WTF is happening in the UK?

[TheGreenAnger]

Let it be said that I don't believe that Labour is the answer either but if we don't pull our fingers out this country will be wrecked from within!

[Boac]

Will a typical domestic telephone line via fibre cease to work?

Simple answer - does your telephone plug into a thing called a router?

[G-CPTN]

Will a typical domestic telephone line via fibre cease to work?

Simple answer - does your telephone plug into a thing called a router?

No - a 'BT' socket.

[Boac]

Then your phoneline is not 'via fibre'.

[Fox3WheresMyBanana]

Wonder how long it will be before she grabs Boris's crown as "Worst PM in living memory", which is traditionally handed down from each succeeded PM

..and the answer is.....5 weeks. Well done Liz, that's a new record for the fastest to become the worst, as well as being the worst!

An Observer poll today puts Truss at -47 approve/disapprove.

For comparison, Joe Biden is currently -20, and NogVlad the Bad is at +50.

[Woody]

[Fox3WheresMyBanana]

After the wild success of the original, Hollywood has released 'Clueless 2'
This time the action is in London, and it's being run in short nightly episodes.
The format is like a TV news broadcast, and it stars Liz Truss.

[OFSO]

I read this morning that our witless prime minister is going to ban farmers erecting solar panels because (much upward rolling of eyes) they don't "look nice" and they should instead be concentrating on growing crops and having cows and sheep and such things.

(Sky: Liz Truss to ban solar projects on farms as Tory MP warns plan is 'unwise'
The PM attacked the installations during her leadership campaign, and has called them "a blight on the landscape".)

[Woody]

Nobody told Larry that fox hunting is banned

[Boac]

Sleaze!! Corruption!! Give me more!! https://www.theguardian.com/politics/20 ... 1665471497

“administrative oversight”

[TheGreenAnger]

Sleaze!! Corruption!! Give me more!! https://www.theguardian.com/politics/20 ... 1665471497

“administrative oversight”

What with his friends in the city shorting the pound as he sipped champagne with them directly after (or shorting before?) his disastrous budget (for us mere mortals) was announced, this man is not fit to be chancellor!

[Boac]

In my opinion he is not even fit to clean the bogs in No10! I gather the book he 'co-wrote' with the 2 planks aimed at destroying public services and benefits in the UK while leaving it all open to venture capitalists to come in and clean up. Odd that............

Someone needs tp serialise the book. Where is the Daily Fail when you REALLY need it?

[TheGreenAnger]

Bond market reeling again due to the insoucinace of the idiots at the helm of this government. Kwarteng and Truss should be taken outside and summarily shot.

The Bank of England stepped in with another emergency intervention in the markets on Tuesday in an attempt to stave off a “fire sale” of UK government bonds by pension funds.

In the second update for its bond-buying scheme in as many days, the Bank said it would expand its operations to include purchases of index-linked gilts, a type of UK government bond that tracks inflation.

Threadneedle Street said it was taking the step to further increase its emergency programme, which is due to expire on Friday, after a “significant repricing” for UK government debt this week.

UK government borrowing costs rose sharply on Monday to the highest levels since the financial market chaos triggered by Kwasi Kwarteng’s mini-budget in September, despite renewed efforts to smooth over the turmoil.

The central bank was forced to step in late last month amid a dramatic sell-off for long-dated government debt, with a promise to buy up to £65bn in UK government bonds in a scheme running until 14 October.

Sir John Gieve, a former Bank deputy governor for financial stability, said the central bank could be forced to extend its bond-buying programme for as much as a “couple more weeks” beyond this Friday.

“The [bond market] moves yesterday must have alarmed them,” he told BBC Radio 4’s Today programme. “The message may have been the market felt that there were still important investors who were exposed to a spiral developing, of having to sell gilts in order to find cash, in order to meet demands in the market.”

Gieve suggested the Bank was being forced to take action as a consequence of the chancellor’s mini-budget, which promised £45bn of unfunded tax cuts directed at middle and high earners.

“The internal workings of the financial markets have thrown up an element of instability that the Bank is addressing. But the underlying move came on the back of the announcement of huge amounts of extra borrowing and tax cuts without a clear plan of how to pay for them,” he said.

In the final week of the emergency scheme, the Bank warned there were still financial stability risks for pension funds in “liability driven investment” schemes, which have been caught out by the dramatic rise in UK government bond yields since the mini-budget.

“Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability,” the Bank said in a statement.

The move by the Bank to include purchases of index-linked gilts comes after it said on Monday it would loosen the criteria of the scheme. It had promised to increase the capacity of its programme to £10bn a day from a previous level of £5bn to ensure there was sufficient capacity in the market before the end of the programme. The Bank has however used limited amounts of this overall capacity, buying fewer than £6bn out of its £65bn potential total so far.


Threadneedle Street said the enhancement of its programme to include index-linked gilts would run until 14 October, when its emergency intervention would still end as planned.

The sharp rise in bond yields comes despite an attempt by the government on Monday to calm markets by announcing it would bring forward the date of Kwarteng’s debt-cutting plan from 23 November to 31 October, alongside naming a respected civil servant, James Bowler, as the new top official at the Treasury.

Gieve said the steps provided soothing “mood music” for the financial markets, but warned the biggest problem was a black hole in the government finances that could be politically difficult to close.

The Institute for Fiscal Studies estimates Kwarteng will need to find £60bn to fill the gap left by unfunded tax cuts. Economists have said he will either need to U-turn on more of the government’s tax plans, launch deep public spending cuts unseen since George Osborne’s austerity drive, or run higher levels of public borrowing that could risk further turbulence in financial markets.

“He’s actually got to now produce a set of projections which add up,” Gieve said.

“Now it’s one thing to say that, can he actually deliver that? Does the parliamentary party believe in that? All the difficult decisions have still got to be taken.”

https://www.theguardian.com/business/20 ... i-kwarteng

[TheGreenAnger]

The Bank of England Statement...

https://www.bankofengland.co.uk/news/20 ... aa5df1b706

On 10 October, the Bank announced additional measures to support market functioning and an orderly end to its gilt purchase scheme. These included the launch of a Temporary Expanded Collateral Repo Facility (TECRF) through which banks would be able to help to ease liquidity pressures facing their client LDI funds through liquidity insurance operations, and the expansion of the scale of its remaining gilt purchase auctions.

The purpose of these operations is to enable LDI funds to address risks to their resilience from volatility in the long-dated gilt market. LDI funds have made substantial progress in doing so over the past week. However, the beginning of this week has seen a further significant repricing of UK government debt, particularly index-linked gilts. Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability.

Therefore the Bank is announcing today that it will widen the scope of its daily gilt purchase operations also to include purchases of index-linked gilts. This enhancement to our operations will be in effect from 11 October 2022 until 14 October 2022 alongside the Bank’s existing daily conventional gilt purchase auctions.

These additional operations will act as a further backstop to restore orderly market conditions by temporarily absorbing selling of index-linked gilts in excess of market intermediation capacity. As with the conventional gilt purchase operations, these additional index-linked gilt purchases will be time-limited and fully indemnified by HM Treasury. The Bank has also consulted with the Debt Management Office.

As announced on 10 October, the Bank stands ready to purchase up to £10bn of gilts each day, of which up to £5bn will be allocated to long-dated conventional gilts and up to £5bn to index-linked gilts. The pricing of this additional operation will reflect its nature as a backstop and that this is not a monetary policy instrument. The total size of these auctions will be kept under review. All purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided.

The Bank will temporarily pause its CBPS sales operations this week. Confirmation of these restarting will be included as part of the Bank’s regular operational announcements.

The Bank will publish a Market Notice confirming operational details of the Bank’s index-linked gilt purchases.

[Fox3WheresMyBanana]

No mention, of course of who caused the dysfunction in the first place.
And this actually is dysfunction, unlike the BoE's usual use of the term, meaning "won't do what we want it to".
What's going on quite well summarized here, I think.

https://www.washingtonpost.com/business ... story.html

There are five fundamental causes to all of that, none of which have changed.
1. Moral hazard - national governments bailed bankers out of their fraud in 2008. Now the banks think they can do anything. No markets are real any more.
2. Statistics - almost all government statistics are horribly wrong. They've been manipulated so much, either to cover up failed policies or promote desired behaviours,
that they no longer represent what they are supposed to be measuring. Basing future policies on these false statistics only compounds the problem.
3. Government itself. Government's solution to every problem is to take more control, and government is almost always the least efficient way of doing anything.
This is inevitable. Government can almost never reduce control to solve a problem, as that would mean admitting its existing controls were part (if not all) of the problem.
4. Government control by big business. Who contributes to party funds, or is able to divert or enhance policy moves by its control of a market, decides government policy.
This has killed individual initiative due to big business forming cartels. Probably the biggest follow on problem is that the preferred mechanism to establish cartels is to get government to regulate the small operator out of business.
A second one is that workers are treated like slaves. Humans are NOT resources.
5. Government spending and income. All the above leads not only to increased government spending, but also a decrease in expected taxation. The rich finds ways not to pay it (or are given a way in the fine print of laws and regulations), and the grey and black markets continually expand with people who have been forced out of conventional markets by the above-mentioned regulations. Government debt is now typically measured as a % of GDP. Why? Because government can always 'fix' the definition of GDP to improve the look of things. Remember that government spending on its own regulations, which makes things worse, counts as increased GDP - insane. See the 'broken window' fallacy.

And we may now be seeing a sixth problem, which is that people are rejecting the hamster wheel of big business employment and conspicuous consumption.
This has several elements.
The first is people doing the minimum at work - quiet quitting, lying flat, etc. This is a direct result of treating humans as resources.
The second is people doing more for themselves - repairs, maintenance, building, growing veggies.
The third is rejection of mainstream media - government and big business thus have far less influence on what people do or want.
There are a number of causes for the above, but the governments' responses to the pandemic rapidly accelerated the number of people rejecting the hamster wheel.

[TheGreenAnger]

No mention, of course of who caused the dysfunction in the first place.
And this actually is dysfunction, unlike the BoE's usual use of the term, meaning "won't do what we want it to".
What's going on quite well summarized here, I think.

https://www.washingtonpost.com/business ... story.html

Yeah but if you live in a house of straw why light a match? Qwertykwatung and the Hernia woman did!

[Undried Plum]

LDIs are a ticking time bomb, just like those mortgage backed securities were in 2007.

There's quite certainly going to be another cascade-style of giant financial crash throughout the Western finance sector. When it happens, the two methods used to prop up the ailing/failing financial institutions last time won't work. They'll have to resort to massive debt cancellation to avoid hyperinflation. That's never been tried before on a global scale and I don't think anyone quite knows how to do it without causing the interbank flow to seize up.

Quite what the trigger will be: I don't know. Credit Suisse or Deutsche Bank falling over, perhaps?

[Fox3WheresMyBanana]

Yeah but if you live in a house of straw why light a match? Qwertykwatung and the Hernia woman did!

If we take the house of straw analogy, then I would say firstly that the house is in the path of a wildfire, and that something needed to be done.
What the Dynamic Duo decided to do was light a match to burn a firebreak in front of the wild fire.
However, they lit the match inside the house!

Deutsche Bank has to be one heck of a timebomb. But the government is backing it and others may go first.

[llondel]

Having managed to sustain my network for over an hour during the last power outage, I know that the local internet dies not much after an hour. That takes out the VoIP phone and the internet. I assume it took out the cable TV signal too but that wasn't powered so I wasn't bothered by its absence.

[Woody]

Well we’re all reassured by this