M
malaguti
1390 please for me
Pat494
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What is to be done?
Is there any prospect of a serious recognisable economic recovery until a greater proportion of our debts are repaid or written off?
The current governor of the Bank of England seems to believe that the best hope is to force the banks to recognise properly the losses they are likely to make on tens of billions of pounds of loans to over-extended borrowers, households and businesses, and then force the banks to rebuild their loss-absorbing capacity by raising new capital.
That might represent a very speedy route to full nationalisation for Royal Bank of Scotland and Lloyds: private-sector investors would probably be unwilling to inject a substantial amount of new capital into these two semi-nationalised banks, which means taxpayers would foot the bill.
For the avoidance of doubt, the chancellor has already vetoed a public-sector recapitalisation of the banks. He feels, I am told, that it would be career suicide for even an additional penny of government money to go into either of them.
Which leaves what might be called the Turner option, or the Bank of England writing off a sizeable portion of the £375bn it has lent the government, to give the chancellor the fiscal space to stimulate the economy by cutting taxes or boosting public spending.
Here's how Lord Turner, at the same time as Mark Carney was musing about changing the inflation target, came out of the closet on turning government debt into cash. It is a synopsis of a talk he is giving at Cass Business School in early February:
"With interest rates close to the zero bound, conventional monetary policy loses its power. Unconventional policy levers, such as QE have been deployed, but they may also face limits. And sustained low interest rates and QE can themselves create distortions and financial stability risks.
"Two questions now need to be considered: (i) whether the target of monetary policy should change - for instance from inflation to nominal GDP (ii) whether additional unconventional tools of policy, such as some overt money finance of fiscal expenditure, might be available and required to ensure that the chosen target is met."
How dangerous would it be to convert government debt into money?
Very dangerous if it was seen to be a precedent that could turn into a habit
Perhaps a risk worth taking, Lord Turner is likely to argue, if it is a one-off injection of fuel into the flat engine of the economy.
There will be many who view any such forgiveness by the Bank of England of government borrowing as anathema.
But the virtue of stirring up controversy in this way is that it highlights that the debate over appropriate targets for the Bank of England may be to miss the point.
It is all very well redirecting the Bank of England from one target to another, but that's pretty fatuous if the Bank of England doesn't have any bows or arrows.
The problem may not be the Bank of England's target but whether there are really any appropriate tools available to seriously counteract the pernicious, growth stymying impact of deleveraging, the urge to repay debts.
Is there any prospect of a serious recognisable economic recovery until a greater proportion of our debts are repaid or written off?
The current governor of the Bank of England seems to believe that the best hope is to force the banks to recognise properly the losses they are likely to make on tens of billions of pounds of loans to over-extended borrowers, households and businesses, and then force the banks to rebuild their loss-absorbing capacity by raising new capital.
That might represent a very speedy route to full nationalisation for Royal Bank of Scotland and Lloyds: private-sector investors would probably be unwilling to inject a substantial amount of new capital into these two semi-nationalised banks, which means taxpayers would foot the bill.
For the avoidance of doubt, the chancellor has already vetoed a public-sector recapitalisation of the banks. He feels, I am told, that it would be career suicide for even an additional penny of government money to go into either of them.
Which leaves what might be called the Turner option, or the Bank of England writing off a sizeable portion of the £375bn it has lent the government, to give the chancellor the fiscal space to stimulate the economy by cutting taxes or boosting public spending.
Here's how Lord Turner, at the same time as Mark Carney was musing about changing the inflation target, came out of the closet on turning government debt into cash. It is a synopsis of a talk he is giving at Cass Business School in early February:
"With interest rates close to the zero bound, conventional monetary policy loses its power. Unconventional policy levers, such as QE have been deployed, but they may also face limits. And sustained low interest rates and QE can themselves create distortions and financial stability risks.
"Two questions now need to be considered: (i) whether the target of monetary policy should change - for instance from inflation to nominal GDP (ii) whether additional unconventional tools of policy, such as some overt money finance of fiscal expenditure, might be available and required to ensure that the chosen target is met."
How dangerous would it be to convert government debt into money?
Very dangerous if it was seen to be a precedent that could turn into a habit
Perhaps a risk worth taking, Lord Turner is likely to argue, if it is a one-off injection of fuel into the flat engine of the economy.
There will be many who view any such forgiveness by the Bank of England of government borrowing as anathema.
But the virtue of stirring up controversy in this way is that it highlights that the debate over appropriate targets for the Bank of England may be to miss the point.
It is all very well redirecting the Bank of England from one target to another, but that's pretty fatuous if the Bank of England doesn't have any bows or arrows.
The problem may not be the Bank of England's target but whether there are really any appropriate tools available to seriously counteract the pernicious, growth stymying impact of deleveraging, the urge to repay debts.
robster970
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1385 for me this week.
robster970
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Atilla
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Nothing wrong with the dark side Pat if you have a torch handy
Good to see everyone back and some new members
Here's the forecasts for start of week 1.
Based on 10 downs and 4 ups I guess most of us are expecting a fall off the fiscal cliff.
Better make sure we party hard tonight cause it may well be over tomorrow :drunk:
arty::drunk:Wishing you all a happy healthy & wealthy 2013
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Atilla
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Nothing wrong with the dark side Pat if you have a torch handy
Or 3 million candles :cheesy:
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Pat494
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2013-01-02 04:07 GMT
US House passes fiscal cliff bill
After weeks of talks and negotiations, the House of Representatives has finally passed the fiscal cliff bill, with the 'yea' votes obtained surpassing the 217 threshold needed to approve the fiscal deal. The final vote count stood at 257-167 in favour of the bill. President Obama is ready to sign it into law.
The compromise, which first was agreed by Senate in early Tuesday morning, has come not without some last minute agitated negotiation disputes, in which Republicans wanted to challenge the approved senate-bill by sending it back for revision demanding additional spending cuts, with reports initially suggesting that the House Republicans would be adjourning any decision until Wednesday. Pending the signature of President Obama, expected to be done shortly, the US officially avoids that millions of citizens suffer tax hikes and spending reductions, which would have brought the U.S. economy into recession according to economists' projections. Worth not forgetting though, is that still plentiful of unresolved pressing issues remain, with the most immediate being the need to raise the federal borrowing limit, with the deadline over 2 month from now.-
US House passes fiscal cliff bill
After weeks of talks and negotiations, the House of Representatives has finally passed the fiscal cliff bill, with the 'yea' votes obtained surpassing the 217 threshold needed to approve the fiscal deal. The final vote count stood at 257-167 in favour of the bill. President Obama is ready to sign it into law.
The compromise, which first was agreed by Senate in early Tuesday morning, has come not without some last minute agitated negotiation disputes, in which Republicans wanted to challenge the approved senate-bill by sending it back for revision demanding additional spending cuts, with reports initially suggesting that the House Republicans would be adjourning any decision until Wednesday. Pending the signature of President Obama, expected to be done shortly, the US officially avoids that millions of citizens suffer tax hikes and spending reductions, which would have brought the U.S. economy into recession according to economists' projections. Worth not forgetting though, is that still plentiful of unresolved pressing issues remain, with the most immediate being the need to raise the federal borrowing limit, with the deadline over 2 month from now.-
wackypete2
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Thanks for the update, Pat.
Just FYI, the bold part is being reported wrong. The US has reached the borrowing limit already and cannot borrow more money. Treas. Sec't Geithner has enacted emergency measures to avoid defaulting, but as of now the US cannot borrow more money.
Peter
Pat494
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I guess some people are a bit like me and are always looking for a good idea as regards trading forecasting.
OK so I will lay this one out.
The charts show a wiggly line of the ups and downs ok. So why not someone set it to music ? It would be relatively easy for anyone who can programme. The end result may be awful or it just might surprise.
Da boom ity boom ............?
:idea:
OK so I will lay this one out.
The charts show a wiggly line of the ups and downs ok. So why not someone set it to music ? It would be relatively easy for anyone who can programme. The end result may be awful or it just might surprise.
Da boom ity boom ............?
:idea:
China Diapers
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Can I play?
1,490
1,490
Pat494
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China Diapers
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Thanks, hoping this may act as an emotional hedge for my dire fantasy football results.
isatrader
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I had a shockingly bad week, as I was in a reasonably profitable S&P 500 short at the close last week, which has been savaged by this weeks low volume move. I didn't even look at my account on 31st as I took the day off like most people clearly did by the volume and then to see another huge move before the US open on 2nd because of the fiscal cliff nonsense is just annoying frankly. Just shows what can happen when there's no liquidity. Anyway, it's a new week, and although I think the momentum could push the S&P up to retest the September highs this coming week. I think last weeks move was just too extreme, and will need time to be absorbed, and companies also begin reporting earnings this week so I'm thinking that we'll get a consolidation week.
So 1462 please
So 1462 please
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M
malaguti
1440 please
