Wednesday, November 23, 2011

Printy printy time

Goldman's Sigma X Hints Who The Next Contagion Target Is

If this turns out, and it's been pretty accurate, the gilts party will be over. The BoE will attempt to support the governments refinancing costs by printing money to buy the gilts. The sells of the gilts will sell GBP to buy USD, and we will see another round of sterling devaluation, and another spike in inflation. It was also a case of when not if, and the when seems like it might be soon. The only question is how long can the BoE fight the market? All very good for HPC

Posted by nod2glod @ 08:49 PM (2500 views)
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18 thoughts on “Printy printy time

  • Like the use of the word ‘target’ in the title. Gives the impression of pre-meditated attacks. Who will muzzle these parasitical ‘investors’?….and for those of you who think that attacking nations is a justifiable way of making a ‘killing’ in the markets, and earn the bumper end of year bonus, need to remember the many hundreds of thousands, Nay millions who will be suffering so those ‘masters of the Universe’ can slap themselves on the back and buy their next enormous bottle of Crystal.

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  • Yes it’s not going to be good, but bankers and speculators are only a small part of the problem, and they are not the cause. You won’t want to hear this but it’s your fault. Yes you and me and every other person who voted in our governments who have saddled us with crushing deficients and unrealistic expectations of entitlements. This rage against bankers, capitalism and free markets is saddening. Politicians will deflect the real blame, and maybe not the same lot, but the same creed of politician will get voted back in the repeat the same sad story.

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  • “You won’t want to hear this but it’s your fault. Yes you and me and every other person who voted in our governments who have saddled us with crushing deficients and unrealistic expectations of entitlements.”

    We should have voted in the military?

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  • a political party who said cut the nhs, reduce pensions, cut the dole, keep government small, would have been DoA. even now when the weight of the evidence is undeniable, people still what to spend and borrow on the public purse. The political parties who prospered gave the people what they wanted, and it’s was taken without questioning. We got the politicians we deserved.

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  • [email protected] an 4, largely agree with what you are saying but also central banks keeping interest rates too low from 2002 – 2007 was especially suicidal. If interest rates had been 2 -3 % points higher for that period a great deal of this could have been, if not avoided altogether, at least mitigated.

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  • I’m not so sure. A party that said “We’ll halve your tax bill by cutting all welfare payouts, especially housing benefit, dole, JSA, and the “I’ve got six kids so I need money for ciggies and plasma screens” allowance” would have gained several votes. Enough to get in? I don’t know.

    A more progressive approach to this is the Citizen’s Allowance, which can achieve most of the same benefits, minimise cheats, and shrink government.

    I suspect that if an election was called in the near future that UKIP may get a big increase in votes compared to last time, so who knows? A few more black swans and we may not get the same-old same-old next time round.

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  • little professor says:

    Love the image

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  • For the umpteenth time, IT DOESN’T MATTER! See all that business and bank debt? Well guess which country in Europe is home to the most international banks and the most international companies? Yes that’s right, Britain*. The companies borrowing money aren’t pure British companies, they’re global megacorps. When Vodafone wants to build a new mobile phone network in India, they go to the financial markets and borrow the money. The debt is serviced by revenues from customers in India – maybe £1 on every Indian’s phone bill. The fact that the debt appears on the balance sheet of a UK-based company doesn’t mean that we British citizens are liable for it. Half the FTSE100 is made up of global-facing companies like Vodafone. This is actually a source of strength and resilience for the UK; and I believe it’s why London (home to most of these global companies) is relatively unscathed by the recession.

    (*Ok it might be Switzerland but they don’t count.)

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  • All in good time.

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  • Canada’s proportion of household debt looks extreme. With a slowdown in China and a commodities slowdown, Canada’s housing market and banking sector is in for a rough 2012.

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  • I could be wrong about my post #8. All that corporate debt could be PFI. But even our Gordon wasn’t that profligate, surely?

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  • I could be wrong about my post #8. All that corporate debt could be PFI. But even our Gordon wasn’t that profligate, surely?

    Sorry, but I think you are wrong, PFI was a massive cost center.

    a great deal of this could have been, if not avoided altogether, at least mitigated.

    Well, we are where we are…..and where we are is in an economic crisis, heading for a currency crisis.

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  • Drewster, you make a very good point at 8, to which it could be added that much of the bank debt is residential mortgage debt which will be paid off over long periods. Brits will tend to eat spam rather than default.

    I also supect mortgage debt is being counted twice, once under household debt and again as a bank liability. More interesting than these figures would be to see how they are worked out. There is barely any curiousity about that, I suppose that’s what happens if you want to present as gospel.

    I might be wrong but I suspect overall the debt position is dire ((leading to a period of drifting in and out of recession and a lower standard of living generally) but that its not quite fatal as many on here suspect. The crash in 2008 largely stopped the excesses in their tracks (cf China which is still expanding because there is no market to stop it), although it would have been better if the crash had happened five years earlier.

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  • even so government debt is still too high given the future of an older surviving population (the wrinklies are getting older and demanding more resources)

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  • Maybe it’s me not understanding, but the biggest slices of debt, household and massive corporate, aren’t going to be reduced by cutting public spending. If anything I would have thought h’hold debt would likely increase as a result of public spending cuts.
    Also, does it matter how those corporate debts are configured for the purpose of the comparative chart? If Drewster and Bellweather are right about double counting mortgage debt/bank debt being partially global corporation debt, well fine but that shouln’t matter if the same measurement method is applied across each country to reach the comparisons. Presumably US, German and Japanese banks have, like UK banks, global megacorp debt/mortgage debt as part of their balace sheets too.

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  • now back to more important news

    Pink

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