Financial Institutions

[Foxx]

34 minutes ago, Nouseforaname said:

https://www.wsj.com/articles/britains-financial-disaster-is-a-warning-to-the-world-11664596851
 

Behind a paywall but a great read on the mess this week in the UK.  Tread carefully central banks

You can get a good portion more by listening to the article, no idea if it is the complete article though. Certainly more than the small text excerpt they show.

 

London may be the canary in the coal mine, time will tell. The crash of 2008 actually began in Iceland.

[Foxx]

[Nouseforaname]

1 hour ago, Foxx said:

You can get a good portion more by listening to the article, no idea if it is the complete article though. Certainly more than the small text excerpt they show.

 

London may be the canary in the coal mine, time will tell. The crash of 2008 actually began in Iceland.

Everything that happened this week with the gilt and the pound was purely idiotic fiscal policy by the new government.

 

Lower tax rates when you’re trying to battle inflation and go completely opposite of your central bank in a move that was signaled as “for the people” and investors reacted like uk had lost its mind. Had it not been for the central bank stepping in to save the pension funds they would have been left holding their dicks.  

 

We may think politicians are these Machiavellian style leaders planning ten years ahead but most of the time, they’re tyrod Taylor when you’re down by 7 in 2 minute offense.

[Uncle Joe]

1 hour ago, Nouseforaname said:

We may think politicians are these Machiavellian style leaders planning ten years ahead but most of the time, they’re tyrod Taylor when you’re down by 7 in 2 minute offense.

Some Canadian, "Stay tuned for my new book, Political Financial Policy for Dummies"

[Foxx]

1 hour ago, Nouseforaname said:

Everything that happened this week with the gilt and the pound was purely idiotic fiscal policy by the new government.

 

Lower tax rates when you’re trying to battle inflation and go completely opposite of your central bank in a move that was signaled as “for the people” and investors reacted like uk had lost its mind. Had it not been for the central bank stepping in to save the pension funds they would have been left holding their dicks.  

 

We may think politicians are these Machiavellian style leaders planning ten years ahead but most of the time, they’re tyrod Taylor when you’re down by 7 in 2 minute offense.

The arsonist is trying to put out the fire with gasoline?

 

Apparently no amount of taxation is ever enough.

 

Yeah, no.

[Nouseforaname]

Just now, Uncle Joe said:

Some Canadian, "Stay tuned for my new book, Political Financial Policy for Dummies"

Also included for subscribers, best meatball sauce on the continent.

[Nouseforaname]

Just now, Foxx said:

The arsonist is trying to put out the fire with gasoline?

 

Apparently no amount of taxation is ever enough.

 

Yeah, no.

I’m not against lowering taxes but they didn’t even have a plan about how they were going to pay for it and would obviously go against the actual plan of lowering inflation.

 

It was boneheaded. 

[Foxx]

2 minutes ago, Nouseforaname said:

I’m not against lowering taxes but they didn’t even have a plan about how they were going to pay for it and would obviously go against the actual plan of lowering inflation.

 

It was boneheaded. 

I don't disagree. However, it is not rocket science and there is a long history of inflation being created when the central bank creates fiat out of thin air.

 

Here's a novel thought, lets cut government spending, period. 

 

It's all a house of cards but with the current environment, any number of things, on their own, is going to bring it crashing down.

[Nouseforaname]

16 minutes ago, Foxx said:

I don't disagree. However, it is not rocket science and there is a long history of inflation being created when the central bank creates fiat out of thin air.

 

Here's a novel thought, lets cut government spending, period. 

 

It's all a house of cards but with the current environment, any number of things, on their own, is going to bring it crashing down.

If every financial crisis and averted crisis of the last 100 years has taught us, the financial system is primarily backed by confidence.  A lot of financial institutions fell in 2008 simply because rumors spread that they were holding tons of commercial paper backed by subprime which wasn’t actually the case.

 

The uk is suffering from very high inflation and investors have all but priced in increased rates and a recession for 2023. By dropping tax rates and effectively going counter to what everyone expected, the market panicked and voila, bailout needed.

 

I don’t disagree that government spending is way too high and bad decisions have brought us where we are today but a crisis of confidence is all that is needed to trigger the panic.

[Foxx]

@Nouseforaname Regarding London being the canary in the coal mine. I think that it may actually be Germany. Credit Suisse and Deutsche Bank are are in serious trouble. Compound that with the energy sector and all that it happening there and the severance of the Nordstreams, there is a perfect storm brewing there alone.

[Foxx]

4 minutes ago, Nouseforaname said:

If every financial crisis and averted crisis of the last 100 years has taught us, the financial system is primarily backed by confidence.  A lot of financial institutions fell in 2008 simply because rumors spread that they were holding tons of commercial paper backed by subprime which wasn’t actually the case.

 

The uk is suffering from very high inflation and investors have all but priced in increased rates and a recession for 2023. By dropping tax rates and effectively going counter to what everyone expected, the market panicked and voila, bailout needed.

 

I don’t disagree that government spending is way too high and bad decisions have brought us where we are today but a crisis of confidence is all that is needed to trigger the panic.

Not arguing your main point, at all. Where we diverge is the role of the central bank. Of whom, are the ones responsible for the looming confidence crisis. The savior should not be the arsonist.

[Nouseforaname]

1 hour ago, Foxx said:

Not arguing your main point, at all. Where we diverge is the role of the central bank. Of whom, are the ones responsible for the looming confidence crisis. The savior should not be the arsonist.

In this case the arsonist was the Tory government and the savior was the central bank. 

[Nouseforaname]

1 hour ago, Foxx said:

@Nouseforaname Regarding London being the canary in the coal mine. I think that it may actually be Germany. Credit Suisse and Deutsche Bank are are in serious trouble. Compound that with the energy sector and all that it happening there and the severance of the Nordstreams, there is a perfect storm brewing there alone.

NS 1&2 are not in operation.  If you’ll notice, as mentioned in the article, Germany also made some fiscal adjustments but it was communicated and more realistic and the market did not overreact to the news.  
 

There is no doubt that the next few months will be crucial.  Governments in Europe to stay in political favor with their constituents has decided to cut energy use within industry rather than reducing household energy consumption. Not sure how this will play out but it’s not a good idea.

[Foxx]

1 hour ago, Nouseforaname said:

In this case the arsonist was the Tory government and the savior was the central bank. 

Are you sure about that?

 

The central bank created the current environment of inflation with their fiscal policies. The new UK gov wants to give people relief to help pay their soaring bills. 

 

the chicken or the egg...

[Nouseforaname]

2 minutes ago, Foxx said:

Are you sure about that?

 

The central bank created the current environment of inflation with their fiscal policies. The new UK gov wants to give people relief to help pay their soaring bills. 

 

the chicken or the egg...

The central bank manages fiscal policy ? News to me.

[Foxx]

1 minute ago, Nouseforaname said:

The central bank manages fiscal policy ? News to me.

Monetary policy. You should have known what I meant.

[Nouseforaname]

2 minutes ago, Foxx said:

Monetary policy. You should have known what I meant.

You never know.

 

I’m a fiscal conservative and I have no issue with lower taxes but they have to come from somewhere or else you have to borrow it.  Germany also offered lower taxes to its citizens to help offset the increasing energy cost but it was done in a transparent way.

 

If you want more info, listen to Bloomberg surveillance from this past week.  Based on the interviews from the parties involved, they shit the bed and they knew it.

[Foxx]

5 minutes ago, Nouseforaname said:

I’m a fiscal conservative and I have no issue with lower taxes but they have to come from somewhere or else you have to borrow it.

Or, you know... you just &#%$ing quit government spending. Spending on useless &#%$ing programs. Government was never meant to support the people, yet here we are.

I've no problem, whatsoever with a hand-up. What I do have a serious problem with, is a lifetime hand-out. This is essentially what government has become, help those who simply will not help themselves. And they rob the taxpayer to do it and effectually create a perpetual engine..

[Nouseforaname]

Just now, Foxx said:

Or, you know... you just &#%$ing quit government spending. Spending on useless &#%$ing programs. Government was never meant to support the people, yet here we are.

I've no problem, whatsoever with a hand-up. What I do have a serious problem with, is a lifetime hand-out. This is essentially what government has become, help those who simply will not help themselves. And they rob the taxpayer to do it and effectually create a perpetual engine..

No disagreement there but I don’t have much knowledge of the Uk’s fiscal spending.

[Foxx]

4 minutes ago, Nouseforaname said:

No disagreement there but I don’t have much knowledge of the Uk’s fiscal spending.

I don't either but I do know quite a few people that live there and it's a Western civilization, of which, while the minutiae may differ slightly, they all hold pretty much the same core tenets.