interestrateripoff

The Bank Of England Clueless Thread

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8 hours ago, darkmarket said:

I'd like it if this inquiry was fairly narrowly focussed to be honest, and issues like inflation measurement were dealt with in parallel. I'd like to see a conclusion that the BoE has been acting in direct contradiction of its remit, but that'll remain a nice dream. Nevertheless, it's all a move in the right direction.

Fair enough and no doubt there could be advantages doing it that way - although my view is that their thinking is so disjointed (probably intentionally so) that unless they consider it all holistically then they will never come to a joined up conclusion that benefits the economy/the real economy.

They'll never see the linkages - again probably intentionally.  Those that do see the overall picture will exploit the stupid MPs (maybe the majority?) don't.

Edited by billybong

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33 minutes ago, billybong said:

Fair enough and no doubt there could be advantages doing it that way - although my view is that their thinking is so disjointed (probably intentionally so) that unless they consider it all holistically then they will never come to a joined up conclusion that benefits the econy/the real economy.

They'll never see the linkages - again probably intentionally.  Those that do see the overall picture will exploit the stupid MPs (maybe the majprity?) who don't.

This is the trade-off. My concern would be that terms of reference set too wide can create insurmountable problems for an inquiry, as seen in that into historical child abuse for example. The hope would be that a more narrowly-focussed inquiry could then be fed into a more overarching view of the situation, but that leads to problems you describe.

1 hour ago, Noallegiance said:

2. In every assessment made by the BoE, the man in the street is not their concern. Every answer given today was weighted toward protecting the institutions within the financial system. This may be a manifestation of the realisation that the UK financial sector is so vast that a catastrophic failure within it would be hugely detrimental to everyone on our shores, but it means that the impacts of the current system on Mr & Mrs Britain do not feature within their policy making strategies.

Given the subject of the hearing was BoE Financial Stability Reports 2016 and the focus of the witnesses of macroeconomic matters, this isn't altogether surprising. The MPs present have a responsibility to translate the responses into something meaningful for the electorate, which they are incapable or unwilling to do.

If you're angry about the lack of attention to the consequences of their actions on average people, I'd considering directing that towards the elected representatives who are supposed to be able to bridge the macroeconomy with lived experience. For the most part, I'd say they're incompetent. In certain instances, like Rees-Mogg for example, they appear to just not care.

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BoE's Carney - curbing consumer lending would be 'big call'

LONDON Bank of England Governor Mark Carney said it would be a "big call" for the central bank to rein in rapid growth in consumer lending, which picked up strongly last year and brought some echoes of the period before the global financial crisis.

 

We can't stop people spending money they don't have...

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2 hours ago, interestrateripoff said:

Virtually every "forecast" he has made has been so wrong there can be no confidence that he's right this time - except maybe on some sort of stopped watch principle - an if at first you don't succeed ....principle.  Maybe he's trying to blight good news by the latest forecast.

If there ever is another referendum it'll be the best laugh ever to hear his "forecasts" then.  How he stays in the job is just one of those great mysteries.

Edited by billybong

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15 minutes ago, billybong said:

 

If there ever is another referendum it'll be the best laugh ever to hear his "forecasts" then.  How he stays in the job is just one of those great mysteries.

I think it's a poisoned chalice. Anyone who wants the boe governer job must be ruled out for stupidity.

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2 hours ago, interestrateripoff said:

BoE's Carney - curbing consumer lending would be 'big call'

LONDON Bank of England Governor Mark Carney said it would be a "big call" for the central bank to rein in rapid growth in consumer lending, which picked up strongly last year and brought some echoes of the period before the global financial crisis.

 

We can't stop people spending money they don't have...

It's interesting that there are "echoes of the period before the global financial crisis" but he's still focusing on the the things that they focused on then - the things that didn't reveal the approaching crisis.  It's not as if he's coming out with reports about investigating say hidden areas of possible banking fraud or other more hidden macro issues like those that led to the "unexpected" global financial crisis - and at this stage they are very likely to be developing in the background and becoming more obvious.  Like the possible crisis became pretty obvious to those portrayed in the movie "The Big Short" - despite the central banks not noticing a thing.

He/the BoE  might as well not bother.

Edited by billybong

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22 minutes ago, Si1 said:

I think it's a poisoned chalice. Anyone who wants the boe governer job must be ruled out for stupidity.

The way he repeatedly undermined Haldane today suggests he's very aware of one person stupid enough, and spending more time thinking about keeping his poisoned chalice than any "big call" like, say, working towards financial stability.

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1 hour ago, Si1 said:

http://www.economist.com/blogs/buttonwood/2017/01/light-bulb-moment?fsrc=scn%2Ffb%2Fte%2Fbl%2Fed%2F

 

The Economist magazine gets in a bit of a fuddle wondering why economic productivity growth is currently zero.

Highly productive = highly profitable. High risk/highly profitable activity only happens in the private sector... which is currently saturated with debt. Without demand there's little opportunity for growth.

Keynesian debt production holds up employment and wages, which is good, but is inherently wasteful since there's no (market) mechanism for distinguishing sound investments from unsound ones. Finite budgets but an uncountable list of apparently worthy causes.

As long as the public sector confines itself to marginally profitable (low risk) activities these losses will be modest and justifiable. Attempts to fund high margin activities with public money, however, are likely to multiply those losses uncontrollably. Which is why command economies don't work, and why the exponential run-up in sovereign debt post-GFC has done nothing for productivity growth.

Now I know you know all this stuff already, but why the Economist doesn't is... bewildering. :o

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5 hours ago, zugzwang said:

.

Now I know you know all this stuff already, but why the Economist doesn't is... bewildering. :o

Occasionally economist staffers write personal pieces about the life of... an Economist staffer.

 

The London HO based ones are all bought into the London property Ponzi. They have been subsumed by the body snatchers. They ARE the liberal establishment. They are ZIRP VIs.

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6 hours ago, zugzwang said:

Highly productive = highly profitable. High risk/highly profitable activity only happens in the private sector... which is currently saturated with debt. Without demand there's little opportunity for growth.

Keynesian debt production holds up employment and wages, which is good, but is inherently wasteful since there's no (market) mechanism for distinguishing sound investments from unsound ones. Finite budgets but an uncountable list of apparently worthy causes.

As long as the public sector confines itself to marginally profitable (low risk) activities these losses will be modest and justifiable. Attempts to fund high margin activities with public money, however, are likely to multiply those losses uncontrollably. Which is why command economies don't work, and why the exponential run-up in sovereign debt post-GFC has done nothing for productivity growth.

Now I know you know all this stuff already, but why the Economist doesn't is... bewildering. :o

Buttonwood is good.

The article is on the lack of productivity in global stats.

He offers his opinion, hidden in the last paragraph:

'We know that a few companies are still producing substantial productivity gains but it may be that monetary policy, by keeping rates low, has stymied the forces of creative destruction; "zombie" companies have been kept alive, dragging down the productivity numbers. Whatever the reason, economic growth won't rebound until productivity perks up.'

 

As far as the UK sepcific problems goes I'd suggest its combination of high house prices, high debt, dragiing most of EEer to work in subbed jobs, high public sector employment, high benefits stopping people working.

 

 

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1 hour ago, spyguy said:

Buttonwood is good.

The article is on the lack of productivity in global stats.

He offers his opinion, hidden in the last paragraph:

'We know that a few companies are still producing substantial productivity gains but it may be that monetary policy, by keeping rates low, has stymied the forces of creative destruction; "zombie" companies have been kept alive, dragging down the productivity numbers. Whatever the reason, economic growth won't rebound until productivity perks up.'

 

 

Yes and no 

 

The concluding statement "economic growth won't rebound until productivity perks up.'"

 

is so obvious as to be facile

Edited by Si1

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1 hour ago, Si1 said:

Yes and no 

 

The concluding statement "economic growth won't rebound until productivity perks up.'"

 

is so obvious as to be facile

You might think that but try getting that message through to a political body that thinks paying someone 1k/month to work 16h in a nail bar is productive.

 

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1 hour ago, spyguy said:

You might think that but try getting that message through to a political body that thinks paying someone 1k/month to work 16h in a nail bar is productive.

 

Fair point. Depressing.

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50 minutes ago, spyguy said:

You might think that but try getting that message through to a political body that thinks paying someone 1k/month to work 16h in a nail bar is productive.

 

They're fixated with the idea that full employment is the route to recovery. Nope, it's the quality of employment that's paramount. Without that you're condemned to a Third World standard of living.

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21 minutes ago, zugzwang said:

They're fixated with the idea that full employment is the route to recovery. Nope, it's the quality of employment that's paramount. Without that you're condemned to a Third World standard of living.

Or til we run out of money, paying people to dig a hole and fill it in.

Bear in mind the Chancellor position has been held for the last ~20 years by a lunatic Scots , followed by a towel folder.

 

 

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On 1/10/2017 at 10:16 PM, Noallegiance said:

You mean........ Surely not....... Less than 3 months after headlines proclaiming Carnage as the saviour of Britain he's going to get butt-fooked on live tellybox as scapegoat numero uno?!

Quote

This is also very embarrassing for the Financial Times which has of course lauded what it calls the UK's rock star central banker. Actually the Financial Times has had a dreadful run hasn't it?

 

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14 minutes ago, Noallegiance said:

Less than 24 hours after the BoE claiming to MPs that a surge in private debt isn't much of an issue:

http://www.bbc.co.uk/news/business-38611148

Strange that.

Carnage goes on record earlier this week saying that Brexit is minor and the biggest problem is the level of debt in the UK.

Few days later and a report comes out.

Youd think he was getting first dibs on the reports ....

 

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4 minutes ago, satch said:

So minor that Carnage needed to cut interest rates and price tens of billions of pounds in a fit of pique or panic ..... I expect that now he sees this as a mistake and will raise interest rates and unwind the latest round of QE .................................. What's that sooty?? ...... Not a snowflake's chance in hell

Well he wont. He'll be drinking Maple cocktails.

The markets will

Gilt yields are up quite a bit on the year.

 

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1 hour ago, Noallegiance said:

Less than 24 hours after the BoE claiming to MPs that a surge in private debt isn't much of an issue:

Worth looking again at the idiotic non-response to that claim. If ever proof were needed of incompetence at the highest levels, it's right here:

http://parliamentlive.tv/event/index/5727df3b-082b-4b56-9cfe-3edc6f352198?in=16:35:08

"Well... that's true." No, it isn't.

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