If they take a hatchet to the NHS, then the Tory party is finished.
It won't be a hatchet, though.
A thousand small cuts is way more likely. The combination of flattish spending and ten percent inflation just means that there will be gaps in staffing and stuff not being available.
And to be clear, there is no point right-wing blowhards stamping their feet and saying "we don't want to pay NHS staff more". Tough. Beyond a certain point, the consequence of squeezing public sector pay is that you can't get enough good enough people to do public sector jobs.
But the net effect is the same. And politically, the effect of nibbling great big holes in schools'n'hospitals is yet another thing that's going to play badly for the government.
I have to confess seeing the headline 'This is a Labour moment, says Keir Starmer' did not really hit home for me. It just made me think 'Wouldn't he say that about any moment?'
I am, FWIW, totally open to reform of our parliamentary system. A new national Senate replacing the Lords. Go for it. Cement the Union by giving all four nations Senatorial powers. Sounds good. And voting reform: why not? I am not convinced FPTP is serving us well. And maybe even a written Constitution? Repatriate the ECHR
All these things are negotiable. We are free to do them. Let us do them, if we want. Maybe the Labour government of 2024-2025 will be weirdly revolutionary, and then thank fuck the Tories will come back, phew
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
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
Nobody voted for this Kwazi Truss project. The democratic deficit here is a matter of regret and concern for all who truly value democracy as opposed to just paying lip service or equating it with nationalism.
I didn't vote for Gordon Brown when he took over from Blair. But I accepted this awkward Scottish twat as our PM, as that is our democratic system, and I was able to swiftly vote him out of power at the next election, as you will be able to dismiss Liz Truss in 2024.
That's our democracy. You don't get to pick and choose the bits you like; if you want to change our system, persuade your leader Keir Starmer to change it when he reaches power, as I am fairly sure he will.
Because we are a democracy, even more so now we are out of the EU.
But imagine Brown had been Corbyn and used the cover of the GFC to implement a hard left reshaping of the country that very few people wanted. You'd be spitting bricks and those bricks would deserve to be spat.
Exactly.
It's too late now for this new PM but Labour (and the Tories for that matter) should have a manifesto commitment to change the law so that a new PM has to call an election within 3 months of taking office.
It's not party political since both parties have failed to do that in the past.
Thanks for your reply, moonshine - I have some quite key differences with your point of view there, but always appreciate a thoughtful and detailed reply.
Unfortunate timing for the nordstream sabotage. Before those incidents the wholesale gas price was falling quite sharply and the actual cost to the government of its commitment on the price cap was falling too. Now it’s back up and every increment adds billions to the bill.
Still, shorten the commitment to 6 months and cover some of it with a windfall tax and the bond markets may ease off a bit.
Hopefully this whole episode as well as leading the Tories to the thumping they deserve after clowning around like kids for the last 6 years will allow the realisation to dawn on voters that you don’t get nice things like furlough schemes or government support on your energy bills if you’re not prepared to fork out a bit of tax from time to time, and the next election will involve honest debate about the trade offs.
The idea that the UK government should not change policy direction from that promised, by manifesto, in 2019 - when there has literally been a once-in-a-century global plague and an almost-unprecedented European war in the interim - is beyond preposterous
Of course they will adapt to the circumstances. That is the nature of executive government. We get to change this government at elections once every five years max
Also: we can naturally change our system if we wish. We could have government guided by referenda, a la Suisse, if we desire. Heck we could have government by daily opinion poll. And maybe we should? Fact it: it's all up to us, and our governments will make real decisions with real impact
We are now free to govern ourselves as we wish, thanks to Brexit
Yes, the UK government has every right to change policy as it wants to. And when that change is economically illiterate, the financial markets have every right to sell UK plc to reduce their risk. And the Great British public have every right to observe the clusterf*ck and decide to vote against the government.
The Tories screwed up big time and will get hammered for it at the next election. Democracy working as it should.
I completely agree. That is a functioning democracy.
I am on the right. I generally want the Tories to win (usually, but not always - I saw the need for Blair in 97).
But the Tories have fucked things up royally, on several occasions, in the last 12 years. And I therefore imagine the British people will kick these decadent Tory fuckers into the gutter in 2024, feeling like it is time for a change. And even though I will regret the missed opportunities of 2010-2024 I will cheer British democracy for doing what it does: expressing the will of the people.
There will be no Trumpite coup attempt, when Liz Truss loses.
THIS is why I voted Leave in 2016. To restore power to the British voters. If these British voters exercise their votes in ways I dislike, so be it. I am content: that's the way it works.
I seem to remember many thoroughly compelling and hard fought British general elections culminating in the orderly transfer of power during our time as members of the European Union.
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.
That's not what the IMF statement says though - we must take it at its word. It is a political intervention. An economical intervention (which imo would also be un-called for in the circumstances) would talk about how leveraged the UK Government had become due to furlough followed by the energy freeze. This is a political intervention, because it takes aim at the perceived 'unpopular' part of the budget and targets that with its political judgements.
And what the UK is doing is about avoiding recession. It is the Western Central Banks who've caused this inflation, and are now swerving so hard that a full on recession is guaranteed unless their aggressive tightening at the same time as we're having an energy crisis is ameliorated.
“ That's not what the IMF statement says though “.
But it does though. It is. Because on Friday was an enormous mountain of expensive borrowing and the UK government has publicly stated it intends to hand out a huge amount of it to people who don’t need help,
it’s not just the IMF employed economists and markets calling it daft, our home grown economists got there first, the outside world rather slow to join the pile on.
The fact UK announced this without costs or mitigations, when it could have done as it had OBR available, is an own goal that plays into the hands of the markets and the critical economists, home and abroad. As likewise, the tax cuts wrapped around the announcement of the (expensively) buying a mountain of debt plays into the hands of markets and economists saying you can’t afford to do that - but the tax cuts just rashers of bacon around the Turkey, the elephant in the room is the Turkey, don’t allow yourself to get distracted by the internal UK political row and miss the key point here.
The point here is you yourself should this evening be asking yourself should we be borrowing this amount of money to freeze the market price for everyone, and answering, no, it’s bonkers.
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.
Sorry to hear that. I had that with my Covid and it was both the worst symptom and the last to go (after 4 weeks). Hope it doesn't linger too long.
All this year, so it’s been a while. I can taste basic tastes - salt; sweet; bitter; sour - but smell very few things at all. Other than, as Leon suggested, sulphurous notes… and strangely, nutmeg. I miss the scent of flowers.
It’s not great, but there are far worse things, I’m sure.
I am, FWIW, totally open to reform of our parliamentary system. A new national Senate replacing the Lords. Go for it. Cement the Union by giving all four nations Senatorial powers. Sounds good. And voting reform: why not? I am not convinced FPTP is serving us well. And maybe even a written Constitution? Repatriate the ECHR
All these things are negotiable. We are free to do them. Let us do them, if we want. Maybe the Labour government of 2024-2025 will be weirdly revolutionary, and then thank fuck the Tories will come back, phew
You feeling alright? You're almost talking sense there.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
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.
That's not what the IMF statement says though - we must take it at its word. It is a political intervention. An economical intervention (which imo would also be un-called for in the circumstances) would talk about how leveraged the UK Government had become due to furlough followed by the energy freeze. This is a political intervention, because it takes aim at the perceived 'unpopular' part of the budget and targets that with its political judgements.
And what the UK is doing is about avoiding recession. It is the Western Central Banks who've caused this inflation, and are now swerving so hard that a full on recession is guaranteed unless their aggressive tightening at the same time as we're having an energy crisis is ameliorated.
“ That's not what the IMF statement says though “.
But it does though. It is. Because on Friday was an enormous mountain of expensive borrowing and the UK government has publicly stated it intends to hand out a huge amount of it to people who don’t need help,
it’s not just the IMF employed economists and markets calling it daft, our home grown economists got there first, the outside world rather slow to join the pile on.
The fact UK announced this without costs or mitigations, when it could have done as it had OBR available, is an own goal that plays into the hands of the markets and the critical economists, home and abroad. As likewise, the tax cuts wrapped around the announcement of the (expensively) buying a mountain of debt plays into the hands of markets and economists saying you can’t afford to do that - but the tax cuts just rashers of bacon around the Turkey, the elephant in the room is the Turkey, don’t allow yourself to get distracted by the internal UK political row and miss the key point here.
The point here is you yourself should this evening be asking yourself should we be borrowing this amount of money to freeze the market price for everyone, and answering, no, it’s bonkers.
I don’t often agree with LuckyGuy but he’s right here. The 45% tax cut is a fiscal rounding error and might even be net positive to the budget. This is a political intervention for sure, by people who are not particularly bright or self aware.
The level of overseas commentary is completely unacceptable. Yellen might like to consider the US crushing everything because of Fed activity is a reason for the global turmoil. Globalists swarming.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I don’t get the sense that the Chinese are particularly trying to help Russia but again, who am I to rule that out? It is notable for sure that the sell off in govt bonds is US and UK focused.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar right near the beginning of the war. This is the part of moonshine's post, or suggested range of possibilities, that I find more interesting.
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
The bit, rather big bit, the markets and the IMF, other leading economists around the world are heated about, was actually somehow hidden last Friday domestically in our country by the row over Gordon Brown’s outgoing trick present for George Osborne from 2010 being, courageously as they say in Yes Minister, binned.
UK politics has sleep walked into this stupid unnecessary and expensive freeze policy - the Boris administration and Treasury seem to have done nothing to have helped the new government by warning them about it and giving them alternatives, Lib Dems and Labour initially proposed it, and have made a huge mistake by failing to publicly announce they changed their minds, because they own it too now. Labour and Lib Dems own this run on the pound as much as the Tories because it’s their stupid freeze policy that is causing it.
LuckyGuy is ruffled by foreign economists calling it mad and regressive, then listen to all our home grown economists in our own think tanks, most of whom have called it mad and regressive at every stage themselves.
The better parallel is with Northern Rock - everyone saw what a run on a bank or building society in the 21st century looked like. It looked like panic, it looked like approaching civil disorder. The first duty of any Government is the preservation of law and order so, as with Northern Rock, the new Truss Government decided it had to do something to prevent the full force of proposed price increases being passed on to businesses and consumers.
For ideological and probably practical reasons, a windfall tax wasn't going to cut it - the Government needed to step in directly and absorb the fuel spike much as it absorbed the threat of bank collapses via the personal deposit guarantee in 2007 (or 2008).
Once people realised their money was safe, they calmed down. Once people realised the Government would meet most of the costs of rising energy prices, they calmed down.
Almost all of what is happening at the moment is beyond government control. - Covid could have killed millions of jobs - they stopped that by spending on furlough, but the borrowing reduced future wiggle room. - The restart of our economy post-Covid was bumpy because staff had gone home to eastern Europe and the finely tuned web of just-in-time manufacturing and food distribution was messed up (oh yes, and Brexit didn't help but a lot of Europe was messed up at the same time, so it's a smaller factor). - Our trick of keeping inflation low by exporting so much production cost of key goods to poorer parts of the World was screwed up by China's zero-Covid strategy and disruption to shipping patterns. - The energy shock caused by the war in Ukraine. - The US raising interest rates to kill off inflation caused by all their gigantic quantitative easing.
It's a perfect storm.
Of course we all want things to back to how they were. Pick your golden period. 3 years ago. 10 years ago. 25 years ago. 35 years ago. Well tough - it isn't happening. The new normal will be higher interest rates for the next 2-3 years or more. An increase in house repossessions followed by a fall in house values. A weaker pound and less consumption because we cannot substitute for UK manufactured goods. It's going to be rubbish. Much of Europe will have similar issues. No British Exceptionalism here.
A Labour government will not make it better. They *always* spend more money than the Tories and that means higher taxes and/or more even borrowing. This will end up making things worse. It will also mean higher unemployment in the end. The sad thing is that it won't be Labour's fault. It is us, the electorate. We want nice things but everyone else to pay for them. We could do that with all the wealth we gained from Empire, but that treasure has long gone. We cannot tax ourselves out of the hole. We must change. Starmer doesn't offer that.
Gloomy rant over. I know lots of us disagree on a lot of this, but there is an underlying truth here: As Niall Ferguson's research shows* - every Civilisation in history failed when it consumed wealth faster than it created it. So you might not like the idea of going for growth, but really there is no alternative if we want to escape that fate or delay the day of reckoning. So how do we get growth? That is a worthwhile discussion for the smart people on PB.
(*Sorry but I can't find the quote from him - it was something like successful civilisations had more soldiers and merchants than priests and kings.)
(also apologies for any wording/spelling issues: I am dyslexic and find writing really tricky)
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
You what?
The folk in opposition, who can only suggest things not do them, forced Truss and Kwarteng to go for broke on a plan they probably cooked up in a university hall 20 years ago and always wanted to try out?
The level of overseas commentary is completely unacceptable. Yellen might like to consider the US crushing everything because of Fed activity is a reason for the global turmoil. Globalists swarming.
Banking systems of Ghana and Egypt have run out of foreign currency as a direct consequence of the Fed’s irrational hawkishness. Places that really are vulnerable to currency crises. Probably there are others that I’m not as familiar with. The world today is a bizarre place that is for sure. It’s not helped by certain posters thinking they are clever pasting glib tweets that shine no light whatsoever.
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.
* If it is, then we get WW3 and probably soon. * Whoever it is, if they keep at it then sooner or later they may get caught. Which would be waaay bigger than Gary Powers. * Internet cables and oil rigs are other possible targets. * Final observation: Russia may start carrying out black ops of a similar kind, not necessarily even in Europe.
Think we are virtually in ww3 now. This pieline attack is the latest escalation whoever did it
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
I personally wouldn't agree with that at all ; look again at Germany's bailout. I would say it's the combination of things, as per the IFS's report, that's the issue.
The bit, rather big bit, the markets and the IMF, other leading economists around the world are heated about, was actually somehow hidden last Friday domestically in our country by the row over Gordon Brown’s outgoing trick present for George Osborne from 2010 being, courageously as they say in Yes Minister, binned.
UK politics has sleep walked into this stupid unnecessary and expensive freeze policy - the Boris administration and Treasury seem to have done nothing to have helped the new government by warning them about it and giving them alternatives, Lib Dems and Labour initially proposed it, and have made a huge mistake by failing to publicly announce they changed their minds, because they own it too now. Labour and Lib Dems own this run on the pound as much as the Tories because it’s their stupid freeze policy that is causing it.
LuckyGuy is ruffled by foreign economists calling it mad and regressive, then listen to all our home grown economists in our own think tanks, most of whom have called it mad and regressive at every stage themselves.
The better parallel is with Northern Rock - everyone saw what a run on a bank or building society in the 21st century looked like. It looked like panic, it looked like approaching civil disorder. The first duty of any Government is the preservation of law and order so, as with Northern Rock, the new Truss Government decided it had to do something to prevent the full force of proposed price increases being passed on to businesses and consumers.
For ideological and probably practical reasons, a windfall tax wasn't going to cut it - the Government needed to step in directly and absorb the fuel spike much as it absorbed the threat of bank collapses via the personal deposit guarantee in 2007 (or 2008).
Once people realised their money was safe, they calmed down. Once people realised the Government would meet most of the costs of rising energy prices, they calmed down.
Almost all of what is happening at the moment is beyond government control. - Covid could have killed millions of jobs - they stopped that by spending on furlough, but the borrowing reduced future wiggle room. - The restart of our economy post-Covid was bumpy because staff had gone home to eastern Europe and the finely tuned web of just-in-time manufacturing and food distribution was messed up (oh yes, and Brexit didn't help but a lot of Europe was messed up at the same time, so it's a smaller factor). - Our trick of keeping inflation low by exporting so much production cost of key goods to poorer parts of the World was screwed up by China's zero-Covid strategy and disruption to shipping patterns. - The energy shock caused by the war in Ukraine. - The US raising interest rates to kill off inflation caused by all their gigantic quantitative easing.
It's a perfect storm.
Of course we all want things to back to how they were. Pick your golden period. 3 years ago. 10 years ago. 25 years ago. 35 years ago. Well tough - it isn't happening. The new normal will be higher interest rates for the next 2-3 years or more. An increase in house repossessions followed by a fall in house values. A weaker pound and less consumption because we cannot substitute for UK manufactured goods. It's going to be rubbish. Much of Europe will have similar issues. No British Exceptionalism here.
A Labour government will not make it better. They *always* spend more money than the Tories and that means higher taxes and/or more even borrowing. This will end up making things worse. It will also mean higher unemployment in the end. The sad thing is that it won't be Labour's fault. It is us, the electorate. We want nice things but everyone else to pay for them. We could do that with all the wealth we gained from Empire, but that treasure has long gone. We cannot tax ourselves out of the hole. We must change. Starmer doesn't offer that.
Gloomy rant over. I know lots of us disagree on a lot of this, but there is an underlying truth here: As Niall Ferguson's research shows* - every Civilisation in history failed when it consumed wealth faster than it created it. So you might not like the idea of going for growth, but really there is no alternative if we want to escape that fate or delay the day of reckoning. So how do we get growth? That is a worthwhile discussion for the smart people on PB.
(*Sorry but I can't find the quote from him - it was something like successful civilisations had more soldiers and merchants than priests and kings.)
(also apologies for any wording/spelling issues: I am dyslexic and find writing really tricky)
The commentary from the US is somewhat odd. Maybe we have overreacted somewhat? I notice that Paul Krugman and Simon Wren Lewis, two economists who I don't ever remember saying much good about the Conservative party think that a Sterling crisis is unlikely. Krugman saying that the emails he was getting from city economists said their main problem was that the budget was 'moronic.'
The level of overseas commentary is completely unacceptable.
Who exactly do you think Kwasi is borrowing all the money from?
So much simpler in the olden times, when the king could just threaten and devastate certain local communities to pony up cash. Today's desperate for cash governments have far more restrictions, but more options.
🚨 Moody's rating agency tonight warns the UK's new fiscal policy regime is "credit negative". "A sustained confidence shock arising from market concerns over the credibility of the government's fiscal strategy...could permanently weaken the UK's debt affordability" https://twitter.com/MehreenKhn/status/1574879376801497089/photo/1
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.
* If it is, then we get WW3 and probably soon. * Whoever it is, if they keep at it then sooner or later they may get caught. Which would be waaay bigger than Gary Powers. * Internet cables and oil rigs are other possible targets. * Final observation: Russia may start carrying out black ops of a similar kind, not necessarily even in Europe.
Think we are virtually in ww3 now. This pieline attack is the latest escalation whoever did it
The level of overseas commentary is completely unacceptable. Yellen might like to consider the US crushing everything because of Fed activity is a reason for the global turmoil. Globalists swarming.
Freedom of speech, innit ?
Seriously, though, why shouldn’t people outside the UK comment on our finances ? We do the same often enough. Capital markets are international, not confined to individual countries.
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Further humiliation. Not only does Moody's warn of a credit rating downgrade but predicts Truss and Kwarteng's policy will fail on its own terms: growth not expected to return to potential (which btw is nowhere near 2.5%) until 2026.
Missed the story: inflation to hit 11% and be locked in for next 3 YEARS.
🚨 Moody's rating agency tonight warns the UK's new fiscal policy regime is "credit negative". "A sustained confidence shock arising from market concerns over the credibility of the government's fiscal strategy...could permanently weaken the UK's debt affordability" https://twitter.com/MehreenKhn/status/1574879376801497089/photo/1
There should be market concerns over the credibility of the Ratings Agencies. I am still furious that they escaped from their culpability in the securitisation scandal behind the great financial crash.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Putin wants NATO to be at indirect war with him. That the invasion directly led to their involvement, expansion of the alliance, and a longer border with him if he succeeded, shows he doesn't think NATO is at war with him, he wants it.
Clearly make believe was not working for him when trying to paint Russia as oppressed, so he made it closer to true.
🚨 Moody's rating agency tonight warns the UK's new fiscal policy regime is "credit negative". "A sustained confidence shock arising from market concerns over the credibility of the government's fiscal strategy...could permanently weaken the UK's debt affordability" https://twitter.com/MehreenKhn/status/1574879376801497089/photo/1
There should be market concerns over the credibility of the Ratings Agencies. I am still furious that they escaped from their culpability in the securitisation scandal behind the great financial crash.
Country Risk departments are where dossers and theorists reside in banks. The inept ones get made redundant from banks before they’re 30 and join the credit rating agencies, where they are paid less but have people like Scott hanging on their every word.
Also, what is the PB consensus on who did Nordstream? Aliens? David Miliband? Mark Reckless?
Seems obvious to me that it was Russia. They aren't going to have much use for a gas pipeline going to Europe for much longer.
Of course - and it is very much in Putin’s interest to tighten the economic screws by pushing up gas futures prices. It probably won’t help him, but it could further damage us and Europe.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
I am, FWIW, totally open to reform of our parliamentary system. A new national Senate replacing the Lords. Go for it. Cement the Union by giving all four nations Senatorial powers. Sounds good. And voting reform: why not? I am not convinced FPTP is serving us well. And maybe even a written Constitution? Repatriate the ECHR
All these things are negotiable. We are free to do them. Let us do them, if we want. Maybe the Labour government of 2024-2025 will be weirdly revolutionary, and then thank fuck the Tories will come back, phew
You feeling alright? You're almost talking sense there.
When righties' politics have completely shat it, that's when they turn to some vaguely sensible alternative. it won't last..
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Putin wants NATO to be at indirect war with him. That the invasion directly led to their involvement, expansion of the alliance, and a longer border with him if he succeeded, shows he doesn't think NATO is at war with him, he wants it.
Clearly make believe was not working for him when trying to paint Russia as oppressed, so he made it closer to true.
I can’t help but think back to Day 1 of the invasion, when my AM radio signal was interrupted by babushka music during Biden’s address. Never happened before or since. That weekend there was a story that a bbc radio antenna was down. If I recall correctly BA had a “computer issue” that weekend too. I’ve been amazed we haven’t seen more direct action from Russia against NATO states. GCHQ guys and gals earning their keep no doubt. But we’re in a new phase now, where things are becoming existential for Putin himself. Who knows what this winter will bring.
This guy was pretty conservative about the Kharkiv advance, so I'm willing to take his word for it that if the situation is looking a bit dicey for the Russians in Lyman, then it probably isn't an exaggeration.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
Russian subs have the capability to snip sub sea power and data cables. The US can see most of what’s going on due to seabed sonar stations. It’s all a bit of a game. Russia knows it couldn’t do that without America knowing. What would America do? Bugger all given the silence on Nordstream. “It might be sabotage”. Biden is being pushed and pushed by Putin to snap, because Russia are having their arses handed to them on the conventional battlefield. Quite unclear what way this will go.
He wants to see it, that's good. Other leaders didn't want that Chancellor admitted the markets have been volatile but said they’re “settling down” now. Said volatility was in part due to traders not knowing everything that was coming in his mini-Budget, leading to a frustrated reaction. But stressed he was not “complacent”.
Kwarteng said he wants to see an uptick of growth in mid-2023 then a good year of growth in 2024, per the MP. (2024 widely expected to be election year. Strategy is underpinned by political hope that Gov gets rewarded for a growing economy come then.)
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Everyone has had it with the weirdo Conservative leadership cult(Truss, Kwasi JRM ETC) from the IMF down to the Red Wall...
Remember when the "tide" came in over Gordon Brown's head in 2008? The same is happening right now with Conservatives and UKPLC sadly...
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
We only have to be better than the Russians. Large landing zone where the Navy is pretty useless, but still better than the Russians.
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
I personally wouldn't agree with that at all ; look again at Germany's bailout. I would say it's the combination of things, as per the IFS's report, that's the issue.
It’s not complicated. UK gov proposes £220B of expensive borrowing promising to give much away to those who don’t need it. And who came up with the idea of doing such a stupid thing, becuase an aggressive extension of windfall tax would have brought in £30B tops before hitting investment - saying anything different would have been Starmer and Reeves looking you in the face and lying - hence they talked about 6months worth not probable through life costs.
Other countries start with different models of providing energy, more quasi state owned than us for example. But the key thing here is the UK government could last Friday have announced the borrowing for freeze, could have put it through the OBR, could have not announced the £45B growth push instead announced windfall tax extension, and talked about plans to balance books in medium term, and STILL the markets would have reacted the way they did, still home grown and foreign economists calling it to big a borrowing hit for the freeze programme - because, IT IS. We should tackle the bills problem with one of the less regressive, better targeted much cheaper options available.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
If that happens then it's a hot war and we'll have a lot more to worry about than just our offshore turbines.
Unfortunately it all feels terribly, terribly possible at this moment in time.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Putin wants NATO to be at indirect war with him. That the invasion directly led to their involvement, expansion of the alliance, and a longer border with him if he succeeded, shows he doesn't think NATO is at war with him, he wants it.
Clearly make believe was not working for him when trying to paint Russia as oppressed, so he made it closer to true.
I can’t help but think back to Day 1 of the invasion, when my AM radio signal was interrupted by babushka music during Biden’s address. Never happened before or since. That weekend there was a story that a bbc radio antenna was down. If I recall correctly BA had a “computer issue” that weekend too. I’ve been amazed we haven’t seen more direct action from Russia against NATO states. GCHQ guys and gals earning their keep no doubt. But we’re in a new phase now, where things are becoming existential for Putin himself. Who knows what this winter will bring.
Midway through watching The Undeclared War on C4.
It's great TV but I think it may be exaggerating Russian cyber capability somewhat. Though the Glavset troll farm is probably realistic.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
Russian subs have the capability to snip sub sea power and data cables. The US can see most of what’s going on due to seabed sonar stations. It’s all a bit of a game. Russia knows it couldn’t do that without America knowing. What would America do? Bugger all given the silence on Nordstream. “It might be sabotage”. Biden is being pushed and pushed by Putin to snap, because Russia are having their arses handed to them on the conventional battlefield. Quite unclear what way this will go.
If the Russians are sabotaging undersea assets, what happens if they 'lose' a sub doing that? Do they accuse the West of attacking a sub and hence admitting their sabotage, or keep quiet and stop doing it?
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
Two brief thoughts/comments in response to the views expressed on this thread.
1. Almost everyone here seems to agree that the UK government needs to present a credible economic plan, backed up by believable calculations and projections, if it wishes to keep the financial markets onside. In the recent "mini-budget", where the freely offered advice of the OBR was deliberately rejected, they have blatantly failed to do so.
2. The clever PB-ers here argue that improved growth depends primarily on achieving improved long term productivity, which in turn requires long term investment in infrastructure and other stuff ( see David L for more detail!). This can't be achieved overnight or even in two years. So aiming or wishing for improved economic growth as a result of government decisions in the short term seems very "optimistic".
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
I personally wouldn't agree with that at all ; look again at Germany's bailout. I would say it's the combination of things, as per the IFS's report, that's the issue.
It’s not complicated. UK gov proposes £220B of expensive borrowing promising to give much away to those who don’t need it. And who came up with the idea of doing such a stupid thing, becuase an aggressive extension of windfall tax would have brought in £30B tops before hitting investment - saying anything different would have been Starmer and Reeves looking you in the face and lying - hence they talked about 6months worth not probable through life costs.
Other countries start with different models of providing energy, more quasi state owned than us for example. But the key thing here is the UK government could last Friday have announced the borrowing for freeze, could have put it through the OBR, could have not announced the £45B growth push instead announced windfall tax extension, and talked about plans to balance books in medium term, and STILL the markets would have reacted the way they did, still home grown and foreign economists calling it to big a borrowing hit for the freeze programme - because, IT IS. We should tackle the bills problem with one of the less regressive, better targeted much cheaper options available.
It's already going to work out a lot cheaper than 60bn. Thank goodness.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
If that happens then it's a hot war and we'll have a lot more to worry about than just our offshore turbines.
Unfortunately it all feels terribly, terribly possible at this moment in time.
Look on the plus side - it solves the pensions crisis, the obesity crisis, the cost-of-living crisis and climate change.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
Russian subs have the capability to snip sub sea power and data cables. The US can see most of what’s going on due to seabed sonar stations. It’s all a bit of a game. Russia knows it couldn’t do that without America knowing. What would America do? Bugger all given the silence on Nordstream. “It might be sabotage”. Biden is being pushed and pushed by Putin to snap, because Russia are having their arses handed to them on the conventional battlefield. Quite unclear what way this will go.
If the Russians are sabotaging undersea assets, what happens if they 'lose' a sub doing that? Do they accuse the West of attacking a sub and hence admitting their sabotage, or keep quiet and stop doing it?
{K-129 has entered the chat, 300 miles off course}
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
If that happens then it's a hot war and we'll have a lot more to worry about than just our offshore turbines.
Unfortunately it all feels terribly, terribly possible at this moment in time.
Look on the plus side - it solves the pensions crisis, the obesity crisis, the cost-of-living crisis and climate change.
I fear we may be at march in the threads film...the nuclear exchange occurred at the end of may so we may get a nice christmas present
At the very centre of this crisis, two arsonists responsible for the heat, Reeves and Starmer - who put the government on the spot with this insane needless borrowing plan in the first place.
You what?
The folk in opposition, who can only suggest things not do them, forced Truss and Kwarteng to go for broke on a plan they probably cooked up in a university hall 20 years ago and always wanted to try out?
I know what your problem is. I can help you.
kwarzi announced a Turkey of a energy market freeze policy last Friday - it came wrapped in streaky bacon. The Turkey he got from Starmer and Reeves, the streaky bacon cooked up with Truss in university hall 20 years ago.
Everyone in UK could only smell the bacon, global markets and economists only see the Turkey.
This IMF statement is extraordinary. The cut to the 45% tax rate is fiscally irrelevant. So why are they making a public pronouncement to the effect it must be reversed and that they are “monitoring the UK”?
I suspect there’s far more going on right now than meets the eye. There’s no rational reason for UK gilts to be attacked in this way.
Could you expand on whatever you are impying here, moonshine ? I'm genuinely Interested to hear what you mean.
Global markets are basically just a giant bipolar hive mind. They’re quite easy to tip one way or the other, it just needs a sufficient pool of cash or media reach to shift sentiment. I’ve seen it done quite effectively on the micro but it’s also possible on the macro. Sometimes it needs an active conspiracy, sometimes it’s just big money pushing a self fulfilling narrative.
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Could be the chinese are supporting the russians by selling off us treasurys and uk gilts
I'm suddenly remembering a story I actually posted on a speculation of combined chinese-russian efforts to weaken the pound and dollar at the beginning of the war. This is the part of moonshine's post that I find most interesting.
Nordstream + gilts. Putin strikes back?
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
NATO may not feel able to send in the troops, but Putin never said anything about the European Broadcast Union. No one messes with those guys.
I believe Putin means it when he says he thinks Nato is at war with him. There are only so many ways he can sting back. I wouldn’t rule it out in the gilts market to be honest. Nordstream is a clear story of Russian hybrid warfare. It spikes gas prices again because it shows capability and probable willingness to do it on pipelines that are active.
Bit worried about Norwegian gas and our offshore turbines. Hope the RN aren't actually as useless as some of our posters make out.
If that happens then it's a hot war and we'll have a lot more to worry about than just our offshore turbines.
Unfortunately it all feels terribly, terribly possible at this moment in time.
Look on the plus side - it solves the pensions crisis, the obesity crisis, the cost-of-living crisis and climate change.
I fear we may be at march in the threads film...the nuclear exchange occurred at the end of may so we may get a nice christmas present
Just as well we have a lot of cool heads in charge.
Further humiliation. Not only does Moody's warn of a credit rating downgrade but predicts Truss and Kwarteng's policy will fail on its own terms: growth not expected to return to potential (which btw is nowhere near 2.5%) until 2026.
Missed the story: inflation to hit 11% and be locked in for next 3 YEARS.
Slightly misleading interpretation there Scott. What is says is that inflation will hit 11% next year and remain above the 2% target until 2025. Slightly different from the "inflation to hit 11% and be locked in for next 3 YEARS. "
Comments
A thousand small cuts is way more likely. The combination of flattish spending and ten percent inflation just means that there will be gaps in staffing and stuff not being available.
And to be clear, there is no point right-wing blowhards stamping their feet and saying "we don't want to pay NHS staff more". Tough. Beyond a certain point, the consequence of squeezing public sector pay is that you can't get enough good enough people to do public sector jobs.
But the net effect is the same. And politically, the effect of nibbling great big holes in schools'n'hospitals is yet another thing that's going to play badly for the government.
https://youtu.be/XBgbBmbYqsQ
I am, FWIW, totally open to reform of our parliamentary system. A new national Senate replacing the Lords. Go for it. Cement the Union by giving all four nations Senatorial powers. Sounds good. And voting reform: why not? I am not convinced FPTP is serving us well. And maybe even a written Constitution? Repatriate the ECHR
All these things are negotiable. We are free to do them. Let us do them, if we want. Maybe the Labour government of 2024-2025 will be weirdly revolutionary, and then thank fuck the Tories will come back, phew
Government must urgently lay out how it will fix the problems it has created.
This is a statement that should set alarm bells ringing in government.
They need to act now.
https://twitter.com/RachelReevesMP/status/1574875556138590225
What about this, I think it describes how many of us are thinking about the Government and its cheerleaders: https://www.youtube.com/watch?v=05o1gMSEOLo
I think we’re seeing a couple of things going on. Instinctive anti Brexit among key decision makers. Brexit really ain’t that big a deal and yet you still see senior (mostly foreign) execs at bulge bracket banks banging on about it.
This IMF attack shows a second ideological front, namely that the UK has an anti socialist govt and that cannot be allowed to stand! The 45% tax cut is white noise in the UK’s fiscal picture but that’s what they choose to highlight? After a decade lf fiscal incontinence bailing out banks after 08, the whole economy in covid and now again with the energy shock?
There’s not really a rationale reason for the pound or gilts to be attacked this severely, UK inflation, debt and the deficit all compare reasonably or even quite favourable vs peers. And Uk Inc has much going for it, far more so in terms of growth prospects than most immediate peers.
It doesn’t need to be an organised conspiracy. Most market participants just read and reflect sentiment. “I’m selling gilts today like a mother-f!”. Why? “Because the market is selling gilts”.
Of course there is room for an organised conspiracy too. Whether we wish to admit it or not, we are basically engaged right now in WW3, just that it looks and feels very different to how anyone predicted. It was low liquidity post weekend asia hours when this story really got going, plenty of poorly regulated money out there. The story doesn’t need that to be the culprit but who am I to rule it out.
Maybe it was us who did Nordstream too. All together with the Queen's death, a bit of a flex by the UK this last month.
It's too late now for this new PM but Labour (and the Tories for that matter) should have a manifesto commitment to change the law so that a new PM has to call an election within 3 months of taking office.
It's not party political since both parties have failed to do that in the past.
Still, shorten the commitment to 6 months and cover some of it with a windfall tax and the bond markets may ease off a bit.
Hopefully this whole episode as well as leading the Tories to the thumping they deserve after clowning around like kids for the last 6 years will allow the realisation to dawn on voters that you don’t get nice things like furlough schemes or government support on your energy bills if you’re not prepared to fork out a bit of tax from time to time, and the next election will involve honest debate about the trade offs.
But it does though. It is. Because on Friday was an enormous mountain of expensive borrowing and the UK government has publicly stated it intends to hand out a huge amount of it to people who don’t need help,
it’s not just the IMF employed economists and markets calling it daft, our home grown economists got there first, the outside world rather slow to join the pile on.
The fact UK announced this without costs or mitigations, when it could have done as it had OBR available, is an own goal that plays into the hands of the markets and the critical economists, home and abroad. As likewise, the tax cuts wrapped around the announcement of the (expensively) buying a mountain of debt plays into the hands of markets and economists saying you can’t afford to do that - but the tax cuts just rashers of bacon around the Turkey, the elephant in the room is the Turkey, don’t allow yourself to get distracted by the internal UK political row and miss the key point here.
The point here is you yourself should this evening be asking yourself should we be borrowing this amount of money to freeze the market price for everyone, and answering, no, it’s bonkers.
I can taste basic tastes - salt; sweet; bitter; sour - but smell very few things at all. Other than, as Leon suggested, sulphurous notes… and strangely, nutmeg. I miss the scent of flowers.
It’s not great, but there are far worse things, I’m sure.
Meghan funded it.
https://youtu.be/z5em8lQAcvg?t=12
Globalists swarming.
https://twitter.com/Samfr/status/1574877019497701392
Worth remembering that the Sun is more than happy to stick the boot into the Conservatives if it thinks its readers are narked enough.
- Covid could have killed millions of jobs - they stopped that by spending on furlough, but the borrowing reduced future wiggle room.
- The restart of our economy post-Covid was bumpy because staff had gone home to eastern Europe and the finely tuned web of just-in-time manufacturing and food distribution was messed up (oh yes, and Brexit didn't help but a lot of Europe was messed up at the same time, so it's a smaller factor).
- Our trick of keeping inflation low by exporting so much production cost of key goods to poorer parts of the World was screwed up by China's zero-Covid strategy and disruption to shipping patterns.
- The energy shock caused by the war in Ukraine.
- The US raising interest rates to kill off inflation caused by all their gigantic quantitative easing.
It's a perfect storm.
Of course we all want things to back to how they were. Pick your golden period. 3 years ago. 10 years ago. 25 years ago. 35 years ago. Well tough - it isn't happening. The new normal will be higher interest rates for the next 2-3 years or more. An increase in house repossessions followed by a fall in house values. A weaker pound and less consumption because we cannot substitute for UK manufactured goods. It's going to be rubbish. Much of Europe will have similar issues. No British Exceptionalism here.
A Labour government will not make it better. They *always* spend more money than the Tories and that means higher taxes and/or more even borrowing. This will end up making things worse. It will also mean higher unemployment in the end. The sad thing is that it won't be Labour's fault. It is us, the electorate. We want nice things but everyone else to pay for them. We could do that with all the wealth we gained from Empire, but that treasure has long gone. We cannot tax ourselves out of the hole. We must change. Starmer doesn't offer that.
Gloomy rant over. I know lots of us disagree on a lot of this, but there is an underlying truth here: As Niall Ferguson's research shows* - every Civilisation in history failed when it consumed wealth faster than it created it. So you might not like the idea of going for growth, but really there is no alternative if we want to escape that fate or delay the day of reckoning. So how do we get growth? That is a worthwhile discussion for the smart people on PB.
(*Sorry but I can't find the quote from him - it was something like successful civilisations had more soldiers and merchants than priests and kings.)
(also apologies for any wording/spelling issues: I am dyslexic and find writing really tricky)
Maybe we should offer Eurovision to Lviv (and guarantee security) in response.
The folk in opposition, who can only suggest things not do them, forced Truss and Kwarteng to go for broke on a plan they probably cooked up in a university hall 20 years ago and always wanted to try out?
"A sustained confidence shock arising from market concerns over the credibility of the government's fiscal strategy...could permanently weaken the UK's debt affordability" https://twitter.com/MehreenKhn/status/1574879376801497089/photo/1
She's an artist and she don't look back.
Seriously, though, why shouldn’t people outside the UK comment on our finances ? We do the same often enough. Capital markets are international, not confined to individual countries.
Seems strange to get so wound up about it.
Missed the story: inflation to hit 11% and be locked in for next 3 YEARS.
https://twitter.com/mehreenkhn/status/1574879376801497089
Clearly make believe was not working for him when trying to paint Russia as oppressed, so he made it closer to true.
https://mobile.twitter.com/DefMon3/status/1574880755754344462
High rates “not seen since the financial crisis” implies the financial crisis caused high rates
Quite the opposite!
Chancellor admitted the markets have been volatile but said they’re “settling down” now. Said volatility was in part due to traders not knowing everything that was coming in his mini-Budget, leading to a frustrated reaction. But stressed he was not “complacent”.
Kwarteng said he wants to see an uptick of growth in mid-2023 then a good year of growth in 2024, per the MP. (2024 widely expected to be election year. Strategy is underpinned by political hope that Gov gets rewarded for a growing economy come then.)
https://twitter.com/benrileysmith/status/1574847009093308418
Remember when the "tide" came in over Gordon Brown's head in 2008? The same is happening right now with Conservatives and UKPLC sadly...
Other countries start with different models of providing energy, more quasi state owned than us for example. But the key thing here is the UK government could last Friday have announced the borrowing for freeze, could have put it through the OBR, could have not announced the £45B growth push instead announced windfall tax extension, and talked about plans to balance books in medium term, and STILL the markets would have reacted the way they did, still home grown and foreign economists calling it to big a borrowing hit for the freeze programme - because, IT IS. We should tackle the bills problem with one of the less regressive, better targeted much cheaper options available.
Unfortunately it all feels terribly, terribly possible at this moment in time.
It's great TV but I think it may be exaggerating Russian cyber capability somewhat. Though the Glavset troll farm is probably realistic.
1. Almost everyone here seems to agree that the UK government needs to present a credible economic plan, backed up by believable calculations and projections, if it wishes to keep the financial markets onside. In the recent "mini-budget", where the freely offered advice of the OBR was deliberately rejected, they have blatantly failed to do so.
2. The clever PB-ers here argue that improved growth depends primarily on achieving improved long term productivity, which in turn requires long term investment in infrastructure and other stuff ( see David L for more detail!). This can't be achieved overnight or even in two years. So aiming or wishing for improved economic growth as a result of government decisions in the short term seems very "optimistic".
- The IMF is sticking its oar in. Janet Yellen is wading in. What are we in?
- You want the word?
- The word!
- Crisis!
kwarzi announced a Turkey of a energy market freeze policy last Friday - it came wrapped in streaky bacon. The Turkey he got from Starmer and Reeves, the streaky bacon cooked up with Truss in university hall 20 years ago.
Everyone in UK could only smell the bacon, global markets and economists only see the Turkey.
Does that help at all?