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VickieJo

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About VickieJo

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  1. I would just like to wish Japan and the Japanese well in very difficult times.
  2. I saw a good article at the end of January which explained some technical reasons why this could be a hard year for the UK mortgage and hence housing market and it refers to a previous article writen in December. I have written before that I feel that this is going to be a hard year for the UK housing market. Please do not get me wrong it needs a downward adjustment but my fear is that this adjustment could accelerate in 2011 and there is a danger of it becoming something of a rout. I wrote an article elsewhere back in December about the Bank of England’s withdrawal of its Special Liquidity Scheme and the impact I feel that withdrawal around £9 billion per month is likely to have on the availability of credit in 2011 and in particular on mortgage finance. I feel more and more that this move was and is a policy error.http://t.co/Xb2LJAK It looks to me that he is being proved correct as the evidence emerges.
  3. Whilst the majority view is that interest-rates will be unchanged today I did spot a thoughtful sub-text to it earlier this week. A Wild CardThe wild card is that MPC members must be aware that they are attracting criticism which is rising and that their policy is becoming an ever larger embarrassment. Looked at like that then just like a wild animal which is cornered their behaviour is hard to predict and so I will be awaiting noon on Thursday! http://t.co/uZPNJ89 Just to be clear he feels that the main likelihood is that we will see unchanged interest-rates today but that there is also a small chance of a raise....
  4. There seem to be further problems building in Greece too with bond yields rising. I saw some shocking figures quoted by the economist Shaun Richards today for this rise in Greek yields over the last year and then in something not reported much elsewhere he pointed this out. Greek finances: tax revenue disappoint againThe Greek newspaper Kathimerini reported this yesterday about Greek budget revenues. Compared with the first two months of 2010, revenues declined this year by 9.2 percent…………the shortfall exceeding 870 million euros after the February goal was missed by 595 million. This reinforced a point made in the downgrade issued by Moody’s (point two from my update from Monday the 7th of March) . It also reminds me of the furious sounding rebuttal of the downgrade issued by the Greek Finance Ministry. Furthermore, Moody’s announcement refers to the delay in the rebounding of budget revenues, yet does not take into account the increase in revenues. Whilst they are talking about 2010 they must have known their own figures for 2011….. http://t.co/nzXfPbL
  5. I saw a good blog post quoted on here last week which gave some suggestions as to what the author thought Ireland could and indeed should try to do to get out of its financial mess. In his opinion the current "rescue" is only liable to make things worse. First we get an analysis of what is wrong. This morning voters in the Irish Republic will take to the ballot box and cast their votes in a general election. After the economic “perfect storm” that has hit their country they do need a change and I hope that it will show that the ballot box as well as the gun and revolution can lead to fundamental change. As we stand in spite of the “rescue” from the EU/ECB/IMF then Ireland looks insolvent as she goes forward. Her government bond market has if anything deteriorated since the date the “rescue” was announced. As I type this her ten-year government bond yield is 9.46% which we can compare with seriously troubled but unrescued Portugal at 7.64% or the UK at 3.72%. If you compare the relative situations then it is plainly unfair that Ireland has a rate 6% higher than that of the UK as there are as many similarities as differences. Regular readers will be aware that I often argue that the shorter end of the maturity spectrum also gives us insight into a country’s finances and here we find a bond maturing in April 2013 which yields 8.03% which to my mind has even worse implications than the ten-year yield. For those to whom this is unfamiliar you can learn a lot from what is called a yield curve but my point here is that the revealing part is the gap between the official central bank rate (1%) and a yield of 8.03%. Thus in two years the gap is over 7%!http://t.co/6kxWr7i The article then oges on to give some policy prescriptions for Ireland....
  6. I saw a good post on this subject which pointed out that there is now a big gap between the rhetoric of the ECB and that of the Bank of England. So some tough talk and it remains to be seen if this is translated into action. Later there was another section which to my mind will echo around the Threadneedle Street offices of the Bank of England. It is paramount that the rise in HICP inflation does not lead to second-round effects and thereby give rise to broad-based inflationary pressures over the medium term. Inflation expectations over the medium to longer term must remain firmly anchored in line with the Governing Council’s aim of maintaining inflation rates below, but close to, 2% over the medium term. It’s not that often that I agree with Mr.Trichet!So let’s enjoy the moment and on a more serious note he is expressing a view which is completely the opposite of the majority of his counterparts at the Bank of England…. http://t.co/vY8xPPn Let's hope someone points this out to the Bank of England as I for one would like to see their reply...
  7. After all the claims from the Bank of England that inflation is temporary it looks like the European Central Bank takes a different view... After the ECB left rates at a record low 1pc, Mr Trichet said inflation pressures had increased since the ECB last met a month ago, largely due to a rise in commodity prices. He added price risks were on the upside. "Strong vigilance is warranted with a view to containing upside risks to price stability," Mr Trichet said. The ECB used the phrase "strong vigilance" repeatedly during its 2005-2007 rate hike cycle, typically one month before it raised rates, although there were exceptions to that rule. Mr Trichet was not explicit as to whether the verbal signal still holds good. He said an April rate rise was not certain but sounded notably hawkish "When we have a shock - and we have a shock - our responsibility is to prevent a second round of effects [from high oil prices]," he said. In his opening statement, he also pointedly did not say that rates were at an appropriate level. http://www.telegraph.co.uk/finance/economics/8359506/ECBs-strong-vigilance-on-inflation-seen-as-rate-rise-signal.html As one of the comments already points out I wonder what the Bank of England will make of that...
  8. Did anybody spot the way that Ben Bernake introduced a "rule of thumb" for the impact of his Quantitative Easing policy in his testimony? I was just reading a good article on this which looks at it and gives a critique. Applying it to the UK gives a fascinating answer too...
  9. I saw an interesting blog post on this subject yesterday morning. The US Dollar is surprisingly weakYou might at such a time be expecting a strong US dollar as it too often has a safe haven status. Indeed there seem to be some signs of US assets being attractive as US Treasury Bond prices have risen and yields dropped. For example the ten-year yield is now 3.40% after recently surging towards 3.6%. However the trade-weighted US dollar index is at 76.96 which is not only lower than when I looked at it last week but also not that far off its 52 week low which was 75.63 back in April 2010. If a lower US dollar is one of the policy objectives of the US government and central bank then the plan is currently working. As a currency has to fall against another currency which accordingly has to rise the rest of the world may not be quite so enthusiastic! However the much maligned Euro is putting in a better performance and shrugging off the fact that of the main industrialised countries it is Italy that looks as if it will be adversely affected the most by the unrest in Libya. A year ago it was at 1.36 and today it is above 1.38. It sounds very stable put like that does it not? We all know that the reality was rather different but it is intriguing that the net effect on a year ago is a rise heading towards 2%! http://t.co/gVmqvsi It also had some interesting views on the Swiss Franc and in particular the Japanese Yen
  10. Thanks for this quote, I wonder if the Irish will have the courage to carry it out.
  11. These figures are concerning and are yet another bit of mud in the eye for expectations! Werent these supposed to be revised up rather than down? This now looks a rather toxic mix of inflation and slow or no growth. I thought that the dangers going forwards were put well here These figures reminded me of a section from the most recent Monetary Policy Committee’s minutes which I quoted yesterday.Nominal domestic demand had increased by 6.8% in the four quarters to Q3, accompanied by nominal consumption growth of 6.3%, in part reflecting the VAT increase in January 2010. These were both above their average growth rates for the decade before 2007. My point is that if nominal domestic demand is surging at a rate shown above and yet real economic growth is turning negative then the gap will be filled by inflation. If you look at problem you can clearly see that inflation from this source is not something that the Bank of England can blame on external factors and the clue is in the word domestic. Yet again we see a sign of possible pent-up inflationary pressure….. http://t.co/6kxWr7i
  12. Yes the Guardian should as its position where it criticises other for doing what it also does is the height of hypocrisy.
  13. The Monetary Policy Committee now has a three way spilt with one group of five members voting for no change one man rather bizarrely voting for £50 billion more of asset purchases and three voting for an interest-rate rise. I guess the change is that Spencer Dale is now voting for an interest-rate rise. I found some convincing analysis as to why he may have changed his mind here. In pure economic terms it is the increases in nominal demand and consumption which are yet another clear signal. If they are both rising at above 6% and economic growth is slowing then there is a gap between the two which is likely to be filled by inflation. If we look again at the minutes please consider what did happen pre 2007……….."These were both above their average growth rates for the decade before 2007." http://t.co/rc6ttmq
  14. I was reading some analysis earlier of the impact on the world economy of an increase in the oil price. For a given increase in it which was ten US dollars the economist Shaun Richards estimated the impact on world inflation and economic output. Then something caught my eye in the article which reminded me very much of the UK and our present situation. The actual state of the economy in the first place also matters as for example one with pre-existing inflation is likely to be disproportionately affected by an oil price rise. Also if an oil price move is sudden and large (often called an oil price shock) it is likely to have a more substantial impact than a move gradual move.http://t.co/O6MpJ0o this made me think of the UK and our present situation.....
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