Friday, Sep 17, 2010
"heavy-duty credit easing"
Telegraph: Bank of England may shift to 'heavy-duty credit easing', says rate setter Adam Posen
'The Bank of England might aim to cut borrowing costs in specific areas of the economy should its buying of government bonds prove ineffective in stimulating economic growth, Monetary Policy Committee member Adam Posen said.'
Posted by hpwatcher @ 11:33 AM (2321 views) Add Comment
53 Comments
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1. sibley's b'stard child said...
"British inflation was 3.1pc in July, well above the central bank's 2pc target, but the BoE said last month this was mostly due to temporary factors while future growth was likely to weaken, making rate rises inappropriate for now".
I imagine there's going to be quite a few of these 'temporary factors' kicking-about for the forseeable future. I look forward in earnest to this time next year:
'BofE indicate they have no long-term concerns over inflation despite it being 1450% above-target; Mrs Miggins had her hip-op last month, and blackberry picking season was the month prior'
2. mark said...
Octobers rate meeting decision and factors
Mervyn stated "although CPI is 15% and RPI is 25% we have decided to keep rates at current level due to a one off factor" the one off factor was Mervyn ate even more donuts and cannot lift his fat ar&e off the rates agenda
I wonder if we can take the BOE to court for not following its remit after all that is a contract..
3. techieman said...
"Mr Posen defined credit easing as the targeting specific sectors, such as the United States did with housing markets." yep and thats worked like a charm hasnt it?
4. hpwatcher said...
I wish BOE should acting like the b@stard son of some Stalinist/socialist government and to start actually doing what they are supposed to do.
5. sibley's b'stard child said...
I know, I saw that Techie; I thought 'did you just publish that?'
6. mark wadsworth said...
"in specific areas of the economy"
Yippee! More Home-Owner-Ism like in the USA! That'll work a treat, Japan, here we come, see if I care, house prices have been sliding there for twenty years, it just won't work.
7. happy mondays said...
Mark W, do you know what the decrease % over that time period? Just curious..
8. hpwatcher said...
It's now very clear that theseb@stards , I mean, b@nkers have decided to stave off any recession and any hint of a depression with the printing press. I think they will do whatever it takes.
Meaning 'cash' is very quickly becoming 'trash'.
9. capitalist said...
I wish BOE should [stop] acting like the b@stard son of some Stalinist/socialist government and to start actually doing what they are supposed to do.
But it is the b@stard son of a Stalinist/socialist government, and it is doing what it is supposed to do in the view of it's designers.
10. ontheotherhand said...
Targeting sectors like housing? No it didn't work in the US and at least they could say their prices had fallen faster and further and stayed there, so perhaps the market was irrational and needlessly damaging banks.
Is this the Bank of England put (like the Greenspan put). If house prices go up, I win. If house prices go down, the Bank steps in to stop it, I win.
I'm beginning to think like tyrellcorporation that resistance is useless...
11. mark wadsworth said...
HM 7, I've seen figures saying that houses or flats in Tokyo are down ninety per cent or something.
OTOH, resistance is not useless. US house prices are still merrily drifting downwards, see also Japan.
12. estrader said...
So, like tyrellcorporation you are going to borrow money and buy a house...I guess that'll learn the BOE a lesson *LOL*
Meanwhile, with all this 'recovery' talk, Gold and Silver are making new highs..."And then my heart...etc
13. mark said...
I think the SH^T is about the hit the fan in the economy things seem to be toooooo quiet
14. mark said...
Off topic
does anyone know why unilever shares are showing a rather large buying volume today, I cannot find any news which would suggest anything.
15. peter said...
"Heavy duty credit easing" eh?
Sounds more like we're in for some more "heavy duty savings destruction" then.
Because that's what happens every time they print more money.
It is looking more and more as though they are prepared to destroy the value of the currency to try and prevent the current asset bubble deflating.
16. Crunchy said...
14. mark said...Off topic
"Does anyone know why unilever shares are showing a rather large buying volume today, I cannot find any news which would suggest anything."
The Tea Party must be growing in leaps and bounds.
17. ontheotherhand said...
No I'm not really going to buy, but I do think that there is some protection being part of a large vested interest voting block in a democracy like ours.
More borrowers than savers? Screw the borrowers.
More votes (obviously) from 18+ than <18? Screw the younger generation to pick up the debt and lack of pensions
More homeowners than renters? Guess who gets screwed?
18. dill said...
@7 happy mondays
The Economist has a useful price comparison chart here:-
http://www.economist.com/node/14438245?story_id=14438245
Broadly speaking, Japan has an index value of under 60 in Q1 2010, as set against 100 in Q1 1990.
19. str 2007 said...
techieman, estrader, mark
An particular idea what the near vertical rise and fall of the FTSE has been about today ?
Was that some sort of staged spike to scare off all the bears before big falls do you think ?
20. mark said...
not sure why
but looking at some buying since this morning some shares have seen huge qtys bought all day with very little selling yet the prices shot up then down below the last few days levels, makes no sense.
21. mountain goat said...
If we have to be a bailout nation, then low bailout interest rates should be reserved for small to medium sized local business' who were not responsible for the housing Ponzi scheme and have had to suffer punishing competition from companies based in low waged countries.
22. jack c said...
str 2007/mark
I went off topic on the "where's our bailout" post by Little Prof
@techieman - Off topic - did you listen to Christian yesterday? - "we are repeating the 1930's crash" with UK talking of banning/curbing short selling with big move to the downside anticipated - 9 minutes of commentary plus 1929 stock market crash chart.
See www.youtube.com/user/PSAadmin#p/u/0/krAo0F948RA or go to perfect stock website and click on the latest youtube link
Well worth a look (IMHO)
23. mark said...
Nothing makes any sense in the economy, it is twisted in all directions
24. str 2007 said...
Hi Jack
Yes I saw that last night and been following him for the last week.
So far he's been wrong as the markets kept going.
He was also fairly strongly suggesting Gold was overbought and could have a bit of a fall.
I changed 2/3 of my Gold to silver a few months ago and silver (in sterling terms) is doing better than gold in its recovery.
25. jack c said...
I share mark's view - "nothing makes any sense in the economy, it is twisted in all directions" and indeed will go one stage further in that little is making any sense in the markets either! - I'm reading earlier today that if Gold continues to rally the FTSE100 will shoot for 6000.
26. str 2007 said...
Christian was talking about the low volume and the fact that it would roll over, but if you'd been putting shorts in you'd have needed a big hand to stay with it this week.
as estrader says : strong hands etc.
27. jack c said...
str 2007 - I'll be tuning in tonight to see what he has to say and you are quite with your previous posts he's been wrong so far.
I notice today that Tim Steer has added his first short to his £301m Artemis UK Growth fund after its remit changed to allow short positions of up to 10%. After successfully shorting insolvent stock Connaught in his hedge fund, Steer has shorted Robert Wiseman Dairies in UK Growth. The manager has questioned the firm’s profit margins after some supermarkets cut milk prices, from £1.53 to £1.25 in the case of a four-pint carton. “The man will be wise indeed to make money at such prices, and that of course is Tim’s bet,” Artemis says in a note.
28. the number cruncher said...
To all the teabaggers on this site (capitalist and HPwatcher @ 4&9 et all)The Bank of England tells us all we need to know about the failure of capitalism and not socialism.
You seem to treat Capitalism as an ideal, but you will never have a perfect free-market as people will always manipulate the market - be that private or state. The ideals of von mises or the Chicago school are a fantasy that can never happen. Just as much a fantasy as those that thought communism would bring us a workers paradise. The fantasy of the ideals of capitalism as allowed the capitalist spuedo states of the UK and USA to launch the 300 years of colonial and now neocolonial rape of third work mineral, agricultural and human wealth, just as communism brought us totalitarian gulag slavery and oppression.
Just as communism brought us outrageous inefficiencies of planned industry so capitalism brings us outrageous inefficiencies of property, speculations and the wasted billions on advertising, marketing and duplication.
Our state and the BOE represents capitalists, it is manipulated by capitalists and capitalist decide policy - our politicians job is to dress it up as acceptable to the populous - it is a capitalist institution.
It has nothing to do with socialism and no matter how much you try to reapeat the tired dogmatic mantra of the self obsessed libertarian right, you will not change that fact.
29. techieman said...
str 2007 - for FTSE see : http://3.bp.blogspot.com/_TwUS3GyHKsQ/TI_fcIsVOKI/AAAAAAAAHhY/nAXAOa9NVpk/s1600/ftse.png.
But effectively it was all on the S&P. The bears had their stops in at the 1129.50 level, wich when breached was run up to 1137. http://4.bp.blogspot.com/_TwUS3GyHKsQ/TJEtG6rVB0I/AAAAAAAAHhw/JkihF4LBquA/s1600/spx60.png. [well thats my take anyway].
Once the bears had been squeezed out, and due to the overbought nature of the thing, and ....., it was probable we would have a reversal. I shorted FTSE today @ 5605 [basis cash] and saw it go down and then back to 5620. Now below 5520 [low 5510].
Of course a short term short is one thing but calling the top of this move....hmmm... which is why we need to tread carefully. As jack says there may be another go up, which is why we have MM.
As for Christian - he is a swing trader - and the way he puts things is amusing. Anyway, look at where he "stuck a fork in it" he may have been saying the move is bogus etc., but you need to take note of his "forks".
http://www.youtube.com/user/psaadmin#p/u/1/y3ekesaG7Yo 3:30 for the ftse "awesome"...
and : http://www.youtube.com/user/psaadmin#p/u/0/krAo0F948RA
30. str 2007 said...
Cheers techieman
Just popping out, boat show no less - we live in hope.
I'll check out your links later.
I got a small short in on the S&P today at 1130, which is looking ok at the moment.
I'll see what Christian has to say this evening.
31. dill said...
@27 number cruncher
Very well said. No-one with decent synaptic connections would doubt it.
The world has a problem. It needs a new politics: a new economic model. Or it needs to go back to the drawing board altogether and conceive something totally new - IF the interests of a vastly inflating global population are to be met fairly. At the moment we're cyclically stuck at a point where localised civil wars are inevitable to address the inequalities caused by the old (modern) mantras. And these could yet lead to renewed global warfare ( already in evidence, economically).
The UK continues to sing to the same old theme tune. There are no new ideas and no new proaction. Also a worldwide malaise. I'm old enough to see it out, regardless. But I keep hoping that someone or something will emerge to put this currently damned species on a better course.
32. capitalist said...
@ 27
"Our state and the BOE represents capitalists, it is manipulated by capitalists and capitalist decide policy - our politicians job is to dress it up as acceptable to the populous - it is a capitalist institution."
You can assert it as many times as you like, it is still wrong. If I can borrow a quick definition of capitalism from George Reisman: Capitalism is a social system based on the recognition of rights, in which all property is privately owned.
Under the Bank of England there is a single monopolised currency imposed by force (abrogation of rights) where money can be created out of thin air (counterfeiting, an abrogation of rights), which interferes in the setting of market interest rates (an abrogation of property rights) and which stands by as lender of last resort using the force of government against taxpayers (a further abrogation of rights).
So, not a capitalist institution at all then.
33. dill said...
@31 capitalist
A little pedantic. You can borrow from who you like - but look closely at your own post and you've proven the point that number cruncher was making.
When is a player of the system actually nothing better than a bitch to the system - perpetuating it against their own better interests, even though they think they're getting a bigger slice of the never ending pie? And with that, they think, their freedom.
No system affords freedom or it woudn't be workable. The numbers to manage are too great.
So, how do you create freedom with universal sense of responsibility and control? Without ultimately sh**ting on someone to achieve it - for the majority of 51%?
34. hpwatcher said...
It has nothing to do with socialism and no matter how much you try to reapeat the tired dogmatic mantra of the self obsessed libertarian right, you will not change that fact.
Whether you like it or not, most people I talk to think it is. It's one of the reasons why house prices are being supported so much.
All the robbing of savers if effectively a redistribution of wealth - I know of a few families who are better off not working and claim more than I earn in benefits.
35. hpwatcher said...
So, how do you create freedom with universal sense of responsibility and control? Without ultimately sh**ting on someone to achieve it - for the majority of 51%?
I think your ''shi**ing comment is very telling. Why does working hard, and getting rewarded for it, have to be shitting on someone?
36. dill said...
@34
When did I mention working hard? Working hard for what? The appreciation of your peers because that's what you've been brought up to believe in - because otherwise they'll treat you as a pariah? Working class bull from a bygone era, sunshine. Contributing to a society in which basic needs are exploited as the basis for an economy? So that more and more are left out until endless amounts of fiddling lead to more and more losing out for the few - until retribution. Whooppee doo.
I'm addressing the broader picture, hpwatcher. You're jumping to unfounded conclusions. Consider what I wrote.
Capitalism exploits. That's how it works. It's what Humans do naturally.
Democracy is a means to excuse it.
Over to you.
37. Crunchy said...
33. hpwatcher
....Cloward - Priven Strategy.
38. shipbuilder said...
Come now, Number cruncher, capitalism or the free market can only exist 100% or not at all. Therefore they can never be criticised. Everything else is socialism and so socialism is always a failure. Yet despite never having had capitalism, it's responsible for all of mankind's advances in the past few centuries.
This is elementary HPC logic.....
39. quiet guy said...
I'd like to have my say in this Capitalism vs Socialism debate.
We've never had perfect Capitalism, Socialism or any other 'ism. However, if you compare living in America when it respected it's constitution (19th Century) with living in Stalin's Russia or Mao's China, I have to say that life in America would probably have been much more enjoyable.
If we tried a bit of small government, an honest financial system and less military adventures, we'd probably be a bit better off and happier overall. Remember that all government is ultimately achieved by the threat of violence and/or imprisonment.
I suppose LVT could be argued for as part of a more honest financial system as well.
40. shipbuilder said...
Quiet Guy,
That's more of a comparison between democracy and totalitarianism. Agree with the rest.
41. quiet guy said...
@Shipbuilder
"a comparison between democracy and totalitarianism"
Quite.
42. the number cruncher said...
Shipbiulder @ 36 - "capitalism or the free market can only exist 100% or not at all." Rubbish! a complete oxymoron.
quiet guy @ 37 - agreed - but it was still very grim for many in USA and UK in the last century. It was living hell in Stalinist Russia, but remember it was living hell in the Russia before the soviets. The soviets where a response to totalitarian monarchy and crony capitalism far worse than we can understand in our own history.
hpwatcher 34 - most people who have large wealth did not work for it in the economic or real sense. They inherited it or they are exploiting some form a monopoly (i.e. shi*ing) Are you being deliberately obtuse? or are you so blinded by your own narrow moral judgement you cannot see another point of view? (I work very hard and I am well paid - nothing wrong with that, unfortunately a lot of people work hard but to not get well paid for it) Most hard working people are being robbed of the fruit of their labours by monopolists and people who hoard unearned income (the Sh*ters)
hpwatcher @ 33 - the mail and express must have good sales around your way(thank God we do not have fox news in this country yet). The reason that house prices are being supported is to help the very wealthiest in society (i.e the CAPITALISTS) and the poorest are loosing out (i.e.it is anti-socialist) Is that clear enough or do you need it explaining a bit more! At every stage wealth is being taken from the poor and hardworking people of this country and put into the hands of an ever smaller group of capitalists. That is what capitalism is, the process of concentrating wealth into ever fewer hands through legalised monopoly - it has nothing do do with the free-market or libertarianism or socialism for that matter.
43. shipbuilder said...
Quiet guy - Of course there are very successful socialist democracies. Von Hayek was really talking about statism. Of course there is also a capitalist variant, called corporatism. It's probably the most accurate description of our economic system.
Number cruncher - missed my sarcasm there.
44. hpwatcher said...
Capitalism exploits. That's how it works. It's what Humans do naturally.
Yes, but we aren't living in a capitalistic state. It's been far more socialist over the past 15 odd years than anything else, and now we are BUST because of it. I'm under survelliance almost 24/7 by the state for my own protection, know what I mean?
45. hpwatcher said...
most people who have large wealth did not work for it in the economic or real sense. They inherited it or they are exploiting some form a monopoly (i.e. shi*ing).....(I work very hard and I am well paid - nothing wrong with that, unfortunately a lot of people work hard but to not get well paid for it) Most hard working people are being robbed of the fruit of their labours by monopolists and people who hoard unearned income (the Sh*ters)
What else would you have? Massive death duties to strip the wealth off away from them like the 70s socialist Labour government - which also ended in a massive bust. Punitive taxes for everyone? You are making a big & foolish judgement about a fairly wide group of people.
Are you being deliberately obtuse? or are you so blinded by your own narrow moral judgement you cannot see another point of view
I see your point of view perfectly well, but I think it smacks of resentment and jealousy.
46. novice pete said...
slowly but surely we sink towards fascism or, slowly but surely we have sunk into fascism. All hail the American dream.
Liberté, égalité, fraternité is dead
47. the number cruncher said...
hpwatcher @ 43
your comment at 33 I think your ''shi**ing comment is very telling. Why does working hard, and getting rewarded for it, have to be shitting on someone?" was answered full by my comment at 40 - but your response "I see your point of view perfectly well, but I think it smacks of resentment and jealousy" does not corroborate with your earlier statement.
sounds like your falling back on some tried and tested ways of avoiding a proper reasoned debate, by making a 'straw man' statement of trying to discredit me instead of addressing my post. I would be grateful and honoured if you answered the question properly.
48. estrader said...
the number cruncher, IMO, you should be using the term Fascism instead of Capitalism because it is only in this recent version of "Capitalism" where corporations are "too big to fail".
49. hpwatcher said...
So, how do you create freedom with universal sense of responsibility and control? Without ultimately sh**ting on someone to achieve it - for the majority of 51%?
I am not answering it, because it is leading question.
sounds like your falling back on some tried and tested ways of avoiding a proper reasoned debate, by making a 'straw man' statement of trying to discredit me instead of addressing my post. I would be grateful and honoured if you answered the question properly.
What I find funny is that you think you are worth honouring.
50. the number cruncher said...
estrada @ 46
Fascism is totalitarian national socialism in its ideal, In Germany, Italy and Spain fascist dictators got into bed with the biggest and most powerful capitalists to screw the workers to increase their wealth and control and lost any notion of socialism once they gained power.
What we have today is a different beast more along the lines of the Robber Baron laissez fair days of the 19th century UK and USA. But in today's incarnation the large capitalist groups are more subtle in their operation, using legal instruments and offshore trading to disguise their untaxed and unearned wealth. They make their money by shaving off supernormal profits as rent seekers and monopolists. They employ fake think tanks, charities and lobbyists to forward their objectives in the political arena. They own the media and promote a corporate agenda for the the populace to follow using the most subtle of techniques based at exploiting our base emotions to control others (like our good friend hpwatcher and his mates who avidily follow the propaganda of the mail/express/times etc they is of couse far more subtle manipulation of the media in the Guardian, independent and BBC). Although they commit many illegal acts, they are not many real conspiracies in those groups, just individual and small group actions out of self interest and an utter disinterest in the consequences.
I am no bildergberg conspiraloon - but I do think the biggest problem we face is man's greed and laziness and when anyone gets into positions of power their greed and laziness take over so they want to control more for less effort, plain and simple. We need Government to protect the common man, not exploit him. What the teabaggers want is a small Government, what they will get is direct control by powerful private interests, replacing a government which acts as a proxy and buffers the effects of powerful private interests.
I do think my use of the word CAPITALIST is the best description, although PLUTOCRAT, MONOPOLIST or RENT SEEKERS would work as well. Many corporations where too big to fail such as the early corporations granted private monopolies to exploit resources such as the East India Company (which failed and was bailed out a few times). Also many banks and industries in the 19th and 20th century where too big to fail and received state support with taxpayers money going into supporting private assets. This was often done with unsubtle legal monopolies and tariffs, which where very damaging to trade and the whole economy.
51. techieman said...
I agree with HPW it is funny that you would consider any answer by HPW honourable! ;).
"I am not answering it, because it is leading question." - yes and the school playtime bell has just rung. or maybe its because he has no clue.
Sorry tnc for not adding anything to the debate. You have obviously given this alot of thought and i for one agree with your penultimate paragraph @ 48. Have a great weekend!
52. braindeed said...
I sometimes have to laugh at the knots people tie themselves in, in here – so many arguments bear no scrutiny. Assinus assinum frica
A lot of words have come to mean things different from their original interpretation. Cynicism, Anarchy, Communism, Fascism ….all were adopted and evolved against the backcloth of their own time. There are those who seek the comfort blanket of their own preferred dogma (as against the reality of their dogma’s new empirical meaning) - having the loudest shout doesn’t make you right.
Oi....Oi....listen to me....it's Broon's fault, I tells ya
53. Taffy62 said...
@Number Cruncher, Comment 48 was genius. Keep going. Your thinking is far ahead of the game.
I'd like to remind everyone of the outcome in a game of Monopoly. The winning strategy is to buy whatever you land on and build hotels as soon as possible. Even if everybody puts in an equal effort, the winner is always the one who lands on Mayfair/ Park Lane first.
It's not enough to work hard or smart. Those who accumulate capital first, get greater leverage and easier reward as they accumulate. Free markets in our badly designed capitalist system are not fair. Simple as.
If you can design a capitalist system where the advantage of capital leverage, is in proportion to the productive effort put in to accumulate the capital. I might be interested.