Economic contraction shocker -> minus 0.3%

[zugzwang]

2 minutes ago, byron78 said:

I'm pretty sure Panmure Gordon are run by a Ricci Rich or something daft like that.

So far removed from reality it's funny.

 

Yeah, him and 'Diamond' Bob Diamond. Pair of crooks who ran Barclays into the ground then got away with an illegal bailout from the Qatari royal family approved by that other Manure Gordon - Gordon Brown.

 

[slawek]

42 minutes ago, henry the king said:

0.5% is now a live possibility as this makes a 4:3:2 split more likely (4 vote for 0.5%, 3 for 0.25% and 2 for 0%). 

It is a binary vote for what the governor of BoE proposes. 

[henry the king]

15 minutes ago, slawek said:

It is a binary vote for what the governor of BoE proposes. 

If it is a 4:3:2 split then they do 0.5% rise. This is a live possibility as confirmed by the BoE. 

[rantnrave]

1 hour ago, reddog said:

Apparently a large factor was due to the test and trace scheme getting phased out.

 

This gives you an insight as to how much has been wasted on test and trace!

Rewards for doing ONS Covid survey each month dropped from £25 to £20 from the start of May...

[BaldED]

1 minute ago, henry the king said:

If it is a 4:3:2 split then they do 0.5% rise. This is a live possibility as confirmed by the BoE. 

So they are fudging the voting procedure then. What a joke. Those that were going to vote 0% will go for the lesser evil of 0.25%. So no chance of anything other than 0.25%

What a joke of a system get rid of it.

[henry the king]

15 minutes ago, BaldED said:

So they are fudging the voting procedure then. What a joke. Those that were going to vote 0% will go for the lesser evil of 0.25%. So no chance of anything other than 0.25%

What a joke of a system get rid of it.

I think they will go 0.25% on balance. I'd see 2 or 3 voting to freeze at 0% though.

[Mikhail Liebenstein]

1 hour ago, byron78 said:

I think often a hedge fund will just call to destroy/break up a company if they can see more immediate profit in that tbh.

One of the reasons our world is such a mess is that rapid short-term gains are often valued over sensible long-term growth. 

 

Quick call Wall St Bets! 

[henry the king]

A lot of people calling 0.75% from the Fed now. That would put the cat amongst the pigeons. 

Markets telling the Fed to put up or shut up.

Edited June 13, 2022 by henry the king

[Si1]

4 minutes ago, henry the king said:

I think they will go 0.25% on balance. I'd see 2 or 3 voting to freeze at 0% though.

That'll be Silvana Tenreyro who I believe was basically appointed explicitly for her dovish low rate preferences. She's like a more subtle glamorous version of Danny Blanchflower.

[Fromage Frais]

2 hours ago, byron78 said:

I think often a hedge fund will just call to destroy/break up a company if they can see more immediate profit in that tbh.

One of the reasons our world is such a mess is that rapid short-term gains are often valued over sensible long-term growth. 

Private companies value profit. Their CEOs value their next bonus and (usually these days) that is related to how high they can push the share price. All the focus is on that quick buck. Not society. Not people. Certainly not countries or sovereignty.

An American hedge fund thinks the UK property market is so broken there won't be a quick fix. 

I think you're right - it's a snippet that does suggest economic stress. 

Basically, they see more profit from breaking than from selling or ramping.

 

Another thing juiced by low rates.

BHS being a prime example.

Also as posted many time before loads of small companies that are no more debt based acquisition vehicles going around buying hotels and pubs.

The owners often struggle to make money in them and work in that themselves.

The company comes along and seems to be loosing millions but has a good line and loads of shareholders... You keep an eye and not much seems to change.

With inflation and staff issues I don't see how they pay over the odds ... but they do.

But that was went rates where low so I expect that to be another thing that falls by the wayside.

Like those two Asda guys how can they just buy everything ... low rates and a good relationship with the banks methinks

turnover vanity > profit sanity > cash king only applies over 5% rates it seems

Edited June 13, 2022 by Fromage Frais

[henry the king]

Just now, Si1 said:

That'll be Silvana Tenreyro who I believe was basically appointed explicitly for her dovish low rate preferences. She's like a more subtle glamorous version of Danny Blanchflower.

Cunliffe is the biggest dove too. They won't vote to raise rates. 

 

[zugzwang]

9 minutes ago, henry the king said:

A lot of people calling 0.75% from the Fed now. That would put the cat amongst the pigeons. 

Markets telling the Fed to put up or shut up.

That would be a genuine popcorn moment. ☺️

[zugzwang]

7 minutes ago, Si1 said:

That'll be Silvana Tenreyro who I believe was basically appointed explicitly for her dovish low rate preferences. She's like a more subtle glamorous version of Danny Blanchflower.

Like Lisa Nandy and Peter Mandelson.

[henry the king]

2 minutes ago, zugzwang said:

That would be a genuine popcorn moment. ☺️

Well there will be 75 basis points at one of the next 3 meetings based on market predictions. I'd agree too. I think August for 0.75% rise by the Fed.

Puts the BoE into a tight spot if that happens. 

[Social Justice League]

I expect a 4% rise this week, taking IR's to 5%, which is still 50% less than our 10%+ inflation rate.

[PropertyMania]

3 hours ago, Mikhail Liebenstein said:

https://news.sky.com/story/shock-contraction-of-03-for-economy-in-april-as-cbi-demands-vital-actions-to-prevent-recession-12632893

Urgent calls for action from CBI

Add in the insane continuation of mass migration under Bozo (let's estimate the population has grown by 1% in the last year) and GDP/capita for the year is already negative. 

[btd1981]

2 minutes ago, Social Justice League said:

I expect a 4% rise this week, taking IR's to 5%, which is still 50% less than our 10%+ inflation rate.

Haha can you imagine that!!

To be fair, what was the biggest single drop when they were slashing rates during the crisis? Mad changes can happen (but seemingly only in one direction)

[henry the king]

5 minutes ago, Social Justice League said:

I expect a 4% rise this week, taking IR's to 5%, which is still 50% less than our 10%+ inflation rate.

They don't need to. The bubble is so huge that small rises already put us in recession territory.  

That is the same with housing. HPI will already be over with 1% rates. Get them to 2% and watch out. You would see the "cost" of housing increase about 35% vs 0% rates and QE. So housing will be 35% more expensive and will crash.

[slawek]

52 minutes ago, henry the king said:

If it is a 4:3:2 split then they do 0.5% rise. This is a live possibility as confirmed by the BoE. 

Source.

The official procedure is that MPC votes on the proposal made by the governor but dissents later express their desired rate.

"2.28  At the end of the meeting of the MPC, the Governor invites the Committee to vote on his proposal for the interest rate. They also record the individual preferences of the members of the Committee in respect of the amount by which they wish to change the interest rate, if at all. "

https://publications.parliament.uk/pa/ld199899/ldselect/ldmon/96/9605.htm

[Flat Bear]

12 hours ago, henry the king said:

I think they will go 0.25% on balance. I'd see 2 or 3 voting to freeze at 0% though.

Interesting

Like you, I do not actually know. But if I am reading the mood music correctly we will see a vote for a 0.25% rise or a 0.5% rise. I would suggest there will be 100% concensus for a 0.5% rise which the BOE will use to tell us all how vigilant and hawkish they are. 1.5% base rate with CPI at 9% and rising, who are they kidding?

[reddog]

17 minutes ago, Flat Bear said:

Interesting

Like you, I do not actually know. But if I am reading the mood music correctly we will see a vote for a 0.25% rise or a 0.5% rise. I would suggest there will be 100% concensus for a 0.5% rise which the BOE will use to tell us all how vigilant and hawkish they are. 1.5% base rate with CPI at 9% and rising, who are they kidding?

I don't know either.

 

Obviously if the Fed do 0.75% and the BoE do 0.25%, the £ and therefore petrol prices are going to be in a whole world of pain!

[reginekierkegaard]

 

15 hours ago, Si1 said:

Lower interest rates and more QE?

The fall in gdp is caused by demand destruction. The higher living cost reduce disposable income. The supply chain remains an issue. The supply side is seriously constrained by lack of workers, raw materials and excessive energy cost. If we lower rate and QE, we will get stagflation or hyperinflation. If we QT and raise interest rate, we will get a recession. SPX is now in a bear market. 10 yrs US treasury is at over 336 basis point. Crypto had gone into winter if not in ice age. VIX is rising and the market is full of fear. Housing market in Australia and Canada had already fallen. Bond prices and momentum stock had fallen in price. Cash is trash when inflation is at double digit.

The music had stopped and someone had taken the punch bowl out. It is time to sober up and face the reality. 

 

[Flat Bear]

1 minute ago, reddog said:

I don't know either.

 

Obviously if the Fed do 0.75% and the BoE do 0.25%, the £ and therefore petrol prices are going to be in a whole world of pain!

I don't think most people actually understand how important the value of the pound is now. If the pound goes below 1.20 we will see carnage.

I realize I am on the front line as everything I buy, as all other importers, will be in dollars. On another thread I have gone through why the bank (Barclays) have decided unilaterally to close my USD account and I was fully aware that the financial institutions are preparing to defend the GBP for as long as they can by preventing as far as possible USD purchases and runs on sterling.

It does not look like there will be another form of currency that could be turned to as all the cryptos have failed and the UK banks and other institutions make it clear we can not deal or carry out business using the USD.

If the pound collapses, say down to a few pennies or so then the only option will be to use the USD but it won't be easy and the UK government will make it as difficult as possible.

Petrol prices are quite irrelivant and commerce could still take place until maybe petrol reached $8 which could equate to £8 to £10 a litre or if the pound collapses a lot more. In many ways this would be a good thing with the amount of traffic and congestion falling. At this price rate, electric cars would start to become viable so no worries there or even the horse and cart?

[Wurzel Of Highbridge]

8 hours ago, Flat Bear said:

Petrol prices are quite irrelivant and commerce could still take place until maybe petrol reached $8 which could equate to £8 to £10 a litre or if the pound collapses a lot more. In many ways this would be a good thing with the amount of traffic and congestion falling. At this price rate, electric cars would start to become viable so no worries there or even the horse and cart?

I'm not sure how people will be able to afford electric cars under those circumstances. Perhaps a push bike?

[dugsbody]

On 13/06/2022 at 07:33, Mikhail Liebenstein said:

Surely employers can just pay more to deal with labour shortages- if not, then they are not viable businesses!

Does paying more magic an employee into existence?