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Shares Soar And Pound And Bond* Yields Tumble As Mark Carney Makes An Instant Impact As Governor

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http://www.dailymail.co.uk/money/markets/article-2356235/New-Bank-England-star-Mark-Carney-rocks-markets.html

.............The Bank said the shift in expectations ‘was not warranted’ in a sign that it has no plans to raise interest rates any time soon. ‘In the committee’s view, the implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy,’ it said.

Carney – who favoured forward guidance during his spell in Canada – has been asked by George Osborne to report on the potential use of such tactics in Britain at next month’s inflation report.

The Bank said the analysis ‘would have an important bearing’ on what the MPC decides to do next month in terms of interest rates and QE.

But David Tinsley, UK economist at BNP Paribas, said: ‘...they are looking to forward guidance as a key tool in massaging yields and expected Bank Rate lower.’

In the comments section there's a fair bit of joy coming from homeowners, some sarcastically (I presume) suggesting their house's price will double within 2 years.

*However, unless I'm going round the bend, bond yields are

Name Yield 1 Day 1 Month 1 Year Time

UK Gilt 2 Year Yield 0.38% +1 +2 +16 04:05:40

UK Gilt 5 Year Yield 1.37% +1 +29 +70 03:46:12

UK Gilt 10 Year Yield 2.40% +3 +38 +74 04:06:55

UK Gilt 30 Year Yield 3.58% +2 +22 +53 03:50:25

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So, gidiot appoints, has seen the history, the CV and the results of the new Goldman technocrat, then demands to have it explained to him what it all means in the August Inflation report?

You coulnt make the incompetence up.

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The QE waterfall. First there's inflation in financial prices (stocks, bonds, houses), then there's inflation in commodity prices (oil, food, water), finally there's inflation in the real economy (consumer prices and wages). Carney and co want us to believe they can keep the economic boat on an even keel at the bottom while opening and closing the sluice gates at the top.

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He certainly has made an impression. It seemed like the necessary correction had begun, then this fool stomped in and blew the bubble back up. Great work, moron, now we are right back to square one. If this guy had control of the economy at the end of WW2 he would have prevented troops from being disbanded and insisted on keeping up production of munitions. Otherwise we would have a temporary correction, you see, and that can never be allowed at any cost.

I knew Carney was bad news as soon as Ed Balls made it clear Carney was his choice for central planner in chief. So now it's more of the same. The sensible and competent being stolen from. The foolish an incompetent must being given state support. Zero percent interest rates forever and an endless depression. Brilliant. Just brilliant.

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I knew Carney was bad news as soon as Ed Balls made it clear Carney was his choice for central planner in chief. So now it's more of the same. The sensible and competent being stolen from. The foolish an incompetent must being given state support. Zero percent interest rates forever and an endless depression. Brilliant. Just brilliant.

What do you expect? Its the LabourTory way. dry.gif

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He certainly has made an impression. It seemed like the necessary correction had begun, then this fool stomped in and blew the bubble back up. Great work, moron, now we are right back to square one. If this guy had control of the economy at the end of WW2 he would have prevented troops from being disbanded and insisted on keeping up production of munitions. Otherwise we would have a temporary correction, you see, and that can never be allowed at any cost.

I knew Carney was bad news as soon as Ed Balls made it clear Carney was his choice for central planner in chief. So now it's more of the same. The sensible and competent being stolen from. The foolish an incompetent must being given state support. Zero percent interest rates forever and an endless depression. Brilliant. Just brilliant.

Im sorry, but who else can you steal from?...cant steal from the banks as they dont have the readies, Government doesnt have it, so you can only get it from the people who have got it....

No point in robbing a bank with no vault or cash.

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*However, unless I'm going round the bend, ...(snip)

article-2356235-1AAA8AF4000005DC-148_634x425.jpg

Yeah, that tumble is somewhat underwhelming, especially as at midday today, Bloomberg is telling me that the UK Govt Bonds 10 Year Note Generic Bid Yield is at 2.43%. If Carney and Osborne want bond yields down they are going to have to print or hope that something sufficiently horrible happens elsewhere so we can clamber away from the relegation zone in the continuing worldwide least dirty shirt competition.

The Daily Mail must be getting a special Wishful Thinking feed from Bloomberg.

Just thinking about the post (sorry, can't remember who) about Mervyn King's Maradona analogy for central bankers, surely we are now at a point where Carney can't be crafty; if we continue to lose ground against economies like Germany and the US which are staging a slighly less horrid 'recovery', then either the MPC is essentially mandated to print sufficiently to hold gilt yields down, or they will rise. End of.

Suggesting that he could do something clever is like suggesting that you don't have to hold a man's head underwater whilst you drown him. It's nonsense, if you let him, he'll come up for air, and if you let the bond market speak plainly about the merits of holding fixed interest instruments denominated in sterling, yields will rise. All we're about to discover is how bad is the collateral damage and wealth transfer going to be from the manipulation of the markets with money printing, and how long it can go on for. I suspect the answers will be "massive" and "possibly decades".

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article-2356235-1AAA8AF4000005DC-148_634x425.jpg

Yeah, that tumble is somewhat underwhelming, especially as at midday today, Bloomberg is telling me that the UK Govt Bonds 10 Year Note Generic Bid Yield is at 2.43%. If Carney and Osborne want bond yields down they are going to have to print or hope that something sufficiently horrible happens elsewhere so we can clamber away from the relegation zone in the continuing worldwide least dirty shirt competition.

Bit crafty that graph though as cable did go up 150 pips or so the day before. Overall its lost 100 pips agains the dollar, and EURUSD has tumbled also (Draghi's comments) though has stood its ground better, perhaps loosing 50 pips overall.

Edited by Secure Tenant

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article-2356235-1AAA8AF4000005DC-148_634x425.jpg

Yeah, that tumble is somewhat underwhelming, especially as at midday today, Bloomberg is telling me that the UK Govt Bonds 10 Year Note Generic Bid Yield is at 2.43%. If Carney and Osborne want bond yields down they are going to have to print or hope that something sufficiently horrible happens elsewhere so we can clamber away from the relegation zone in the continuing worldwide least dirty shirt competition.

The Daily Mail must be getting a special Wishful Thinking feed from Bloomberg.

Just thinking about the post (sorry, can't remember who) about Mervyn King's Maradona analogy for central bankers, surely we are now at a point where Carney can't be crafty; if we continue to lose ground against economies like Germany and the US which are staging a slighly less horrid 'recovery', then either the MPC is essentially mandated to print sufficiently to hold gilt yields down, or they will rise. End of.

Suggesting that he could do something clever is like suggesting that you don't have to hold a man's head underwater whilst you drown him. It's nonsense, if you let him, he'll come up for air, and if you let the bond market speak plainly about the merits of holding fixed interest instruments denominated in sterling, yields will rise. All we're about to discover is how bad is the collateral damage and wealth transfer going to be from the manipulation of the markets with money printing, and how long it can go on for. I suspect the answers will be "massive" and "possibly decades".

As someone else pointed out, what he can do is actually pretty limited which leads to the question why are we paying a 6 figure sum for the services. I suppose actors are expensive.

I think we should do something like Trident. We lease a few missiles off the US rather than have to develop our own. We should lease Benarke for a day or so a month and save some cash.

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But Carney has a 22 month time frame; get GDP 'growth' and get property prices soaring, this should be enough to win the election for George. Fixing the base rate at 0.5% for 12 months and using some QE should accomplish both these objectives. Short term objective fulfilment and can-kicking of potential problems.

Osborne's Grand Plan In a nutshell. With the mother of all 'reveals' to come in the Autumn budget statement of 2015.

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I think the rating agencies will be downgrading the UK within the next few years.

Again.

Agreed. Not before 2015 - caveat of exogenous shock. China?

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Further cable and Euro tumbles today due to stronger dollar, better than expected non farm payroll figures and evidence that proper jobs are being created in the US, rather than temp help non jobs. Leisure growing stronger indicative of discretionary spend being put to use.

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Further cable and Euro tumbles today due to stronger dollar, better than expected non farm payroll figures and evidence that proper jobs are being created in the US, rather than temp help non jobs. Leisure growing stronger indicative of discretionary spend being put to use.

The tide is going out -- the UK seems to have misplaced its swim trunks.

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I find it funny that some HPCers believe it all to be incompetence. :rolleyes:

clearly its not all incompetence, but to have the guy explain it all next month is a bit rich...like he never knew about it...or as you say, he did know but plausible deniability kicks in...but that sounds stupid.

Of course, people will have forgotten come August.

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Timber-r-r-r-r!!

gbpusd-jobs_2609835c.jpg

Cable is down over 5% in under a month.

I'm sure this won't result in any inflationary pressures. :huh:

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Cable is down over 5% in under a month.

I'm sure this won't result in any inflationary pressures. :huh:

Yep. 1.57 a couple of weeks ago 1.48 today.

Read a report on ZH also a couple of weeks ago with GS telling everyone to buy pounds (presumably so they could sell)

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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