Stop voting for fucking Tories

[_Os_]

Treasury Orthodoxy over 30/40 years has seen large swathes of Britain become some of the poorest areas in Western Europe, this did not begin with Brexit and it is not unfair to suggest alternative approaches (the current alternative approach is batshit obviously)

That Spectator article is trying to use culture wars bullshit (that no normal person cares about) to explain the economy. Which was the point I was making, the stuff one side is pumping out is total madness, whatever reality they're in it's not the same one I'm in.

Getting into the actual substance. The immediate point is that "Treasury orthodoxy" looks almost conspiratorial if that's the primary explanation, it's Trump's "deep state" and "drain the swamp". The real explanation is that globalisation and the end of the Cold War unlocked a huge supply of labour, then computer and telecoms technology amplified this. This created a lot of new wealth, including in the UK, the UK hasn't stagnated for 30-40 years. What some advanced economies have failed to do (most evident in English speaking countries it seems) is ensure that new wealth was spread widely, rather than concentrated at the top and in specific geographic locations. Politics is mostly process driven not event driven, the process started with Thatcherism (which still dominates the orthodox position), Blair/New Labour and Cameron changed some parts of this model (and the orthodoxy too) but did not replace it. Then Brexit promised those that had been failed by this process total system change and no immigration, and those that had done well from this process no system change and also no immigration ... and what they got is a deranged version of Thatcherism (and now Reaganism) and even greater immigration.

Tory alternate reality is a responsibility free zone. 2022 UK is more or less a Tory creation. The structural problems aren't the fault of the external enemies the Tories have created (EU, immigrants), nor the internal enemies that have been invented (single mothers, benefits claimants, judges, remainers, the Treasury, and now "the anti growth coalition"). The problems and the lack of solutions are about Tory thought being dominant and any alternative being immediately destroyed as heretical. Which means the problem is with the voters too. New Labour mk2 is a real possibility now (a definite upgrade on what's currently in power), but that doesn't actually fix the problem. An electoral system that forces the creation of two dominant parties and forces a false consensus, is one of the bigger culprits in all this.

A Treasury that was in favour of capital expenditure on infrastructure and energy and understood the value of assets as well as liabilities would have created a very different Britain in 2022 to the one we have.

As we're learning, it is actually the executive in control of the ship. Not some civil servant in a windowless Whitehall office.

If Truss and Kamikwasi continue on their adventure, infrastructure spending will be cut. It will have to happen, because the alternative is more expensive debt. The guy in the windowless Whitehall office sending out anodyne emails pointing out reality, isn't the one that will cut infrastructure spending for tax cuts. It's Truss, Kamikwasi, and the Tory party.

I predicted on this thread a year ago that the BoE would become a battleground, we're now about to see who wins that battle. I've seen a few populist/nationalist shit shows, the civil service always becomes a battleground too and that's when the real damage gets done.

[Paddington Bear]

That Spectator article is trying to use culture wars bullshit (that no normal person cares about) to explain the economy. Which was the point I was making, the stuff one side is pumping out is total madness, whatever reality they're in it's not the same one I'm in.

Getting into the actual substance. The immediate point is that "Treasury orthodoxy" looks almost conspiratorial if that's the primary explanation, it's Trump's "deep state" and "drain the swamp". The real explanation is that globalisation and the end of the Cold War unlocked a huge supply of labour, then computer and telecoms technology amplified this. This created a lot of new wealth, including in the UK, the UK hasn't stagnated for 30-40 years. What some advanced economies have failed to do (most evident in English speaking countries it seems) is ensure that new wealth was spread widely, rather than concentrated at the top and in specific geographic locations. Politics is mostly process driven not event driven, the process started with Thatcherism (which still dominates the orthodox position), Blair/New Labour and Cameron changed some parts of this model (and the orthodoxy too) but did not replace it. Then Brexit promised those that had been failed by this process total system change and no immigration, and those that had done well from this process no system change and also no immigration ... and what they got is a deranged version of Thatcherism (and now Reaganism) and even greater immigration.

Tory alternate reality is a responsibility free zone. 2022 UK is more or less a Tory creation. The structural problems aren't the fault of the external enemies the Tories have created (EU, immigrants), nor the internal enemies that have been invented (single mothers, benefits claimants, judges, remainers, the Treasury, and now "the anti growth coalition"). The problems and the lack of solutions are about Tory thought being dominant and any alternative being immediately destroyed as heretical. Which means the problem is with the voters too. New Labour mk2 is a real possibility now (a definite upgrade on what's currently in power), but that doesn't actually fix the problem. An electoral system that forces the creation of two dominant parties and forces a false consensus, is one of the bigger culprits in all this.

A Treasury that was in favour of capital expenditure on infrastructure and energy and understood the value of assets as well as liabilities would have created a very different Britain in 2022 to the one we have.

As we're learning, it is actually the executive in control of the ship. Not some civil servant in a windowless Whitehall office.

If Truss and Kamikwasi continue on their adventure, infrastructure spending will be cut. It will have to happen, because the alternative is more expensive debt. The guy in the windowless Whitehall office sending out anodyne emails pointing out reality, isn't the one that will cut infrastructure spending for tax cuts. It's Truss, Kamikwasi, and the Tory party.

I predicted on this thread a year ago that the BoE would become a battleground, we're now about to see who wins that battle. I've seen a few populist/nationalist shit shows, the civil service always becomes a battleground too and that's when the real damage gets done.

I'm not defending Truss et al, I'm pointing out that it's not unreasonable to criticise Treasury orthodoxy and the outcomes of it are evident across the country. The (very able) Civil Servants are working within a deeply flawed investment methodology

[_Os_]

I'm not defending Truss et al, I'm pointing out that it's not unreasonable to criticise Treasury orthodoxy and the outcomes of it are evident across the country. The (very able) Civil Servants are working within a deeply flawed investment methodology

It sounds conspiratorial, because "orthodoxy" is positioned as if it popped out of thin air. When orthodoxy actually comes from power, and what has proven to have worked, or more to the point what has proven to have worked for those in power and their supporters. In other words Tories have shaped the orthodoxy in the UK more than anyone or anything else.

I'm not sure Truss and Kamikwasi really know what they're proposing, they have some slogans they're insanely committed to but there doesn't appear to be much substance beneath that. It seems like they've stumbled into supporting some form of half baked MMT with austerity mixed in? As far as I can tell the Treasury pointed out "are you sure about this it doesn't look like it'll work", and were mostly ignored.

[Biffer]

I'm not defending Truss et al, I'm pointing out that it's not unreasonable to criticise Treasury orthodoxy and the outcomes of it are evident across the country. The (very able) Civil Servants are working within a deeply flawed investment methodology

It sounds conspiratorial, because "orthodoxy" is positioned as if it popped out of thin air. When orthodoxy actually comes from power, and what has proven to have worked, or more to the point what has proven to have worked for those in power and their supporters. In other words Tories have shaped the orthodoxy in the UK more than anyone or anything else.

I'm not sure Truss and Kamikwasi really know what they're proposing, they have some slogans they're insanely committed to but there doesn't appear to be much substance beneath that. It seems like they've stumbled into supporting some form of half baked MMT with austerity mixed in? As far as I can tell the Treasury pointed out "are you sure about this it doesn't look like it'll work", and were mostly ignored.

The best way I've seen it phrased is that they look back at Thatcher and see the levers she pulled, so they're pulling the same levers. But they don't understand

1. How those levers worked in the eighties
2. Why they were pulled in the eighties
3. How Thatcherite policies disconnected those levers and what the effect on the macroeconomic structure of the country was
4. The differences between the UK economy in the eighties and now

So they're just yanking away at the levers without any idea what they'll do or if they're actually connected to anything.

[Paddington Bear]

I'm not defending Truss et al, I'm pointing out that it's not unreasonable to criticise Treasury orthodoxy and the outcomes of it are evident across the country. The (very able) Civil Servants are working within a deeply flawed investment methodology

It sounds conspiratorial, because "orthodoxy" is positioned as if it popped out of thin air. When orthodoxy actually comes from power, and what has proven to have worked, or more to the point what has proven to have worked for those in power and their supporters. In other words Tories have shaped the orthodoxy in the UK more than anyone or anything else.

I'm not sure Truss and Kamikwasi really know what they're proposing, they have some slogans they're insanely committed to but there doesn't appear to be much substance beneath that. It seems like they've stumbled into supporting some form of half baked MMT with austerity mixed in? As far as I can tell the Treasury pointed out "are you sure about this it doesn't look like it'll work", and were mostly ignored.

Your points would make much more sense if I were defending the mini budget, which I'm not.

[Lobby]

I'm not defending Truss et al, I'm pointing out that it's not unreasonable to criticise Treasury orthodoxy and the outcomes of it are evident across the country. The (very able) Civil Servants are working within a deeply flawed investment methodology

It sounds conspiratorial, because "orthodoxy" is positioned as if it popped out of thin air. When orthodoxy actually comes from power, and what has proven to have worked, or more to the point what has proven to have worked for those in power and their supporters. In other words Tories have shaped the orthodoxy in the UK more than anyone or anything else.

I'm not sure Truss and Kamikwasi really know what they're proposing, they have some slogans they're insanely committed to but there doesn't appear to be much substance beneath that. It seems like they've stumbled into supporting some form of half baked MMT with austerity mixed in? As far as I can tell the Treasury pointed out "are you sure about this it doesn't look like it'll work", and were mostly ignored.

Your points would make much more sense if I were defending the mini budget, which I'm not.

Yes, but by adopting their terminology about 'Treasury Orthodoxy' you are (perhaps unconsciously) supporting their attempt to shift the blame for the UK's low growth rate to the Treasury rather than the specific policies pursued by successive Governments (and especially Tory Governments).

The constant references to 'Treasury Orthodoxy' by Truss and KhamiKwasi are a clear attempt to absolve themselves from responsibility for the last 12 years of the UK's economic performance, despite them being key members of the Government largely responsible for that performance.

[Paddington Bear]

It sounds conspiratorial, because "orthodoxy" is positioned as if it popped out of thin air. When orthodoxy actually comes from power, and what has proven to have worked, or more to the point what has proven to have worked for those in power and their supporters. In other words Tories have shaped the orthodoxy in the UK more than anyone or anything else.

I'm not sure Truss and Kamikwasi really know what they're proposing, they have some slogans they're insanely committed to but there doesn't appear to be much substance beneath that. It seems like they've stumbled into supporting some form of half baked MMT with austerity mixed in? As far as I can tell the Treasury pointed out "are you sure about this it doesn't look like it'll work", and were mostly ignored.

Your points would make much more sense if I were defending the mini budget, which I'm not.

Yes, but by adopting their terminology about 'Treasury Orthodoxy' you are (perhaps unconsciously) supporting their attempt to shift the blame for the UK's low growth rate to the Treasury rather than the specific policies pursued by successive Governments (and especially Tory Governments).

The constant references to 'Treasury Orthodoxy' by Truss and KhamiKwasi are a clear attempt to absolve themselves from responsibility for the last 12 years of the UK's economic performance, despite them being key members of the Government largely responsible for that performance.

Fair enough to an extent, but Treasury Orthodoxy is a phrase that is used to critique British policy over a 30 year period by people across the political spectrum and was not magicked out of thin air a few weeks ago. Truss and Kwarteng certainly can't blame the Treasury for the current shitshow!

[fishfoodie]

So Dizzy repeated at PMQs, that she won't be making cuts, but instead has identified massive waste, that previously was missed by the decade of Tory Ministers.

Just where is the money coming from ?

Did she recently receive an email from a deposed African Prince, offering her money if she helps him get his ill-gotten gains out of the Country ?

[dpedin]

So Dizzy repeated at PMQs, that she won't be making cuts, but instead has identified massive waste, that previously was missed by the decade of Tory Ministers.

Just where is the money coming from ?

Did she recently receive an email from a deposed African Prince, offering her money if she helps him get his ill-gotten gains out of the Country ?

Truss was feckin awful! Not sure what she meant by 'no cuts' - real terms, cash terms, etc? She is really boxed into a corner now - political, economic and idealogical pressures all pulling in different directions now. I am not sure the Tory MPs will be enamoured with that display, many will be tidying up their CVs and brushing up their interviewing skills. Truss is toast and men in grey suits will be at her door soon.

[JM2K6]

Your points would make much more sense if I were defending the mini budget, which I'm not.

Yes, but by adopting their terminology about 'Treasury Orthodoxy' you are (perhaps unconsciously) supporting their attempt to shift the blame for the UK's low growth rate to the Treasury rather than the specific policies pursued by successive Governments (and especially Tory Governments).

The constant references to 'Treasury Orthodoxy' by Truss and KhamiKwasi are a clear attempt to absolve themselves from responsibility for the last 12 years of the UK's economic performance, despite them being key members of the Government largely responsible for that performance.

Fair enough to an extent, but Treasury Orthodoxy is a phrase that is used to critique British policy over a 30 year period by people across the political spectrum and was not magicked out of thin air a few weeks ago. Truss and Kwarteng certainly can't blame the Treasury for the current shitshow!

Doesn't that phrase essentially refer to the Treasury being on the face of it a "safety-first, balance the budgets, everything must be paid for" advocate, while embracing free trade and free markets wholesale, all the time quietly building up a lot of state debt?

None of that has prevented governments from redirecting funding to the poorer and more deprived areas, or even using that funding wisely. Capitalism creates inequality, neo-liberalism makes it excessive, and this libertarian nonsense makes it an absolute disaster. And this is one of the few times when the government hasn't been in lockstep with Treasury policy; it's just that they're breaking away from it in order to do utterly insane things for ideological reasons, and pointing fingers at the Treasury's innately conservative nature.

[SaintK]

So Dizzy repeated at PMQs, that she won't be making cuts, but instead has identified massive waste, that previously was missed by the decade of Tory Ministers.

Just where is the money coming from ?

Did she recently receive an email from a deposed African Prince, offering her money if she helps him get his ill-gotten gains out of the Country ?

And within 30 minutes of her finishing PMQ's Downing St start "rowing back" on what she said!!!

[Paddington Bear]

Yes, but by adopting their terminology about 'Treasury Orthodoxy' you are (perhaps unconsciously) supporting their attempt to shift the blame for the UK's low growth rate to the Treasury rather than the specific policies pursued by successive Governments (and especially Tory Governments).

The constant references to 'Treasury Orthodoxy' by Truss and KhamiKwasi are a clear attempt to absolve themselves from responsibility for the last 12 years of the UK's economic performance, despite them being key members of the Government largely responsible for that performance.

Fair enough to an extent, but Treasury Orthodoxy is a phrase that is used to critique British policy over a 30 year period by people across the political spectrum and was not magicked out of thin air a few weeks ago. Truss and Kwarteng certainly can't blame the Treasury for the current shitshow!

Doesn't that phrase essentially refer to the Treasury being on the face of it a "safety-first, balance the budgets, everything must be paid for" advocate, while embracing free trade and free markets wholesale, all the time quietly building up a lot of state debt?

None of that has prevented governments from redirecting funding to the poorer and more deprived areas, or even using that funding wisely. Capitalism creates inequality, neo-liberalism makes it excessive, and this libertarian nonsense makes it an absolute disaster. And this is one of the few times when the government hasn't been in lockstep with Treasury policy; it's just that they're breaking away from it in order to do utterly insane things for ideological reasons, and pointing fingers at the Treasury's innately conservative nature.

Partially because my interests are very infrastructure heavy I have generally seen it used to describe something of a 'computer says no' approach to infrastructure spending, notably around energy and northern railways.

I'm in no way defending the current government, I am as despairing as the next man

[JM2K6]

Fair enough to an extent, but Treasury Orthodoxy is a phrase that is used to critique British policy over a 30 year period by people across the political spectrum and was not magicked out of thin air a few weeks ago. Truss and Kwarteng certainly can't blame the Treasury for the current shitshow!

Doesn't that phrase essentially refer to the Treasury being on the face of it a "safety-first, balance the budgets, everything must be paid for" advocate, while embracing free trade and free markets wholesale, all the time quietly building up a lot of state debt?

None of that has prevented governments from redirecting funding to the poorer and more deprived areas, or even using that funding wisely. Capitalism creates inequality, neo-liberalism makes it excessive, and this libertarian nonsense makes it an absolute disaster. And this is one of the few times when the government hasn't been in lockstep with Treasury policy; it's just that they're breaking away from it in order to do utterly insane things for ideological reasons, and pointing fingers at the Treasury's innately conservative nature.

Partially because my interests are very infrastructure heavy I have generally seen it used to describe something of a 'computer says no' approach to infrastructure spending, notably around energy and northern railways.

I'm in no way defending the current government, I am as despairing as the next man

No, I get it, I'm just trying to work out which bits can be fairly blamed on the Treasury and which can't. I would assume the "computer says no" approach is regarding the balancing the budgets, right? I guess my point is I would view that as a failure of the government to put forward a proposal that makes financial sense. But I guess it's hard to say with hypotheticals.

[tabascoboy]

[Paddington Bear]

Doesn't that phrase essentially refer to the Treasury being on the face of it a "safety-first, balance the budgets, everything must be paid for" advocate, while embracing free trade and free markets wholesale, all the time quietly building up a lot of state debt?

None of that has prevented governments from redirecting funding to the poorer and more deprived areas, or even using that funding wisely. Capitalism creates inequality, neo-liberalism makes it excessive, and this libertarian nonsense makes it an absolute disaster. And this is one of the few times when the government hasn't been in lockstep with Treasury policy; it's just that they're breaking away from it in order to do utterly insane things for ideological reasons, and pointing fingers at the Treasury's innately conservative nature.

Partially because my interests are very infrastructure heavy I have generally seen it used to describe something of a 'computer says no' approach to infrastructure spending, notably around energy and northern railways.

I'm in no way defending the current government, I am as despairing as the next man

No, I get it, I'm just trying to work out which bits can be fairly blamed on the Treasury and which can't. I would assume the "computer says no" approach is regarding the balancing the budgets, right? I guess my point is I would view that as a failure of the government to put forward a proposal that makes financial sense. But I guess it's hard to say with hypotheticals.

There's a general conflation of CapEx and OpEx that seems to bedevil a lot of projects, and the Treasury seems to have a very deep scepticism about cost:benefit ratios on projects outside SE England (Thameslink upgrades had a significantly lower CBR than an upgraded TransPennine service or a Leeds metro network, for example, but one exists and the other two don't). Of course the push back from politicians has been pretty lame so we get inertia.

[C69]

So Dizzy repeated at PMQs, that she won't be making cuts, but instead has identified massive waste, that previously was missed by the decade of Tory Ministers.

Just where is the money coming from ?

Did she recently receive an email from a deposed African Prince, offering her money if she helps him get his ill-gotten gains out of the Country ?

And within 30 minutes of her finishing PMQ's Downing St start "rowing back" on what she said!!!

This is going into The Thick of it territory now.
The Minister for Victorian values this morning was an absolute disgrace. Causality and Beeb imaprtiality ffs...

[JM2K6]

Partially because my interests are very infrastructure heavy I have generally seen it used to describe something of a 'computer says no' approach to infrastructure spending, notably around energy and northern railways.

I'm in no way defending the current government, I am as despairing as the next man

No, I get it, I'm just trying to work out which bits can be fairly blamed on the Treasury and which can't. I would assume the "computer says no" approach is regarding the balancing the budgets, right? I guess my point is I would view that as a failure of the government to put forward a proposal that makes financial sense. But I guess it's hard to say with hypotheticals.

There's a general conflation of CapEx and OpEx that seems to bedevil a lot of projects, and the Treasury seems to have a very deep scepticism about cost:benefit ratios on projects outside SE England (Thameslink upgrades had a significantly lower CBR than an upgraded TransPennine service or a Leeds metro network, for example, but one exists and the other two don't). Of course the push back from politicians has been pretty lame so we get inertia.

Got it, cheers

[charltom]

So Dizzy repeated at PMQs, that she won't be making cuts, but instead has identified massive waste, that previously was missed by the decade of Tory Ministers.

Just where is the money coming from ?

Did she recently receive an email from a deposed African Prince, offering her money if she helps him get his ill-gotten gains out of the Country ?

Truss was feckin awful! Not sure what she meant by 'no cuts' - real terms, cash terms, etc? She is really boxed into a corner now - political, economic and idealogical pressures all pulling in different directions now. I am not sure the Tory MPs will be enamoured with that display, many will be tidying up their CVs and brushing up their interviewing skills. Truss is toast and men in grey suits will be at her door soon.

She was asked about cuts to spending, not cuts to budgets. Budgets are always for higher spending; it is easy to cut them without cutting actual spending. The latter is what she was asked about.

[Biffer]

Partially because my interests are very infrastructure heavy I have generally seen it used to describe something of a 'computer says no' approach to infrastructure spending, notably around energy and northern railways.

I'm in no way defending the current government, I am as despairing as the next man

No, I get it, I'm just trying to work out which bits can be fairly blamed on the Treasury and which can't. I would assume the "computer says no" approach is regarding the balancing the budgets, right? I guess my point is I would view that as a failure of the government to put forward a proposal that makes financial sense. But I guess it's hard to say with hypotheticals.

There's a general conflation of CapEx and OpEx that seems to bedevil a lot of projects, and the Treasury seems to have a very deep scepticism about cost:benefit ratios on projects outside SE England (Thameslink upgrades had a significantly lower CBR than an upgraded TransPennine service or a Leeds metro network, for example, but one exists and the other two don't). Of course the push back from politicians has been pretty lame so we get inertia.

And often when 'regional' projects are evaluated they're done differently - capital projects in the SE are routinely consider to be spending on National Infrastructure, but outside the SE they aren't. For example widening the A13 (Southend on Sea to London) was a National Infrastructure project, but building a new Forth Crossing wasn't.

[Torquemada 1420]

This is going into The Thick of it territory now.
The Minister for Victorian values this morning was an absolute disgrace. Causality and Beeb imaprtiality ffs...

Agree. The Beeb was a disgrace in letting Victorian Dad off the hook this am.

[Torquemada 1420]

So Dizzy repeated at PMQs, that she won't be making cuts, but instead has identified massive waste, that previously was missed by the decade of Tory Ministers.

The massive waste she is referring to is spending on the poor, weak and vulnerable of society. Next she will propose a new solution to the energy crisis

[Rhubarb & Custard]

This is going into The Thick of it territory now.
The Minister for Victorian values this morning was an absolute disgrace. Causality and Beeb imaprtiality ffs...

Agree. The Beeb was a disgrace in letting Victorian Dad off the hook this am.

We might not like them or their message but allowing HMG to put its view is hardly unreasonable. And across the BBC since that happened any number of people with a modicum of common sense have been pouring scorn on the Minister for the 18th Century

You don't need to get upset by every single interview which doesn't go as you want

[_Os_]

10 days ago I would have thought that the chances of a UK pension fund going tits up was remote even with the unprecedented volatility in the bond market but today ,I am not so sure.
Having looked at the numbers, particularly the leverage and the 'Hedges' put on using synthetic derivatives to the underlying investment positions, these funds are going to post massive losses
It appears that the UK is now practising a policy of Fiscal Dominance i.e, The BOE doing the Governments bidding which is the polar opposite of what they are mandated to do .

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

[PCPhil]

10 days ago I would have thought that the chances of a UK pension fund going tits up was remote even with the unprecedented volatility in the bond market but today ,I am not so sure.
Having looked at the numbers, particularly the leverage and the 'Hedges' put on using synthetic derivatives to the underlying investment positions, these funds are going to post massive losses
It appears that the UK is now practising a policy of Fiscal Dominance i.e, The BOE doing the Governments bidding which is the polar opposite of what they are mandated to do .

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

I think a bunch of OAPs vote to elect another tory government in because the Heil and Express tell them that Starmer will nationalise their houses.

[Line6 HXFX]

Gordon brown, having read Britainia unchained concluded this is actually the plan. Crash the UK economy and the pound, , set up a sort of Hong Kong on sea situation where we are all scrabbling in the dirt for a bit of damp coal, whilst venture capitalists eat our lunch and shit in our faces.


So what if this is actually the plan?

Tories last crack at playing with democracy, is to just fuck us.
No one actually believes they have a guiding ideology at this point do they?

https://twitter.com/gordonbrown/status ... 7490560001

[fishfoodie]

10 days ago I would have thought that the chances of a UK pension fund going tits up was remote even with the unprecedented volatility in the bond market but today ,I am not so sure.
Having looked at the numbers, particularly the leverage and the 'Hedges' put on using synthetic derivatives to the underlying investment positions, these funds are going to post massive losses
It appears that the UK is now practising a policy of Fiscal Dominance i.e, The BOE doing the Governments bidding which is the polar opposite of what they are mandated to do .

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

The Tories throw their hands up, & blame Putin; & then say that they are committed to paying pensions; but they're so very, very sorry, but the only way they can find the money to do so, is to flog the NHS, lock, stock , & smoking ruin to the Americans, & put in place a shiny new Health insurance program, to give citizens access to this new privatized service, but not to worry, it'll be only a small charge .....

[Deveron Boy]

This is going into The Thick of it territory now.
The Minister for Victorian values this morning was an absolute disgrace. Causality and Beeb imaprtiality ffs...

Agree. The Beeb was a disgrace in letting Victorian Dad off the hook this am.

We might not like them or their message but allowing HMG to put its view is hardly unreasonable. And across the BBC since that happened any number of people with a modicum of common sense have been pouring scorn on the Minister for the 18th Century
You don't need to get upset by every single interview which doesn't go as you want
[/quo

He accused the BBC of breaching impartiality guidelines when they asked him if there was a link between turmoil in the bond market and kami Kazi’s fiscal event - that’s a perfectly reasonable question where his response was to play to the defund the BBC fuckwits

[Torquemada 1420]

This is going into The Thick of it territory now.
The Minister for Victorian values this morning was an absolute disgrace. Causality and Beeb imaprtiality ffs...

Agree. The Beeb was a disgrace in letting Victorian Dad off the hook this am.

We might not like them or their message but allowing HMG to put its view is hardly unreasonable. And across the BBC since that happened any number of people with a modicum of common sense have been pouring scorn on the Minister for the 18th Century

You don't need to get upset by every single interview which doesn't go as you want

I was not querying giving him a platform. The Beeb's job is to ask relevant questions. It chose not to. The most obvious one being the BofE was conducting a policy absolutely contrary to that of Government.

[Torquemada 1420]

10 days ago I would have thought that the chances of a UK pension fund going tits up was remote even with the unprecedented volatility in the bond market but today ,I am not so sure.
Having looked at the numbers, particularly the leverage and the 'Hedges' put on using synthetic derivatives to the underlying investment positions, these funds are going to post massive losses
It appears that the UK is now practising a policy of Fiscal Dominance i.e, The BOE doing the Governments bidding which is the polar opposite of what they are mandated to do .

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

Well, I commented somewhere that the public sector schemes are £2 trillion in deficit. Pretty much every private sector, FS scheme has been miles in the red for at least 2 decades + and I've been in the camp for that time that many would inevitably implode. Carillion, Kodak, Monarch have all gone. The PPF now props up over 1000 schemes. So failure is routine. The USS is knocking at the door.

[fishfoodie]

Agree. The Beeb was a disgrace in letting Victorian Dad off the hook this am.

We might not like them or their message but allowing HMG to put its view is hardly unreasonable. And across the BBC since that happened any number of people with a modicum of common sense have been pouring scorn on the Minister for the 18th Century

You don't need to get upset by every single interview which doesn't go as you want

I was not querying giving him a platform. The Beeb's job is to ask relevant questions. It chose not to. The most obvious one being the BofE was conducting a policy absolutely contrary to that of Government.

I'd say the BOE is conducting exactly the policy that it was handed, & has had for a very long time now; control Inflation, & maintain a stable financial system.

If the Government starts a fire in the markets, they can't complain when the Fire Brigade comes along & drenches everything in water !

[Torquemada 1420]

I'd say the BOE is conducting exactly the policy that it was handed, & has had for a very long time now; control Inflation, & maintain a stable financial system.

If the Government starts a fire in the markets, they can't complain when the Fire Brigade comes along & drenches everything in water !

Yes. And why did the Beeb not hose Victorian Dad with this fact?

[_Os_]

10 days ago I would have thought that the chances of a UK pension fund going tits up was remote even with the unprecedented volatility in the bond market but today ,I am not so sure.
Having looked at the numbers, particularly the leverage and the 'Hedges' put on using synthetic derivatives to the underlying investment positions, these funds are going to post massive losses
It appears that the UK is now practising a policy of Fiscal Dominance i.e, The BOE doing the Governments bidding which is the polar opposite of what they are mandated to do .

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

Well, I commented somewhere that the public sector schemes are £2 trillion in deficit. Pretty much every private sector, FS scheme has been miles in the red for at least 2 decades + and I've been in the camp for that time that many would inevitably implode. Carillion, Kodak, Monarch have all gone. The PPF now props up over 1000 schemes. So failure is routine. The USS is knocking at the door.

Yes but then what. Pension funds aren't only invested in bonds, if they have to liquidate assets then fires are going to breakout elsewhere which could replicate what's happened in the bond market (huge new supply, no demand, lack of liquidity).

If whatever fiscal position is reached isn't credible (which looks the likely outcome now), then the BoE has no option but QE to support the bond market surely? Which means higher inflation (which is directly opposed to the BoE's main goal) and long term a weaker £ also? Does the BoE cycle through a series of temporary measures, each time allowing pressure to build in the hope the fiscal position changes, before going back in? Didn't have "the entire UK economy will be run using the model of a DFS closing down sale" on my 2022 bingo card.

[fishfoodie]

I'd say the BOE is conducting exactly the policy that it was handed, & has had for a very long time now; control Inflation, & maintain a stable financial system.

If the Government starts a fire in the markets, they can't complain when the Fire Brigade comes along & drenches everything in water !

Yes. And why did the Beeb not hose Victorian Dad with this fact?

Because they're still shit scared of the Tories abolishing the License Fee, & sad to say, the British public still trust the toff with the posh accent, & don't know he's a lying bastard.

[Paddington Bear]

I'd say the BOE is conducting exactly the policy that it was handed, & has had for a very long time now; control Inflation, & maintain a stable financial system.

If the Government starts a fire in the markets, they can't complain when the Fire Brigade comes along & drenches everything in water !

Yes. And why did the Beeb not hose Victorian Dad with this fact?

Because they're still shit scared of the Tories abolishing the License Fee, & sad to say, the British public still trust the toff with the posh accent, & don't know he's a lying bastard.

It’s because BBC correspondents are gossip merchants who know nothing about markets or anything else, nothing more to it than that. People don’t trust this government, posh accent or not, there’s significant polling to show that

[fishfoodie]

Never mind the Bullocks, here comes the Tories !

[tabascoboy]

A collection of quotes from the 1922 Committee meeting

[The sun god]

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

Well, I commented somewhere that the public sector schemes are £2 trillion in deficit. Pretty much every private sector, FS scheme has been miles in the red for at least 2 decades + and I've been in the camp for that time that many would inevitably implode. Carillion, Kodak, Monarch have all gone. The PPF now props up over 1000 schemes. So failure is routine. The USS is knocking at the door.

Yes but then what. Pension funds aren't only invested in bonds, if they have to liquidate assets then fires are going to breakout elsewhere which could replicate what's happened in the bond market (huge new supply, no demand, lack of liquidity).

If whatever fiscal position is reached isn't credible (which looks the likely outcome now), then the BoE has no option but QE to support the bond market surely? Which means higher inflation (which is directly opposed to the BoE's main goal) and long term a weaker £ also? Does the BoE cycle through a series of temporary measures, each time allowing pressure to build in the hope the fiscal position changes, before going back in? Didn't have "the entire UK economy will be run using the model of a DFS closing down sale" on my 2022 bingo card.

Great post as they are the questions many people are asking.
There has been evidence of position liquidation in the past 2 weeks in the longer end derivative market but not as much as I would have expected primarily because of a lack of liquidity... : if you know that pension fund XXX is a seller of 20 to 30 year swaps, then you aren't going to be sticking in too many bids out there or you will end up wearing them as a necklace.
When I wrote that comment yesterday I was expecting the BOE to extend its bond support programme at least until the magician of the exchequer makes his funding report later this month but I noticed last night that many of the financial blogs etc were mentioning the policy of 'Fiscal dominance' that I mentioned yesterday and I wonder has that given Bailey and Co pause for thought. They have to at least maintain a façade of ' independence' and doing the Tory party's bidding is not compatible with that.

Going to be a rocky 36 hours in the markets ,ahead...... The type of days I used to love.

[The sun god]

That's because Bailey (BoE governor) just directly told pension funds they have 3 days to rebalance their positions and after that the BoE is taking no further action, as per the original intension that it was temporary action. Either the BoE caves in 3 days and starts QE to support pensions, which means the BoE loses credibility and erratic fiscal policy coming out of Downing Street has won, which would mean money printing and maybe the end of the £ being sound. Or the BoE sticks to its guns and pensions maybe collapse (but no one really knows).

Most of this goes away if the two morons backdown, but their belief cutting taxes beyond what is credibly possible produces growth and their ignorance/stupidity have combined to make that look very unlikely. Kamikwasi is trying to find over £40bn in spending cuts, whilst Truss is saying there definitely won't be austerity.

This is all being wilfully brought about by the Tories. It's all completely self inflicted.

I don't think they can survive even a relatively small pension fund collapsing; but I have a horrible feeling that we aren't taking about small pension funds here, I think it's the biggies with the sword of Damocles hanging above their heads.

If a major pension goes under, we aren't just talking about losing a GE, or two; we're talking about the total destruction of the Conservative Party. It's hard to overstate how bad this could be.

I would be very surprised if any pension fund collapses - the employer has to collapse first for that to happen. The reporting of this issue has been woeful, and I suspect that it's not the actual pension funds that are at risk but other players in the market. The payments out to pension fund members are spread out over decades and the scheme valuations don't happen particularly quickly. Generally speaking, DB funds will be happy with the current climate and yields rising because it will have a positive effect come valuation time due to the benefits becoming much cheaper to provide.

That is NOT the case at all. All these funds are managed externally and ringfenced so of course they can go bust.

[Torquemada 1420]

Surprised this post didn't get any replies, from memory TSG isn't an amateur at this stuff.

My question is, if the worst does happen then what comes next?

Well, I commented somewhere that the public sector schemes are £2 trillion in deficit. Pretty much every private sector, FS scheme has been miles in the red for at least 2 decades + and I've been in the camp for that time that many would inevitably implode. Carillion, Kodak, Monarch have all gone. The PPF now props up over 1000 schemes. So failure is routine. The USS is knocking at the door.

Yes but then what. Pension funds aren't only invested in bonds, if they have to liquidate assets then fires are going to breakout elsewhere which could replicate what's happened in the bond market (huge new supply, no demand, lack of liquidity).

If whatever fiscal position is reached isn't credible (which looks the likely outcome now), then the BoE has no option but QE to support the bond market surely? Which means higher inflation (which is directly opposed to the BoE's main goal) and long term a weaker £ also? Does the BoE cycle through a series of temporary measures, each time allowing pressure to build in the hope the fiscal position changes, before going back in? Didn't have "the entire UK economy will be run using the model of a DFS closing down sale" on my 2022 bingo card.

Who knows what extent the damage could be because you are right, wholesale sell offs in this climate could generate panic? I see the BofE was privately signalling it would continue to buy bonds which totally undermines Bailey's credibility as well as the BofE itself.......... just what the UK needs amid a crisis generated by the markets' lack of confidence in Government's economic capability and direction.

I'm as dark about the whole thing of you and already think the UK is facing a generation+ to see any sort of meaningful recovery. In a "I'm all right(ish) Jack" sentiment, my wife and I would be among the survivors if we stayed but emigrating is looking an ever increasingly attraction.

[Slick]

I don't think they can survive even a relatively small pension fund collapsing; but I have a horrible feeling that we aren't taking about small pension funds here, I think it's the biggies with the sword of Damocles hanging above their heads.

If a major pension goes under, we aren't just talking about losing a GE, or two; we're talking about the total destruction of the Conservative Party. It's hard to overstate how bad this could be.

I would be very surprised if any pension fund collapses - the employer has to collapse first for that to happen. The reporting of this issue has been woeful, and I suspect that it's not the actual pension funds that are at risk but other players in the market. The payments out to pension fund members are spread out over decades and the scheme valuations don't happen particularly quickly. Generally speaking, DB funds will be happy with the current climate and yields rising because it will have a positive effect come valuation time due to the benefits becoming much cheaper to provide.

That is NOT the case at all. All these funds are managed externally and ringfenced so of course they can go bust.

Have to say, everything I have read from non frothy sources is agreeing with robmatic, or at least saying it's extremely unlikely