Macroeconomics, the economy, inflation etc. *likely to be very dull*

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  • TheBigBean
    TheBigBean Posts: 21,928
    surrey_commuter said:

    TheBigBean said:

    surrey_commuter said:

    TheBigBean said:

    Yesterday, £28bn of Government bonds rolled off and for the first time in years, the proceeds won’t be reinvested by the Bank of England.


    The BoE is also selling £20bn of corporate bonds it holds.
    Well I am going to take that as good news even if it seems to imply that it needed a crisis to find enough buyers for new issues.

    If the BofE used pretend money to buy the bonds that it will now sell for real money what will it do with the profit?
    It just adjusts its balance sheet. It had £895bn of assets. Now it has a bit less. Less pretend money if you like.
    This is what my brain can not comprehend.

    In my world they used pretend money to buy a £20bn asset, they are selling the asset for 20 billion real pounds.

    So, I can see why you say they have £20bn less pretend money but what do they do with the real money?
    It's not pretend/real, they are all the same. Think of it in terms of notes and a printing press. They printed £20bn of cash, actual cash not fake stuff. They have been repaid £20bn of actual cash. They will now burn it, so it no longer exists.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    TheBigBean said:

    surrey_commuter said:

    TheBigBean said:

    surrey_commuter said:

    TheBigBean said:

    Yesterday, £28bn of Government bonds rolled off and for the first time in years, the proceeds won’t be reinvested by the Bank of England.


    The BoE is also selling £20bn of corporate bonds it holds.
    Well I am going to take that as good news even if it seems to imply that it needed a crisis to find enough buyers for new issues.

    If the BofE used pretend money to buy the bonds that it will now sell for real money what will it do with the profit?
    It just adjusts its balance sheet. It had £895bn of assets. Now it has a bit less. Less pretend money if you like.
    This is what my brain can not comprehend.

    In my world they used pretend money to buy a £20bn asset, they are selling the asset for 20 billion real pounds.

    So, I can see why you say they have £20bn less pretend money but what do they do with the real money?
    It's not pretend/real, they are all the same. Think of it in terms of notes and a printing press. They printed £20bn of cash, actual cash not fake stuff. They have been repaid £20bn of actual cash. They will now burn it, so it no longer exists.
    Bizarrely I think I get it.

    I was netting off the cash and pretend money whereas they are burning the cash and stop pretending to have £20bn of pretend money.

    Imay have to start picturing them as a particularly crazy rock band
  • rick_chasey
    rick_chasey Posts: 75,661
    So speaking to various senior economics people of the last 3 weeks for work and things are pretty bearish - everyone predicting a recession in the next 12 months.

    Markets were in a flap on Friday and poised to continue today.
    _
  • rick_chasey
    rick_chasey Posts: 75,661
    Should also add, the world's most important Port Town - Shanghai, is going through the harshest lockdown yet. Big deal.
    _
  • Dorset_Boy
    Dorset_Boy Posts: 7,579
    rick_chasey said:

    So speaking to various senior economics people of the last 3 weeks for work and things are pretty bearish - everyone predicting a recession in the next 12 months.

    Markets were in a flap on Friday and poised to continue today.

    Not everyone is predicting that Rick.
  • rick_chasey
    rick_chasey Posts: 75,661
    edited May 2022
    Dorset_Boy said:

    rick_chasey said:

    So speaking to various senior economics people of the last 3 weeks for work and things are pretty bearish - everyone predicting a recession in the next 12 months.

    Markets were in a flap on Friday and poised to continue today.

    Not everyone is predicting that Rick.
    Everyone I met, Christ did you fail your English comprehension GCSE?!

    Anyway, your comprehension aside, market indicators are as bearish as they have been for over a century, if you care to look so the *market* is saying it.
    _
  • surrey_commuter
    surrey_commuter Posts: 18,867
    Dorset_Boy said:

    rick_chasey said:

    So speaking to various senior economics people of the last 3 weeks for work and things are pretty bearish - everyone predicting a recession in the next 12 months.

    Markets were in a flap on Friday and poised to continue today.

    Not everyone is predicting that Rick.
    Others are arguing that it is only luck (with dates) that mean we are not in one already
  • Dorset_Boy
    Dorset_Boy Posts: 7,579
    rick_chasey said:

    Dorset_Boy said:

    rick_chasey said:

    So speaking to various senior economics people of the last 3 weeks for work and things are pretty bearish - everyone predicting a recession in the next 12 months.

    Markets were in a flap on Friday and poised to continue today.

    Not everyone is predicting that Rick.
    Everyone I met, Christ did you fail your English comprehension GCSE?!

    Anyway, your comprehension aside, market indicators are as bearish as they have been for over a century, if you care to look so the *market* is saying it.
    That's rich coming from you.
    You have spoken to a small sample.
    Far from every invetment house is predicting recession, and you also need to qualify whther you are taking Uk or global recession.
    But you carry on and perpetuate your habit of a small sample representing everyone's views.
  • rick_chasey
    rick_chasey Posts: 75,661
    Which house is not predicting a recession?!
    _
  • orraloon
    orraloon Posts: 13,236
    The House of Spaffer?
  • Dorset_Boy
    Dorset_Boy Posts: 7,579
    JP Morgan weren't last week, and their consolidated research suggested the same was true for the majority of fund houses.
  • rick_chasey
    rick_chasey Posts: 75,661
    edited May 2022
    Dorset_Boy said:

    JP Morgan weren't last week, and their consolidated research suggested the same was true for the majority of fund houses.

    lol. You sure about that, hun?

    https://www.cnbc.com/video/2022/05/06/recession-is-not-a-near-term-concern-despite-negative-markets-says-jpmorgans-michael-feroli.html

    ^^ 2 days ago.

    Let's just say I've spoken to the people leading the research functions at those very same "fund houses", which is where I got the idea from.

    PMI is down, yield curve is inverted, no sign of chinese lockdown disruption abating, stagflationary energy costs. They are all pointing to a recession. The question is if it's this year or next. My mate Feroli is suggesting next.
    _
  • Dorset_Boy
    Dorset_Boy Posts: 7,579
    rick_chasey said:

    Dorset_Boy said:

    JP Morgan weren't last week, and their consolidated research suggested the same was true for the majority of fund houses.

    lol. You sure about that, hun?

    https://www.cnbc.com/video/2022/05/06/recession-is-not-a-near-term-concern-despite-negative-markets-says-jpmorgans-michael-feroli.html

    ^^ 2 days ago.

    Let's just say I've spoken to the people leading the research functions at those very same "fund houses", which is where I got the idea from.

    PMI is down, yield curve is inverted, no sign of chinese lockdown disruption abating, stagflationary energy costs. They are all pointing to a recession. The question is if it's this year or next. My mate Feroli is suggesting next.
    I was at a JPM seminar on Tuesday last week 'hun'. and their UK strategists weren't suggesting recsesion, but acknowledged it is a possiblity and on the spectrum of outcomes. They don't deal in absolutes after all, unlike some lay folk.
    No one is saying it's not a possibility.
  • focuszing723
    focuszing723 Posts: 8,151
    Draft
  • focuszing723
    focuszing723 Posts: 8,151
    draft
  • rick_chasey
    rick_chasey Posts: 75,661
    _
  • focuszing723
    focuszing723 Posts: 8,151
    edited May 2022
    rick_chasey said:



    So Rick? What do Governments start doing, spend big on infrastructure (anything)? But what about inflation/interest rates?
  • focuszing723
    focuszing723 Posts: 8,151
    edited May 2022
    Stevo, any thoughts?
  • focuszing723
    focuszing723 Posts: 8,151
    edited May 2022
    Anybody, any thoughts?
  • pblakeney
    pblakeney Posts: 27,345
    focuszing723 said:



    So Rick? What do Governments start doing, spend big on infrastructure (anything)? But what about inflation/interest rates?

    Changing (increasing) interest rates will do diddly squat to help the economy.
    More likely to accelerate the recession in fact.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    Veronese68 wrote:
    PB is the most sensible person on here.
  • Pross
    Pross Posts: 43,463
    focuszing723 said:

    rick_chasey said:



    So Rick? What do Governments start doing, spend big on infrastructure (anything)? But what about inflation/interest rates?
    A version of eat out to help out for lapdancing clubs would seem to be a good starting point.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    focuszing723 said:

    Anybody, any thoughts?

    Rejoining the SM/CU would help curb inflation and boost the economy.

    Paying people to dig holes seems pointless when we have more than full employment.

    Obviously I do not believe in a magic wand that the Govt can wave that will make everything OK so I don’t think there is much we can do except bend over and take it.

    Over time the economy will naturally adjust to being wrenched out of the SM/CU but right now we are vulnerable to external shocks.

    Boris should have the balls to tell people this is what they voted for
  • Jezyboy
    Jezyboy Posts: 3,616
    Lots of moonshot type green/low carbon initiatives and research that could be sold to the rest of the world would seem a potential start to me.

    Probably looking for paying for it by borrowing. But perhaps it could be a meaningful way of making sure that when you went outside the m25 there were more jobs than just working in distribution centres.

  • surrey_commuter
    surrey_commuter Posts: 18,867
    Jezyboy said:

    Lots of moonshot type green/low carbon initiatives and research that could be sold to the rest of the world would seem a potential start to me.

    Probably looking for paying for it by borrowing. But perhaps it could be a meaningful way of making sure that when you went outside the m25 there were more jobs than just working in distribution centres.

    Can you share some “shovel ready” examples

    I do not believe the Govt is better at picking winners than the market

  • rjsterry
    rjsterry Posts: 29,605
    surrey_commuter said:

    Jezyboy said:

    Lots of moonshot type green/low carbon initiatives and research that could be sold to the rest of the world would seem a potential start to me.

    Probably looking for paying for it by borrowing. But perhaps it could be a meaningful way of making sure that when you went outside the m25 there were more jobs than just working in distribution centres.

    Can you share some “shovel ready” examples

    I do not believe the Govt is better at picking winners than the market

    They don't need to pick winners. They don't offer tax breaks to the film industry on a production by production basis. Some of those films will have lost money. Similarly they did manage to regenerate the Docklands and other areas without picking winners. I don't think it matters if not every renewables startup makes it.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • pangolin
    pangolin Posts: 6,648
    All you guys need to do is cut the bit that says /blockquote in arrows, and paste it back before SC's comment
    - Genesis Croix de Fer
    - Dolan Tuono
  • pangolin
    pangolin Posts: 6,648
    rjsterry said:

    surrey_commuter said:

    Jezyboy said:

    Lots of moonshot type green/low carbon initiatives and research that could be sold to the rest of the world would seem a potential start to me.

    Probably looking for paying for it by borrowing. But perhaps it could be a meaningful way of making sure that when you went outside the m25 there were more jobs than just working in distribution centres.

    Can you share some “shovel ready” examples

    I do not believe the Govt is better at picking winners than the market
    They don't need to pick winners. They don't offer tax breaks to the film industry on a production by production basis. Some of those films will have lost money. Similarly they did manage to regenerate the Docklands and other areas without picking winners. I don't think it matters if not every renewables startup makes it.
    Like this
    - Genesis Croix de Fer
    - Dolan Tuono
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rjsterry said:

    surrey_commuter said:

    Jezyboy said:

    Lots of moonshot type green/low carbon initiatives and research that could be sold to the rest of the world would seem a potential start to me.

    Probably looking for paying for it by borrowing. But perhaps it could be a meaningful way of making sure that when you went outside the m25 there were more jobs than just working in distribution centres.

    Can you share some “shovel ready” examples

    I do not believe the Govt is better at picking winners than the market

    They don't need to pick winners. They don't offer tax breaks to the film industry on a production by production basis. Some of those films will have lost money. Similarly they did manage to regenerate the Docklands and other areas without picking winners. I don't think it matters if not every renewables startup makes it.
    Docklands was 40 years ago and arguably both of your examples are them choosing not to do something.

    I am not a purist but do think the Govt’s best hope of improving thing is to stop doing stuff.
  • TheBigBean
    TheBigBean Posts: 21,928
    surrey_commuter said:



    Docklands was 40 years ago and arguably both of your examples are them choosing not to do something.

    I am not a purist but do think the Govt’s best hope of improving thing is to stop doing stuff.

    There are probably some that believe in free markets more than you, but not many, so I'd say your purity rating is pretty high.

    By way of example based on the posts above, the government could propose a tariff it will pay per tonne of carbon captured. The free market can then work out the best way to make money from that proposal.

    Unfortunately, most of the ideas put forward by the private sector are all about patenting something with the hope of making billions one day.

  • surrey_commuter
    surrey_commuter Posts: 18,867
    TheBigBean said:

    surrey_commuter said:



    Docklands was 40 years ago and arguably both of your examples are them choosing not to do something.

    I am not a purist but do think the Govt’s best hope of improving thing is to stop doing stuff.

    There are probably some that believe in free markets more than you, but not many, so I'd say your purity rating is pretty high.

    By way of example based on the posts above, the government could propose a tariff it will pay per tonne of carbon captured. The free market can then work out the best way to make money from that proposal.

    Unfortunately, most of the ideas put forward by the private sector are all about patenting something with the hope of making billions one day.

    I often think that the easiest thing for UK to do is copy ideas from abroad that have been test driven. The other side of that coin is to ask why nobody else has done your new idea.

    Knowing nothing aboutthe subject do you know why nobody else has adopted it.

    None of these ideas will alleviate the current recession/cost of living crisis

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