ‘We’ve got to make this work’. That has changed over the weekend. It’s now, ‘What do we do? This is a shit show.”
If a housing market crash got house prices back to a 3x income multiple, but the trade-off was Labour in power for a Blair-like period of time, then I'd be OK with that.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
Maybe we'd not be in a country where millions of kids are getting fed by food banks?
A genuine I'm still blaming Fatch post.
Bravo.
In response to a post ascribing current economic conditions to Thatcher's 1981 economic policies it seems reasonable.
Hmmm I think it's possible to ascribe to someone (her) a structural transformation of our society while allowing subsequent governments over the course of their 13 year term to ensure the rough edges are knocked off
Ah so everything good is down to Thatcher, nothing bad is. Got it! The fact is that the Gini coefficient (measuring income inequality) went up massively in the early years of her government and never really went down again. That structural transformation has had long term consequences, good for some (including me), bad for many.
Like life, really. Why did you make it and others didn't?
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
No, I think she is not after personal glory, she is not a needy airhead craving attention like Johnson, she actually believes this stuff.
but she has shown willing to ditch things. The regional pay policy for example. I am sure she believed in that, but it would stop her being PM so it went. The CoS employment deal. She saw nothing wrong with that, until she did.
If keeping Kwasi means rebellion, I think he is gone
Removing Kwasi isn't going to stop the rebellion - it would just add 1 more person to it (and one who with a few sentences could easily bring Truss down).
If Sunak ousts Truss, that will be two PMs he brought down. He hasn’t yet been forgiven for Boris. If he makes it to no10 , he will have a problem with loyalty.
The bottom line is that they need a spell in opposition, but can we wait two years?
The shooter who murdered at least 11 children and four adults yesterday in Izhevsk, Udmurtia, is said to have had a swastika on his t-shirt. This symbol appears in at least one still photo, in red on a black shirt, counterclockwise and looking handpainted. (The Nazis generally used a clockwise version.) Dunno whether there's any footage of it being on his shirt when he entered the building.
I fear more incidents of this kind.
The FSB really are c***s in a way that many on the British right who enjoy going on about them have little clue about.
See the Moscow apartment block bombings of 1999 for reference.
If the shooter had gone to Ukraine and shot up a Ukranian school instead, Putin would probably be pinning a medal on him or his corpse about now.
Reminder: Ukraine is under martial law, operates military conscription, and has banned all men aged between 18 and 60 from leaving the country.
Because they are in a war for existential survival. Not conscripting young men to prolong a losing war of unprovoked aggression so that an inferior dictator can survive politically.
Thank goodness nobody is conscripting elderly women to shorten an almost already-won defensive war they were provoked into so that a terribly superior dictator with a cut-glass accent could defenestrate himself economically.
You probably believe that most people in the five territories want where they live to be in the Ukraine. Because you have to.
What's your position, out of interest, regarding the many Ukrainian men aged between 18 and 60 who have illegally fled the country?
I doubt morale is that great right now in the Ukrainian army, except in the Azov Regiment maybe.
A mask slips...
He wears a mask? I didn't realise.
If he masks himself as a far-right Russian shill, what's his real character? A Ukrainian intelligence operative trying to make Putin's cheerleaders look like even bigger twats than they actually are?
If Sunak ousts Truss, that will be two PMs he brought down. He hasn’t yet been forgiven for Boris. If he makes it to no10 , he will have a problem with loyalty.
The bottom line is that they need a spell in opposition, but can we wait two years?
Sunak won't be bringing Truss down - the Tory's problem is that their only choice is Sunak.....
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
I think there is a need for bond yields and interest rates to return to historic norms, but there does need to be time for individuals, business and government to adapt. Doing that reversion by Christmas rather than 2025 is a problem.
You're arguing for boiling the frog with a relatively long period of rising rates which is surely also 'a problem'. There's no pain free way to do this.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
Good morning
The conservatives need Sunak more than ever as either COE or PM
For the first time I have concluded Truss will not survive 2023
She needs to be gone well before then. As a Labour supporter, I should be in good heart given these poll leads. I'm anything but given that as a country we're facing financial Armageddon unless your lot get rid of her without delay.
The challenge is how to replace her without triggering a vote of the party membership and another unthinkable six week campaign.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
The only quibble I have is that the odds of this working are probably a lot worse than red vs. black.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
No, I think she is not after personal glory, she is not a needy airhead craving attention like Johnson, she actually believes this stuff.
If there's one thing we've learned about Liz Truss it's that she's adept at changing her mind when it not longer suits her.
If Kwasi becomes a problem for he she will certainly junk him.
That won't solve the problem for 2 reasons
1) she was party to all the decisions in the budget so needs to go down with it. 2) who in their right minds wants to be Chancellor and responsible for fixing this mess - it's something that is going to destroy your reputation not build it...
That's suddenly led to a very frightening thought indeed.
Somebody not in their right mind. Already hated and despised. Currently at the Department for Business, like she and Kwarteng were. A darling of the Tory right. Worked in the city.
But surely even She wouldn't. She couldn't. She mustn't...she might...
How can they bin Truss. She’s only just gotten the job and is pretty much doing what she said she’d do to the membership.
If the Tory Party wants to nuke their credibility even further they will have yet another leadership election while the country slides into disaster.
They need to get through this crisis and try and assemble a narrative for a Truss government. That will be hard because she’s probably blown up her chances in the first three weeks, but changing leaders again too soon is not credible.
The funny thing is that we all mock Gordon Brown for saying he'd ended boom and bust but the whole nation (planet) has been acting as though it had ended.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
I think there is a need for bond yields and interest rates to return to historic norms, but there does need to be time for individuals, business and government to adapt. Doing that reversion by Christmas rather than 2025 is a problem.
You're arguing for boiling the frog with a relatively long period of rising rates which is surely also 'a problem'. There's no pain free way to do this.
Its a bit like dealing with the house price unaffordability issue. Say that a house price crash is needed, and people respond with 'that's terrible, people will face negative equity', then say that instead a period of high wage-led inflation is needed instead then, where wages outstrip house prices but without negative equity and people say 'that's terrible, inflation is awful'.
There are only terrible solutions. But the problems we have are just as bad if not worse, so we need to face up to some of them. If you have cancer, then you might think chemotherapy is unpleasant but still go through it anyway.
We need to find a way to eliminate our current account deficit, our fiscal deficit, grow the economy and get house prices back to say a 4x income multiple in London and a 3x income multiple in the rest of the country. There is no 'easy' way to do all that.
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
With surging corporate bond yields I think we may see some big names fall. Morrisons and Asda are ones to watch. Very highly leveraged and junk bond ratings on the latter. Wouldn't be surprised if they weren't able to meet their servicing costs next year because the economy will be in the shit, inflation rampant and interest rates surging. People won't be spending money and they have a mountain of debt and will be facing annual servicing costs in excess of £1bn per year.
In general we could see a lot of those leveraged buyouts by PE fall apart soon and a lot of jobs lost as a result of perfectly healthy companies being loaded up with debt when money was cheap.
Yep: there's a lot of PE-backed firms that could find themselves in real trouble, real quickly.
I’ve seen a couple fall already
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
Very near sighted. In the early 90s the largest number of defaults happened when the market was recovering giving banks maximum opportunity to recoup losses.
This was an odd situation - they never even discussed with the PE firm, just took the company at a board meeting. I suspect there is something I don’t know going on.
You would expect Morrisons and Asda to be highly profitable if they defaulted. Probably more so, in fact, given the stupid over-extension of their debt levels.
A bank might even be tempted just to own them for a bit and try to get their money back that way.
If, on the other hand, either did cease trading, the UK supermarket would immediately be a shambles with just two major retailers and a few more medium sized ones dominating it. Sure, you would expect Aldi and Lidl to hoover up more market share, but it would have a nasty distorting effect.
About the only positive would be if these vulture fund owners went bankrupt themselves, but somehow I suspect they would find a way to avoid that.
It would be a debt for equity swap or an equity injection
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
The problem is that judging by her past career she actually wants both.
There are no shortage of batshit crazinesses in her past even in jobs she was clearly mad keen on. Maths GCSE. Australia trade deal. Cheese speech. Rostov on Don.
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
Cutting taxes from a 74 year high isn't batshit crazy.
The fact some critics act like it is, is a battle that needs to be won.
With surging corporate bond yields I think we may see some big names fall. Morrisons and Asda are ones to watch. Very highly leveraged and junk bond ratings on the latter. Wouldn't be surprised if they weren't able to meet their servicing costs next year because the economy will be in the shit, inflation rampant and interest rates surging. People won't be spending money and they have a mountain of debt and will be facing annual servicing costs in excess of £1bn per year.
In general we could see a lot of those leveraged buyouts by PE fall apart soon and a lot of jobs lost as a result of perfectly healthy companies being loaded up with debt when money was cheap.
Yep: there's a lot of PE-backed firms that could find themselves in real trouble, real quickly.
I’ve seen a couple fall already
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
Very near sighted. In the early 90s the largest number of defaults happened when the market was recovering giving banks maximum opportunity to recoup losses.
This was an odd situation - they never even discussed with the PE firm, just took the company at a board meeting. I suspect there is something I don’t know going on.
You would expect Morrisons and Asda to be highly profitable if they defaulted. Probably more so, in fact, given the stupid over-extension of their debt levels.
A bank might even be tempted just to own them for a bit and try to get their money back that way.
If, on the other hand, either did cease trading, the UK supermarket would immediately be a shambles with just two major retailers and a few more medium sized ones dominating it. Sure, you would expect Aldi and Lidl to hoover up more market share, but it would have a nasty distorting effect.
About the only positive would be if these vulture fund owners went bankrupt themselves, but somehow I suspect they would find a way to avoid that.
It would be a debt for equity swap or an equity injection
And debt for equity would probably actually be a good solution for everyone - customers, staff, debt holders and the government - except the current equity holders. Equally, it was obvious at the time that they were being greedy and therefore that's their own fault.
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
As you can imagine - this was causing great excitement at Labour conference last night. Shadow cabinet ministers insisting no complacency but clearly think this is a game changer now. Someone who’d been to conferences since early 90s said the last time felt like this was 1996… https://twitter.com/steven_swinford/status/1574497783410835459
Not so sure about this. Starmer had the opportunity to back PR for our elections. Even some of the leading unions were supportive of this change. But no. He timidly backed away from this.
So what is his message in attracting fair-minded people to join his ranks. Only "I am not a Conservative" - and because that is the same message as a lot of other parties, it is at the end of the day, a very weak one - nothing positive about it.
I do not trust Labour. They have made half-promises, but turned their back on progressive policies (such as PR) time after time. Apart from that, they are at the highest levels, as authoritarian as the Tories.
If we want to give power to the people, we have to go with PR and the Lib Dems.
Labour will sensibly only target Tory seats at the next election.
They're abandoning Scotland?
Or do you mean they're going to ignore the yellow taxi?
Without wishing to sound like Stuart, it is not likely they will win many seats in Scotland at the moment. They would be better off targeting seats in the North, Wales and the Midlands.
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
This was Dan Hodges last night
45p is Liz Truss’s Poll-Tax. She can spend a few weeks burning up the rest of her government’s political capital trying to defend it. Or she can ditch it, and start to rebuild her economic strategy. Those are the options. Because this policy is politically indefensible.
I am not sure he is right.
They already laid out their political defence. "We will do unpopular things. This is really unpopular. Must be working..."
The only way it can be reversed is if it is done by someone who isn't Kwasi
"It’s worse than Black Wednesday. This self-inflicted and without a mandate, whereas at least [Black Wednesday] was perceived as a bid to manage a crisis."
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
How do they sell that, even if they were willing to take that path?
Sacking the Chancellor would seem a minimum for it to happen.
As you can imagine - this was causing great excitement at Labour conference last night. Shadow cabinet ministers insisting no complacency but clearly think this is a game changer now. Someone who’d been to conferences since early 90s said the last time felt like this was 1996… https://twitter.com/steven_swinford/status/1574497783410835459
Not so sure about this. Starmer had the opportunity to back PR for our elections. Even some of the leading unions were supportive of this change. But no. He timidly backed away from this.
So what is his message in attracting fair-minded people to join his ranks. Only "I am not a Conservative" - and because that is the same message as a lot of other parties, it is at the end of the day, a very weak one - nothing positive about it.
I do not trust Labour. They have made half-promises, but turned their back on progressive policies (such as PR) time after time. Apart from that, they are at the highest levels, as authoritarian as the Tories.
If we want to give power to the people, we have to go with PR and the Lib Dems.
The more likely a Labour majority the less likely there will be a commitment to PR. ‘‘Twas ever thus.
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
Cutting taxes from a 74 year high isn't batshit crazy.
The fact some critics act like it is, is a battle that needs to be won.
A discussion was held in my office this morning regarding taxes. These are people earning £55K+ plus per year. They all thought taxes should rise, but only for rich people.
If we end up with a mild recession and nothing worse of course that would be a win from here.
But we will have a deep recession, currency crisis, energy crisis, debt crisis sharp drops in standard of living for half the country, and an overdue house price crash all happening in the next year.
And fail to even start tackling the lack of investment or coherent economic strategy that is holding us back (not from being gloriously great again, but from being that boring bit incrementally better each year, which over a generation or two makes a significant difference).
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
Cutting taxes from a 74 year high isn't batshit crazy.
The fact some critics act like it is, is a battle that needs to be won.
It seems to me like the plan is being defeated by simple household economics, rather than any battle of ideas going on. The prospective cuts are being funded by borrowing, but the lenders don't have confidence in the plans so the cost of borrowing is rising.
I think that a cut in the 45% rate of tax could work, in that it would lead to proportionately more growth through investment; but it has to be properly funded. But this is a catastrophic failure of economic and political management associated with the manner of an announcement, rather than an academic debate about tax levels.
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
How do they sell that, even if they were willing to take that path?
Sacking the Chancellor would seem a minimum for it to happen.
Ken Clarke got away with a forced U turn on VAT on fuel bills in 1994. But does KK want to U turn, even now?
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
Cutting taxes from a 74 year high isn't batshit crazy.
The fact some critics act like it is, is a battle that needs to be won.
A discussion was held in my office this morning regarding taxes. These are people earning £55K+ plus per year. They all thought taxes should rise, but only for rich people.
Sounds sensible, the big tax rises should be on the asset rich, not upper middle earners.
Labour will sensibly only target Tory seats at the next election.
They're abandoning Scotland?
Or do you mean they're going to ignore the yellow taxi?
Without wishing to sound like Stuart, it is not likely they will win many seats in Scotland at the moment. They would be better off targeting seats in the North, Wales and the Midlands.
A rising tide lifts all ships. If they're looking like getting a majority, they'll make gains in Scotland too.
The men in grey suits don't need to replace Truss if they can force her to sack Kwasi.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
I very much doubt if he would agree to return to the Treasury under Truss. He has too many fundamental points of disagreement with her. Moreover, for that reason she would probably resign rather than appoint him.
Come back to my question earlier
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
Cutting taxes from a 74 year high isn't batshit crazy.
The fact some critics act like it is, is a battle that needs to be won.
A discussion was held in my office this morning regarding taxes. These are people earning £55K+ plus per year. They all thought taxes should rise, but only for rich people.
Sounds sensible, the big tax rises should be on the asset rich, not upper middle earners.
They all own decent sized homes so are asset rich, tax rises are always popular if someone else is paying them.
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
How do they sell that, even if they were willing to take that path?
Sacking the Chancellor would seem a minimum for it to happen.
Ken Clarke got away with a forced U turn on VAT on fuel bills in 1994. But does KK want to U turn, even now?
Got away with??? The tories got hammered in the next election
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
How do they sell that, even if they were willing to take that path?
Sacking the Chancellor would seem a minimum for it to happen.
Ken Clarke got away with a forced U turn on VAT on fuel bills in 1994. But does KK want to U turn, even now?
One factor is that if the ultimate direction of the market would be the same, what's the point in U-turning only to find yourself in the same position in the run up to the next election? Politically it's better to double-down and see the crisis through now.
Does Liz want to be PM more than she wants to try out her batshit theories?
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
If Thatcher had reversed on her policies when 364 economists said she should, then where would we be today?
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
The bond market is in meltdown and you want to double down.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
Need clarification of that last paragraph analogy pls.
The government placing a massive gamble on unfunded tax cuts with no OBR oversight = putting house on black.
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
I think there is a need for bond yields and interest rates to return to historic norms, but there does need to be time for individuals, business and government to adapt. Doing that reversion by Christmas rather than 2025 is a problem.
You're arguing for boiling the frog with a relatively long period of rising rates which is surely also 'a problem'. There's no pain free way to do this.
Its a bit like dealing with the house price unaffordability issue. Say that a house price crash is needed, and people respond with 'that's terrible, people will face negative equity', then say that instead a period of high wage-led inflation is needed instead then, where wages outstrip house prices but without negative equity and people say 'that's terrible, inflation is awful'.
There are only terrible solutions. But the problems we have are just as bad if not worse, so we need to face up to some of them. If you have cancer, then you might think chemotherapy is unpleasant but still go through it anyway.
We need to find a way to eliminate our current account deficit, our fiscal deficit, grow the economy and get house prices back to say a 4x income multiple in London and a 3x income multiple in the rest of the country. There is no 'easy' way to do all that.
1. Don’t cut taxes 2. Invest in R&D to boost productivity 3. Build more houses
Are we underestimating the likelihood of a U turn on the "mini budget" ? It seems like the most probable political outcome, after which we just get a zombie government that stumbles on to the next election which it loses, badly.
How do they sell that, even if they were willing to take that path?
Sacking the Chancellor would seem a minimum for it to happen.
Ken Clarke got away with a forced U turn on VAT on fuel bills in 1994. But does KK want to U turn, even now?
Looks like he lost a commons vote and then ditched it. So that is a plausible path. Agree for Sunak to lead a mini rebellion, vote it down and it can be shelved "until the finances allow".
In the unlikely event that Truss was booted quickly and Sunak had a coronation it would surely be the closest we will ever get in politics to seeing an “alternative history” or sliding doors moment actually play out.
We would be able to see that the platform that Truss and the Mail pushed to get her elected didn’t work and the platform that Sunak pushed was stable (although he would be starting from a worse position).
Usually it’s years down the line where we ask “what would have happened if Milligan’s had won” or what if Beown had called a snap election.
Labour will sensibly only target Tory seats at the next election.
They're abandoning Scotland?
Or do you mean they're going to ignore the yellow taxi?
After much huffing and puffing, looking at diagrams and more misses than hits, SKS Labour has finally found the English clitoris (largely because the soon to be ex has lost their touch, but that’s by the by); I suggested that should have been the plan at least a couple of years ago. That’s just as well because judging by the whiny, angry rants re the SNP at the Lab conference this week, they’re as far away from locating the Scottish pleasure button as ever.
The basic problem is that the markets do not trust the Tories. Given how they have behaved over the last six years, that’s hardly a surprise. This is not about a lack of belief in the UK. It’s about a complete loss of faith in its government.
Comments
Still don't see how she can reverse the 45p debacle without sacking the chancellor, which would in turn destabilise her further
https://twitter.com/LHSummers/status/1574586690869641216
Up well over 1% pa in the last 3 days alone. That'll cost more in the long run than a lot of these tax cuts. That is an unprecedented size and speed of the increase in the cost of borrowing this century.
I said we we're potentially facing a sovereign debt crisis at the weekend. Well we're now one step closer after yesterday.
https://twitter.com/PaulBrandITV/status/1574646133884063744
I think she does, which means bye bye Kwasi.
Can she bring Rishi back as chancellor?
Only way for a (relatively) clean start.
Truss should stick to her guns, but she needs to cut taxes more on lower earners and ensure that tax thresholds rise.
A currency crisis in a reserve currency could well have global consequences. I am surprised that we have heard nothing from the IMF.
https://twitter.com/LHSummers/status/1574586705218256901
R&W found a 3% swing between the 21st and 25th.
Those are the only two polls so far that straddle the launch date of Kwarteng's Special Fiscal Operation. Clearly it's going down about as well as its Russian equivalent.
And I doubt whether either poll fully reflects the impact of the financial market meltdown and associated discussion of emergency interest rate and mortgage rate hikes of the last couple of days.
The conservatives need Sunak more than ever as either COE or PM
For the first time I have concluded Truss will not survive 2023
Will the party get rid of her? I don't think they can defy the membership like that.
Economists aren't the problem. The problem is the government wants to borrow extra billions and the market doesn't have confidence in Truss/Kwarteng and so will only lend at much higher real rates.
We're like a gambler saying it's not their decision to bet their house on black that is the problem, but it's the fault of the bank refusing to give a mortgage while the wheel is spinning.
What’s interesting is the banks are in no mood to compromise. No chance for the sponsor to put in more equity - they just took the keys on the first default and are selling the businesses without a restructuring
It must be also said that bond markets across the world are struggling with rising interest rates at attempts to reduce inflation generally
However this does not excuse Kwarteng/ Truss
If Kwasi becomes a problem for he she will certainly junk him.
Bravo.
If keeping Kwasi means rebellion, I think he is gone
The bond market losing faith in government and refusing to lend what they have asked for = the bank refusing to help finance the house that they just gambled with.
It's probably a bit of a rubbish analogy, but as someone who works in said bond market, unsurprisingly I had a very long day yesterday.
Have a bearable day today.
Dying at the early morning shade from @elenicourea https://twitter.com/estwebber/status/1574652817213734914/photo/1
We need as much wind as we can get so that on windy days we aren't using any gas and we can find good uses for any excess wind power generated.
As some lenders withdraw mortgages and the pound plummets: “This isn’t a serious chancellor, but there are serious consequences to the choices he made.”
https://twitter.com/REWearmouth/status/1574653525430345728
https://twitter.com/ExStrategist/status/1574651461232865280
ForgottenGenius
@ExStrategist
"My guess is that pound will find its way below parity with both the dollar and euro."
And 7% interest rates.
I suspect he is right...
I also think its the right thing to do.
"Why are his staff letting him walk out the front door when there are camera's all along the street?" one shadow minister asked?
That's easy everyone in the Treasury already hates and wants rid of him..,..
One former minister said: “The moment it becomes serious is when mortgage rates go up for homeowners. That’s a Rubicon-crossing moment. And if it happens before conference then it’ll dominate and you can’t predict how the party will respond. Her leadership was on an unstable platform and it’s becoming more unstable.”
One Tory strategist said that MPs were in a state of “deep unease” at how quickly the budget had unravelled, adding: “The general view when Liz won was, ‘We’ve got to make this work’. That has changed over the weekend. It’s now, ‘What do we do? This is a shit show.”
https://www.thetimes.co.uk/article/tories-fear-a-world-of-pain-if-housing-market-crashes-9x8shgvpd
The fact is that the Gini coefficient (measuring income inequality) went up massively in the early years of her government and never really went down again. That structural transformation has had long term consequences, good for some (including me), bad for many.
1. We begin with our new leader, Margarine Thatcher, who in only 3 weeks has become PM, finished off The Queen, taken 2 weeks away from work, ruined our relations with the US, crashed the economy, and started backbench rebellion to remove her from office
@RussInCheshire Margarine Thatcher or, as the Tory members who voted for her are starting to call her, I Can't Believe She's Not Better.
https://twitter.com/somersetbagpuss/status/1574449099583397889
1) she was party to all the decisions in the budget so needs to go down with it.
2) who in their right minds wants to be Chancellor and responsible for fixing this mess - it's something that is going to destroy your reputation not build it...
The only easy way out of this is for the Tories to bin Truss and Co immediately, bring someone sane in and remove any say members have in electing leaders...
A bank might even be tempted just to own them for a bit and try to get their money back that way.
If, on the other hand, either did cease trading, the UK supermarket would immediately be a shambles with just two major retailers and a few more medium sized ones dominating it. Sure, you would expect Aldi and Lidl to hoover up more market share, but it would have a nasty distorting effect.
About the only positive would be if these vulture fund owners went bankrupt themselves, but somehow I suspect they would find a way to avoid that.
Kwasi and Truss are tied together...
The bottom line is that they need a spell in opposition, but can we wait two years?
What a mess.
If he masks himself as a far-right Russian shill, what's his real character? A Ukrainian intelligence operative trying to make Putin's cheerleaders look like even bigger twats than they actually are?
If so he deserves a medal.
Somebody not in their right mind. Already hated and despised. Currently at the Department for Business, like she and Kwarteng were. A darling of the Tory right. Worked in the city.
But surely even She wouldn't. She couldn't. She mustn't...she might...
AAAAAAARGHHHHHHHHH!
If the Tory Party wants to nuke their credibility even further they will have yet another leadership election while the country slides into disaster.
They need to get through this crisis and try and assemble a narrative for a Truss government. That will be hard because she’s probably blown up her chances in the first three weeks, but changing leaders again too soon is not credible.
If Rishi was chancellor he would effectively be driving policy for the next 2 years
There are only terrible solutions. But the problems we have are just as bad if not worse, so we need to face up to some of them. If you have cancer, then you might think chemotherapy is unpleasant but still go through it anyway.
We need to find a way to eliminate our current account deficit, our fiscal deficit, grow the economy and get house prices back to say a 4x income multiple in London and a 3x income multiple in the rest of the country. There is no 'easy' way to do all that.
Does she want to be PM, or does she want to do batshit crazy things.
I think she wants to be PM
There are no shortage of batshit crazinesses in her past even in jobs she was clearly mad keen on. Maths GCSE. Australia trade deal. Cheese speech. Rostov on Don.
The fact some critics act like it is, is a battle that needs to be won.
Or do you mean they're going to ignore the yellow taxi?
So what is his message in attracting fair-minded people to join his ranks. Only "I am not a Conservative" - and because that is the same message as a lot of other parties, it is at the end of the day, a very weak one - nothing positive about it.
I do not trust Labour. They have made half-promises, but turned their back on progressive policies (such as PR) time after time. Apart from that, they are at the highest levels, as authoritarian as the Tories.
If we want to give power to the people, we have to go with PR and the Lib Dems.
45p is Liz Truss’s Poll-Tax. She can spend a few weeks burning up the rest of her government’s political capital trying to defend it. Or she can ditch it, and start to rebuild her economic strategy. Those are the options. Because this policy is politically indefensible.
I am not sure he is right.
They already laid out their political defence. "We will do unpopular things. This is really unpopular. Must be working..."
The only way it can be reversed is if it is done by someone who isn't Kwasi
W/@e_casalicchio
https://www.politico.eu/article/liz-truss-honeymoon-canceled-as-pound-plummets-and-uk-borrowing-costs-soar/
Sacking the Chancellor would seem a minimum for it to happen.
But we will have a deep recession, currency crisis, energy crisis, debt crisis sharp drops in standard of living for half the country, and an overdue house price crash all happening in the next year.
And fail to even start tackling the lack of investment or coherent economic strategy that is holding us back (not from being gloriously great again, but from being that boring bit incrementally better each year, which over a generation or two makes a significant difference).
I think that a cut in the 45% rate of tax could work, in that it would lead to proportionately more growth through investment; but it has to be properly funded. But this is a catastrophic failure of economic and political management associated with the manner of an announcement, rather than an academic debate about tax levels.
本日、安倍晋三元首相の卓越した生涯を偲び、日本の皆さまと思いを同じくしています。
安倍元首相の長年にわたる英国との温かい友情は、今日の日英両国の緊密な友好関係の中に、永遠の遺産として残ります。
https://twitter.com/trussliz/status/1574661522751918080
2. Invest in R&D to boost productivity
3. Build more houses
We would be able to see that the platform that Truss and the Mail pushed to get her elected didn’t work and the platform that Sunak pushed was stable (although he would be starting from a worse position).
Usually it’s years down the line where we ask “what would have happened if Milligan’s had won” or what if Beown had called a snap election.
We all know her and Kwateng are tied at the hip in terms of policy. She must have signed off the budget despite all the warnings.
She’s entered the job acting like she was the one winning an 80 seat majority.