The Bank Of England Clueless Thread

[Wayward]

http://www.telegraph.co.uk/business/2017/11/25/productivity-could-take-soon-economists-warned-gloomy/

Productivity could take off soon...!  this time it is different!!  Don't pay attention to farcical forecast failings as illustrated in Zugzwang's post above... 

[Errol]

It isn't clear to me why they think productivity would suddenly increase. If anything, I can see it dropping further.

[TheCountOfNowhere]

On 28/11/2017 at 12:56 PM, Wayward said:

The dismal science....

Perhaps they should place an advert on TV explaining how banks work and the creation of money...that will help.

"BoE must work harder to reverse distrust of economics

Andy Haldane, chief economist at the Bank of England, has said that the central bank must work harder to improve the public's understanding of economics after seeing trust in the organisation fall following the financial crisis.  Mr Haldane said economics was currently facing a "twin deficit" in which the British public failed to understand and trust economics. He said efforts to improve understanding of economic policy would help people make better decisions while ensuring there is a "trusting and understanding" relationship between the public and the BoE."

 

As reported in press..

The Times, Page: 46

https://www.ft.com/content/d842ffc4-d381-11e7-8c9a-d9c0a5c8d5c9?FTCamp=engage/CAPI/webapp/Channel_Moreover//B2B

British people must work harder to have economists arrested for fraud.

Edited November 29, 2017 by TheCountOfNowhere

[sPinwheel]

20 hours ago, Wayward said:

That chart is hilarious...how do they preserve any credibility whatsoever...self evidently their forecasters are idiots.  At what stage to they ask themselves.." we never seem to get this right, perhaps something is wrong with our approach" ??? 

God, please no return to the fan charts. The only thing missing was the shite hitting them.

[Wayward]

3 hours ago, sPinwheel said:

God, please no return to the fan charts. The only thing missing was the shite hitting them.

If I was so consistently wrong I would expect to be sacked...seems to be different for top economic forecasters.  I expect we could run a comparison with tea leaf reading and the success rate would be similar to the experts.  Much like the highly paid fund managers that on average are no better than a FTSE tracker.

[Fairyland]

Bloomberg: Don't Jump the Rate-Hike Gun on this Brexit Breakthrough

  Quote

A big Brexit roadblock has been busted, and sterling markets have obliged with a big response. The pound soared to a two-month high against the dollar, and 10-year gilt yields jumped. But the most interesting move is in front-end rate expectations. The money markets are interpreting negotiating progress as somehow enabling the Bank of England to pull forward its next interest-rate hike from November 2018 to as early as September. This looks like jumping the gun.

Rate hike come quicker than expected?

[Si1]

3 hours ago, Wayward said:

.  Much like the highly paid fund managers that on average are no better than a FTSE tracker.

On average they're much worse than a tracker (after fees)

[TheCountOfNowhere]

4 hours ago, Fairyland said:

Bloomberg: Don't Jump the Rate-Hike Gun on this Brexit Breakthrough

  Quote

A big Brexit roadblock has been busted, and sterling markets have obliged with a big response. The pound soared to a two-month high against the dollar, and 10-year gilt yields jumped. But the most interesting move is in front-end rate expectations. The money markets are interpreting negotiating progress as somehow enabling the Bank of England to pull forward its next interest-rate hike from November 2018 to as early as September. This looks like jumping the gun.

Rate hike come quicker than expected?

Odd....who'd a thought it.

[zugzwang]

4 hours ago, Wayward said:

If I was so consistently wrong I would expect to be sacked...seems to be different for top economic forecasters.  I expect we could run a comparison with tea leaf reading and the success rate would be similar to the experts.  Much like the highly paid fund managers that on average are no better than a FTSE tracker.

By way of contrast, this forum was warning about an impending crisis in 2005/6 when the economics profession was still congratulating itself about the 'Great Moderation'. Not only did we time the Crash, we also predicted its severity (on a similar scale to the Great Depression), while the economists were utterly clueless about both. In fact most of them were forecasting a modest interruption of growth even as late as the summer of 2008.

Truth is, economics is a dismal science because its taught and practiced by wannabe mathematicians rather than scientists or engineers. A faculty of third-rate pretenders with no more practical sense than a starfish. The entire curriculum needs to be re-written from top to bottom and the subject re-established on a proper empirical foundation with the insights of quantitative finance, behavioural psychology and nonlinear system dynamics at its heart.

[SOLZHENITSYN]

1 hour ago, TheCountOfNowhere said:

Odd....who'd a thought it.

I don’t think BoE can even wait until September 2018 for their next rate rise.

By that point the Fed might have raised US rates by another 0.75% above where they are now. That would put sterling 1.5% behind the dollar.

Noises coming out of the US all seem to be pointing towards a December rise.

https://www.afp.com/en/news/827/fed-survey-shows-signs-inflation-rising-wages-us-doc-up7j53

https://www.wsj.com/amp/articles/feds-williams-fed-should-continue-slow-rate-rises-over-next-year-1511981548

 

Edited November 29, 2017 by SOLZHENITSYN

[LittlePig]

9 minutes ago, zugzwang said:

By way of contrast, this forum was warning about an impending crisis in 2005/6 when the economics profession was still congratulating itself about the 'Great Moderation'. Not only did we time the Crash, we also predicted its severity (on a similar scale to the Great Depression), while the economists were utterly clueless about both. In fact most of them were forecasting a modest interruption of growth even as late as the summer of 2008.

Truth is, economics is a dismal science because its taught and practiced by wannabe mathematicians rather than scientists or engineers. A faculty of third-rate pretenders with no more practical sense than a starfish. The entire curriculum needs to be re-written from top to bottom and the subject re-established on a proper empirical foundation with the insights of quantitative finance, behavioural psychology and nonlinear system dynamics at its heart.

There is a game of truth and a game of power. If they are not playing by the rules of truth, then...

[Wayward]

I like this in all today's papers on the BOE's latest numbers....a fall from 9.8% growth in unsecured credit to 9.6% and therefore 'soothing' fears over reckless bank lending !!  All is well in the world.  Also reported - mortgage approvals falling, I expect that has been posted elsewhere today on forum.

 

"Consumer credit growth falls to 18-month low

Lending on credit cards and loans has fallen to an 18- month low,  soothing fears over reckless bank lending. The B o E said unsecured consumer credit grew by 9.6% year-on-year in October, down from 9.8% in September. Mean while, the number of mortgage approvals for buying a house fell to its lowest level in more than a year last month. The B oE said that a total of 64,575 loans to buy a home were approved in October, below what economists had been expecting and fewer than the 66, 232 reported in September."

Reported in press as follows... 

The Guardian, Page: 28   The Sun, Page: 53   Daily Mirror, Page: 50   Evening Standard, Page: 41 

https://www.thetimes.co.uk/article/mortgage-figures-pour-more-cold-water-on-housing-market-m8sbf9swb

[TheCountOfNowhere]

18 hours ago, SOLZHENITSYN said:

I don’t think BoE can even wait until September 2018 for their next rate rise.

By that point the Fed might have raised US rates by another 0.75% above where they are now. That would put sterling 1.5% behind the dollar.

Noises coming out of the US all seem to be pointing towards a December rise.

https://www.afp.com/en/news/827/fed-survey-shows-signs-inflation-rising-wages-us-doc-up7j53

https://www.wsj.com/amp/articles/feds-williams-fed-should-continue-slow-rate-rises-over-next-year-1511981548

 

The Boe will raise rates 1 month before the US raise rates.

i.e. we will say 0.5 to 1.0 points behind the US.

If the US get to 5 we get to 4/4.5  by that point the damage will be done

The bankers have "fibbed" for 10 years why would they show their hand on interest rates ?

The unreliably boyfriend is f**king someone else.

Edited November 30, 2017 by TheCountOfNowhere

[Fairyland]

Bank of England warning over debt: borrowing puts UK at risk of Venezuela-style collapse, official warns

Quote

Britain cannot afford to borrow more without jeopardising the country’s financial stability, a senior Bank of England official has warned.

Richard Sharp said the Government had already borrowed an extra £1 trillion since the 2008 financial crisis.

Borrowing more could put the country at risk of suffering from a collapse similar to that experienced by Venezuela, he suggested. Mr Sharp, a member of the Bank’s Financial Stability Committee, spokejust days after Philip Hammond announced a £25 billion spending spree in the Budget and at a time when the Labour Party is advocating borrowing an extra £250 billion.

We are vigilant!

Edited December 1, 2017 by Fairyland

[IMHAL]

12 minutes ago, Fairyland said:

Bank of England warning over debt: borrowing puts UK at risk of Venezuela-style collapse, official warns

We are vigilant!

No Sh1te Sherlock!

[whome_yesyou]

What exactly have they done for the past 5 years to prevent loose lending and bring some value back to money? Nobody else to blame but themselves.

Again, they are all talk and warnings. It’s what they do that counts.

[guest_northshore]

1 hour ago, Fairyland said:

Bank of England warning over debt: borrowing puts UK at risk of Venezuela-style collapse, official warns

We are vigilant!

That's not what he actually said:

"The aftermath of the financial crisis shows just how valuable fiscal space can be.
-The UK went from the lowest debt-to-income ratio in our peer-group of G7 countries to middle of the pack.
-The demographic shift of an ageing and shrinking population attacks government budgets on two fiscal flanks: simultaneously reducing tax revenue and increasing expenditure.
-The effectiveness of fiscal stimulus may also be impaired when debt is already high, reducing the fiscal multiplier.
-we entertained Nicholas Taleb at the BoE to discuss the risks of unanticipated, rare events – fat-tail events..."it pays to be paranoid"...
-I’m now taking the liberty of ignoring benign present market conditions ... Let me remind you of the definition of a AAA rating...Venezuela is now in default.
-recognise that the UK’s debt levels may be stretched given the risk that unexpected shocks may materialise ...
-low market interest rates and a persistent excess of global liquidity could be creating an illusion of readily available spare national debt capacity; a point of view which one unanticipated shock could challenge.
-Following the 1976 crisis, there had been until the global financial crisis a relatively unqualified victory of the capitalist free-market model to generating prosperity. Then the global financial crisis threw old certainties into doubt.
-high-conviction policymaking in an uncertain economic environment is perilous.
-challenge to the financial stability policymaker is to assess the cost of losing valuable fiscal space to promote financial stability if any debt-financed expenditure fails to produce the promised growth"

http://www.bankofengland.co.uk/publications/Pages/speeches/2017/1014.aspx

[zugzwang]

UK inflation hits a six year high of 3.1%.

https://www.yahoo.com/news/uk-inflation-hits-nearly-six-high-3-1-093359338--business.html

Quote

The CPI has surged from a subdued 0.5 percent at the time of the Brexit vote in June 2016 to its highest since March 2012.

The Office for National Statistics said on Tuesday the main driver of inflation last month came from air fares which fell, but by less than in November 2016.

An increase in prices for computer games also pushed up inflation.

The alternative measure of retail price inflation, which is used to calculate payments on government bonds and many commercial contracts, edged down to 3.9 percent - still putting pressure on the government's stretched budget.

Tuesday's data showed factories faced a pickup in price pressure after the recent rise in oil prices.

The cost of raw materials - many of them imported - was 7.3 percent higher than in November 2016, up from 4.8 percent in October and at the top end of forecasts by economists polled by Reuters. It was the first increase in the rate since August and the sharpest rise since January.

 

[Wayward]

In the Standard today....page 45

Ultra-low rates may be set to end

PwC’s Andrew Sentance says the “unreal world” of ultra-low interest rates since the 2008-09 financial crisis could come to an end sooner than markets and economists are expecting. He says the strengthening global economy, consumer price inflation and the history of rate-rising cycles point to the MPC raising rates quickly to promote longer-term monetary stability.

??? since when have they been interested in longer term monetary stability??  It's a laugh a minute.

This 'unreal world' is the new normal for many, reality is likely to be cruel.  Oh dear me.

[Wayward]

more laughs from the comedy factory....

See City AM page 2  and DT business page 4 today....

Falling immigration to drive wage growth

Michael Saunders, a member of the Bank of England’s Monetary Policy Committee, has said that record low unemployment may start to drive wage growth as companies find it harder to hire foreign workers amid Brexit talks. He said that easy access to foreign labour may have, until recently, limited “the extent to which pay growth responds to low UK unemployment”.
 

But I thought immigration didn't lower wages ??!!!  They are forgetting the script.!  What a laugh !

[Wayward]

Seems no shortage of BOE drivel in the press today...

See Times pg 46, Ind I pg 38 and DM pg 71

Bank bosses warned over consumer debt

The Bank of England has written to bank bosses, warning them to “remain vigilant” about the heightened risks linked to rising consumer debt levels. The warning comes after a review from the Prudential Regulation Authority which found executives were receiving inadequate information and might be missing warning signs along the way.

"Vigilant"?? , "missing warning signs"??   

[Fence]

19 minutes ago, Wayward said:

.....Michael Saunders, a member of the Bank of England’s Monetary Policy Committee, has said that record low unemployment may start to drive wage growth as companies find it harder to hire foreign workers amid Brexit talks. He said that easy access to foreign labour may have, until recently, limited “the extent to which pay growth responds to low UK unemployment”.  But I thought immigration didn't lower wages ??!!!  They are forgetting the script.!  What a laugh !

"....."Oh, that was easy," says Man, and for an encore goes on to prove that black is white and gets himself killed on the next zebra crossing.”

(Douglas Adams, The Hitchhiker's Guide to the Galaxy)

Edited January 18, 2018 by Fence

[jiltedjen]

when the rail-mania bubble collapsed it was bailed out by governments at the time as those in government where balls deep into said investments, (buy to let) which gave the smartest a chance to get out and unwind positions and let morons (recent buy to letters!) take on the debt instead.  It took a second collapse for the whole mess to finally be sorted out.

This bubble? well i can imagine when it pops there will be such an upset of everyone loosing so much money, that regulation should finally be tightened for good (for 25 years at least).

The BOE are basically posting stuff so when it goes go pop they can say they warned everyone and its not their fault (when it clearly is their fault keeping rates far to low for too long) . At some point the 'everything' bubble will pop.

[TheCountOfNowhere]

1 hour ago, jiltedjen said:

when the rail-mania bubble collapsed it was bailed out by governments at the time as those in government where balls deep into said investments, (buy to let) which gave the smartest a chance to get out and unwind positions and let morons (recent buy to letters!) take on the debt instead.  It took a second collapse for the whole mess to finally be sorted out.

 

That's my view point.  The 2nd collapse will be much worse...for some.

They'll hang someone out to dry ( Osborne ? ) and we'll see massive changes.

Wealth preservation is key now, nothing else.

I'd have thought BrExit was the ideal situation to get it over with.

[Toast]

5 hours ago, jiltedjen said:

when the rail-mania bubble collapsed it was bailed out by governments at the time as those in government where balls deep into said investments, (buy to let) which gave the smartest a chance to get out and unwind positions and let morons (recent buy to letters!) take on the debt instead.  It took a second collapse for the whole mess to finally be sorted out.

This bubble? well i can imagine when it pops there will be such an upset of everyone loosing so much money, that regulation should finally be tightened for good (for 25 years at least).

The BOE are basically posting stuff so when it goes go pop they can say they warned everyone and its not their fault (when it clearly is their fault keeping rates far to low for too long) . At some point the 'everything' bubble will pop.

That's an interesting thought!

I can't find anything in the Wikipedia article about a bail-out of the 1845 bubble - although it's clear that some of the large companies (and presumably their well-connected owners) benefited from the crash by buying assets at a deep discount; but that's a different mechanism (but clearly a way for those "in the know" to profit, if they keep their powder dry). Do you have a link to a more comprehensive history of the crash?

Also, if this is indeed what happens with housing, one would expect the elite to have divested following 2007/8 (assuming that can be seen as the "first" crash). Do we have any evidence for that? Lastly, 10 years seems like a long time for our poor masters to have to wait before rinsing us commoners, so they must be getting quite antsy, if that's what they were expecting.