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Continuing Discussion.
Last edited by: VxFan on Thu 20 Oct 22 at 11:21
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news.sky.com/story/who-is-going-on-strike-in-august-and-when-12668354
Looks like liz truss might have quite alot to deal with as soon as she's in office.
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She is going to make Theresa May look like an established secure longterm respected heavyweight PM.
She wont win the next election - or the one after - and will be dumped by the party when in opposition. What a waste of time and effort, and what a time to leave the government floundering while we are bombarded by his pointless and meaningless charade.
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But are you making the mistake of believing the Tories care about the country and not just each other?
Look at the damage Boris got done. If Truss is there till the next election there is still a whole lot more damage she can do to the country but her paymasters and fellow Tories will be happy with her.
And then before the next election the Daily Mail etc will go full pelt against whoever the Labour leader is and then the Tories will get in again.
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I'm sure if Labour managed to find a credible leader that people would vote for them. You can't always blame the Mail. Keir isn't so bad, no better or worse than Truss. I'd have preferred Rishi though.
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Many folk say Blair got in because The Sun supported him.
Others say The Sun supported him cos they knew he was going to get in…
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As most Sun readers cant read, I wonder why they didn't vote for the girl with the biggest tits.
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>> As most Sun readers cant read, I wonder why they didn't vote for the girl
>> with the biggest tits.
>>
Sir Humphrey's assistant?
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>> >> As most Sun readers cant read, I wonder why they didn't vote for the
>> girl
>> >> with the biggest tits.
>> >>
>>
>> Sir Humphrey's assistant?
Everything you need to know about the political system is contained within the scripts of YM.
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'Sun readers'
Makes me giggle when local Liverpool newspapers drop into my feed, they always refer to The Sun as The S**.
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All joking aside, Brexit and the current Tories have proved that it is possible to lie blatantly about policies, prospectus etc etc. as well as denying facts that are black and white.
Will be interesting to see on what basis the next election will be fought on. Many people voted for Boris even though they knew he was a liar and cheat. “But he wasn’t Corbyn”.
Will 4 or 5 years of Tory lies and broken promises change their voters opinions?
Last edited by: Bobby on Thu 18 Aug 22 at 11:50
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The real question is: How can the party system in the UK dredge up two such woefully unsuitable donkeys as leaders (Bojo and Corbyn) to chose from.
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>All joking aside, Brexit and the current Tories have proved that it is possible to lie blatantly about
>policies, prospectus etc etc. as well as denying facts that are black and white.
Current Tories? Where TF have you been for the last 3,000 years?
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>> Current Tories? Where TF have you been for the last 3,000 years?
They've taken it to a new level though.
Liars summa cum laude
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The Romans make our current lot look like rank amateurs.
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You need to go back over a decade to find some lies from the opposition - mainly because they are opposition. In opposition criticism of the party in power comes easily and promises need never be made good. Who remembers these favourites:
- Blair convinced that Saddam had weapons of mass destruction - we are still looking for them
- Brown - no more boom or bust - until the financial crisis
- Liam Byrne in a moment of honesty - there's no money left, we've spent it all
Other than the quite exceptional, all politicians when faced with a choice of lie, brazen it out, or tell the truth and risk political loss will go with one of the first two. I can think of no-one close to, or at the top, of any party that I would describe as exceptional.
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>> - Blair convinced that Saddam had weapons of mass destruction - we are still looking
>> for them
>> - Brown - no more boom or bust - until the financial crisis
>> - Liam Byrne in a moment of honesty - there's no money left, we've spent
>> it all
The first of those was an outright lie.
There was a reasonable belief that the boom/bust cycle, enabled by successive governments the UK suffered post WW2 had been seen off. The Tories now admit that it was Tony Barber's boom post 71/2 that begat the later inflation. A crisis seeded by banking failure across the west was another thing.
The Byrne memo was typical of messages left by outgoing ministers after losing an election. James Callaghan found something very similar from Reggie Maudling on arriving at 11 Downing St in 1964.
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>>There was a reasonable belief that the boom/bust cycle, enabled by successive governments the UK suffered post WW2 had been seen off. The Tories now admit that it was Tony Barber's boom post 71/2 that begat the later inflation. A crisis seeded by banking failure across the west was another thing.
Meh. Hiding billions of public spending from the 'debt list' by using PFI was disingenuous way of masking Brown breaking his 'fiscal rules'.
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>Liars summa cum laude
Today's Dilbert.
dilbert.com/
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Neither the Labour or Tory view of the future was entirely credible in 2019, although Boris did have a Brexit commitment (mistaken in my view) to promote.
What evidently seems the case is that Boris did a far more convincing job than Corbyn in selling a Tory fantasy than Labour illusory promises.
Voters often have very short memories, are influenced by spin and media coverage. In 2024 much will depend on unemployment, inflation, growth, residual Brexit issues etc. I don't think Truss is the best choice for a Tory victory - but I don't get a say.
Sir Keir still hasn't created a coherent Labour view of the future - his only real argument is that he isn't Boris or Boris's replacement. Not very convincing!!
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Having seen predicted energy prices per kWh for March next year, I suspect that the winning candidate is going to seriously regret going for the job in the first place. When their core voters are dying of the cold, and a decent proportion of the country can’t afford to heat or buy food, people get desperate. I wouldn’t be surprised if the sitting government is physically forced out of office by rioting.
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But Kier has a 'fully costed plan' regarding energy issues.
Lets see it then. Oh its not his problem is it? Seeing as he's not in government.
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> She is going to make Theresa May look like an established secure longterm respected heavyweight
I think I quoted Hilaire Belloc at the time:
“And always keep a-hold of Nurse
For fear of finding something worse.“
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I've been trying to be more objective about Truss, because I find her very irritating and excruciating to listen to. But despite my best efforts I keep coming across quotes that suggest she's really not very bright.
The Guardian recently unearthed this.
www.theguardian.com/politics/2022/aug/16/leaked-audio-reveals-liz-truss-said-british-workers-needed-more-graft
It seems to be a fact the UK productivity calculations do not match what should be comparable economies and shows little sign of catching up. Her conclusion is that the workers are the problem. Quite what reasoning connects the available data to her conclusion I don't know. Does she think management has a role? Banks? Government? Investors? We may never know. What seems to e well known is that she doesn't like experts. She thinks that the various economic approaches that have been tried have not worked so she wants to try something new, as yet unspecified and of her own devising, which involves ignoring the 2 trillion of public debt and enthusiastically adding some more to it. Well it has to be worth a try, surely?
On the upside, although the country will be ruined, she surely can't win the next election. We have runaway inflation and for most people unaffordable energy bills to come. It's going to be a very difficult 2 years and much as she seems to appeal to the Conservative membership I'm not sure that voters of any persuasion will find her convincing.
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and much as she seems to appeal
>> to the Conservative membership I'm not sure that voters of any persuasion will find her
>> convincing.
>>
>>
>>
I don't think they find her that appealing more they don't like Sunak.
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>> I've been trying to be more objective about Truss,
I knew nothing about the woman prior to the selection process, so unhampered by pre conceived prejudices, my thoughts about her unsuitability and danger for any form of office are entirely driven by her.
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>>my thoughts about her unsuitability and danger for any form of office are
>> entirely driven by her.
Well, me too but I'm not sure how much weight finding somebody really patronising, annoying and bumptious should have in an objective assessment!
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>> >>my thoughts about her unsuitability and danger for any form of office are
>> >> entirely driven by her.
>>
>> Well, me too but I'm not sure how much weight finding somebody really patronising, annoying
>> and bumptious should have in an objective assessment!
They are all thus at various levels, so filtered out by me. Its the sheer unworkable nonsense, changes of tack, minders having to clarify, modify or deny what she says, blatant attempt to appeal to a very narrow sector to get elected, and her CV of (lack of) past achievement that has convinced me she is incompetent and delusional.
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>>incompetent and delusional.
and therefore dangerous.
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I suspect Liz Truss is far from stupid - you don't get to Oxford Uni from a state school if you are thick. She studied PPE so it seems unlikely she lacks a grasp of basic economics.
Her ambition for the top job is overwhelming. She is smart enough to tell her electorate (Tory party members) what they want to hear, irrespective of whether it is deliverable - a technique she learned from Boris.
She found maverick economists to support her bizarre views and pretends they are common currency amongst the economically literate.
In my view she is untrustworthy and will contribute towards a Tory loss at the next election.
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>> I suspect Liz Truss is far from stupid - you don't get to Oxford Uni
>> from a state school if you are thick. She studied PPE so it seems unlikely
>> she lacks a grasp of basic economics.
PPE is the generalist degree that is supposed to improve their minds, not their knowledge. It doesn't make a technical expert. As you say, basic. But I suppose it could explain why she rejects conventional economics advice and wants to try her own ideas - a touch of Dunning-Kruger?
>> far from stupid
In the everyday sense, maybe. But we all know one or two who confound the theory. Oxbridge selection interviews are supposed to test thinking ability, but that's why candidates are coached by good teachers with ambitions for their pupils and who know the system.
And politicians are something else. Like journalists and lawyers (nothing personal) they tend not to be really comfortable with numbers. Bit of a generalisation, not to be applied to an individual, but I'm fairly confident with it!
Take the 50 year mortgage idea, as a method of improving affordability.
A £300,000 25 year mortgage at 5% p.a. is £1734 a month. 50 years at 6% (a reasonable assumption that the rate will be higher) is £1544 per month.
Most of the monthly payment in the early years is interest so the monthly payments really aren't as different as I suspect Boris Johnson imagines. Or maybe he knows, and he's just creating opportunities for his donors?
The total interest on the first example is £220k, on the 50 year example it's £626k. And of course this future value can be monetised immediately should the lender wish it.
If the improvement in "affordability" were to push up house prices by say 10%, which if the number of potential buyers at every price level were to increase seems quite possible (equilibrium is 12.3%), then the monthly payments on the 50 year loan on £330,000 would only be about £20 a month lower than the 25 year one on 300,000 - but would go on for twice as long.
Is the Oxford genius Johnson just scheming, or innumerate?
In their favour I don't think either of Truss or Sunak has actually endorsed this brainwave of Johnson's yet. I suspect Sunak has figured it out and is desperately hoping Truss will use it so he can rubbish it.
Last edited by: Manatee on Fri 19 Aug 22 at 19:51
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Education and intelligence are not necessarily the same thing. Someone can be highly educated but still basically a bit thick.
No one with an ounce of intelligence would touch the Tory leadership job at the moment. Two years of utter hell, probable civil unrest when the fuel hikes really bite and then after the election consigned to history as one of the worst Prime Ministers ever.
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Not dissimilar to education/intelligence and common sense.
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"No one with an ounce of intelligence would touch the Tory leadership job at the moment. Two years of utter hell, probable civil unrest when the fuel hikes really bite and then after the election consigned to history as one of the worst Prime Ministers ever."
You need to be an arrogant egotist to lead a major political party (a) to fight off the competition, and (b) a self belief that you alone have the vision, tenacity, etc etc to be a success.
Jeremy Hunt who was in the last two with Boris failed to progress this time around. In interview he was quite clear "you only get one chance at the job, I had mine, and will likely never get another".
Blind ambition and the reality that you get only one chance of fame is what drives Rishi and Liz. The winner goes into the history books, the loser will be no more than a footnote.
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Shamelessly plagiarised from elsewhere:
It was pointed out to me recently that a Truss is a simple framework made from two short planks of suitable thickness.
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Sources, hopefully mischievous, are suggesting that Truss will make Rees Mogg Minister for levelling up, and Braverman Home Sec.
Sound satirical to me. So possibly true.
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>> Sources, hopefully mischievous, are suggesting that Truss will make Rees Mogg Minister for levelling up,
>> and Braverman Home Sec.
This is presumably the same source that has Kwasi Kwarting as Chancellor which reputable political commentators regard as nailed on fact.
Braverman gives the impression of Pritti Patel on steroids so will play well with the backwoods.
Moggy for levelling up does however sound like satire. Or perhaps, like Boris, he actually plays well with a cohort of the Red Wall.
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I think it's the job JRM wanted, around the time of the current PM being chucked out, all the resignations etc he was out and about on the east coast (i think) pushing the levelling up line to anyone that would listen.
Seems a likely move to me.
I think JRM and truss get on together. I don't think there's anything unbelievable in the story.
Last edited by: sooty123 on Sun 21 Aug 22 at 10:58
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Kwarteng comes across as the very slimiest of slimeballs.
The last POS I'd want as Chancellor.
The next phase of Tory Govt is going to be a continuation of Bojo's adaptation of Orwell's Animal Farm as these scumbags continue to feather their and their chums' nests while blagging to their base how good a job they're doing.
Last edited by: Lygonos on Sun 21 Aug 22 at 11:37
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JRM's idea of leveling is down. The further beneath him the better. The man has absolutely no interest or empathy in the idea of the plebs improving themselves. The man is a parasite.
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How much of JRM "image" is a creation meeting stereotypical expectations - wealthy toff, fancy expensive education, terribly superior, one of the privileged few etc. And how much is for real.
Labour MPs typically create a different stereotypical persona fitting their political beliefs - bought up in real poverty on a sink council estate, empathetic to anything or anyone downtrodden, man or woman of the people, fight for justice and fairness.
Yet many get their kids privately educated - eg: Diane Abbott, Shami Chakrabati, Emily Thornberry, Valerie Vaz, to name but a few.
Individual politicians I have met invariably seem decent, thoughtful and intelligent irrespective of party allegiance. As a breed or in a group they are a contemptible disgrace.
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>> How much of JRM "image" is a creation meeting stereotypical expectations - wealthy toff, fancy
>> expensive education, terribly superior, one of the privileged few etc. And how much is for
>> real.
Given the evidence across his lifetime, including TV interviews as a child, I think we can disregard any possibility of an "image".
>> Labour MPs typically create a different stereotypical persona fitting their political beliefs - bought up
>> in real poverty on a sink council estate, empathetic to anything or anyone downtrodden, man
>> or woman of the people, fight for justice and fairness.
Typically?. There are a few members, on both sides of the house, brought up in straightened circumstances. Angela Rayner is one example on the Labour side. Kier Starmer's upbringing was skilled working class, his father was a toolmaker.
Can you exemplify someone who has created a stereotypical persona?
>>fight for justice and fairness.
Abd so they should, they would be a disgrace if they did not.
>> Yet many get their kids privately educated - eg: Diane Abbott, Shami Chakrabati, Emily Thornberry,
>> Valerie Vaz, to name but a few.
Different argument. Shami C was never even in the Commons. Dianne Abbott has spoken of her sons difficulties in main stream schooling and how that led her to resort to paying fees. Emily Thornberry's husband is a Judge, Lord Justice Nugee who himself went to Radley College. No doubt their children followed in his footsteps.
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I think you are making excuses for their human inadequacies which comfortably cross the political divide.
Politicians are human with many (or most) of the frailties which beset the rest of us - greed, ambition, envy etc etc. To be elected they play upon emotions - fear, anger, envy, aspiration. It needs to seem driven by decency and concern - in reality it is the way elections are won.
In 2019 the Tories won 44% of the vote and Labour 32%. The Tories cannot all be "privileged toffs" - there simply aren't enough private schools! Even if the vote were segmented only by income levels (it isn't), Tory voters would include mostly very average income earners.
I would neither defend JRM, nor criticise the behaviour of the opposition - simply reflecting on a general political hypocrisy. Assuming political rhetoric is largely detached from reality, either the electorate are stupid to believe it, or they are able to separate fact from fiction.
We enjoy a democracy in which we can change our political leaders at least every 5 years. After 12 years in power the Tories have an extensive back catalogue of failure - an incoming opposition will have no baggage to drag behind them.
For a few years will happily blame their predecessors - as did the Tories blaming (justifiably or otherwise) incompetent financial management of the previous labour government.
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JRM has undoubtedly manufactured himself into Lord Snooty, but it's not a facade - he really lives it, is my assessment.
You suggest that Labour MP's create a persona - recently the only MP I can recall going on about his humble roots is Rishi Sunak.
"Many get their kids privately educated" - you mention four, "to name but a few" - the ones in this DM article which I assume you have also found. Maybe they couldn't find any more, I couldn't.
www.dailymail.co.uk/news/article-7490373/Labour-Party-high-flyers-accused-blind-hypocrisy.html
Perhaps there are a few more. So, what? And rather more Conservatives. At the last intake, the proportions of MPs that had attended fee paying schools themselves was
Con 44%
Lib Dem 38%
Lab 19%
SNP 8%
I don't think it is hypocritical to be Labour and send one's children to a fee paying school. Or even to want to abolish private education and do so. Everyone wants a good education for their children, hopefully Labour MPs want it for everyone. Hopefully, also some Conservatives. And not all fee paying schools are Eton and Harrow.
I don't subscribe to the view that all politicians are the same. But they probably all have to get their hands dirty at some point.
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"But they probably all have to get their hands dirty at some point."
Not me.
If I were ever to get into politics, apart from the bar fights, womanising, prostitution and drug taking I'm as clean as they come.
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You wouldn't pass the entrance exam then.
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Bromp said ...Keir Starmers father was a toolmaker....
The detail he always forgets to mention is that his father actually owned the Oxted Tool company ...
Also Starmer was educated at the independent fee paying Reigate Grammar school.....
Not exactly a working class background!
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Perhaps he was a toolmaker who became the owner of the Oxted Tool Company?
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I love this.
Folks trying to create a divide by throwing the now dirty word 'priviledged' at them because of their education and upbringing and then scrabbling around trying to invent excuses of why it's different when it's pointed out that their heroes enjoyed similar.
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>> I love this.
>>
>> Folks trying to create a divide by throwing the now dirty word 'priviledged' at them
>> because of their education and upbringing
When did I do that?
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>> Folks trying to create a divide by throwing the now dirty word 'priviledged' at them
>> because of their education and upbringing.
In most people's books I think Jacob Rees-Mogg would be regarded as having a privileged upbringing.
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>> Bromp said ...Keir Starmers father was a toolmaker....
>>
>> The detail he always forgets to mention is that his father actually owned the Oxted
>> Tool company ...
>>
>> Also Starmer was educated at the independent fee paying Reigate Grammar school.....
What was the status of the Oxted Tool Company? Was Keir's father a partner in a business employing others or skilled working class who progressed to self employment?
The Reigate Grammar School bit is more easily explained. It was caught up in the move to abolish the 11+/Grammar Schools. The move away from Grammar/Secondary Modern was, to a large extent, a bit of the sixties political consensus. Only subsequently has it suited the narrative for it to be lefty dogma.
Until 1976 it was a voluntary aided Grammar School with pupils selected via the 11 plus. It became independent and fee paying when the County Council's scheme for "Comprehensivisation" was approved.
Starmer was born in September 1962 so presumably took and passed the 11+ in 1973/4 before the change of status. Existing state funded pupils kept their places with the fees paid by the LEA.
Last edited by: Bromptonaut on Mon 22 Aug 22 at 11:37
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Rodney referred to the factory as "my factory". Did he mean that in the sense that he owned it or because he worked there?
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I have met many politicians through my working life.
As noted above on a personal level they are all generally very pleasant, make a show of listening, and some are quite charming.
On a business level they follow instructions, have no shame, and are utterly predictable.
They are in effect, personality disorders epitimoised.
The only one I knew who I wouldn't tar with that brush was Tam Dalyell (he at least didn't follow instructions).
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I liked the Beast of Bolsover - Denis Skinner. Tho even he wasn't quite as he portrayed himself.
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Heard today...
What’s the difference between a politician and a flying pig?
The letter F.
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The latest edition of this regular podcast by Rory Stewart and Alastair Campbell came out this morning. It's a good one IMO. Entitled "Working with Truss, Blackpool with Clinton, and Sewage".
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Reported on another forum that certain quarters have taken to referring to Liz Truss as 'Daggers'.
A reference to Dagenham which is three stops beyond Barking...
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Heard it a few days ago, apparently started by city traders.
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Isn't it when sheep have dirty bums??
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It doesn't seem to be getting any better for Truss. New polls show they are still in 80 seat territory if there were to be a GE now. I don't really believe that but they are definitely in trouble.
She didn't put Gove in her government and he continues to lead opposition to her. Perhaps he refused, or would have.
Their voters ("Labour would be worse", "they're all the same anyway", "Starmer is boring", "Boris is a man of the people") who didn't care about constant lying and venality are definitely concerned about inflation and interest rates. Her and Kwarteng's plans to cut real terms benefits to subsidise £45bn of tax cuts and chuff knows how much for subsidies to the electricity generators area another disaster. On Truss's record, she will also mishandle the "supply side reforms" and it will dawn on their sleepwalking voters that their employment protections are to be further whittled away.
Tory backbenchers who don't have lobbying jobs lined up with banks are deeply concerned that they will be out of a job soon unless they dump her and bring back Sunak, probably their best chance convincing anybody they can get on top of inflation and interest rates.
But they are between the devil and the deep. If they don't dump her they will be unemployed after the GE - she is a terrible speaker, sounds awful, is far too ideological to see sense, and her growth plan requires more immigration so that's the racist vote gone. She can't really change much because she is also controlled by the Brexit extremists who are her only supporters.
OTOH another leadership election will at the very least make the party look incompetent, and unless they change the system then, as one Tory MP said, "the nutter will always win". The Brexit lot just has to ensure that their candidate makes the final two, and the swivel eyes in the local associations will do the rest, again.
If it wasn't for the fact that I fully expect to be at least 25% poorer in 3 years' time I'd be enjoying this. Unfortunately it's a disaster for nearly everybody.
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Liz Truss is the Tories Jeremy Corbyn.
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Corbyn was a better speaker.
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>> Corbyn was a better speaker.
>>
...yeah, but even Orville the duck was a better speaker...
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>> Corbyn was a better speaker.
Yea but very few people liked what came out the grille.
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>>Yea but very few people liked what came out the grille.
And is a fool unable to take advice or deliver consensus politics (much like a red Bojo).
He'd be an absolute disaster right now with Putin/Ukraine if he had been in charge.
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>>
>> He'd be an absolute disaster right now with Putin/Ukraine if he had been in charge.
>>
Didn't he come out as an appeaser for Putin or am I mistaken?
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>> Didn't he come out as an appeaser for Putin or am I mistaken?
As with Ireland his line is Jaw Jaw not War War.
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>>As with Ireland his line is Jaw Jaw not War War.
Worked well in the 1930s.
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>> Worked well in the 1930s.
And was the only thing that worked in Ireland. Not that I am sorry to see JC sidelined, he simply doesn't have the intelligence, relatability or judgement IMO to be PM - too much of an ideologue.
I doubt if he could have done more damage to the UK's financial standing than the current team.
This morning, a further flurry of activity by pension funds with leveraged LDI to maximise their liquidity has been kicked off by the events of the last 2 days.
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This has gone too far now. Gilt yields took off again today, pound fell accordingly. BoE spending billions to try and arrest it.
I think the market has seen the hopelessness of the government position. If Truss won't ditch the tax cuts there is little hope. Not for her, I mean us.
The IFS says £45bn of cuts are needed. The big expenses are the NHS, state pensions, benefits, education, defence. They have already committed to increase defence spending by 50%. The back benchers won't accept benefit cuts. The NHS is at breaking point and it's still October. Half their voters are pensioners. Education should be an area of investment for growth.
If she can't find the cuts the only way out fiscally is a u-turn, but the market fears that won't happen. And if it does, it weakens the government and prolongs uncertainty.
It's great that she has wrecked the Tory party but the country can't take any more collateral damage.
The bank has actually warned about a tipover over financial stability.
They need to bin her now. No time for a leadership contest, bring May back as a caretaker, or give it straight to Sunak.
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>> ..........or give it straight to Sunak Corbyn. ;-)
>>
...I reckon the less-than-impressive Andrew Bailey (Oh for a Mark Carney) has decided that he's had enough of the monkey Liz and Kwasi have put on his back, and decided (via his announcement of the impending termination of support) to hand it back (well, it shouldn't really be his, should it?).
Last edited by: tyrednemotional on Tue 11 Oct 22 at 22:30
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Bailey's not the problem is he.
I don't see how they can survive another week without reversing the tax cuts, and all that will give them is a slightly less abrupt and disorderly departure.
She's mad. She has no mandate from voters or her MPs for what she's doing, and the growth plan doesn't even nearly add up.
Came out today that Kwarteng was for a while on a £20k monthly retainer from Odey Asset Management as an adviser.
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Regardless of BoE support markets won't stabilise until they are gone.
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Interesting yes. He doesn't really account for what happened between 2010-2020 which is rather a long time.
And LDI isn't really the scandal. Nor did it really take off until post 2015 as far as I recall, everybody knew about it, and I have never heard of any big concerns other than the need to have an appropriate 'waterfall' of collateral.
Pension schemes have always used gilts to match their liabilities. But the returns on gilts were poor. Schemes with deficits need some income from investments. They can invest in return-seeking assets but this leaves them open to large fluctuations in the accounting deficit which is the basis for companies having to make large repair payments into their schemes.
LDI enables schemes to have more gilts exposure while also exploiting higher returns from say equities and loan funds. They do this by borrowing money to buy more gilts. The scheme takes the ups and downs on the gilts' value which hedges its risk, and the lender holds the actual gilts as security.
If the gilts fall in value, the scheme has to provide more security aka collateral, so the schemes hold some very liquid, stable investments which can be sold immediately to provide this collateral.
There is always a fall back for the schemes which is to reduce the hedging and sell down the gilts. The problem now is selling into a falling market.
What has been exposed here is that 3 x leverage is probably too much. I suspect this will typically not exceed 2 x in the future which means scheme returns could suffer. And of course it might make LDI less popular.
I suppose the lesson is that there is always extra risk with higher reward.
The fall in yields has simply been bigger and faster than anyone anticipated. This must be dealt with because there is a big risk in bank jargon of "financial instability" (think Zimbabwe).
The pension funds are IMO not the trigger, but the selling of gilts must have made the situation worse. When the Bank yesterday said the support would finish on Friday, schemes will undoubtedly have done some more selling (not just of gilts) to ensure they still have a collateral buffer.
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Borrowing to invest.
Always a good idea.
Can't possibly go wrong.
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"I suppose the lesson is that there is always extra risk with higher reward"
Many market failures arise as this lesson is never learned, or if learned frequently forgotten.
The US savings and loans failures which precipitated almost total banking collapse occurred through simple greed and lack of regulation.
Despite the obvious need to separate retail from casino banking, nothing effective had been done.
Allowing banks to accumulate huge assets and liabilities on the back of small capital margins was blatantly inept.
It seems there are clear parallels with the pension predicament - complacency meets inadequate regulation and greed.
And pretty much the best that could be done to punish those responsible was to strip Fred the Shred of his knighthood.
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>>Many market failures arise as this lesson is never learned, or if learned frequently forgotten.
The bankers were generally playing with somebody else's money and being obscenely rewarded through performance-related pay for doing so.
There is a parallel of sorts but...
Pension funds are massively regulated, trustees of the pension funds we are talking about generally receive either nothing or very modest fees that are emphatically not 'performance' related and they generally seek and heed the 'best' available advice - they have to. They are trying to ensure that members' pensions are paid and that has to be balanced where there are deficits with the ability of the sponsoring company to pay and the investment returns. Trustee boards have some scheme members on them.
The regulation and compliance is incredibly heavy. Even so, I suspect more 'guidance' will emanate very soon. There has been a statement issued which basically exhorts trustees to look at their operational and liquidity arrangements to make sure they meet needs. In other words, do their jobs.
The regulator acknowledges that trustees generally know what they are doing.
Our previous guidance included messaging for DB trustees and advisers in relation to liquidity plans for LDI strategies. The risk of gilt yields rising was well understood by trustees, advisers and LDI managers. Such risks are pre-planned by keeping aside sufficient proportions of liquid assets, which can then be sold to raise cash that can be posted as collateral.
However, it was the unprecedented speed and magnitude at which gilt yields increased towards the end of September, as well as the ability of schemes and LDI funds to respond to this, that created liquidity pressures as LDI managers urgently sought further collateral. DB pension schemes were not at risk of “collapse” due to the rapid movements in gilt yields, but the key challenge for schemes has been the ability to access liquidity at short notice to maintain their liability hedging positions in an environment when long-term interest rates rose rapidly in just a few days.
www.thepensionsregulator.gov.uk/en/document-library/statements/managing-investment-and-liquidity-risk-in-the-current-economic-climate
The real story remains high interest rates and mortgage payments, big inflation, and a huge spending deficit.
Last edited by: Manatee on Wed 12 Oct 22 at 18:20
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The simple fact seems that pension funds had an investment strategy which made them vulnerable to rapid interest rate changes.
They may have had sufficient collateral for the sort of movements they may have anticipated as extreme, but I suspect what actually happened was outside their reasonable worst case.
That the explanation for the outcome involves terms like "LDI strategies", "liability hedging positions", "raise cash that can be posted as collateral" sound suspiciously like a complex managed risk which went seriously wrong.
A little like the "A" rated bonds issued by reputable banks backed by sub-prime mortgages on overvalued property.
A general observation - a relationship exists between risk and reward - the greater the former, the higher the latter. In a very simple sense risk x reward is a constant over the long term.
I suspect the strategy evolved as companies sought to minimise their contributions to pension schemes and insulate themselves (as far as possible) from the curse of regular pension valuations and deficit funding.
Regulators and trustees may have been confident they had all the risks covered. For several decades relative stability ruled making what happened an implausible outcome. Quite simply (and possibly understandably) they were wrong.
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As a trustee I signed up to it. And will possibly do so again. I don't think the dodgy CDOs are a good analogy. With LDI we know what the investments are and in fact there has not been any materialisation of credit risk- because they were government bonds.
Implicitly we didn't think the likelihood of a bonkers prime minister and chancellor was very high. And it wasn't. But it happened.
Anybody who is totally confident nothing can go wrong is a fool.
Pension funds just got caught in the crossfire. The threat to funds' liquidity bore on the Bank's timing of its intervention but I don't doubt that intervention would have come, and there is still a threat to financial stability which the country needs to live with 2.5 trillion of government debt.
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" Quite simply (and possibly understandably) they were wrong."
With hindsight maybe an easy conclusion to reach, as so many are.
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Surely now enough is enough. Gilt yields hit 5% and the bank hasn't stopped support yet.
To describe this as turbulence is moronic. Can't see them last until their mini budget unless there is a big policy reversal which should sink her anyway.
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Rumours that there will be further u turns/adjustments to the mini budget very soon.
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I’m a big fan of the Maitlis/Sopel “Newsagent” daily podcast.
They ripped JRM yesterday for his media rounds, playing out the wonderful Humphrey from Yes Prime Minister in comparison.
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Liz and Kwasi have royally screwed up. They are what the phrase "swivel eyed loons" was invented for.
They are the right-wing equivalent of the Corbynite nationalise and regulate everything for the greater good - all controlled by a thought police ensuring compliance with "right speak".
I do believe in fundamental Tory principles of personal freedom to choose, being rewarded based on effort and ability, looking after those in society genuinely in need etc.
I do not subscribe to a Labour approach to governance which seems to embrace regulation over personal choice and responsibility.
Irrespective of personal political beliefs, the sooner they are gone, the better!
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>>I do believe in fundamental Tory principles of personal freedom to choose, being rewarded based on effort and ability, looking after those in society genuinely in need etc.
These aren’t surely principles that only apply to the Tory Party. Is that what they are trying to claim now?
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>> >>I do believe in fundamental Tory principles of personal freedom to choose, being rewarded based
>> on effort and ability, looking after those in society genuinely in need etc.
>>
>> These aren’t surely principles that only apply to the Tory Party. Is that what they
>> are trying to claim now?
Afraid they are principles not embraced by the labour party or their union backers.
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When will people realise that the Conservatives work for their donors.
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>> As do the labour party.
>>
That's what it says on the tin, if you are referring to unions.
If the Conservatives put the names of their sponsors on their posters, people who think they are there to help those who work for a living might vote differently.
The one nation Conservatives are all on the back benches.
JRM's outrage at the decent backbenchers who've had enough of the hard right Brexit nutters is very gratifying.
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“Ido not subscribe to a Labour approach to governance which seems to embrace regulation over personal choice and responsibility.”
That sounds good but it is of course unworkable. A modern society needs a good deal of regulation if it is to work fairly. Personal choice can’t always be the answer . My choice is not necessarily yours.
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>> Liz and Kwasi have royally screwed up. They are what the phrase "swivel eyed loons"
>> was invented for.
They did what came naturally to them. The fact that they did it without, presumably, even considering the consequences that resulted, therefore without socialising their plan beforehand, which would have IMO meant it being canned, just shows them to be completely unfit for their jobs.
So it's not an unlucky break. They are not up to it. They are unfit and no amount of u-turning will make them fit.
The MPs know this and want them out. But they don't want another leadership contest. Their dilemma is that they need to select a unity candidate for coronation but they won't be able to agree who that is.
That could keep Truss in office, but they perceive that will result in a landslide defeat come the eventual election.
If Truss had any shame or common decency she'd walk. I still hope she will, but Johnson lowered the bar for acceptable conduct so far that it's virtually impossible to get under it.
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Radio whispers are that Kwasi has been flown back to pick up his P45 this afternoon...
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Yes and that Truss will now reinstate Sunak’s tax rise. How would she withstand the resignation calls if she reneges on her campaign promise to cancel it and adopts the approach of her competitor.
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>> Radio whispers are that Kwasi has been flown back to pick up his P45 this
>> afternoon...
Suggestions are he will be replaced by Sajid Javid, Nadhim Zahawi or Jeremy Hunt.
All three are 'safe hands' and towards the One Nation wing of the Tory party.
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Didn't truss sack zahawi when she first became PM?
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>> Didn't truss sack zahawi when she first became PM?
Moved him to be Chancellor of the Duchy of Lancaster.
She and Kwarteng were close buddies, some say joined at the hip.
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It would be pretty embarrassing to go back to zahawi then, mind you there's enough embarrassment to go around this past week.
I don't think it'll be hunt or sunak for differing reasons.
I suppose we'll see at the press conference tonight.
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>> Didn't truss sack zahawi when she first became PM?
>>
Yes. I think Javid would provide more reassurance. He's already shown he won't be pushed around in that role and he isn't a nutter
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Yes javid seems the safeest pair of hands of those names knocking about.
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Well Kwarteng's gone, fired.
I wonder if she had the brains to find somebody else before she got rid.
Zahawi might take it. I doubt if Hunt would want to prop her up, and Javid is his own man too.
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....given the rumours that the plotting to unseat her in short order continues, even the most politically ambitious of the potential new Chancellors ought to take time to consider before tying up to Ms Truss.
(The new incumbent might just become the new shortest-reigned Chancellor ;-) ).
Last edited by: tyrednemotional on Fri 14 Oct 22 at 13:16
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>> Zahawi might take it. I doubt if Hunt would want to prop her up, and
>> Javid is his own man too.
She needs someone from the "other side" to unify the party. Alas she sacked, rubbished or forced them away, so bringing one back requires mucho humble pie gluttony.
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Reported that the Chief Secretary to the Treasury, Chris Philp, is on his way out to. Commentator reporting this says Truss is “trying to put clear blue water between the s*** show and her”.
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>> Reported that the Chief Secretary to the Treasury, Chris Philp, is on his way out
>> to. Commentator reporting this says Truss is “trying to put clear blue water between the
>> s*** show and her”.
That she is throwing the queue under the bus is patently obvious. She cant save herself cos everyone knows it. Completely lost it.
Last edited by: Zero on Fri 14 Oct 22 at 13:31
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>> That she is throwing the queue under the bus is patently obvious. She cant save
>> herself cos everyone knows it. Completely lost it.
>>
Agreed. Nobody thinks Kwarteng rode off into the night and did this on his own, they cooked it up together. If he's unfit, so is she.
Good point above that a replacement could be short-lived. I think they might want a bit of informal reassurance from the suits if they are thinking of crowning a replacement without a contest.
Last edited by: Manatee on Fri 14 Oct 22 at 13:39
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Hunt is Chancellor according to the Graun.
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Seems unlikely, I'm surprised.
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www.bbc.co.uk/news/uk-politics-63257058
Most sneaky and clever way of saying "its her fault"
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Quote
A group of senior Conservatives have decided to call publicly on Liz Truss to resign following her sacking of Kwasi Kwarteng as chancellor.
The party grandees held their discussions and made their decision to act after reports emerged the prime minister was planning to sack her chancellor, which has since been confirmed.
The senior Tories are planning to speak out next week.
One figure involved in the discussions told BBC Newsnight: “These are serious people. The PM will find it hard to survive.”
The senior Tories, including former cabinet ministers, believe the prime minister’s position is untenable because Kwarteng was carrying out her policies.
The source said: “Liz Truss campaigned on these tax cuts. Liz Truss won the Tory leadership contest on the basis of this programme. It is absurd for her to blame Kwasi.”
The Tory source warned that Truss had made a mistake if she thought Kwarteng had no political base within the parliamentary party.
The source said: “People like Kwasi. He is friendly. He’s honest. Maybe a bit too honest. Maybe that’s his problem.”
You cant argue the central premise of this.
Last edited by: Zero on Fri 14 Oct 22 at 13:51
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>> I'm surprised it's hunt
I'm surprised he took it.
His seat's not the most safe and Surrey is prime territory for the LDs to advance.
Propping up Truss won't help.
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>> Propping up Truss won't help.
Not a factor in Farnham, his majority wont be affected by that, other stuff - Like oil and fracking and chewing up the green belt, Deffo.
Last edited by: Zero on Fri 14 Oct 22 at 14:10
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Watching now.
Sounds like too little, too late. I doubt if the markets will happily settle for a down payment on the £60bn. hole until the month end.
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So Corporation Tax will go up to 25% from FY23/24.
As Manatee says, it may be too late.
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Don't think they can change CT any sooner than the next tax year. But that's still less than a third of the giveaway, they are still sitting on whatever the OBR has said so far, and I think another 2 weeks of bluster won't stop the rot.
£ was up this morning on expectation. Down slightly since her inadequate effort.
Last edited by: Manatee on Fri 14 Oct 22 at 15:01
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Firing Kwarteng does not solve the problem.
Truss was complicit in the mess from a failure to communicate, failure to get OBR sign off, and looking for scapegoats does nothing to improve her reputation. I cannot recall any other PM who has so quickly completely fouled up.
The sooner she goes the better - pushed by her Tory colleagues if she fails to go of her own accord.
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>> I'm surprised it's hunt
>>
He backed Sunak in the election. Handily placed to continue as Chancellor when Sunak becomes PM in the new year.
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£ .8 down on euro, 1.4 down on usd.
More needed now.
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£ .8 down on euro, 1.4 down on usd.
More needed now.
She's made it worse.
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> He backed Sunak in the election.
Eventually, after he dropped out.
Just strikes me as an odd choice, they are on opposite wings of the same party. Probably a choice forced on her.
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>> Just strikes me as an odd choice, they are on opposite wings of the same
>> party. Probably a choice forced on her.
To hold on to her job, she needs the support of the opposite wing, specially now they are openly plotting to oust her. Anyway, keep your friends close, and your enemies - closer.
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>.Just strikes me as an odd choice, they are on opposite wings of the same party. Probably a choice forced on her.
He hates her I should think and vice versa. Although she claims he's on board with the growth objective (which she calls a plan, but I'm ignoring that nuance).
But it's usual for a new leader to bring some erstwhile opponents into the cabinet in the name of unity. She didn't, with almost no exceptions, and she was criticised for that. It would have cheesed off the MPs anyway, even without the subsequent display of incompetence.
The news conference was dreadful. Barely a hint of an apology and nothing beyond what had been trailed, when it was clear to me that the market was looking for more of a dent in the black hole, and a quicker proposal than 31 October. Four near identical robotic answers to questions, although to be fair - they all included some form of "shouldn't you resign too, he just did what you wanted".
Truss losing her job this year is now 11/8 which seems generous. You could have got 66/1 when she won the contest, and 4/1 as recently as last week.
Pension trustees have been busy preparing over the last 3 days for the possibility of even higher gilt yields than already seen when BoE support is withdrawn. I don't think any will actually fall over but there will be costs.
To pretend the 'plan' is really OK is just fatuous. Dead duck.
USD/GBP seems to have settled at 1.12 for now, presumably with some bank support. Frankly I feel a bit queasy wondering what will happen on Monday, and what the consequences for the country will be. There certainly need to be some consequences for Truss, apart from the Prime Minister's pension.
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Time for a military take-over?
I was at a military base, in another country back in the '70s. In the officer's mess there were a group who were discussing the state of the country. The CO walked in and suggested that if they didn't like what was going on, they had the materials to change it! .......................................
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>>Time for a military take-over?
That would definitely spook the markets!
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>> >>Time for a military take-over?
Was it mooted in the seventies with characters like David (SAS) Stirling to the fore?
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>> >> >>Time for a military take-over?
>>
>> Was it mooted in the seventies with characters like David (SAS) Stirling to the fore?
>>
I think just rumours, perhaps one or two journos getting excited after a bit of second-hand rumour from some mess.
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>> >> >> >>Time for a military take-over?
>> >>
>> >> Was it mooted in the seventies with characters like David (SAS) Stirling to the
>> fore?
>> >>
>>
>> I think just rumours, perhaps one or two journos getting excited after a bit of
>> second-hand rumour from some mess.
It was a serious enough "rumour" during Wilson's tenure that the security services were secretly imbedded into some regiments......
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It was a serious enough "rumour" during Wilson's tenure that the security services were secretly
>> imbedded into some regiments......
>>
It doesn't take much for some to get excited.
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>> It doesn't take much for some to get excited.
It has to be said that Wilson was particularly paranoid. as were the right wing during that period.
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>> >> >>Time for a military take-over?
>>
>> Was it mooted in the seventies with characters like David (SAS) Stirling to the fore?
Now that you mention it...1968. Wilson government. Mountbatten was allegedly implicated and/or approached to lead it.
en.wikipedia.org/wiki/Harold_Wilson_conspiracy_theories
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I like Hunt, he was one of my favourites in earlier leadership votes.
Boris cleared out many of the better, more experienced ones.
On the broader picture, isn't politics (and politicians) crap these days?
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Sunak must be sniggering big style now. As probably is Boris.
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>> Sunak must be sniggering big style now. As probably is Boris.
Nah Boris is sulking and licking his wounds. He wants to be loved and feted. He wasnt.
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>> >> Sunak must be sniggering big style now. As probably is Boris.
>>
>> Nah Boris is sulking and licking his wounds. He wants to be loved and feted.
>> He wasnt.
He’s in his Churchillian wilderness period waiting for the recall to save the country
>>
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>> He’s in his Churchillian wilderness period waiting for the recall to save the country
>> >>
Ah yes, of course
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>>Nah Boris is sulking and licking his wounds. He wants to be loved and feted. He wasnt.
Apparently he was paid £150k for a speech last week. Not far off his prime minister salary.
He will be like the kid who gets a summer job after first year of uni and suddenly realises how much money there is to be made .
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>> On the broader picture, isn't politics (and politicians) crap these days?
Populism. Social media. The growth of disinformation. I don't think the pendulum will swing back unless somebody can deal with the last one.
I'd like to see PR which might damp the adverse effects a bit.
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Partly, but partly down also to the elected members
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Shallow and manipulative strategies deployed by all parties are a consequence of the inability of most of the electorate to critically challenge the skewed garbage they are fed.
Parties may just as well be selling baked beans, package holidays, shampoo or toothpaste - the goal is the same - get a tick in the box (or money in the till).
It is about brand management - all that can be said is that the Tories have scored a massive own goal (or several of them) and made it easy for the opposition to be self-righteously superior. A little like a child who seeing a sibling misbehave says "mummy - isn't Johnny being naughty".
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>> >>Time for a military take-over?
>> That would definitely spook the markets!
Back then, a work colleague who was a union commitee member, informed me that 'come the revolution', I would be one of the first with my back against the wall.
They looked seriously shocked when I told them what I'd heard in the officer's mess and suggested, that in fact, they'd be the first with their back against the wall!
We're both still here - at the moment.
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Who will be the next Prime Minister? Volume 3 - sooty123
