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Too Early For A Calming Rate Cut

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Good afternoon all.

Our friend David Smith (Times economic editor dude) is curiously calling for a rate cut.

I personally think he has lost the plot. Inflation is rising and this guy wants to cut rates?

http://www.economicsuk.com/blog/000338.html#more

Visit the site and you can post a reply!!

Partial quote:

Too early for a calming rate cut

Posted by David Smith at 11:00 AM

Category: David Smith's other articles

There have been three occasions during its nine years of independence that the Bank of England has reduced interest rates in response to a global financial crisis. How long does the current period of extreme financial-market turbulence have to last before the Bank decides that a calming cut is needed?

If a week is a long time in politics, a day can be an eternity when it comes to reading financial markets. We ended the week stronger but the fragility remains. The stock market’s performance this month gives a fair impression of the old caricature of red-bracered City traders, shouting “buy, buy, buy” in the phone jammed to one ear, and “sell, sell, sell” in the other. One day it’s party time, the next Armageddon.

:o

P.S.

One for the conspiracy theorists... Are The Times journalists under orders to print only bullish stories to keep the public spending?? With people posting the above crap it really does make me wonder...

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Good afternoon all.

Our friend David Smith (Times economic editor dude) is curiously calling for a rate cut.

I personally think he has lost the plot. Inflation is rising and this guy wants to cut rates?

http://www.economicsuk.com/blog/000338.html#more

Visit the site and you can post a reply!!

Partial quote:

Too early for a calming rate cut

Posted by David Smith at 11:00 AM

Category: David Smith's other articles

There have been three occasions during its nine years of independence that the Bank of England has reduced interest rates in response to a global financial crisis. How long does the current period of extreme "financial-market turbulence have to last before the Bank decides that a calming cut is needed?

If a week is a long time in politics, a day can be an eternity when it comes to reading financial markets. We ended the week stronger but the fragility remains. The stock market’s performance this month gives a fair impression of the old caricature of red-bracered City traders, shouting “buy, buy, buy” in the phone jammed to one ear, and “sell, sell, sell” in the other. One day it’s party time, the next Armageddon.

:o

P.S.

One for the conspiracy theorists... Are The Times journalists under orders to print only bullish stories to keep the public spending?? With people posting the above crap it really does make me wonder...

imho it probably has everything to do with massive income they get from property adverts and the imminent ""times.. good homes exhibition in birmingham"

who will pay their salaries if/when the advertising falls off?

ellen

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By the end of the article David Smith doesn't seem that bullish to me

It comes down to a question of two things. Just as the Bank has cited strong equity markets this year as a source of strength for the economy, so a falling market has the potential for generating a decline in confidence and economic weakness. The MPC will have to gauge how powerful this effect is.

The Bank, which keeps a close eye on financial markets, will also be on the lookout for any evidence that the volatility in financial markets is spilling over into the general economy and threatening Britain’s “hard-won stability”.

For the moment, market volatility has probably done enough to snuff out thoughts of base rate going up any time soon, which is good. But markets will have to fall rather more to really put rate cuts back on the agenda.

More of the same old sitting on the fence really . . . . .

;)

Edited by get real

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Good afternoon all.

Our friend David Smith (Times economic editor dude) is curiously calling for a rate cut.

I personally think he has lost the plot. Inflation is rising and this guy wants to cut rates?

http://www.economicsuk.com/blog/000338.html#more

Visit the site and you can post a reply!!

Partial quote:

Too early for a calming rate cut

Posted by David Smith at 11:00 AM

Category: David Smith's other articles

There have been three occasions during its nine years of independence that the Bank of England has reduced interest rates in response to a global financial crisis. How long does the current period of extreme financial-market turbulence have to last before the Bank decides that a calming cut is needed?

If a week is a long time in politics, a day can be an eternity when it comes to reading financial markets. We ended the week stronger but the fragility remains. The stock market’s performance this month gives a fair impression of the old caricature of red-bracered City traders, shouting “buy, buy, buy” in the phone jammed to one ear, and “sell, sell, sell” in the other. One day it’s party time, the next Armageddon.

:o

P.S.

One for the conspiracy theorists... Are The Times journalists under orders to print only bullish stories to keep the public spending?? With people posting the above crap it really does make me wonder...

Well, I can't confess to understanding all of that. What's a risk premia when it's at home, and why are they uncompressing?

But it seems more like he's saying he'd like a rate cut to calm the markets (does this make sense in any way?), but he isn't going to get one. One reason being the MPC wanting to avoid further inflating the housing market here. At least, that's how I read it - all explanations are welcome :)

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P.S.

One for the conspiracy theorists... Are The Times journalists under orders to print only bullish stories to keep the public spending?? With people posting the above crap it really does make me wonder...

There's a post here in another thread that calls this quite bearish - as he's saying that the BoE won't bail out the housing market:

Edited by AFineMess

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David's predictions have seemed to be off somewhat of late.

Didn't he predict a fall in the oil price a number of months ago? Oil has done the opposite since then and broken last years record.

As for conspiracies, I wonder if the Times team are under certain orders in regards to what they can or cannot easily print. A so called predetermined bias if you would like.

Interesting...

:huh:

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i think the WTF should be used as in....

WTF are you doing reading the times economic bits.

its become laughable nonsense.

if the chips of tomorrow dont read it. and its forced upon them.

with vinegar and possible small amount of gravy. and peas.

and a bap.

and a can of tizer.

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i think the WTF should be used as in....

WTF are you doing reading the times economic bits.

its become laughable nonsense.

if the chips of tomorrow dont read it. and its forced upon them.

with vinegar and possible small amount of gravy. and peas.

and a bap.

and a can of tizer.

I didn't realise people still drank Tizer...

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I didn't realise people still drank Tizer...

Only north of Watford / Worcester.

The Bank, which keeps a close eye on financial markets, will also be on the lookout for any evidence that the volatility in financial markets is spilling over into the general economy and threatening Britain’s “hard-won stability”.

Hmmmm.

Well, we don't have "hard won stability".... we've paid for a great big party on the tick and its now time to pay it back. There is no stability - I am sure that this muppet knows this, so why the contra-info spiel.

Also the MPC is tasked with targetting inflation when setting IRs. Not calming financial markets or doing anything else, including targetting housing. Housing isn't in the CPI measure so the MPC should not target it.

In reality I suspect that the MPC look at a whole raft of things outside of the CPI figures when setting IRs, as Merv has already indicated that he dosen't trust the CPI figures.

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This is one of the most mixed and confused pieces I have read in a long time. Smith is usually ramming his opinions, in a clear and easy to understand way for the heard to understand and act on. He was peddline the falling interest rate guff for week after week and people like him are partly responsible for the pick up we have seen as the fools believed it.

I smell foul and think people like Smith are being fed from the Brown camp, blindly repeating what they are told. We all know we do nothing here any more, so without people spending like Beckham, we will be in recession. Browns cards are falling thick and fast now. He will probably regret not pushing Blair a few weeks ago when he had the opportunity.

To me, this reeks of Smith trying to back peddle. The headline suggests he is still on his "theme" of rate cuts being in the pipeline, but if you read it, most of the piece talks about rising rates :lol:

He does indeed wind his way round to saying that the B of E will want to avoid a "B of E put" alluding to the "Greenspan put" where rates were lowered to save stupid investors. He even states the housing market in this and the fact that homeowners may think the bank will drop rates to help them should they get into trouble.

Smith has put himself between a rock and a hard place. This is him starting to publically change his tune. Mervyn King directly warned the likes of Smith that they were totally incorrect and said he was "very surprised" to see a lot of the nonsense that was being written about rate cuts.

Next to Smiths piece, is a piece and headline by Irwin Schitzer saying that US rates are set to continue rising, the global trend continuing. :lol::lol:

On the other hand, Mervyn King, clearly a far more intelligent animal has set himself up for rate rises, warning countless times of the "overvalued housing market", "B of E target inflation, not growth", "debt is real, house prices a matter of opinion", etc etc. When the turd hits the fan, Mervyn will have publically warned enough to be out of the firing line.

I have no idea at all what planet people like Smith are on and how on earth they get the jobs they do. The Times is clearly a new labour mouthpiece, as Realist Bear and others have said, this is a global thing and if rates keep rising elsewhere, we will have no choice.

Regardless, finance is more expensive now than it was 1 year ago. Significantly so.

Edited by BubbleTurbo

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Thanks. Never had Iron Bru. Am I missing anything?

Toothache

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This is one of the most mixed and confused pieces I have read in a long time. Smith is usually ramming his opinions, in a clear and easy to understand way for the heard to understand and act on. He was peddline the falling interest rate guff for week after week and people like him are partly responsible for the pick up we have seen as the fools believed it.

I smell foul and think people like Smith are being fed from the Brown camp, blindly repeating what they are told. We all know we do nothing here any more, so without people spending like Beckham, we will be in recession. Browns cards are falling thick and fast now. He will probably regret not pushing Blair a few weeks ago when he had the opportunity.

To me, this reeks of Smith trying to back peddle. The headline suggests he is still on his "theme" of rate cuts being in the pipeline, but if you read it, most of the piece talks about rising rates :lol:

He does indeed wind his way round to saying that the B of E will want to avoid a "B of E put" alluding to the "Greenspan put" where rates were lowered to save stupid investors. He even states the housing market in this and the fact that homeowners may think the bank will drop rates to help them should they get into trouble.

Smith has put himself between a rock and a hard place. This is him starting to publically change his tune. Mervyn King directly warned the likes of Smith that they were totally incorrect and said he was "very surprised" to see a lot of the nonsense that was being written about rate cuts.

Next to Smiths piece, is a piece and headline by Irwin Schitzer saying that US rates are set to continue rising, the global trend continuing. :lol::lol:

On the other hand, Mervyn King, clearly a far more intelligent animal has set himself up for rate rises, warning countless times of the "overvalued housing market", "B of E target inflation, not growth", "debt is real, house prices a matter of opinion", etc etc. When the turd hits the fan, Mervyn will have publically warned enough to be out of the firing line.

I have no idea at all what planet people like Smith are on and how on earth they get the jobs they do. The Times is clearly a new labour mouthpiece, as Realist Bear and others have said, this is a global thing and if rates keep rising elsewhere, we will have no choice.

Regardless, finance is more expensive now than it was 1 year ago. Significantly so.

Interesting bubble turbo...

To quote Mervyn (October 2005).

"I think a number of people in the last six months have been talking as if the MPC were targeting total demand or, even more oddly, targeting retail sales and consumer spending. We are not. We are trying to target inflation. We have an inflation target,"

This comment was directly aimed at the likes of David.

:blink:

P.S. You can pop along to www.economicsuk.com and post a reply to the article. Tell David what you think...

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  • 301 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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