LEAVE the Conservative Party and save your country!
Comments
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Agree or disagree, this is interesting (US perspective, but relevance here as well):
https://www.slowboring.com/p/low-interest-rates-are-a-curse-we
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have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree0 -
It's consensus UK austerity kicked in too soon and choked off the recovery (thus in turn making it more difficult to tackle the deficit).surrey_commuter said:
have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree0 -
I think we have passed the tipping point so he is p1ssing in the wind whatever he does.rick_chasey said:
It's consensus UK austerity kicked in too soon and choked off the recovery (thus in turn making it more difficult to tackle the deficit).surrey_commuter said:
have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree
I read a headline that he thinks the economy will recover by the end of 2022, laughed and did not read on1 -
Had to share this from an economistsurrey_commuter said:
I think we have passed the tipping point so he is p1ssing in the wind whatever he does.rick_chasey said:
It's consensus UK austerity kicked in too soon and choked off the recovery (thus in turn making it more difficult to tackle the deficit).surrey_commuter said:
have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree
I read a headline that he thinks the economy will recover by the end of 2022, laughed and did not read on
and the follow up analogy
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Is there a reason why the Govt never previously bought it’s own debt to manage interest rates?rick_chasey said:
Had to share this from an economistsurrey_commuter said:
I think we have passed the tipping point so he is p1ssing in the wind whatever he does.rick_chasey said:
It's consensus UK austerity kicked in too soon and choked off the recovery (thus in turn making it more difficult to tackle the deficit).surrey_commuter said:
have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree
I read a headline that he thinks the economy will recover by the end of 2022, laughed and did not read on
and the follow up analogy
Why don’t they buy all the existing debt and save themselves tens of billions?
Why doesn’t the BofE buy directly from the Treasury?0 -
To answer the last question first, I think it can now (for boring plumbing reasons) but the reason it doesn't do it on the whole and buys older debt after it has been issued is to ensure there it pays a fair market price for it. Honest pricing of debt is really important. This is all OK if people continue to trust the central bank and the govt tht they can pay it all back. Rates suggest that's fine.surrey_commuter said:
Is there a reason why the Govt never previously bought it’s own debt to manage interest rates?rick_chasey said:
Had to share this from an economistsurrey_commuter said:
I think we have passed the tipping point so he is p1ssing in the wind whatever he does.rick_chasey said:
It's consensus UK austerity kicked in too soon and choked off the recovery (thus in turn making it more difficult to tackle the deficit).surrey_commuter said:
have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree
I read a headline that he thinks the economy will recover by the end of 2022, laughed and did not read on
and the follow up analogy
Why don’t they buy all the existing debt and save themselves tens of billions?
Why doesn’t the BofE buy directly from the Treasury?
To answer the first question, the reason is that modern thinking on how to run central banks during a crisis combined with the rather unique circumstances of heading into a crisis without the main central banking lever - rate cutes, so they're having to be more creative.
That leads to why this move by Rishi is quite so stupid as fiscal stimulus is all you have left.
To your earlier point "we've passed the tipping point" - on what basis are you saying that? Because to me there's no way you can even know what the tipping point is.
And why buy all the debt when people want it?0 -
I mean, arguably, you could even say the reason for all this counterintuitive central banking is a response to irrational fiscal policies, with gov'ts generally across the western world leaning too heavily on monetary policy to inflate economies.
Edit: ultimately the question of whether spending is financed by treasury bonds or central-bank reserves isn’t a big deal — since both are government liabilities in the end.
At basically zero interest rates you can't encourage any more borrowing in the private sector than you are already are, so the central bank picks up the slack. There are economies of scale for the gov't/bank doing that.
What I don't quite understand in your argument is if there is such a threat about the cost of future borrowing, why is that not reflected in the market rates for longer dated gilts?
I mean, the threat would have to be really very substantial for it to take precedence over dealing with the economic disaster that we're in right now. This is in essence as bad as it gets for developed economics, so why are you worried about 5/10 years down the road?0 -
why do they have to pay it back? surely they already own itrick_chasey said:
To answer the last question first, I think it can now (for boring plumbing reasons) but the reason it doesn't do it on the whole and buys older debt after it has been issued is to ensure there it pays a fair market price for it. Honest pricing of debt is really important. This is all OK if people continue to trust the central bank and the govt tht they can pay it all back. Rates suggest that's fine.surrey_commuter said:
Is there a reason why the Govt never previously bought it’s own debt to manage interest rates?rick_chasey said:
Had to share this from an economistsurrey_commuter said:
I think we have passed the tipping point so he is p1ssing in the wind whatever he does.rick_chasey said:
It's consensus UK austerity kicked in too soon and choked off the recovery (thus in turn making it more difficult to tackle the deficit).surrey_commuter said:
have you ever considered that the founders of Modern Monetary Theory were having a laugh?rick_chasey said:Seems like Sunak hasn't learned the lesson of the GFC. Then again, he's a Brexiter, even if he doesn't play the populist card, so can we really be surprised?
or is it just a coincidence that they landed on the same initials as Magic Money Tree
I read a headline that he thinks the economy will recover by the end of 2022, laughed and did not read on
and the follow up analogy
Why don’t they buy all the existing debt and save themselves tens of billions?
Why doesn’t the BofE buy directly from the Treasury?
To answer the first question, the reason is that modern thinking on how to run central banks during a crisis combined with the rather unique circumstances of heading into a crisis without the main central banking lever - rate cutes, so they're having to be more creative.
That leads to why this move by Rishi is quite so stupid as fiscal stimulus is all you have left.
To your earlier point "we've passed the tipping point" - on what basis are you saying that? Because to me there's no way you can even know what the tipping point is.
And why buy all the debt when people want it?
Why do I think we have passed the tipping point? - we are staring down the barrel of £3trn total debt and for the forseeable future are planning to run deficits of £100bn+ and what are they proposing to fill the hole? a £4bn cut in foreign aid and a freeze on public sector wages but not for anybody in healthcare or low earners.
As you know I believe that gilts rates will go back up and then we will default. Of course if you believe in MMT then this will never happen as the Govt controls the rate through QE and will only be paying interest to itself.
Bizarrely our debate has lead to me reading more about MMT and whilst I understand it more still think that it is smoke and mirrors.0 -
I think a lot of this boils down to you being overimpressed by big numbers and believing you are some contrarian bond expert.
If you believe rates will go up and then cause a default you should go put your money where your mouth is as that would be the trade of the century.0 -
How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.
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Bizarrely 5 years ago, wearing another hat, we had a choice of switching into LDI to as a hedge against long term gilt rates falling still further... not our best decisionrick_chasey said:I think a lot of this boils down to you being overimpressed by big numbers and believing you are some contrarian bond expert.
If you believe rates will go up and then cause a default you should go put your money where your mouth is as that would be the trade of the century.0 -
As in you didn't chose to go into LDI?
Big growth in LDI generally has kept me busy the last two years.0 -
we reckoned that 10yr rates could not go any lower so would be locking in at the wrong time.rick_chasey said:As in you didn't chose to go into LDI?
Big growth in LDI generally has kept me busy the last two years.
Growing LDI should reduce the demand for gilts0 -
This annoys me on a regular basis. "What do you think the swaps market is going to? It can't go any lower, surely? What's the trend?" If I knew that I wouldn't be working.surrey_commuter said:
we reckoned that 10yr rates could not go any lower so would be locking in at the wrong time.rick_chasey said:As in you didn't chose to go into LDI?
Big growth in LDI generally has kept me busy the last two years.
Growing LDI should reduce the demand for gilts0 -
Where do you get a 6% increase in the State Pension from Rick?rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.
It's going up by 2.5% in April, and hasn't increased by 6% in a year probably since the triple lock was introduced.0 -
in fairness our advisors were pushing us to do itTheBigBean said:
This annoys me on a regular basis. "What do you think the swaps market is going to? It can't go any lower, surely? What's the trend?" If I knew that I wouldn't be working.surrey_commuter said:
we reckoned that 10yr rates could not go any lower so would be locking in at the wrong time.rick_chasey said:As in you didn't chose to go into LDI?
Big growth in LDI generally has kept me busy the last two years.
Growing LDI should reduce the demand for gilts
We are a very conservative company and it was too close to the GFC to buy into something as exotic as LDI.
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We had a foreign aid budget as a percentage of GDP that was significantly bigger than the US and Germany. Essentially 300 odd million people in America were giving around twice what the 60 odd million people in the UK were giving. The new rate of 0.5% is still higher than most others in the G7. The argument that our aid budget is small is just not rooted in fact even at its cut rate. The next question this raises if the 0.7% was essential to gain power and influence then did this influence bring us more prosperity than other G7 nations and if so where is the evidence.rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.0 -
Dorset_Boy said:
Where do you get a 6% increase in the State Pension from Rick?rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.
It's going up by 2.5% in April, and hasn't increased by 6% in a year probably since the triple lock was introduced.
Sun journalist
You can see the point I'm making, right?
There's money for guns and for pensioners, but not for public sector workers and foreign aid.
I would at least figure there was some rational thinking behind cutting it all, even if I disagree with it, but the above makes it look like it's giving cover for political choices. Never let a good crisis go to waste.0 -
You can have the argument if you want it, but not with me because I'm not arguing any of this in the post you are replying to.john80 said:
We had a foreign aid budget as a percentage of GDP that was significantly bigger than the US and Germany. Essentially 300 odd million people in America were giving around twice what the 60 odd million people in the UK were giving. The new rate of 0.5% is still higher than most others in the G7. The argument that our aid budget is small is just not rooted in fact even at its cut rate. The next question this raises if the 0.7% was essential to gain power and influence then did this influence bring us more prosperity than other G7 nations and if so where is the evidence.rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.0 -
Well you didn't make reference to a real terms increase in the State Pension. You clearly implied there would be a 6% increase as a result of yesterday's announcement.rick_chasey said:Dorset_Boy said:
Where do you get a 6% increase in the State Pension from Rick?rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.
It's going up by 2.5% in April, and hasn't increased by 6% in a year probably since the triple lock was introduced.
Sun journalist
You can see the point I'm making, right?
There's money for guns and for pensioners, but not for public sector workers and foreign aid.
I would at least figure there was some rational thinking behind cutting it all, even if I disagree with it, but the above makes it look like it's giving cover for political choices. Never let a good crisis go to waste.
I can see what you were trying - namely to make a political dig, and I suspect you deliberately tried to make the increase something it isn't.
Interestingly, given that the State Pension increases by the highest of 2.5%, National Average Earnings or CPI, it seems the IFS are suggesting that neither CPI or average earnings will increase by more than 1.47% pa between 2021 and 2025.
As for the Foreign Aid budget, I think they said on the radio it is still the highest percentage of GDP amongst the G7.
Also, the public sector might be having a pay freeze, but another million in the private sector will be having their pay terminated.0 -
Look I'm not here to argue the numbers - slice and dice them if you want, pensioners are getting a pay rise above inflation to the tune of £6bn collectively over the next 5 years - I'll back the IFS here.Dorset_Boy said:
Well you didn't make reference to a real terms increase in the State Pension. You clearly implied there would be a 6% increase as a result of yesterday's announcement.rick_chasey said:Dorset_Boy said:
Where do you get a 6% increase in the State Pension from Rick?rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.
It's going up by 2.5% in April, and hasn't increased by 6% in a year probably since the triple lock was introduced.
Sun journalist
You can see the point I'm making, right?
There's money for guns and for pensioners, but not for public sector workers and foreign aid.
I would at least figure there was some rational thinking behind cutting it all, even if I disagree with it, but the above makes it look like it's giving cover for political choices. Never let a good crisis go to waste.
I can see what you were trying - namely to make a political dig, and I suspect you deliberately tried to make the increase something it isn't.
Interestingly, given that the State Pension increases by the highest of 2.5%, National Average Earnings or CPI, it seems the IFS are suggesting that neither CPI or average earnings will increase by more than 1.47% pa between 2021 and 2025.
As for the Foreign Aid budget, I think they said on the radio it is still the highest percentage of GDP amongst the G7.
Also, the public sector might be having a pay freeze, but another million in the private sector will be having their pay terminated.
Get bogged down in the weeds if you want but look at the broader picture here.
If this was about saving money because of rona, why hand pensioners and the military more money?
(I personally find the 'private sector having their pay terminated so public sector should see a freeze' argument very unconvincing because I cannot ever in my life remember an argument going the other way (private sector pay is going up so lets pay the public sector more) and if it was made it would be equally unconvincing.)0 -
Not to mention bunging a few billion on an unwanted road tunnel past Stonehenge.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
You don't want to argue the figures because you have deliberately misrepresented them. Alternatively, why can't you acknowledge you got them wrong?
I believe there was consideration to a review of the triple lock earlier this year and it was decided to leave it in place. The triple lock is nothing new and will always result in the State Pension at least keeping pace with CPI, but the inflation rate for pensioners is generally considered to be higher than CPI.0 -
Oh my god.Dorset_Boy said:You don't want to argue the figures because you have deliberately misrepresented them. Alternatively, why can't you acknowledge you got them wrong?
I believe there was consideration to a review of the triple lock earlier this year and it was decided to leave it in place. The triple lock is nothing new and will always result in the State Pension at least keeping pace with CPI, but the inflation rate for pensioners is generally considered to be higher than CPI.
Do you know what 'real' rises actually mean? It means, after inflation.
So if I get a pay rise of 4% after inflation is at 2% my real pay rise is 2%.
What are the IFS getting wrong that you're not?
The Tory gov't does not have to stick to the 'triple lock' if they don't want to. Doing so is a political choice. Benefits are being raised at below inflation rates, by contrast.
But you can't see the big picture can you?
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Of course I f'king know what a real terms rise is. Don't be such a condesending arxsehole.rick_chasey said:
Oh my god.Dorset_Boy said:You don't want to argue the figures because you have deliberately misrepresented them. Alternatively, why can't you acknowledge you got them wrong?
I believe there was consideration to a review of the triple lock earlier this year and it was decided to leave it in place. The triple lock is nothing new and will always result in the State Pension at least keeping pace with CPI, but the inflation rate for pensioners is generally considered to be higher than CPI.
Do you know what 'real' rises actually mean? It means, after inflation.
So if I get a pay rise of 4% after inflation is at 2% my real pay rise is 2%.
What are the IFS getting wrong that you're not?
The Tory gov't does not have to stick to the 'triple lock' if they don't want to. Doing so is a political choice. Benefits are being raised at below inflation rates, by contrast.
But you can't see the big picture can you?
Your orignal post made no mention of a rise in real terms. You stated a 6% rise, no mention of time frame so perfectly reasonable to assume you meant in April. Why not acknowledge that you were at best extremely unclear in why you meant?
It is also a fact that CPI and RPI are a basket of goods & services. It is also a fact that inflation for pensioners has tended to be higher than CPI and RPI because they don't tend to buy the goods and services in the basket that tend to fall in price (eg electricals etc).2 -
I literally posted the tweet where I got it from. Was that clarification not enough?
I'm getting off the merrygoround.
Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.
You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.
Me - a big picture point
you - quibbling over details.0 -
- Intentionally posts misinformationrick_chasey said:I literally posted the tweet where I got it from.
I'm getting off the merrygoround.
Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.
You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.
Me - a big picture point
you - quibbling over details.
- Gets called out on it
- Tries to blame someone else
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I'm slightly torn on this. It's pretty tough for someone who has lost their job seeing someone else getting a payrise funded by taxpayers but equally freezing pay is limiting money that can be spent in the private sector and help safeguard jobs. Certainly during the GFC it was quite annoying hearing Unions moaning about pay freezes when virtually everyone I knew in the private sector who managed to keep their job was being expected to take a pay cut for the privilige. I would also expect public sector employees to get an annual rise of at least the rate of inflation when the economy is growing though.rick_chasey said:
Look I'm not here to argue the numbers - slice and dice them if you want, pensioners are getting a pay rise above inflation to the tune of £6bn collectively over the next 5 years - I'll back the IFS here.Dorset_Boy said:
Well you didn't make reference to a real terms increase in the State Pension. You clearly implied there would be a 6% increase as a result of yesterday's announcement.rick_chasey said:Dorset_Boy said:
Where do you get a 6% increase in the State Pension from Rick?rick_chasey said:How about some evidence that the budget more political than the gov't would ever admit?
Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.
That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.
It's going up by 2.5% in April, and hasn't increased by 6% in a year probably since the triple lock was introduced.
Sun journalist
You can see the point I'm making, right?
There's money for guns and for pensioners, but not for public sector workers and foreign aid.
I would at least figure there was some rational thinking behind cutting it all, even if I disagree with it, but the above makes it look like it's giving cover for political choices. Never let a good crisis go to waste.
I can see what you were trying - namely to make a political dig, and I suspect you deliberately tried to make the increase something it isn't.
Interestingly, given that the State Pension increases by the highest of 2.5%, National Average Earnings or CPI, it seems the IFS are suggesting that neither CPI or average earnings will increase by more than 1.47% pa between 2021 and 2025.
As for the Foreign Aid budget, I think they said on the radio it is still the highest percentage of GDP amongst the G7.
Also, the public sector might be having a pay freeze, but another million in the private sector will be having their pay terminated.
Get bogged down in the weeds if you want but look at the broader picture here.
If this was about saving money because of rona, why hand pensioners and the military more money?
(I personally find the 'private sector having their pay terminated so public sector should see a freeze' argument very unconvincing because I cannot ever in my life remember an argument going the other way (private sector pay is going up so lets pay the public sector more) and if it was made it would be equally unconvincing.)
That said, I also find the argument that public sector workers havehad to work hard to help everyone through the Covid crisis. Whilst that is undoubtably true of public sectors workers in parts of the health service, social care, public health etc. it isn't the case across the board and I've found many of those in the public sector that I have to deal with on a daily basis have taken the changes they have to work due to Covid as an excuse to perform worse than before. I would argue that those in the private care sector have had to work much harder than a person working in the planning department / highway maintenance team / parks department but the private care companies continue to have to work with the shoestring profits they make from running services on behalf of the local council.
As ever the spending priorities seem out of kilter though but I suspect cutting overseas aid plays well with the core of voters that elected a Johnson government.
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You posted the tweet 3 hours after your original post.rick_chasey said:I literally posted the tweet where I got it from. Was that clarification not enough?
I'm getting off the merrygoround.
Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.
You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.
Me - a big picture point
you - quibbling over details.
If you're going to make assertions you have an obligation to at least use correct figures, or present them correctly.0
