Utopia Talk / Politics / In two days...

Seb Member	Tue Mar 04 11:46:26 Trump will have been in office longer than Truss. That's a pretty damming indictment of how crap the US is.
murder Member	Tue Mar 04 11:48:00 And you know a head of lettuce would be so much better at the job.
Forwyn Member	Tue Mar 04 12:22:03 Man's still whining about fifty days two years ago. lol
Rugian Member	Tue Mar 04 12:26:33 Truss got railroaded.
Seb Member	Tue Mar 04 12:35:46 http://www...b0-d67a-4873-a858-8b05ee9f1fb4
Seb Member	Tue Mar 04 12:40:46 Forwyn: Quite the reverse. I see the ability of the UK to rapidly ditch an administration that's obviously incompetent a sign of health.
Rugian Member	Tue Mar 04 12:42:24 Yeah because we all know how much an improvement Sunak was.
Seb Member	Tue Mar 04 12:47:17 Massive. For a start he reversed the collapse in the bond markets.
Forwyn Member	Tue Mar 04 14:11:59 "Short-term speculation is the best judge of administrative policy"
Seb Member	Tue Mar 04 15:02:39 There wasn't much speculative about it. I find it intensely funny that you can't bring yourself to even acknowledge what is blatantly obvious even to most of the right. But hey, you guys are going to try defying gravity now too. I fear it may not end well.
Forwyn Member	Tue Mar 04 15:16:23 "Markets are not speculative" - Seb, 2025
Rugian Member	Tue Mar 04 17:06:17 The Real Culprit in Britain’s Bond Meltdown Story by Joseph C. Sternberg • 6mo It turns out the outbreak of bond vigilantism that laid low Britain’s financial markets in autumn 2022 was an inside job. That’s the belated conclusion of new research from the central bank at the heart of the fiasco that brought down a prime minister and allegedly discredited supply-side economics. It’s the story everyone thinks he knows: Hapless Prime Minister Liz Truss and reckless Chancellor Kwasi Kwarteng on Sept. 23, 2022, announced a big package of energy subsidies and tax cuts billed as a “minibudget.” The prospect of massive deficit-funded fiscal giveaways by a government already laboring under enormous pandemic-era debts stirred bond vigilantes to action. Yields on British government bonds, called “gilts,” surged and the pound plunged as global investors recoiled from Ms. Truss’s supply-side voodoo. The myth persists—or rather, is perpetuated by a lazy political and media class—despite obvious holes. Ms. Truss and Mr. Kwarteng signaled for months about the contents of the minibudget. Most of it was uncontroversial energy subsidies, and the bulk of the rest was plans to scrap planned tax increases. The only surprise was the proposed elimination of the top 45% personal income-tax rate, bringing the top rate to 40%. At projected annual forgone revenue of a few billion pounds, this was trivial in a total budget of £1.2 trillion in 2022-23. And the proposed tax cuts were never implemented anyway. The thing that melted down in response to this fiscal nonsurprise wasn’t “the market,” it was a badly constructed hedging strategy popular among defined-benefit pension funds. These hedges—a response to the Bank of England’s chronic error of suppressing interest rates while tolerating above-target inflation—would have imploded eventually anyway as BOE Gov. Andrew Bailey belatedly joined the battle against rapid inflation. This is a revisionist history. It’s also one that economists at the Bank of England now seem to share, at least in part. Witness a working paper the central bank published to zero fanfare in May, which finds that roughly two-thirds of the calamitous September 2022 surge in gilt yields can be explained in one form or another by monetary policy. Given its title, “LASH Risk and Interest Rates,” you can be forgiven for having missed the paper when it came out. The bulk of it concerns a new type of financial risk that the researchers identify—LASH, which stands for “liquidity after solvency hedging.” This describes a situation in which a shift in interest rates improves an investor’s underlying solvency but still triggers a short-term liquidity crisis. This is different from a normal financial panic, in which the recognition that a bank or fund manager is insolvent triggers a liquidity run. The BOE working paper finds this risk in spades in Britain’s pension industry before 2022. The bank’s decision to suppress interest rates for an extended period had been terrible for defined-benefit pension funds because low rates pushed up the present value of the funds’ long-term liabilities while suppressing investment returns. This low-rate environment prompted pension managers to pile into liability-driven investment funds, which were leveraged attempts to guarantee the pensions’ long-run solvency. The rate increases Mr. Bailey belatedly launched in December 2021—and the active bond sales he announced the day before the minibudget as part of quantitative tightening—should have been a boon for the pensions. Rising interest rates would boost their solvency. Instead, the financial distortions of 15 years of abnormal monetary policy laid the groundwork for a panic as liability-driven investments suddenly became a tremendous financial drag. It’s akin to how a portfolio of ultrasafe Treasurys brought down Silicon Valley Bank thanks to Federal Reserve-induced market distortions. So one cheer to the BOE for at least publishing this paper, although if Mr. Bailey were a more honorable public servant he might be more forthright with the public about what the bank’s economists are learning about 2022 and the central bank’s role in creating the conditions for a panic. One could say the same for the political class and financial press. http://www...in-s-bond-meltdown/ar-AA1pgfqy
Rugian Member	Tue Mar 04 17:08:17 Tl;dr Bad monetary policy coupled with the sudden rise in interest rates caused the sell-off in the gilts markets. Truss' budget, which wasn't anything extraordinary, unjustly caught the blame for it. Congratulations to everyone who fell for banker propaganda.
Sam Adams Member	Wed Mar 05 00:17:57 Sebs like "fuck them white people, import crime, raise taxes and increase red tape" and then is like "why does my economy suck"
Seb Member	Wed Mar 05 01:08:19 That's a funny way of saying: "Liz Truss adopted a radical fiscal position that amounted to a huge injection of liquidity with while the bank was publicity committed to tightening interest and engaging quantitative tightening, which had exactly the impact on the markets everyone said it would have, openly and publicly during her election campaign, but it's everyone else's fault that she went and did it anyway, sacking or forcing out every official who warned her it would be so."
Seb Member	Wed Mar 05 01:12:49 It's really hard to sustain this belief that what Lettuce Liz and KamiKwazi did with the budget was genius, undone by the unknown position of market actors and the bank, when her plans were well trailed in weeks of preceding leadership contest and the then chancellor said exactly what would happen and why, and then it happens. Yes, market players adopt position based on monetary policy. Some of those market players are hugely important. That's precisely why it's fucking stupid to kick the chair from under them in one swift move, rather than work with the markets to unwind said positions.
Seb Member	Wed Mar 05 01:15:24 Sam: Ironically, one of the upsides of the UK economy is precisely because it's got a better dependency ratio due to migration compared to many others. Crime has been declining, and the main increase in red tape has been the decision to leave the EU driven by Sam's. Meanwhile; good luck explaining to anyone how Trump raising tariffs for no reason whatsoever on Canada is due to migration.
Seb Member	Wed Mar 05 01:30:49 So to get back to the point: We had a demented PM taking terrible decisions, and we booted them out. You have a demented President taking terrible decisions. And we have two main approaches: 1. Pretend they decision is in fact genius. 2. Blame it on black people existing. America is weak and decadent.
murder Member	Wed Mar 05 05:46:57 Getting weaker by the minute thanks to Putin's dog.
Seb Member	Wed Mar 05 06:22:08 The term "Diplomatic Revolution" refers to France ditching its traditional alliance with Prussia for their traditional enemy Austria. It resulted ultimately in the loss of the French overseas empire and the French Revolution. Another thing to think about.
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