« ALEA Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next

Re: British tax cut madness

By: Cactus Flower in ALEA | Recommend this post (0)
Fri, 30 Sep 22 2:49 PM | 19 view(s)
Boardmark this board | The Trust Matrix
Msg. 47283 of 54849
(This msg. is a reply to 47282 by clo2)

Jump:
Jump to board:
Jump to msg. #

To be fair... I don't think they used pensions for leverage. I think the bank saved the pension funds by purchasing gilts (UK equivalent of US Treasuries) so as to stabilise the market. The pension funds were being forced to liquidate their holdings because the market was so unstable.

I think the hedge funds probably mounted an attack which forced the Bank of England to respond.

I am not thinking of 2008 as a comparison. For me, it's most like what would have happened to the US if it had adopted the Paul Ryan budget. It relies on phoney assumptions and a magic multiplier. All sorts of effects.

Paul Krugman compares this BOE intervention with Bagehot's Dictum, and thinks it made good sense as a lender of last resort thing. http://en.wikipedia.org/wiki/Lombard_Street:_A_Description_of_the_Money_Market#Lender_of_last_resort

Luckily, however, the big news today was that last quarter's GDP numbers were better than expected. So the UK economy is not as weak as either the government or the markets expected.




» You can also:
- - - - -
The above is a reply to the following message:
Re: British tax cut madness
By: clo2
in ALEA
Fri, 30 Sep 22 2:31 PM
Msg. 47282 of 54849

Peter Boockvar of Bleakley Financials on CNBC is comparing UK problem to 2007 -2008.

After learning they used pensions for leverage, he wonders what other exotic measures they have used.


« ALEA Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next