You should all be chilled like me, sitting next to a fire, feet up, while Husband and Daughter cook dinner.
That definitely sounds like a plan, but I am on the wagon for a while. At a friend's a few days ago and I had too much wine, so I am off it for the rest of the month.
I have a meal out on Thursday, so I might give in to temptation
I did not mention wine .....
It was the "chilled". That read subliminally as wine.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from the supposed experience of "Labour chaos", represented by going to the IMF, and disorder.
Chaos with Ed Miliband, or four Tory PM's in six years and going to the International Monetary Fund ?
I wish I could quite get my head around yields on gilts. I get that as the price of a gilt drops the yield goes up, but I don't see why that means it costs the government more to have the debt.
Surely these yields are on existing gilts that have already been bought from the government and that the government will pay the coupon % on every six months or annually and that coupon remains the same???
Yes. The point is that new gilt issuance will have to reflect those higher yields, so will be issued with higher coupons. Over time debt servicing costs go up.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from this experience of "Labour chaos" and disorder.
Chaos with Ed Miliband, or going to the I.M.F. ?
The IMF do not choose to intervene. They have to be asked.
PS(edit). And then they can choose not to
They are asked and then choose which way to intervene, or not at all, but sometimes are forced to intervene in particular ways by the vagaries of international systemic pressure.
Britain is already being considered a systemic financial problem in Wahington and Europe.
Please forgive me, but I don't think what you're saying is true.
On which point - about the IMF, or what the US snd Europe think ?
There will be posters here who will remember more about the IMF's precise modus operandi than me, but I don't think it's contentious to say that Washington and Europe are considering Britain a major potential systemic problem at the moment - there's been plentiful reporting of that.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
No he isn't. He and I have had our disagreements but he is in reality a very nice person.
I've never seen him be nice to anyone. This says a lot about your judge of character that you consider a bully to be nice. I've seen him people like him pick on my friends all my life, they are not nice. They're bullies. That is what they are.
So you have sadly gone down in my estimation a lot, I am afraid to say.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
China?
I guess: America
Sincerely
Why would Russia cut off a potential choke point and lose leverage?
Labour are on record agreeing with about £16 billion of that.
But it is much easier for them to walk away from it. This way, they give the Tories no target to shoot at.
True. I wonder how much of the market reaction is about Kwarteng not getting an OBR report. It was a bit Boris, that move.
The danger of asking for such a report is it might say (in summary) "Do NOT do this. It will wreck markets". If they then went ahead and did it after such a report then they are doomed.
Far better to do it, claim surprise, and then offer to modify it
What I still have not heard any good answer for, is if we were going to do big tax cuts in April that would massively increase our cost of borrowing is why on earth announce it now?
Announce it in April, we would have had another 7 months of lower interest rate costs during which we could also have quietly put as much as we could get away with onto long term fixes.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
Yes, comrade. And that suspect is Russia.
Why would they do it? (Taking a list from here and elsewhere):
*) They know Germany and most of Europe is not going to go back to gas. *) Damage may be repairable. And if not, Europe is moving away from gas anyway. *) It sends a message - they can go after other pipelines or comms cables. This will be a *major* worry to the west. *) It is a deniable escalation. *) It may get Gazprom off some significant costs.
I also wonder if production is an issue: Russia were flaring off millions of dollars worth of gas a day, and with gas prices falling and few other markets, it may be cheaper to just mothball most of the extraction kit - kit which they will be finding hard to maintain under sanctions. And if production is cut, why keep the pipeline?
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Three airline industry bosses have criticised the government today. ✈️ Virgin’s Shai Weiss: govt should ‘reverse course’ ✈️ Willie Walsh: ‘I am not sure all these policies were thought through’ ✈️ Michael O’Leary: Budget has ‘poured petrol on a bonfire’ https://www.ft.com/content/9bd2e7e6-5bae-425d-be24-7a7b95b263fb
Nobody going on foreign holidays is it?
More years of staycations it is then.
Except staycations will be priced out because the UK will be cheaper for foreigners so demand
will be sky high (with sky high prices to match)
Staycation means a holiday in one’s own home.
Do you mean domestic holidays?
I might have to add staycation to mean UK holidays to the list!!
While I agree 100%, sadly the battle has been lost. Once the media, grabbed hold of the concept that a holiday could be in the U.K. (the horror!), that was it. I preferred the original idea of staying at home and having day trips out.
You should all be chilled like me, sitting next to a fire, feet up, while Husband and Daughter cook dinner.
That definitely sounds like a plan, but I am on the wagon for a while. At a friend's a few days ago and I had too much wine, so I am off it for the rest of the month.
I have a meal out on Thursday, so I might give in to temptation
I did not mention wine .....
It was the "chilled". That read subliminally as wine.
I drink barely at all. I am invariably the designated driver.
I chill by retreating into quiet and my imagination, either outside when gardening or inside when dark. Alcohol rarely adds anything to that.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from this experience of "Labour chaos" and disorder.
Chaos with Ed Miliband, or going to the I.M.F. ?
The IMF do not choose to intervene. They have to be asked.
PS(edit). And then they can choose not to
They are asked and then choose which way to intervene, or not at all, but sometimes are forced to intervene in particular ways by the vagaries of international systemic pressure.
Britain is already being considered a systemic financial problem in Wahington and Europe.
Please forgive me, but I don't think what you're saying is true.
On which point - about the IMF, or what the US snd Europe think ?
There will be posters here who will remember more about the IMF's precise modus operandi than me, but I don't think it's contentious to say that Washington and Europe are considering Britain a major potential systemic problem, at the moment - there's been plentiful reporting of that.
Care to elucidate why we are a systemic risk? Is it the currency instability, or the potential race to the bottom in CT? Am attempting to educate myself.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
Russia has reconnoitered cables and similar infrastructure with submarines. There were even rumours of Russia planting remotely-controlled mines. This is absolutely something Russia has been preparing for. In fact Russia has been investing heavily in special-mission submarines and AUVs for general "fucking around" purposes.
Three airline industry bosses have criticised the government today. ✈️ Virgin’s Shai Weiss: govt should ‘reverse course’ ✈️ Willie Walsh: ‘I am not sure all these policies were thought through’ ✈️ Michael O’Leary: Budget has ‘poured petrol on a bonfire’ https://www.ft.com/content/9bd2e7e6-5bae-425d-be24-7a7b95b263fb
Nobody going on foreign holidays is it?
More years of staycations it is then.
Except staycations will be priced out because the UK will be cheaper for foreigners so demand
will be sky high (with sky high prices to match)
Staycation means a holiday in one’s own home.
Do you mean domestic holidays?
I might have to add staycation to mean UK holidays to the list!!
While I agree 100%, sadly the battle has been lost. Once the media, grabbed hold of the concept that a holiday could be in the U.K. (the horror!), that was it. I preferred the original idea of staying at home and having day trips out.
If I go to the Cotswolds hotel for a long weekend
with the missus is that now a staycation?
No, mini break.
Arguably that’s even worse.
Actually it’s not. But it’s fairly close.
Is a mini-break like a mini-budget i.e. a total clusterf*ck?
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
China?
I guess: America
Sincerely
Why would Russia cut off a potential choke point and lose leverage?
That "leverage" boat has sailed. Europe aint going back to Russia for gas.
Three airline industry bosses have criticised the government today. ✈️ Virgin’s Shai Weiss: govt should ‘reverse course’ ✈️ Willie Walsh: ‘I am not sure all these policies were thought through’ ✈️ Michael O’Leary: Budget has ‘poured petrol on a bonfire’ https://www.ft.com/content/9bd2e7e6-5bae-425d-be24-7a7b95b263fb
Nobody going on foreign holidays is it?
More years of staycations it is then.
Except staycations will be priced out because the UK will be cheaper for foreigners so demand
will be sky high (with sky high prices to match)
Staycation means a holiday in one’s own home.
Do you mean domestic holidays?
I might have to add staycation to mean UK holidays to the list!!
While I agree 100%, sadly the battle has been lost. Once the media, grabbed hold of the concept that a holiday could be in the U.K. (the horror!), that was it. I preferred the original idea of staying at home and having day trips out.
If I go to the Cotswolds hotel for a long weekend with the missus is that now a staycation?
The general mood here outspired me to try a new word. It is TRUMPRUSS, as in "that's a Trumpruss of a haemorrhoid". It seems to have confused the spell checker no end.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
No he isn't. He and I have had our disagreements but he is in reality a very nice person.
I've never seen him be nice to anyone. This says a lot about your judge of character that you consider a bully to be nice. I've seen him people like him pick on my friends all my life, they are not nice. They're bullies. That is what they are.
So you have sadly gone down in my estimation a lot, I am afraid to say.
Now I'm off to the pub, sadly lost at mini golf.
I am sure you will survive. Remember what yoou write and dont be surprised if people react badly as I have.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from the supposed experience of "Labour chaos", represented by going to the IMF, and disorder.
Chaos with Ed Miliband, or four Tory PM's in six years and going to the International Monetary Fund ?
I wish I could quite get my head around yields on gilts. I get that as the price of a gilt drops the yield goes up, but I don't see why that means it costs the government more to have the debt.
Surely these yields are on existing gilts that have already been bought from the government and that the government will pay the coupon % on every six months or annually and that coupon remains the same???
Yes. The point is that new gilt issuance will have to reflect those higher yields, so will be issued with higher coupons. Over time debt servicing costs go up.
Ah, thanks. So when commentators make sweeping comments to the effect that "this will cost the government to service its debts" or some such they are talking about future debt and of course reissuing debt after the time has elapsed on dated gilts. The only way it will cost more for existing debt is if the gilts are indexed???
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
In most cases it's PP. You can drop one after a year ISTR. And economics is considered the difficult one. What with graphs and numbers and stuff. So many have only a term of it.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from this experience of "Labour chaos" and disorder.
Chaos with Ed Miliband, or going to the I.M.F. ?
The IMF do not choose to intervene. They have to be asked.
PS(edit). And then they can choose not to
They are asked and then choose which way to intervene, or not at all, but sometimes are forced to intervene in particular ways by the vagaries of international systemic pressure.
Britain is already being considered a systemic financial problem in Wahington and Europe.
Please forgive me, but I don't think what you're saying is true.
On which point - about the IMF, or what the US snd Europe think ?
There will be posters here who will remember more about the IMF's precise modus operandi than me, but I don't think it's contentious to say that Washington and Europe are considering Britain a major potential systemic problem, at the moment - there's been plentiful reporting of that.
The IMF did help the UK in the past. It's well documented.
There is some risk that the UK will fail to meet it's debts. There is some risk that any major nation might do so. The UK is in no unusual position in this.
The idea that the UK is now seen a special risk (beyond what it always has been) is poppycock.
Faisal Islam @faisalislam · 30m 🚨 IMF says in statement “We are closely monitoring recent economic developments in the UK and are engaged with the authorities.”
Translation: We have no idea what the feck this new lot are doing but it is bad.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
What I don't get is this. Most of the Cabinet made their money in the City. Surely they ought to have had an inkling of how markets would react?
Lots of people make lots of money in the city without knowing much. Either through connections, a fake it til you make it approach, or a clear understanding of how to bet with other peoples money and get well rewarded if it pays off.
Three airline industry bosses have criticised the government today. ✈️ Virgin’s Shai Weiss: govt should ‘reverse course’ ✈️ Willie Walsh: ‘I am not sure all these policies were thought through’ ✈️ Michael O’Leary: Budget has ‘poured petrol on a bonfire’ https://www.ft.com/content/9bd2e7e6-5bae-425d-be24-7a7b95b263fb
Nobody going on foreign holidays is it?
More years of staycations it is then.
Except staycations will be priced out because the UK will be cheaper for foreigners so demand
will be sky high (with sky high prices to match)
Staycation means a holiday in one’s own home.
Do you mean domestic holidays?
I might have to add staycation to mean UK holidays to the list!!
While I agree 100%, sadly the battle has been lost. Once the media, grabbed hold of the concept that a holiday could be in the U.K. (the horror!), that was it. I preferred the original idea of staying at home and having day trips out.
If I go to the Cotswolds hotel for a long weekend
with the missus is that now a staycation?
No, mini break.
Arguably that’s even worse.
Actually it’s not. But it’s fairly close.
Is a mini-break like a mini-budget i.e. a total clusterf*ck?
You should all be chilled like me, sitting next to a fire, feet up, while Husband and Daughter cook dinner.
That definitely sounds like a plan, but I am on the wagon for a while. At a friend's a few days ago and I had too much wine, so I am off it for the rest of the month.
I have a meal out on Thursday, so I might give in to temptation
I did not mention wine .....
It was the "chilled". That read subliminally as wine.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
They’re only 50m down aren’t they? A fairly trivial dive for someone experienced.
It’s not impossible that this was a Ukranian operation. Or maybe the Poles? They really have it in for the Russians & the pipeline breaks are close enough to the Polish coast.
Labour are on record agreeing with about £16 billion of that.
But it is much easier for them to walk away from it. This way, they give the Tories no target to shoot at.
I just had magnificent lamb leg steak, with cavolo nero flash fried with garlic and chili flakes, and M&S goosefat roast potatoes, washed down with Chateau de Bergey Fronsac 2019, an old skool Merlot and quite the bargain at £14, I'd say
Jealous. I am on Co-op Moldovan Merlot at £5.25. It ain't much, but it ain't bad.
Covid anosmia, or something close to it, means that wine either tastes like alcoholic fruit juice (OK) or vinegar (not OK). On the upside, there’s no point in expensive wine anymore.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
What I don't get is this. Most of the Cabinet made their money in the City. Surely they ought to have had an inkling of how markets would react?
Lots of people make lots of money in the city without knowing much. Either through connections, a fake it til you make it approach, or a clear understanding of how to bet with other peoples money and get well rewarded if it pays off.
damning indictment of the City but true...i know a guy whos a multi millionaire who ran his fund into the ground
"For many in the civil service and for the unions representing all government workers, Truss has signalled what could be a fundamental change -- favouring partisan advice over a dispassionate assessment of policy decisions."
Thinking of sensory pleasure the two which just sprung to mind are the deep uniquely savoury taste when biting into some Irish soda bread in a Dublin tearoom, and the powerful scent of wild garlic as I cycled over a rill in Yorkshire.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
What I don't get is this. Most of the Cabinet made their money in the City. Surely they ought to have had an inkling of how markets would react?
Lots of people make lots of money in the city without knowing much. Either through connections, a fake it til you make it approach, or a clear understanding of how to bet with other peoples money and get well rewarded if it pays off.
Yeah. I get that. Most professions work in the same way. (Without the gambling with others' money bit). Many teachers are successful because they act and behave like, and believe themselves to be good teachers. Rather than knowing particularly much. But they do know how others in the same line of work might think and act. This lot apparently don't.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
In most cases it's PP. You can drop one after a year ISTR. And economics is considered the difficult one. What with graphs and numbers and stuff. So many have only a term of it.
why has only one non graduate PM since 1945 (gordon brown) not been to oxford....somethings badly wrong...
So - what's the betting Truss u-turns on the 45%??
She has huge form on u-turn on bonkers, rushed out ideas as we saw during the membership election not that the members noticed or seemed to care.
It will be reversed by this government I think, but not necessarily by her. I’m usually very sceptical about stuff happening, but she has made such an appalling start I’m not entirely closed to the idea that she might be defenestrated.
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Is that you Liz?
Plainly it's too much to hope for that a remainer has a shred of appreciation for how utterly out of order it is for a series of figures from international bodies to seek to intervene in the domestic policies of the elected UK Government. If someone from the IMF kicked you in the face you'd send them a letter of thanks.
Labour are on record agreeing with about £16 billion of that.
But it is much easier for them to walk away from it. This way, they give the Tories no target to shoot at.
True. I wonder how much of the market reaction is about Kwarteng not getting an OBR report. It was a bit Boris, that move.
The danger of asking for such a report is it might say (in summary) "Do NOT do this. It will wreck markets". If they then went ahead and did it after such a report then they are doomed.
Far better to do it, claim surprise, and then offer to modify it
What I still have not heard any good answer for, is if we were going to do big tax cuts in April that would massively increase our cost of borrowing is why on earth announce it now?
Announce it in April, we would have had another 7 months of lower interest rate costs during which we could also have quietly put as much as we could get away with onto long term fixes.
Bonkers.
I do not think that anyone has an answer that makes any sense. No one wants to think that a pack dolts have their hands on the levers of power, but that might very well be the case.
"For many in the civil service and for the unions representing all government workers, Truss has signalled what could be a fundamental change -- favouring partisan advice over a dispassionate assessment of policy decisions."
She can't get rid of them fast enough as far as I'm concerned.
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Is that you Liz?
Plainly it's too much to hope for that a remainer has a shred of appreciation for how utterly out of order it is for a series of figures from international bodies to seek to intervene in the domestic policies of the elected UK Government. If someone from the IMF kicked you in the face you'd send them a letter of thanks.
Will you be saying that when the UK goes cap in hand for an IMF loan?
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
What I don't get is this. Most of the Cabinet made their money in the City. Surely they ought to have had an inkling of how markets would react?
Lots of people make lots of money in the city without knowing much. Either through connections, a fake it til you make it approach, or a clear understanding of how to bet with other peoples money and get well rewarded if it pays off.
damning indictment of the City but true...i know a guy whos a multi millionaire who ran his fund into the ground
Damning? I thought I was being quite generous......
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
They’re only 50m down aren’t they? A fairly trivial dive for someone experienced.
It’s not impossible that this was a Ukranian operation. Or maybe the Poles? They really have it in for the Russians & the pipeline breaks are close enough to the Polish coast.
ive just read pravda and the russians are understandably blaming the americans
That IMF intervention is quite..err.. clear for Truss and Kwasi.
Quite embarrassing really
They would have said the same thing if it was a Labour government - it’s Mouthy Martin Lewis dumbass bills freeze they are referring too.
UK should not be freezing the energy bills, it’s hugely regressive policy and will create huge inequality in UK over the coming years. Lib Dems, Labour and the Tory’s have all gone quiet about the great freeze salvation plan, becuase they all now know they were fools to have backed it, that’s why, foolishly all are responsible for this mad policy going ahead.
The alternative options of targeting help at most need without borrowing eye watering sums simply to hand out to so many who just didn’t need it should have happened instead.
Think of how much the freeze plan will cost £220B thru life or even more, and think how those borrowing costs are going up by the day - think how it doesn’t give nearly as much to the most desperate - think of how much of that borrowed money goes to who don’t need the hand out at all. Madness. Lazy lazy mad bad politics.
There were better options - what a huge cock up by UK to go with this. And they all would have done it - Labour and Lib dems too if in power.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
What I don't get is this. Most of the Cabinet made their money in the City. Surely they ought to have had an inkling of how markets would react?
Lots of people make lots of money in the city without knowing much. Either through connections, a fake it til you make it approach, or a clear understanding of how to bet with other peoples money and get well rewarded if it pays off.
damning indictment of the City but true...i know a guy whos a multi millionaire who ran his fund into the ground
I'm pretty sure I read at the weekend that there was a new quad group of the Cabinet that was basically running the economics and it was Truss, Karwsi, whoever is Levelling-down minister and then it was going to be Mogg, but after the first meeting they told him to piss-off.
I wonder if it was because he actually said: "don't do this, my old mates in Mayfair will blow you to bits".
He may live in the 18th century but he is not totally brain dead.
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Is that you Liz?
Plainly it's too much to hope for that a remainer has a shred of appreciation for how utterly out of order it is for a series of figures from international bodies to seek to intervene in the domestic policies of the elected UK Government. If someone from the IMF kicked you in the face you'd send them a letter of thanks.
Will you be saying that when the UK goes cap in hand for an IMF loan?
It must be terrible to be so full of craven self-loathing.
You should all be chilled like me, sitting next to a fire, feet up, while Husband and Daughter cook dinner.
That definitely sounds like a plan, but I am on the wagon for a while. At a friend's a few days ago and I had too much wine, so I am off it for the rest of the month.
I have a meal out on Thursday, so I might give in to temptation
I did not mention wine .....
It was the "chilled". That read subliminally as wine.
I drink barely at all. I am invariably the designated driver.
I chill by retreating into quiet and my imagination, either outside when gardening or inside when dark. Alcohol rarely adds anything to that.
Ah ok. V good and hats off. For some reason - that I struggle to articulate - I had you down as stiff G and T plus at least one glass of vino with dinner. I have an uneasy relationship with alcohol myself. Learnt to modulate it now.
I'm pretty sure I read at the weekend that there was a new quad group of the Cabinet that was basically running the economics and it was Truss, Karwsi, whoever is Levelling-down minister and then it was going to be Mogg, but after the first meeting they told him to piss-off.
There was a story that said the new quad had 5 people in it, which explains a lot about Kwasi's grasp of numbers...
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
Who do you reckon?
There are very few powers with the ability to do this - as you clearly recognise.
I don't think it was Russia either. The Portovaya compressor station near Vyborg was also probably sabotaged.
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
Yes, comrade. And that suspect is Russia.
Why would they do it? (Taking a list from here and elsewhere):
*) They know Germany and most of Europe is not going to go back to gas. *) Damage may be repairable. And if not, Europe is moving away from gas anyway. *) It sends a message - they can go after other pipelines or comms cables. This will be a *major* worry to the west. *) It is a deniable escalation. *) It may get Gazprom off some significant costs.
I also wonder if production is an issue: Russia were flaring off millions of dollars worth of gas a day, and with gas prices falling and few other markets, it may be cheaper to just mothball most of the extraction kit - kit which they will be finding hard to maintain under sanctions. And if production is cut, why keep the pipeline?
Am looking at your list of possible reasons why Russia might have done it. Can't see that 1,2,4 are even reasons. 3? Wouldn't they be telling the intended message recipient, i.e. presumably US and its satellites in NATO, what they already knew anyway? As for 5 - what costs? Why not just let the pipeline crumble?
Labour are on record agreeing with about £16 billion of that.
But it is much easier for them to walk away from it. This way, they give the Tories no target to shoot at.
I just had magnificent lamb leg steak, with cavolo nero flash fried with garlic and chili flakes, and M&S goosefat roast potatoes, washed down with Chateau de Bergey Fronsac 2019, an old skool Merlot and quite the bargain at £14, I'd say
Jealous. I am on Co-op Moldovan Merlot at £5.25. It ain't much, but it ain't bad.
Covid anosmia, or something close to it, means that wine either tastes like alcoholic fruit juice (OK) or vinegar (not OK). On the upside, there’s no point in expensive wine anymore.
You have that?!
You have my very real sympathies. I had it for just three days and it seriously dented my life. Food, wine, coffee, flowers, travel, sex, whatever, all vastly diminished
I now cannot imagine a life without a sense of smell, and shudder at the thought. And then you have the risk of parosmia, when everything smells of sewage and rotting cabbage
Faisal Islam @faisalislam · 30m 🚨 IMF says in statement “We are closely monitoring recent economic developments in the UK and are engaged with the authorities.”
Translation: We have no idea what the feck this new lot are doing but it is bad.
“Senior gov't officials warned the PM and the Chancellor that [the Budget] would trigger market volatility and cause a shock to the economy. Officials who advised against Friday’s plans included civil servants in the Treasury and Downing Street, as well as Simon Case.”
Ray Dalio @RayDalio · 3h The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
What I don't get is this. Most of the Cabinet made their money in the City. Surely they ought to have had an inkling of how markets would react?
Lots of people make lots of money in the city without knowing much. Either through connections, a fake it til you make it approach, or a clear understanding of how to bet with other peoples money and get well rewarded if it pays off.
damning indictment of the City but true...i know a guy whos a multi millionaire who ran his fund into the ground
I'm pretty sure I read at the weekend that there was a new quad group of the Cabinet that was basically running the economics and it was Truss, Karwsi, whoever is Levelling-down minister and then it was going to be Mogg, but after the first meeting they told him to piss-off.
I wonder if it was because he actually said: "don't do this, my old mates in Mayfair will blow you to bits".
He may live in the 18th century but he is not totally brain dead.
Or perhaps JRM was calling up all his city mates to sell sterling. Not that the Chancellor would be objecting, of course, but perhaps wanted his own mates to get the call first.....
So - what's the betting Truss u-turns on the 45%??
She has huge form on u-turn on bonkers, rushed out ideas as we saw during the membership election not that the members noticed or seemed to care.
The money regained is a relatively modest amount, so not a big enough remedy.
The problem is the borrowing for tax cuts on the basis of theoretical growth without any OBR statement.
Regained confidence requires over-reaction, and convincing the markets that there won't be repetition. I just can't see that happening.
Aren't there two problems here?
The 45 percent tax thing is politically toxic, but a relatively small part of Kwasi's enormous package. Ditching it would help with selling the package to Mr and Mrs Voter, but there would still be an enormous injection of cash which I bet the financial markets still wouldn't like.
Labour are on record agreeing with about £16 billion of that.
But it is much easier for them to walk away from it. This way, they give the Tories no target to shoot at.
I just had magnificent lamb leg steak, with cavolo nero flash fried with garlic and chili flakes, and M&S goosefat roast potatoes, washed down with Chateau de Bergey Fronsac 2019, an old skool Merlot and quite the bargain at £14, I'd say
Jealous. I am on Co-op Moldovan Merlot at £5.25. It ain't much, but it ain't bad.
Covid anosmia, or something close to it, means that wine either tastes like alcoholic fruit juice (OK) or vinegar (not OK). On the upside, there’s no point in expensive wine anymore.
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Fine progressive fellows, the IMF. (Duh, am I really writing that??)
If you find it pleasing that un-elected supranational bodies feel that they can overrule elected national Governments by Tweet, simply because in this instance, you like the cut of their socialistic gib, then yes, I suppose you are.
Posen (a former member of the Bank of England Monetary Policy Committee):
"I believe that the Bank of England should be making it clear that the government's reckless budgetary statement is having consequences that will surely require higher interest rates. The Bank can do so by making clear the program's implications for the UK economy and thus for what the Bank will do with interest rates."
"...the Truss-Kwarteng fiscal policy package has taken the UK policy regime right back to 1974, bringing pound weakness front and center. The years that followed were the nadir of British postwar economic performance and awful for the British people."
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Fine progressive fellows, the IMF. (Duh, am I really writing that??)
If you find it pleasing that un-elected supranational bodies feel that they can overrule elected national Governments by Tweet, simply because in this instance, you like the cut of their socialistic gib, then yes, I suppose you are.
Fuck these people.
I hope the budget is full of tax cuts.
Just so you and your chums can wreck the polity. It's not even as if you will be better off from the tax cuts, given the decrease in the value of the pound sterling.
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Absolutely
There seems to be a new upper middle class of western people who believe they have a right to opine, indeed overtly intervene, in the doings of freely elected democratic governments, when these people themselves - this self appointed clerisy - have absolutely no democratic remit at all
Cf Ursula von der Leyen and the Italian elections
Fuck them all. And all the UK charities likewise. Butt the fuck out, you stupid Guardianista twats
The irony is, of course, that they generally drive events in the opposite way to which they intend. As with Brexit
The pipe sabotage is extraordinary. I don't see how Russia destroys its own means of leverage with Europe. I don't see how Ukraine has the capability - or would be able to act without American sponsorship. That seems to leave only one suspect.
Who do you reckon?
There are very few powers with the ability to do this - as you clearly recognise.
USA obviously. Biden threatened to do it.
Though you have to assume if it's them they have at least tried to cover their tracks and frame someone else up.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from the supposed experience of "Labour chaos", represented by going to the IMF, and disorder.
Chaos with Ed Miliband, or four Tory PM's in six years and going to the International Monetary Fund ?
I wish I could quite get my head around yields on gilts. I get that as the price of a gilt drops the yield goes up, but I don't see why that means it costs the government more to have the debt.
Surely these yields are on existing gilts that have already been bought from the government and that the government will pay the coupon % on every six months or annually and that coupon remains the same???
They have to borrow more - a lot more - and they have to refinance shorter dated debt as it is redeemed.
Also there’s a load of index linked issued, and dividends go up with inflation.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from the supposed experience of "Labour chaos", represented by going to the IMF, and disorder.
Chaos with Ed Miliband, or four Tory PM's in six years and going to the International Monetary Fund ?
I wish I could quite get my head around yields on gilts. I get that as the price of a gilt drops the yield goes up, but I don't see why that means it costs the government more to have the debt.
Surely these yields are on existing gilts that have already been bought from the government and that the government will pay the coupon % on every six months or annually and that coupon remains the same???
The bonds are being issued all the time - the price of existing gilts will be the price of the next one sold. And that may be much less than the nominal value of the bond if inflation is going to erode the value of the bond when it is redeemed.
I'm pretty sure I read at the weekend that there was a new quad group of the Cabinet that was basically running the economics and it was Truss, Karwsi, whoever is Levelling-down minister and then it was going to be Mogg, but after the first meeting they told him to piss-off.
There was a story that said the new quad had 5 people in it, which explains a lot about Kwasi's grasp of numbers...
Easy to confuse a quad (as in babies) and a quad (as in Oxbridge).
Here’s the full, critical IMF statement released tonight about the UK. “We do not recommend” big fiscal moves. Nov23 Budget a chance to “reevaluate” (ie change) the big tax cuts just announced. Yikes. https://twitter.com/benrileysmith/status/1 574852489433825280/photo/1
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
So - what's the betting Truss u-turns on the 45%??
She has huge form on u-turn on bonkers, rushed out ideas as we saw during the membership election not that the members noticed or seemed to care.
The crazy thing in that the 45% think is only £2bn but people are making out like its the end of the world. Which is remarkable considering the sums thrown about on other things in recent years.
£38bn pre-announced for reversing NI and CT changes, £60bn or so on Furlough, £150bn estimate for energy support, many hundreds of billions on Covid overall. They've been bandying tens and hundreds of billions around for years now all without much of a tremor, but just £2bn on the 45% change and its hysteria and meltdown apparently.
It reminds me a bit of this scene with the Joker in the Dark Knight. His facial tics and gestures during the scene even seem similar to Kwasi's in that infamous clip of him at the funeral.
https://www.youtube.com/watch?v=Wkn7lO-nZGU I just did what I do best. I took your little plan and I turned it on itself. Look what I did to this market with a few billion pounds and a couple of bullet points. Hmmm? You know... You know what I've noticed? Nobody panics when things go "according to plan." Even if the plan is horrifying! If, tomorrow, I tell the press that, like, tens of billions will go on furlough, or hundreds of billions in energy prices will be blown up, nobody panics, because it's all "part of the plan". But when I say that one little old tax will be cut, well then everyone loses their minds. Introduce a little anarchy. Upset the established order, and everything becomes chaos. I'm an agent of chaos.
Here’s the full, critical IMF statement released tonight about the UK. “We do not recommend” big fiscal moves. Nov23 Budget a chance to “reevaluate” (ie change) the big tax cuts just announced. Yikes. https://twitter.com/benrileysmith/status/1 574852489433825280/photo/1
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
You ok, hun?
I am perfectly fine - I'm having a normal reaction to foreign citizens who nobody here (or anywhere) elected trying to strike down the budget of the elected Government in my country. As it happens I think the budget is fairly flat-footed and uninspiring - it wouldn't have been my choice. But I'm damned if I am not supporting it against this background. These people are bad and dangerous for democracy, and need to be faced down.
The surge in #gilt yields is a much bigger threat to the UK economy than the fall in the #pound (though the two are related). Sentiment needs to turn quickly to prevent lasting damage.
As mentioned, if it doesn't, and international bodies like the IMF are forced to intervene, the modern Tory brand will be over, possibly even presaging a new party or parties. The entire modern Tory mindset , and press support, has been built on distinction from the supposed experience of "Labour chaos", represented by going to the IMF, and disorder.
Chaos with Ed Miliband, or four Tory PM's in six years and going to the International Monetary Fund ?
I wish I could quite get my head around yields on gilts. I get that as the price of a gilt drops the yield goes up, but I don't see why that means it costs the government more to have the debt.
Surely these yields are on existing gilts that have already been bought from the government and that the government will pay the coupon % on every six months or annually and that coupon remains the same???
They have to borrow more - a lot more - and they have to refinance shorter dated debt as it is redeemed.
Also there’s a load of index linked issued, and dividends go up with inflation.
The government could have chosen to fix at the historically low rates over the last decade. Bizarre that they have not. Even more bizarre that they did not move to fix more ahead of these announcements.
So, more questions: 1. Are you surprised by the reaction in financial markets? Why do you think they disagree with you?
2. You are not going to get any demand stimulus from this. The money you give to rich people will be clawed back from the pain caused by raising mortgage rates on those in the middle. Where is the benefit for the economy?
3. The IMF have weighed in and are concerned about the brewing financial crisis in the UK. Are you not embarrassed?
4. Why are you publishing a 'medium term' plan in November. Didn't you think this through fully already before announcing it? Why can't we see the plan now?
5. Why are you meeting the BoE governor so often - every day?! Why don't you let officials coordinate with each other. This is just cosplay and theatre isn't it? You want to pretend to take over the steering wheel without actually interfering formally.
6. We hear mortgage providers are withdrawing new mortgages until they figure out the much higher rate people will be able to fix at. So house purchases are falling through and prices will drop. Why are they having to go through is? What purpose does it serve?
7. Economists seen as close to you are now out treading the boards discussing how the real agenda is going to have to be to reduce spending to match lower taxes. Is that the real agenda? Which kinds of spending do you want to cut?
8. Isn't this the most calamatous political error? You have crashed the pound, forced interest rates up, all to give tax cuts to very high earners that one day will have to be paid for. The measures themselves are unpopular and the polls have turned against you.
9. The rate the government has to pay on borrowing has shot up. That alone is going to cost billions isn't it? That's just pure waste you have introduced because people are frightened you don't know what you are doing. How do you respond to that?
Fuck them and their pathetic opining on whether the UK's tax changes will result in 'inequality' - Mind your own fucking business.
Is that you Liz?
Plainly it's too much to hope for that a remainer has a shred of appreciation for how utterly out of order it is for a series of figures from international bodies to seek to intervene in the domestic policies of the elected UK Government. If someone from the IMF kicked you in the face you'd send them a letter of thanks.
Will you be saying that when the UK goes cap in hand for an IMF loan?
It must be terrible to be so full of craven self-loathing.
It’s not the package of tax cuts and push for growth in particular Lucky - it’s the amount of borrowing to freeze the energy market that has no costings done for it but involves vast swathes of all that borrowed money handed out to so many who don’t need hand out.
I’m putting you in charge at the IMF Lucky with task to comment on what UK is borrowing for the freeze, and how they will be using the incredible amount of borrowed money - let’s be honest you would come out with exactly the same comment? Why? Becuase you don’t have to be paid by the IMF to say it, you can see for yourself right now that it’s quite simply the wrong bonkers route to have gone down.
UK politics and the world outside is now waking up to the stupid thing the UK has done here with such massive borrowing for unnecessary hand outs to so many who don’t need it. The up to 45B of welcome with a few controversial tax cuts is mere fluff round the edges easily brushed off - the UKs mistake to borrow so much to freeze its energy market is so big it can tip the whole world into recession.
Comments
One of our nobler traditions
BUT FUCK OFF YOU ASPIE REMOANER SCUM I'M NOT PEELING MY OWN ROAST POTATOES WHEN I CAN GET THEM FROM MARKS AND SPARKS WITH ALREADY ADDED GOOSE FAT
There will be posters here who will remember more about the IMF's precise modus operandi than me, but I don't think it's contentious to say that Washington and Europe are considering Britain a major potential systemic problem at the moment - there's been plentiful reporting of that.
So you have sadly gone down in my estimation a lot, I am afraid to say.
Now I'm off to the pub, sadly lost at mini golf.
Sincerely
Why would Russia cut off a potential choke point and lose leverage?
Announce it in April, we would have had another 7 months of lower interest rate costs during which we could also have quietly put as much as we could get away with onto long term fixes.
Bonkers.
Why would they do it? (Taking a list from here and elsewhere):
*) They know Germany and most of Europe is not going to go back to gas.
*) Damage may be repairable. And if not, Europe is moving away from gas anyway.
*) It sends a message - they can go after other pipelines or comms cables. This will be a *major* worry to the west.
*) It is a deniable escalation.
*) It may get Gazprom off some significant costs.
I also wonder if production is an issue: Russia were flaring off millions of dollars worth of gas a day, and with gas prices falling and few other markets, it may be cheaper to just mothball most of the extraction kit - kit which they will be finding hard to maintain under sanctions. And if production is cut, why keep the pipeline?
Ray Dalio
@RayDalio
·
3h
The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand. (2/5)
That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country... (3/5)
...it is producing too much debt in a currency that there is not a big world demand for. I hope, but doubt, that other policymakers who are doing similar things (4/5)
https://twitter.com/RayDalio/status/1574793756720730115
Surely this is the end of Eton and most especially PP-fucking-E, as the finishing schools for UK pols. God knows what they teach at Oxford.
Actually it’s not. But it’s fairly close.
I chill by retreating into quiet and my imagination, either outside when gardening or inside when dark. Alcohol rarely adds anything to that.
I head coatwards without a backward glance.
Am attempting to educate myself.
Wow - this line from the Telegraph's Tim Stanley
"This was the week everything changed in British politics. For the first time in a long time, Labour looks like the "not mad" option." https://www.telegraph.co.uk/politics/2022/09/27/week-politics-changed-keir-starmers-speech-shows-labour-not/
I add lots of crushed garlic, sea salt, cracked kampot black pepper, smoky butter, and a sprig of rosemary (if eating with lamb)
OMFG, delish. Probably 4000 calories a go but MMMMMMM
No shit Sherlock that warnings were ignored, I'd bloody well hope so. As I said to you at 8:25 when you first linked to this story.
So many have only a term of it.
There is some risk that the UK will fail to meet it's debts. There is some risk that any major nation might do so. The UK is in no unusual position in this.
The idea that the UK is now seen a special risk (beyond what it always has been) is poppycock.
Faisal Islam
@faisalislam
·
30m
🚨
IMF says in statement “We are closely monitoring recent economic developments in the UK and are engaged with the authorities.”
Translation: We have no idea what the feck this new lot are doing but it is bad.
https://twitter.com/carlgardner/status/1574853092880879619
She has huge form on u-turn on bonkers, rushed out ideas as we saw during the membership election not that the members noticed or seemed to care.
It’s not impossible that this was a Ukranian operation. Or maybe the Poles? They really have it in for the Russians & the pipeline breaks are close enough to the Polish coast.
On the upside, there’s no point in expensive wine anymore.
Her whole agenda was built on this stuff. And she is massively stubborn
"For many in the civil service and for the unions representing all government workers, Truss has signalled what could be a fundamental change -- favouring partisan advice over a dispassionate assessment of policy decisions."
The problem is the borrowing for tax cuts on the basis of theoretical growth without any OBR statement.
Regained confidence requires over-reaction, and convincing the markets that there won't be repetition. I just can't see that happening.
But they do know how others in the same line of work might think and act.
This lot apparently don't.
Maybe they can survive the IMF.
Maybe they can survive the Civil Service.
Maybe they can survive the decline in Sterling.
Maybe they can survive the rise in Gilts.
Maybe they can survive the rise in intertest rates.
Maybe they can survive the mortgage market seizing up.
It's not immediately clear how they survive all of them, all at once...
UK should not be freezing the energy bills, it’s hugely regressive policy and will create huge inequality in UK over the coming years. Lib Dems, Labour and the Tory’s have all gone quiet about the great freeze salvation plan, becuase they all now know they were fools to have backed it, that’s why, foolishly all are responsible for this mad policy going ahead.
The alternative options of targeting help at most need without borrowing eye watering sums simply to hand out to so many who just didn’t need it should have happened instead.
Think of how much the freeze plan will cost £220B thru life or even more, and think how those borrowing costs are going up by the day - think how it doesn’t give nearly as much to the most desperate - think of how much of that borrowed money goes to who don’t need the hand out at all. Madness. Lazy lazy mad bad politics.
There were better options - what a huge cock up by UK to go with this. And they all would have done it - Labour and Lib dems too if in power.
https://www.niesr.ac.uk/wp-content/uploads/2022/09/A-Variable-Energy-Price-Cap.pdf
I wonder if it was because he actually said: "don't do this, my old mates in Mayfair will blow you to bits".
He may live in the 18th century but he is not totally brain dead.
That is their opportunity for a u-turn, just dont whip too hard, or even agree with the rebels to vote it down to give them a face saving out.
There are very few powers with the ability to do this - as you clearly recognise.
I don't think it was Russia either. The Portovaya compressor station near Vyborg was also probably sabotaged. Am looking at your list of possible reasons why Russia might have done it. Can't see that 1,2,4 are even reasons. 3? Wouldn't they be telling the intended message recipient, i.e. presumably US and its satellites in NATO, what they already knew anyway? As for 5 - what costs? Why not just let the pipeline crumble?
You have my very real sympathies. I had it for just three days and it seriously dented my life. Food, wine, coffee, flowers, travel, sex, whatever, all vastly diminished
I now cannot imagine a life without a sense of smell, and shudder at the thought. And then you have the risk of parosmia, when everything smells of sewage and rotting cabbage
https://www.thetimes.co.uk/article/parosmia-long-covid-symptom-that-leaves-a-bad-smell-in-the-nose-rzwz36k6h
I hope you get better, old bean
The 45 percent tax thing is politically toxic, but a relatively small part of Kwasi's enormous package. Ditching it would help with selling the package to Mr and Mrs Voter, but there would still be an enormous injection of cash which I bet the financial markets still wouldn't like.
Fuck these people.
I hope the budget is full of tax cuts.
"I believe that the Bank of England should be making it clear that the government's reckless budgetary statement is having consequences that will surely require higher interest rates. The Bank can do so by making clear the program's implications for the UK economy and thus for what the Bank will do with interest rates."
"...the Truss-Kwarteng fiscal policy package has taken the UK policy regime right back to 1974, bringing pound weakness front and center. The years that followed were the nadir of British postwar economic performance and awful for the British people."
https://www.piie.com/blogs/blog/how-bank-england-should-respond-uk-fiscal-policy-crashing-pound
There seems to be a new upper middle class of western people who believe they have a right to opine, indeed overtly intervene, in the doings of freely elected democratic governments, when these people themselves - this self appointed clerisy - have absolutely no democratic remit at all
Cf Ursula von der Leyen and the Italian elections
Fuck them all. And all the UK charities likewise. Butt the fuck out, you stupid Guardianista twats
The irony is, of course, that they generally drive events in the opposite way to which they intend. As with Brexit
Though you have to assume if it's them they have at least tried to cover their tracks and frame someone else up.
True, that.
Also there’s a load of index linked issued, and dividends go up with inflation.
And that may be much less than the nominal value of the bond if inflation is going to erode the value of the bond when it is redeemed.
You can't buck the market, as someone once said.
https://twitter.com/JohnRentoul/status/1574859603187273741
£38bn pre-announced for reversing NI and CT changes, £60bn or so on Furlough, £150bn estimate for energy support, many hundreds of billions on Covid overall. They've been bandying tens and hundreds of billions around for years now all without much of a tremor, but just £2bn on the 45% change and its hysteria and meltdown apparently.
It reminds me a bit of this scene with the Joker in the Dark Knight. His facial tics and gestures during the scene even seem similar to Kwasi's in that infamous clip of him at the funeral.
https://www.youtube.com/watch?v=Wkn7lO-nZGU
I just did what I do best. I took your little plan and I turned it on itself. Look what I did to this market with a few billion pounds and a couple of bullet points. Hmmm? You know... You know what I've noticed? Nobody panics when things go "according to plan." Even if the plan is horrifying! If, tomorrow, I tell the press that, like, tens of billions will go on furlough, or hundreds of billions in energy prices will be blown up, nobody panics, because it's all "part of the plan". But when I say that one little old tax will be cut, well then everyone loses their minds. Introduce a little anarchy. Upset the established order, and everything becomes chaos. I'm an agent of chaos.
So, more questions:
1. Are you surprised by the reaction in financial markets? Why do you think they disagree with you?
2. You are not going to get any demand stimulus from this. The money you give to rich people will be clawed back from the pain caused by raising mortgage rates on those in the middle. Where is the benefit for the economy?
3. The IMF have weighed in and are concerned about the brewing financial crisis in the UK. Are you not embarrassed?
4. Why are you publishing a 'medium term' plan in November. Didn't you think this through fully already before announcing it? Why can't we see the plan now?
5. Why are you meeting the BoE governor so often - every day?! Why don't you let officials coordinate with each other. This is just cosplay and theatre isn't it? You want to pretend to take over the steering wheel without actually interfering formally.
6. We hear mortgage providers are withdrawing new mortgages until they figure out the much higher rate people will be able to fix at. So house purchases are falling through and prices will drop. Why are they having to go through is? What purpose does it serve?
7. Economists seen as close to you are now out treading the boards discussing how the real agenda is going to have to be to reduce spending to match lower taxes. Is that the real agenda? Which kinds of spending do you want to cut?
8. Isn't this the most calamatous political error? You have crashed the pound, forced interest rates up, all to give tax cuts to very high earners that one day will have to be paid for. The measures themselves are unpopular and the polls have turned against you.
9. The rate the government has to pay on borrowing has shot up. That alone is going to cost billions isn't it? That's just pure waste you have introduced because people are frightened you don't know what you are doing. How do you respond to that?
https://twitter.com/giorgiameloni/status/1574859841193054208
https://www.euractiv.com/section/politics/news/italys-meloni-backs-orban-says-hungary-is-democratic/
I’m putting you in charge at the IMF Lucky with task to comment on what UK is borrowing for the freeze, and how they will be using the incredible amount of borrowed money - let’s be honest you would come out with exactly the same comment? Why? Becuase you don’t have to be paid by the IMF to say it, you can see for yourself right now that it’s quite simply the wrong bonkers route to have gone down.
UK politics and the world outside is now waking up to the stupid thing the UK has done here with such massive borrowing for unnecessary hand outs to so many who don’t need it. The up to 45B of welcome with a few controversial tax cuts is mere fluff round the edges easily brushed off - the UKs mistake to borrow so much to freeze its energy market is so big it can tip the whole world into recession.