BOE 3rd November Rate Announcement

[jameswills]

NowWatchThisDrive said:

The BBC guy has it a bit wrong there. The institutions like Grayscale, BlackRock and Fidelity are just the ETF managers. It's not their billions being poured in, it's the customers and ETF buyers.

Agreed, the headline is not quite the story it makes out, but these entities are heavily entwined with governments and the central banking system, I don’t think it’s something you can separate easily. Another article here sort of explaining how they might be actually trying to kill Crypto not invest in it by their actions, coupled with US government actions

https://www.forbes.com/sites/digital-assets/2023/1...

Again, don’t propose to be an expert, I’m just very interested in the current state of currency and money markets and looking at possible outcomes to this mess.

[ooid]

Scootersp said:

This is what I mean about the Gold narrative/sentiment, Gold equals conspiracy loon, it just rolls off the tongue and is at best 50:50 agreed/disagreed with, when the "International Monetary Fund" holds over 90 Million ounces.

Also this is an IMF working paper

https://www.imf.org/en/Publications/WP/Issues/2023...

Have a look at the link you posted and tell us you do not see the largest buyers(countries) common ground?

[audikarma]

Sometimes DonkeyApple gives out a nugget of wisdom.

But often it’s wrapped in 2000 words of him smugly smelling his own farts and thinking how delicious they are.

[OoopsVoss]

jameswills said:

NowWatchThisDrive said:

The BBC guy has it a bit wrong there. The institutions like Grayscale, BlackRock and Fidelity are just the ETF managers. It's not their billions being poured in, it's the customers and ETF buyers.

Agreed, the headline is not quite the story it makes out, but these entities are heavily entwined with governments and the central banking system, I don’t think it’s something you can separate easily. Another article here sort of explaining how they might be actually trying to kill Crypto not invest in it by their actions, coupled with US government actions

https://www.forbes.com/sites/digital-assets/2023/1...

Again, don’t propose to be an expert, I’m just very interested in the current state of currency and money markets and looking at possible outcomes to this mess.

Its not just misleading, its simply wrong. Blackrock is not a bank. its an Asset Manager. At that point you ought to have given up reading. A bank or responsible Central Bank is not going to be buying up BTC (or any decentralised) crypto currency in size - unless its a derivative hedge (that means they have already passed on the risk). Regulations require banks to hold capital against market risk or in simple terms price volatility. The cost of capital plus associated loss potential would nix it as an investment. Central Banks should have zero loss taking capacity so they are even less likely too (unless you want to avoid sanctions, OFAC etc). UK regulations would almost certainly see a CEO doing a 7 stretch if a UK bank embarked on this strategy and BTC did a 30% dump wiping them out.

Its an interesting theory and the motivation might be there, but its not practical (yet). I will however 100% guarantee they will buy digitised / tokenised assets or stable coins - particularly CBDCs. Overtime, decentralised BTC etc may actually get on to banks balance sheets but as part of a broader adoption of crypto (and if its prices stabilises).

Its entirely logical to think "hmmmm system might blow, we need a lifeboat"; but most have embraced Too Big To Fail. And it won't be allowed to. The absolute ONLY solution is a managed adjustment and gradual deleveraging - which will take decades.

[Mr Whippy]

DonkeyApple said:

You are simply describing life. The mistake that you are making is in still believing that you were the first to see these things and that somehow you are special.

Everyone alive today grew up being bombarded by that utopian view of the future. It's not something weirdly unique to 44 year olds.

Every generation has had people feathering their own nest. It is madness to try and suggest that the Boomers somehow invented that!! The facade that somehow the 'silent generation' and the 'greatest generation' were somehow full of people of moral principle is just silly. They were riddled with crooks and self serving douche bags and it is merely a natural function of time that distorts people's realities.

People have always 'cling to the dream of making it'. Again, that's not suddenly unique to people today. It's practically the definition of a loser. The person who thinks they're owed something and then just sits there hoping it will randomly materialise before them.

You also seem to believe not being taught the facts of life at school has put you at a disadvantage but no one is taught this stuff, we all mostly leave education with a delusion and a great hope and it is during first contact with the real world that we learn these things.

It's at this point that people who have the path to be higher income earners make their life choices and split into the two different groups There are those who realise how things have always worked and then choose to work with that and then there are those who persist in maintaining the delusions of youth, the blaming of others, the wanting pocket money, the envy of others, still living at home, spending their money on shopping and self indulgence and most recently, genuinely believing WFH is some kind of birth right and being extremely confused as to why they're on the front line of work force reductions.

There are, as there always are, significant problems and hurdles within society but the cacophony of whinging from higher income adult babies is somewhat farcical. All the pensioners with perfectly good, if not excessive, retirement incomes endlessly botching about how hard done by they are, the growing whinging of those in their 50s who have wasted their money shopping and not growing up who now are starting to see their peers who chose to pay off their mortgages, not rent cars endlessly, not go skiing twice a year and not marry an unemployed interior design fraudster all discussing their retirement to coincide with when employers all stop wanting to have sad old people cluttering the workspace. Maybe the real difference among the 40 somethings is that more of them believed that bks of youth and genuinely spent their working life to date thinking bizarrely that they were somehow special and different and deserving? Maybe some of it is down to the baffling naivety of seeing all these fraudulent lifestyles being endlessly promoted and not actually realising almost all are fake?

among lower income households we have a the very serious issues that have been caused by debt deregulation that has drive asset values, stalled wage inflation, formed synthetic lifestyles but among higher income earners they, like all those who have preceded them, knew they should have been saving and paying down essential debt in their 30s and 40s but made their own choices to do the opposite. Seeing these higher income earners subsequently attempting to claim they have been subjected to the same issues as lower income earners is pretty disgraceful. Like those gap year kids begging in Asia.

I know you’re right, but in hindsight everything is easy.

Society should be making it clear to kids in the schooling system that society isn’t a utopia with an omni-potent and good political system.

The system in fact creates sheep and you have to learn to be a wolf.
Indeed if that is the case would wolves succeed as much if everyone was thinking like one?

Is this system set up the way it is to provide meat for the grinder?
Or is it just eternal optimism that’s ruining the lives of many young people going into the world thinking everyone else is a positive socially minded person?

It’s a st system in any case and is an abuse of everyone who enables it and exposes their children to it.


Ie, you bemoan people buying cars on credit, going on two holidays etc, but those people spend money and generate income for businesses to profit from.
For society to profit from.

If everyone tomorrow went into hermit mode and paid down debts first, the economy would collapse.



Thus the system is broken. It’s broken on multiple levels.

After ages of advancement and wealth creation, things like basic houses and electricity should be free.
Indeed we did have this outlook as a society a lifetime ago, it’s not ever been a dream of the young only.


We’ve fked up. Because of people like Rishi, Hunt, etc… greed and has infested the people who run the country and they’ve ruined it.

[OoopsVoss]

Mr Whippy said:

We’ve fked up. Because of people like Rishi, Hunt, etc… greed and has infested the people who run the country and they’ve ruined it.

Whilst this is veering a long way from the BoE, surely you have to see that corrosive media habits have a big part to play. Look at the massive "flexing" (I'm assured is the word by my 10 year old) on social media and the volumes of cash pumped into vacuous media celebrities. Life is presented as "if you don't have the latest and greatest, you aren't living it the max, YOLO bks". I'm not in anyway suggesting that Rishi and Co are quality politicians (probably lower attainment than his mediocre Goldman's career); but I think the rot is in at a societal level. Greed / manipulation / envy / low self esteem is driving a society solely driven by attaining material things at almost any cost (or worse to actively ignore the costs). Yes politicians are shameful in doing this, but they might be representative of a global idiocracy.

[Scootersp]

ooid said:

Scootersp said:

This is what I mean about the Gold narrative/sentiment, Gold equals conspiracy loon, it just rolls off the tongue and is at best 50:50 agreed/disagreed with, when the "International Monetary Fund" holds over 90 Million ounces.

Also this is an IMF working paper

https://www.imf.org/en/Publications/WP/Issues/2023...

Have a look at the link you posted and tell us you do not see the largest buyers(countries) common ground?

Why throw out out the conspiracy stuff and then this "take a look" and get back to me blah blah, why not just explain what you think is going on? It's all just points of view, personal interpretation, why not just state yours in a more clear manner, rather than be dismissive and condescending?

Tell me what you see re the bigger buyers and then what that means/why you think it's important/significant?

Ok so forget additional buying, why don't the others not buying not sell theirs? Why keep any? Why do they continue to hold it? I think it's because it's money that isn't their own currency, why do you think?

[The Ferret]

OoopsVoss said:

Whilst this is veering a long way from the BoE, surely you have to see that corrosive media habits have a big part to play. Look at the massive "flexing" (I'm assured is the word by my 10 year old) on social media and the volumes of cash pumped into vacuous media celebrities. Life is presented as "if you don't have the latest and greatest, you aren't living it the max, YOLO bks". I'm not in anyway suggesting that Rishi and Co are quality politicians (probably lower attainment than his mediocre Goldman's career); but I think the rot is in at a societal level. Greed / manipulation / envy / low self esteem is driving a society solely driven by attaining material things at almost any cost (or worse to actively ignore the costs). Yes politicians are shameful in doing this, but they might be representative of a global idiocracy.

There is a huge issue as you point out at societal level. But that issue has always been there, it's just been contained.

40 years ago my old man would have loved a new Ferrari, but didn't have the cash saved up for it. The issue was still there that he wanted one, but it was kept a dream, as the only way of raising that sort of cash back then was downsizing the house or selling a kidney.

40 years later if you want a new Range Rover all you need to do is go and sign a few forms and you can have one.

Credit has caused the rot that has always existed at societal level to rise to the surface. It's set the beast free. It'll go on the rampage until nothing is left, unless its put back in its cage. That's the issue though, every day the beast becomes bigger and tougher to tame.

[supersport]

Mr Whippy said:

I know you’re right, but in hindsight everything is easy.

Society should be making it clear to kids in the schooling system that society isn’t a utopia with an omni-potent and good political system.

I am fairly certain that the schooling system isn't teaching kids that society is a utopia etc. I think you would have to be pretty naive to think that you would leave school into a utopia.

I imagine a fair number of kids see and are aware of the difficulties that their parents experience, and what is going on the world.

Life, and being successful at it is generally hard work, and I think sensible kids see this.

Now, some of the utter dross that is out there on social media seems to show kids / people that they should be able to get anything they want, but I still think you need to be fairly naive to actually believe that.

[OoopsVoss]

The Ferret said:

There is a huge issue as you point out at societal level. But that issue has always been there, it's just been contained.

40 years ago my old man would have loved a new Ferrari, but didn't have the cash saved up for it. The issue was still there that he wanted one, but it was kept a dream, as the only way of raising that sort of cash back then was downsizing the house or selling a kidney.

40 years later if you want a new Range Rover all you need to do is go and sign a few forms and you can have one.

Credit has caused the rot that has always existed at societal level to rise to the surface. It's set the beast free. It'll go on the rampage until nothing is left, unless its put back in its cage. That's the issue though, every day the beast becomes bigger and tougher to tame.

Credit has existed for 100's of years. Its societies attitude towards material possessions that has changed in a short period of time driven by media and instant gratification (think about the rise of instant takeways, cabs, movies, next day delivery etc etc etc). Its creating entitlement and many can't or don't know how to sensibly budget because we don't teach it. We have made credit more available, but there have always been checks and buffers. What is missing is self control mixed with a massive air of entitlement. Its a pervasive must have it all now attitude. You could withdrawal some of the leverage from the system, but there is a hugely irresponsible MSM industry and lack of education about basic finance.

What has happened is leverage pumping asset prices, in turn leading to more credit to buy said assets. Its a leverage spiral.

I don't quite believe you can rock up and have a Range Rover on an average salary, but I'll take your word for it. And if people are doing that, I wouldn't be feeling envy, but "pitying the fool". The good thing in the UK (despite anecdotally it seems that every Herbert has a RRS SVR), the reality is we are less indebted as a nation and better savers than many.

[BobToc]

OoopsVoss said:

I'm not in anyway suggesting that Rishi and Co are quality politicians (probably lower attainment than his mediocre Goldman's career);m

It’s completely tangential to this thread, but Rishi’s GS career was brief rather than mediocre. Jumping to TCI post-Stanford was a stellar opportunity for him and didn’t reflect on a disappointing time at GS (quite the opposite).

Edit: he is, however, hilariously bad at politics.

Edited by BobToc on Tuesday 5th March 14:32

[G-wiz]

audikarma said:

Sometimes DonkeyApple gives out a nugget of wisdom.

But often it’s wrapped in 2000 words of him smugly smelling his own farts and thinking how delicious they are.

Now I realize why I find DonkeyApple's posts so informative.

[OoopsVoss]

BobToc said:

It’s completely tangential to this thread, but Rishi’s GS career was brief rather than mediocre. Jumping to TCI post-Stanford was a stellar opportunity for him and didn’t reflect on a disappointing time at GS (quite the opposite).

Edit: he is, however, hilariously bad at politics.

Edited by BobToc on Tuesday 5th March 14:32

I did say mediocre, not terrible (like his political attainment). Compared to other GS alumni who transitioned to politics or Central Banks, he wasn't anywhere near as senior. He's certainly presided over no genius policy as chancellor or PM. Its a shame he didn't think to bring what he learnt from finance into government. It's what government needs, realistic and honest understanding if finance- not leave at the door for political vanity, of which he is ultra guilty. Not. A. Fan.

Anyhow. It's an interesting debate (the monetary stuff mot Rishi) unusual for PH there is a general consensus agreement, just different levels of hypothesis on what comes next.

[BobToc]

For what it’s worth I think Sunak is a bit of a cautionary tale for finance types on what makes a successful politician. A lot of finance people (especially GS people) breathed a sigh of relief at his appointment. We’ve known what the problems are and here, finally, was a guy like us who would sort everything out because he thought just like us. I’d like to believe that all these finance types have taken the lesson that being very smart in an investing context doesn’t translate to good political decision making, but memories are short…

[leef44]

OoopsVoss said:

jameswills said:

NowWatchThisDrive said:

The BBC guy has it a bit wrong there. The institutions like Grayscale, BlackRock and Fidelity are just the ETF managers. It's not their billions being poured in, it's the customers and ETF buyers.

Agreed, the headline is not quite the story it makes out, but these entities are heavily entwined with governments and the central banking system, I don’t think it’s something you can separate easily. Another article here sort of explaining how they might be actually trying to kill Crypto not invest in it by their actions, coupled with US government actions

https://www.forbes.com/sites/digital-assets/2023/1...

Again, don’t propose to be an expert, I’m just very interested in the current state of currency and money markets and looking at possible outcomes to this mess.

Its not just misleading, its simply wrong. Blackrock is not a bank. its an Asset Manager. At that point you ought to have given up reading. A bank or responsible Central Bank is not going to be buying up BTC (or any decentralised) crypto currency in size - unless its a derivative hedge (that means they have already passed on the risk). Regulations require banks to hold capital against market risk or in simple terms price volatility. The cost of capital plus associated loss potential would nix it as an investment. Central Banks should have zero loss taking capacity so they are even less likely too (unless you want to avoid sanctions, OFAC etc). UK regulations would almost certainly see a CEO doing a 7 stretch if a UK bank embarked on this strategy and BTC did a 30% dump wiping them out.

Its an interesting theory and the motivation might be there, but its not practical (yet). I will however 100% guarantee they will buy digitised / tokenised assets or stable coins - particularly CBDCs. Overtime, decentralised BTC etc may actually get on to banks balance sheets but as part of a broader adoption of crypto (and if its prices stabilises).

Its entirely logical to think "hmmmm system might blow, we need a lifeboat"; but most have embraced Too Big To Fail. And it won't be allowed to. The absolute ONLY solution is a managed adjustment and gradual deleveraging - which will take decades.

can someone explain to me how an ETF starts out? I'm not that clued up on this.

Does a financial institute have to buy up a whole load of bitcoin to start the ETF in the primary market to operate the ETF in the secondary market for the retail investor?

if that's the case then would that not explain why these large institutes have massive purchases of bitcoin and subsequently ends up boosting up the price?

[wisbech]

leef44 said:

can someone explain to me how an ETF starts out? I'm not that clued up on this.

Does a financial institute have to buy up a whole load of bitcoin to start the ETF in the primary market to operate the ETF in the secondary market for the retail investor?

if that's the case then would that not explain why these large institutes have massive purchases of bitcoin and subsequently ends up boosting up the price?

No, an ETF could well start out at zero (BTC held) As purchase/ sell requests come in from retail, the ETF buys/ sells the assets held in the ETF.

But, ETF may boost demand, as you can then buy/ sell BTC without all the hassle of ramps/ KYC/ passwords etc.

[OoopsVoss]

wisbech said:

leef44 said:

can someone explain to me how an ETF starts out? I'm not that clued up on this.

Does a financial institute have to buy up a whole load of bitcoin to start the ETF in the primary market to operate the ETF in the secondary market for the retail investor?

if that's the case then would that not explain why these large institutes have massive purchases of bitcoin and subsequently ends up boosting up the price?

No, an ETF could well start out at zero (BTC held) As purchase/ sell requests come in from retail, the ETF buys/ sells the assets held in the ETF.

But, ETF may boost demand, as you can then buy/ sell BTC without all the hassle of ramps/ KYC/ passwords etc.

Or trades derivatives (think basic CFD - Contract for Difference, Futures / Options) to mimic the performance of BTC. That way you can build a leveraged ETF - without full physical replication...... and yay, shadow banks (asset managers) get on the leverage creation band wagon. What could go wrong......

EDIT to add, I'm not sure leveraged ETFs are suitable for retail, but there are thousands upon thousands of leveraged ETFs sold to professional investors.

Edited by OoopsVoss on Wednesday 6th March 10:07

[DonkeyApple]

Mr Whippy said:

I know you’re right, but in hindsight everything is easy.

Hindsight is certainly a bh but it's nothing new. Much of the reason older people dare to giver you her people 'advice' on life is arguably born from hindsight of having made, seen made or nearly made the very mistakes.

Mr Whippy said:

Society should be making it clear to kids in the schooling system that society isn’t a utopia with an omni-potent and good political system.

Yes and no. One of the major cultural shifts of recent times is the absolution of parental responsibility. When you choose to bring a child into this world you accept a tacit obligation to impart wisdom as opposed to living with an expectation that everyone else was put in this planet to do your job for you. I agree that schooling is a great time and place to teach young minds that real life isn't some Disney fantasy. Yet we must face the reality that only some children grow into adults who are completely deluded and the differentiator isn't therefore school but home. Millions of young adults have been failed by their parents.

Mr Whippy said:

The system in fact creates sheep and you have to learn to be a wolf.
Indeed if that is the case would wolves succeed as much if everyone was thinking like one?

In a way but no one needs to be a wolf. Being a pig that builds its house out of bricks is suffice. Thinking that one needs to be a wolf to survive is probably too extreme a view for me. I'd prefer to look it as there always being wolves but one doesn't haven't to label oneself up as food.

Mr Whippy said:

Is this system set up the way it is to provide meat for the grinder?

I don't think so but it doesn't always help those who fall in, or are born in the grinder sufficiently although we have seen the ghastly social structures that oppressed based on who one was spaffed out to pretty much crushed since the 90s and those who became adults around the turn of the century simply have not been held back by disgraceful beliefs of class, sex or race. Those who hurl themselves into the meat grinder by choosing to live like a little prince or princess can be left to their own self inflicted devices.

Mr Whippy said:

Or is it just eternal optimism that’s ruining the lives of many young people going into the world thinking everyone else is a positive socially minded person?

The question here is how many as very many aren't and why did the parents of those that do opt to step away from their responsibilities? It's hard to blame society as a whole when society as a whole isn't to blame and many succeed and excel.

Let's also not forget that many when they're in their say 30s and looking around to see how they are getting along compared to their peers and their parents tend to make the same pair of mistakes. Firstly when looking at their peers they don't look at the whole picture just the lifestyle elements which could easily be a complete facade and when looking at parents and their peers they tend to look at what they have now as opposed to back when they were in their 30s and quite possibly hadn't even been on a foreign holiday or owned a German prestige car!!

Mr Whippy said:

It’s a st system in any case and is an abuse of everyone who enables it and exposes their children to it.

It's not really. It's just a system like any other where some become more fortunate than others and some bin all their savings on a better lifestyle now rather than investing in a better lifestyle in perpetuity.

Mr Whippy said:

Ie, you bemoan people buying cars on credit, going on two holidays etc, but those people spend money and generate income for businesses to profit from.
For society to profit from.

Credit is essential. Equitable access to credit is essential. What I've been discussing is excess credit and its toxicity along with the reality that it isn't even essential.

Mr Whippy said:

If everyone tomorrow went into hermit mode and paid down debts first, the economy would collapse.

Absolutely, hence why you wouldn't and governments work to prevent that. But this is about excess credit, not cutting credit for all. It is just the observation that when you extend credit to those who don't need credit to have a good quality of life you create asset inflation, cost inflations etc that then impact everyone.

For example, if car credit were capped then the U.K. fleet average would be cheaper and subsequently everyone's insurance would be lower. When a £100k car is written off, the cost is t born by the owner but by everyone paying to be insured by that syndicate, in very simple terms.

Likewise property credit. Absolutely essential but philosophically, do we need £1m+ mortgages? No one actually needs a property of such value so why not just say to people that they're completely free to buy them but they actually have to be able to afford them. That way, you take out a slug of house price inflation as well as derisking the market. You probably would also have less demand for second homes as the lending wouldn't be as available etc. Yet such a cap would impact no one in terms of necessity.

Mr Whippy said:

Thus the system is broken. It’s broken on multiple levels.

It is unwell. The problem with broken is that implies a reset is required (hence all the currency talk) but that wouldn't solve anything. The have nots still would have nothing and the haves would start again and be joined by the next generation on haves and you'll be back to square one. I think it better to wind things down than put them down.

Mr Whippy said:

After ages of advancement and wealth creation, things like basic houses and electricity should be free.

They kind of are for those most desperate. To go much beyond that would certainly be an extreme change. And let's not forget, everyone has had super cheap electricity and gas since the 70s, hence why many never considered the need for their home to be remotely energy efficient.

Mr Whippy said:

Indeed we did have this outlook as a society a lifetime ago, it’s not ever been a dream of the young only.

I'm not sure about that.

Mr Whippy said:

We’ve fked up. Because of people like Rishi, Hunt, etc… greed and has infested the people who run the country and they’ve ruined it.

Personally, I don't think they've ruined it. But there is an argument that they've failed to fix enough things. As will the next bunch of clowns who will be ruled by the devolved powers and give money to pro spenders who will hurl it as quickly as they can at the people they despise, making them even wealthier and despised even more.

[ooid]

Scootersp said:

Why throw out out the conspiracy stuff and then this "take a look" and get back to me blah blah, why not just explain what you think is going on? It's all just points of view, personal interpretation, why not just state yours in a more clear manner, rather than be dismissive and condescending?

Nothing dismissive or condescending really, I simply pointed out the list, can you see Russia, China, Turkey as the biggest gold buyers recently? Let's take Turkey for instance, closer to Europe ( so to speak). Run by a lunatic, no free speech, nearly 10 billion USD worth of local industrialists left the country in the last few years, huge debt and of course a mickey mouse currency (please google 1 USD to TRY and see the drop in the last 12 months). The least they can do just to buy more Gold to slow*down their currency becoming a toiler paper in a few months, rather than hours maybe ?

There is nothing wrong including Gold in a portfolio, it is a diversifier and that's it.

[leef44]

OoopsVoss said:

wisbech said:

leef44 said:

can someone explain to me how an ETF starts out? I'm not that clued up on this.

Does a financial institute have to buy up a whole load of bitcoin to start the ETF in the primary market to operate the ETF in the secondary market for the retail investor?

if that's the case then would that not explain why these large institutes have massive purchases of bitcoin and subsequently ends up boosting up the price?

No, an ETF could well start out at zero (BTC held) As purchase/ sell requests come in from retail, the ETF buys/ sells the assets held in the ETF.

But, ETF may boost demand, as you can then buy/ sell BTC without all the hassle of ramps/ KYC/ passwords etc.

Or trades derivatives (think basic CFD - Contract for Difference, Futures / Options) to mimic the performance of BTC. That way you can build a leveraged ETF - without full physical replication...... and yay, shadow banks (asset managers) get on the leverage creation band wagon. What could go wrong......

EDIT to add, I'm not sure leveraged ETFs are suitable for retail, but there are thousands upon thousands of leveraged ETFs sold to professional investors.

Edited by OoopsVoss on Wednesday 6th March 10:07

Thanks.

With leveraged ETFs is there a risk that it all collapses like a house of cards similar to the Lloyds insurance spiral back in the 80's (?)