BOE 3rd November Rate Announcement
Discussion
DonkeyApple said:
All the big ticket stuff like extensions, renovations, cars etc do appear to be in a big shift. I'd love to know what's happening at kitchen companies as they're a real consumer and consumer debt bellwether.
I was looking at jobs the other week and one caught my eye.Similar ish to my last professional job 13 years ago, but different industry.
They wanted to pay less than I was on 13 years ago, by about 8%!
That was for the parent company of Second Nature kitchens iirc, so all that kitchen/homeware consumer stuff.
I know some industries are naff on pay but still attract workers… but still.
I know what pay these skills can attract just freelancing or working any old place and that pay is bargain basement for someone skilled.
I don't disagree with any of the that, but re this
OoopsVoss said:
Its too big a risk, so they won't test it - the system WILL be maintained until the conditions are there for massive and long term (generational) fiscal reform.
If they are in total control, powerful and coordinated enough to do the first thing ie hold off issues and the retain status quo as long as necessary, then why can they not also create the conditions for the reform? If they see the problem, what are they having to wait for to enact the 'fix'? If that if they have this much control over the years how the merry hell have they controlled something to the point where they have boxed themselves into such a corner!?Your confidence is shared across the market no doubt but, that it is, doesn't that create higher risk in itself? A sort of over confidence?
Why do we ever need to worry if we can be so confident that they can stave things off, presumably it's because they actually can't hold it all together indefinitely, those conditions, whatever they are need to come, and if that's true and there is a timeline (or other) limitation involved then our high confidence about the maintenance of the status quo could/should be questioned?
Scootersp said:
I don't disagree with any of the that, but re this
Your confidence is shared across the market no doubt but, that it is, doesn't that create higher risk in itself? A sort of over confidence?
Why do we ever need to worry if we can be so confident that they can stave things off, presumably it's because they actually can't hold it all together indefinitely, those conditions, whatever they are need to come, and if that's true and there is a timeline (or other) limitation involved then our high confidence about the maintenance of the status quo could/should be questioned?
That’s exactly it.OoopsVoss said:
Its too big a risk, so they won't test it - the system WILL be maintained until the conditions are there for massive and long term (generational) fiscal reform.
If they are in total control, powerful and coordinated enough to do the first thing ie hold off issues and the retain status quo as long as necessary, then why can they not also create the conditions for the reform? If they see the problem, what are they having to wait for to enact the 'fix'? If that if they have this much control over the years how the merry hell have they controlled something to the point where they have boxed themselves into such a corner!?Your confidence is shared across the market no doubt but, that it is, doesn't that create higher risk in itself? A sort of over confidence?
Why do we ever need to worry if we can be so confident that they can stave things off, presumably it's because they actually can't hold it all together indefinitely, those conditions, whatever they are need to come, and if that's true and there is a timeline (or other) limitation involved then our high confidence about the maintenance of the status quo could/should be questioned?
CB omnipotence is now the risk.
Front run everything, because even if that risk accelerated meltdown, it’ll bring forward the only viable intervention, QE and lowering interest rates, which generates inflation and booms in assets.
So as risk rises, participant response is to get in at any price because the only outcome is being left behind.
The risk then is, can the CBs truly pull this off?
How much money will they have to put into markets and economies to keep things going?
At some level the sums will be so unpalatable the confidence in the entire economy will fail… not least when other countries stop buying your debt… and only your citizens do.
And at that point when they’re buying debt in pensions etc, see tens of trillions printed, and suppressed interest rates and yields… having just experienced rampant inflation because of that previously at much lower levels… hmmm.
I get a feeling this next crash will require CBs to let a lot of people suffer financial losses.
Or, they just play it softly for a decade or two of miserable economic doldrums… nvidia might be at ATH today, and not fall much, but it might still be at that value in 25 years, inflation corrected (Intel among others has done that trick already)
Or a war.
The current approach of central banks is IMO daft - all doing the same thing at the same time. US economy is looking pretty healthy while European economies aren't, and yet there's been barely a flicker of movement between the major exchange rates.
It's as daft as investors all piling into passive investment without realising there simply isn't a market unless there's a very large proportion of active investors out there.
Lemming mentality.
It's as daft as investors all piling into passive investment without realising there simply isn't a market unless there's a very large proportion of active investors out there.
Lemming mentality.
Scootersp said:
If they are in total control, powerful and coordinated enough to do the first thing ie hold off issues and the retain status quo as long as necessary, then why can they not also create the conditions for the reform? If they see the problem, what are they having to wait for to enact the 'fix'? If that if they have this much control over the years how the merry hell have they controlled something to the point where they have boxed themselves into such a corner!?
Your confidence is shared across the market no doubt but, that it is, doesn't that create higher risk in itself? A sort of over confidence?
Why do we ever need to worry if we can be so confident that they can stave things off, presumably it's because they actually can't hold it all together indefinitely, those conditions, whatever they are need to come, and if that's true and there is a timeline (or other) limitation involved then our high confidence about the maintenance of the status quo could/should be questioned?
I'm sharing the view, I'm not quite sure home much confidence I have in it. Your confidence is shared across the market no doubt but, that it is, doesn't that create higher risk in itself? A sort of over confidence?
Why do we ever need to worry if we can be so confident that they can stave things off, presumably it's because they actually can't hold it all together indefinitely, those conditions, whatever they are need to come, and if that's true and there is a timeline (or other) limitation involved then our high confidence about the maintenance of the status quo could/should be questioned?
Arguably by design and purpose they created these conditions - it was deliberate to expand money supply / asset price growth. What they never left fat or redundancy in - was Black Swans like the GFC and Covid. They need to create the conditions for reform, but you are dealing with politicians. Who have no interest in long term planning and bar a miniscule % only in it for themselves.
The Central Banks are actually calling for restraint from Govts, but they aren't listening. We used to have technocratic governments and Treasury functions - that's largely blown to dust. The problem you have globally is populism. Trump is thus far, looking a strong bet for next President. He is going to do whatever he wants and it will be MAGA on crack. He will be in power in SPITE of all attempts to stop him - a lot from within the republicans so he will have a tiny echo chamber of nutters around him. Likewise in Europe, there are elections this year where right wing parties are going to poll very well - possibly winning. Interestingly, the UK is probably past peak populism and sick to the teeth of it. Make no mistake, the incoming government will have no money and spiralling costs for NHS etc - but the Tory implosion will give Labour at least 2 terms to run or commence a turnaround. Everyone with a brain knows this is now decade / generational fixes - bar the clowns in charge (or they might but they don't care - cos power). And stealing from the future, doesn't carry costs today.
I don't tend to buy into its a conspiracy / cabal stuff, its more likely its idiots that are the problem. I did have a mildly morbid thought, the people churning this policy out believe its end of days / we are doomed - Covaids / nuke our self to destruction so go out on a high - but I think even that is beyond their thinking power.
OoopsVoss said:
Scootersp said:
I'm trying to find a 2008 pre crisis quote where one of the major banks top staff, did the "it's fine nothing to see here" a week or so before total carnage.
This is why crashes are so severe? because (fair enough) everyone tries/fights to the last?
It might have been said by someone, but there were enough voices saying the "balloon is going to go up", that it wasn't a consensus view. The Big Short might have suggested that only 3 people saw this coming, but anyone sensible was already offloading the dogsThis is why crashes are so severe? because (fair enough) everyone tries/fights to the last?
t, getting paid more to sit on it or take bigger haircuts. Arguably that haircut ramping did Lehman in, once JPM started (and everyone else followed) upping the haircuts on loans to Lehman - they couldn't cover the margin calls so everyone called default.2006 we were talking on PH about looming issues.
2007 I was selling off stuff I didn't really need, including a house in Italy as it was looming particularly bad over there.
Late 2007 I sold off a book of overseas HNWs to an Icelandic Bank as I was on the hook for a percentage of any loss risk. Late 2008 I was sitting on Necker when Branson informed us that RBS had gone and remember the looks on the faces of those who had Coutts accounts.
2010 my plan to buy back all the things I'd sold for pennies on the £ had gone to crap because I'd never for a moment imagined we could have something like QE.
2017 I sold up the BTLs and last year I sold the house as the plan was to downsize when the kids left but looking at those timings it was going to coincide with when all the big Boomer homes would really be hitting the market with few buyers close to current values. Got the timing wrong on that as bids began when Truss began so took a reaming.
I just can't get away from the fact that we're trudging slowly closer to the edge of something. For example, if US commercial property junk bonds all started defaulting, how could the U.K. remain isolated from that? Lenders would start pulling lines over here and it's not as if we don't have a lump of zombie businesses and zombie commercial property that's barely clinging on presently?
DonkeyApple said:
I just can't get away from the fact that we're trudging slowly closer to the edge of something. For example, if US commercial property junk bonds all started defaulting, how could the U.K. remain isolated from that? Lenders would start pulling lines over here and it's not as if we don't have a lump of zombie businesses and zombie commercial property that's barely clinging on presently?
IMO there are two things right now that will be seen as weird with the benefit of hindsight,1. Crypto. This week people are discussing, "Why the recent volatility?". My answer is simple - there's nothing of substance so the the price just swings about with sentiment from one moment to the next.
2. A.I. Every business that's got a computer and a decent PR department is shouting "A.I." and, hey presto, the share price goes up. It's got so crazy some commentators are extolling "chips" as being the next "oil". Doesn't make sense to me in anything but the short term when you reckon the cheapest Samsung phone is already said to have more computing power than the Apollo space program.
Some of the big computers that watch what's going on among financial commentators track the use of specific words. There are reports that the word "frothy" has been used a lot in the last month.
Panamax said:
IMO there are two things right now that will be seen as weird with the benefit of hindsight,
1. Crypto. This week people are discussing, "Why the recent volatility?". My answer is simple - there's nothing of substance so the the price just swings about with sentiment from one moment to the next.
2. A.I. Every business that's got a computer and a decent PR department is shouting "A.I." and, hey presto, the share price goes up. It's got so crazy some commentators are extolling "chips" as being the next "oil". Doesn't make sense to me in anything but the short term when you reckon the cheapest Samsung phone is already said to have more computing power than the Apollo space program.
Some of the big computers that watch what's going on among financial commentators track the use of specific words. There are reports that the word "frothy" has been used a lot in the last month.
Crypto: Find a use for it amongst people with money, otherwise it's just another punting product for adult babies who haven't the balls to admit they're gamblers. 1. Crypto. This week people are discussing, "Why the recent volatility?". My answer is simple - there's nothing of substance so the the price just swings about with sentiment from one moment to the next.
2. A.I. Every business that's got a computer and a decent PR department is shouting "A.I." and, hey presto, the share price goes up. It's got so crazy some commentators are extolling "chips" as being the next "oil". Doesn't make sense to me in anything but the short term when you reckon the cheapest Samsung phone is already said to have more computing power than the Apollo space program.
Some of the big computers that watch what's going on among financial commentators track the use of specific words. There are reports that the word "frothy" has been used a lot in the last month.
AI: These YT overly excitable chaps always forget that it'll be the death of many companies and those companies banging on about AI efficiencies, many will be butchered by other companies that do it better and more aggressively.
It's like the folk currently banging on about how Tesla is going to fail. That chance was back in the last decade and completely old news. Tesla has the EV lead and can undercut others for share and it also has all the real data from all its millions of cars that most likely other manufacturers are going to have to buy access to for their development of things like self driving. Musk may be a freaky turd you wouldn't let near your children but the business is here to stay.
Re the computing power of the Apollo space mission, didn't Sor Clive claim that back in the mid 80s re the Spectrum?
What intrigues me is how this social media spankers' hysteria has infected the market as a whole with machines and traders soiling themselves at every data release rather than reading it first.
OoopsVoss said:
I don't tend to buy into its a conspiracy / cabal stuff, its more likely its idiots that are the problem.
and 99.9% of the these idiots being too wealthy to feel it personally to any meaningful degree.I forget that lots of wealthy people don't even take an interest in the things being discussed here, the large majority entrust this to the professionals and they aren't/can't? be in the more pessimistic range as, like DA's experience they can't time things right and so tend to leave money in.
Those on here in the markets nearer the high finance coal face will have got wind of the 2007/08 things, and may have done their best to avoid it's fall out but as per DA's timeline, when there was a whiff 2004 onwards it didn't get tackled, it just became the trend/gravy train, people making money overlook/ignore things until it can be juggled no more.
DonkeyApple said:
What intrigues me is how this social media spankers' hysteria has infected the market as a whole with machines and traders soiling themselves at every data release rather than reading it first.
First/fastest out with the sound bite wins, very few go away and think about it, if a social media person did when they come back with a more considered view it'll be old news and the next breaking news will be the focus of the masses?Scootersp said:
First/fastest out with the sound bite wins, very few go away and think about it, if a social media person did when they come back with a more considered view it'll be old news and the next breaking news will be the focus of the masses?
Yup. I understand that part, the bit that surprises me is the amount of capital that not just chases that effect, because I can understand that, but acts like it in independence. Even the liquid and traditionally rational markets are acting more like spiv stocks the morning Red Hot Penny Shares hits the retirement home. Must be part of ooopsVoss's market confidence comment? They might as well just latch onto the what's hot and ride those waves because of the "they won't let anything bad happen" vibe "it won't happen pre election" etc.
Haven't the big 5-7 Dow stocks been a bit like this for ever now, good companies but huge multiples, but consistent monthly income flows keep the prices moving skyward, the it's worked so it'll keep working mentality? Everything in my adult living memory has widely been propped up, bailed out and if it's not now it's broadly accepted that it's going to be monumentally serious so we'll just deal with that when it comes?
markets seem to hang on every word/sentiment change right now? Just look at the FED meetings/decisions, perhaps it was always thus (it's not something I ever used to be tuned into)
Haven't the big 5-7 Dow stocks been a bit like this for ever now, good companies but huge multiples, but consistent monthly income flows keep the prices moving skyward, the it's worked so it'll keep working mentality? Everything in my adult living memory has widely been propped up, bailed out and if it's not now it's broadly accepted that it's going to be monumentally serious so we'll just deal with that when it comes?
markets seem to hang on every word/sentiment change right now? Just look at the FED meetings/decisions, perhaps it was always thus (it's not something I ever used to be tuned into)
If the long term strategy is all just debase our currencies and slowly swirl the toilet… or blow mega £££ bailing it all out which has the nasty dude consequence of asymmetric impact and broadens the wealth gap…
Why not front run it?
Print £2Tn, pay off gov debt, take the interest savings and save them, or use them wisely.
Why do this slowly and pay all that interest and let the country crumble on the way there? Where is the sense in that?
Why not just move immediately to the ideal end point from a financial pov, then start picking up the pieces?
I just don’t get the logic sometimes of keeping along our current trajectory.
It’s not working. You fix it. You don’t see an impending crash and not swerve or hit the brakes.
Current policy seems to be to just pretend it’s not happening
Why not front run it?
Print £2Tn, pay off gov debt, take the interest savings and save them, or use them wisely.
Why do this slowly and pay all that interest and let the country crumble on the way there? Where is the sense in that?
Why not just move immediately to the ideal end point from a financial pov, then start picking up the pieces?
I just don’t get the logic sometimes of keeping along our current trajectory.
It’s not working. You fix it. You don’t see an impending crash and not swerve or hit the brakes.
Current policy seems to be to just pretend it’s not happening
DonkeyApple said:
Money printing works best when all your peers are doing likewise. Step away from that and you're Argentina.
But isn’t that if you’re selling your currency as debt with a yield?What if you don’t sell debt?
Ok your imports might cost more but if you’re genuinely making stuff others want (which we could be doing), then surely you’d get a reasonable parity on things?
And if your currency drops 10x who cares?
Poor people don’t, as they live off their income which would broadly go up.
Wealthy people have assets and if they’ve diversified they’ll likely be ok.
The only issue is if you’re not getting pay rises isn’t it?
Mr Whippy said:
DonkeyApple said:
Money printing works best when all your peers are doing likewise. Step away from that and you're Argentina.
But isn’t that if you’re selling your currency as debt with a yield?What if you don’t sell debt?
Ok your imports might cost more but if you’re genuinely making stuff others want (which we could be doing), then surely you’d get a reasonable parity on things?
And if your currency drops 10x who cares?
Poor people don’t, as they live off their income which would broadly go up.
Wealthy people have assets and if they’ve diversified they’ll likely be ok.
The only issue is if you’re not getting pay rises isn’t it?
As for diversification, you better hope your portfolio included physical fuel, tinned foodstuffs and 5.56mm.
DA is 100% bang on, step out of line and do Monetary Financing you are f
ked.One thing that might have a big impact on the debt / leverage boom is BASLE3 Endgame. Leverage costs might balloon and the equity punters might be in for a shock with the PBs start correctly pricing leverage.
OoopsVoss said:
Well it's a bit of an issue if you are not fuel and food self sufficient. Poor people will feel the niggest impact. De globalisation, near shoring etc isn't really happening in any meaningful way IF you look at the trade data.
As for diversification, you better hope your portfolio included physical fuel, tinned foodstuffs and 5.56mm.
DA is 100% bang on, step out of line and do Monetary Financing you are fked.
One thing that might have a big impact on the debt / leverage boom is BASLE3 Endgame. Leverage costs might balloon and the equity punters might be in for a shock with the PBs start correctly pricing leverage.
I’m looking out of my window and see plenty of space to grow food.As for diversification, you better hope your portfolio included physical fuel, tinned foodstuffs and 5.56mm.
DA is 100% bang on, step out of line and do Monetary Financing you are f
ked.One thing that might have a big impact on the debt / leverage boom is BASLE3 Endgame. Leverage costs might balloon and the equity punters might be in for a shock with the PBs start correctly pricing leverage.
Fuel? Don’t we have loads of gas? And EVs? And coal? And nuclear? And wind? Etc.
Are we really a million miles from being self sufficient if we wanted and needed to?
Agree, it’s a bit pie in the sky.
But it seems ok to all slide into oblivion together over decades while the few are enriched at the cost of the many… rather than try fix your own boat and go it alone.
Why is that? What mentality is driving this?
Is it because leaders tend to be wealthy/connected to wealth and don’t want to lose that… which we would if we went it alone (ie, it’d level wealth a great deal)?
Mr Whippy said:
I’m looking out of my window and see plenty of space to grow food.
Fuel? Don’t we have loads of gas? And EVs? And coal? And nuclear? And wind? Etc.
Are we really a million miles from being self sufficient if we wanted and needed to?
Agree, it’s a bit pie in the sky.
But it seems ok to all slide into oblivion together over decades while the few are enriched at the cost of the many… rather than try fix your own boat and go it alone.
Why is that? What mentality is driving this?
Is it because leaders tend to be wealthy/connected to wealth and don’t want to lose that… which we would if we went it alone (ie, it’d level wealth a great deal)?
We could be fuel self sufficient and maybe food too, but we are not. And it won't change overnight. Its a sad state of affairs.Fuel? Don’t we have loads of gas? And EVs? And coal? And nuclear? And wind? Etc.
Are we really a million miles from being self sufficient if we wanted and needed to?
Agree, it’s a bit pie in the sky.
But it seems ok to all slide into oblivion together over decades while the few are enriched at the cost of the many… rather than try fix your own boat and go it alone.
Why is that? What mentality is driving this?
Is it because leaders tend to be wealthy/connected to wealth and don’t want to lose that… which we would if we went it alone (ie, it’d level wealth a great deal)?
As for the "leaders", how many times do the leadership bubbles have to be wrong. They are so out of touch is absolutely mental. That's why populist like Trump and Co do so well. This year's elections are worrying, the nutters could get in all over the place.
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