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Kwarteng & The Hedge Fund Managers
27 Answers
A normal meeting? Or setting things up for his pals and old boss?
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I guess it helps to have a ‘useful idiot’ as a puppet if you’re looking to make a quick fortune before the Tories get removed?
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I guess it helps to have a ‘useful idiot’ as a puppet if you’re looking to make a quick fortune before the Tories get removed?
Answers
I do remember having a discussion similar where you NJ were adamant it was the fault of the haulage industry that there were no truckers due to a recently implemented government policy. You don't believe a word the government says, and when anything goes 'bad' it seems like always the fault of private industry. You seem like an intelligent bloke and I'm...
21:50 Sun 02nd Oct 2022
//Or would you rather the government continue to play fast and loose with your pension funds?//
The government was doing no such thing. Those playing fast and loose were the trustees of those funds who used LDIs when they knew (or should have known) that they were highly risky when circumstances changed. They should also have known that circumstances would eventually change because continually printing worthless money is unsustainable. The real villains of the piece are the BoE and their fellow so-called regulators I have mentioned. They should not have allowed the fund managers to become so exposed to such risk-laden investments.
The government was doing no such thing. Those playing fast and loose were the trustees of those funds who used LDIs when they knew (or should have known) that they were highly risky when circumstances changed. They should also have known that circumstances would eventually change because continually printing worthless money is unsustainable. The real villains of the piece are the BoE and their fellow so-called regulators I have mentioned. They should not have allowed the fund managers to become so exposed to such risk-laden investments.
I’d say the villains of the piece are Truss and Kwarteng, who did their sums all wrong and apparently didn’t share the info with cabinet colleagues but even more crucially not with each other!
They waived scrutiny too and subsequently trashed the Pound.
Even George Osborne(yes, THAT George Osborne) says they caused an earthquake and have trashed the Party reputation for being financially prudent, he reckons they’re finished.
Are you sure the BofE didn’t need to step in though?
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They waived scrutiny too and subsequently trashed the Pound.
Even George Osborne(yes, THAT George Osborne) says they caused an earthquake and have trashed the Party reputation for being financially prudent, he reckons they’re finished.
Are you sure the BofE didn’t need to step in though?
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//Are you sure the BofE didn’t need to step in though?//
Where did I say they didn’t need to? What I said was they should not have needed to, had they and their fellow regulators been doing their job correctly. Specifically:
“The BoE would have had no need to shore it up this time had they and their fellow indolent institutions (The FCA, the Pensions Regulator and the Prudential Regulation Authority) not been asleep at the wheel for the past four years.”
The government does not administer private pension funds. That’s the job of the fund managers. If their investment strategies are so fragile that the announcement of a modest reduction in general taxation (six months hence) can cause them so much grief, they are at best inept and at worst negligent. Their investment strategies should be robust enough to withstand such minor shocks and the job of the regulators (including the BoE) is to ensure that they are.
Where did I say they didn’t need to? What I said was they should not have needed to, had they and their fellow regulators been doing their job correctly. Specifically:
“The BoE would have had no need to shore it up this time had they and their fellow indolent institutions (The FCA, the Pensions Regulator and the Prudential Regulation Authority) not been asleep at the wheel for the past four years.”
The government does not administer private pension funds. That’s the job of the fund managers. If their investment strategies are so fragile that the announcement of a modest reduction in general taxation (six months hence) can cause them so much grief, they are at best inept and at worst negligent. Their investment strategies should be robust enough to withstand such minor shocks and the job of the regulators (including the BoE) is to ensure that they are.
//So what prompted the BofE to act,...//
There are plenty of sources you can learn about this. Google "LDI pension scheme chaos" or similar. A brief precis from one source:
"An investment strategy used by UK pension funds to protect themselves from falling yields in the government bond market has been blamed for backfiring when they surged instead. Funds following a so-called liability-driven investment, or LDI, strategy were forced to post more collateral when prices for UK sovereign bonds, known as gilts, collapsed suddenly -- driven largely by their own selling. That prompted the Bank of England to step in to prevent a death spiral and a systemic crash."
I think this thread has largely run its course as far as I am concerned. You believe last week's problems for the pensions industry was the government's fault and I believe it was due to ineptitude or negligence on the part of the pension fund managers. We won't resolve that.
There are plenty of sources you can learn about this. Google "LDI pension scheme chaos" or similar. A brief precis from one source:
"An investment strategy used by UK pension funds to protect themselves from falling yields in the government bond market has been blamed for backfiring when they surged instead. Funds following a so-called liability-driven investment, or LDI, strategy were forced to post more collateral when prices for UK sovereign bonds, known as gilts, collapsed suddenly -- driven largely by their own selling. That prompted the Bank of England to step in to prevent a death spiral and a systemic crash."
I think this thread has largely run its course as far as I am concerned. You believe last week's problems for the pensions industry was the government's fault and I believe it was due to ineptitude or negligence on the part of the pension fund managers. We won't resolve that.
New Judge,
//I think this thread has largely run its course as far as I am concerned. You believe last week's problems for the pensions industry was the government's fault and I believe it was due to ineptitude or negligence on the part of the pension fund managers. We won't resolve that.//
Odd then that reputable political commentators, economists and politicians of all stripes put the blame squarely on the shoulders of the government, I didn’t hear anyone condemn a city trader or fund manager, but c’est la vie.
//I think this thread has largely run its course as far as I am concerned. You believe last week's problems for the pensions industry was the government's fault and I believe it was due to ineptitude or negligence on the part of the pension fund managers. We won't resolve that.//
Odd then that reputable political commentators, economists and politicians of all stripes put the blame squarely on the shoulders of the government, I didn’t hear anyone condemn a city trader or fund manager, but c’est la vie.
I do remember having a discussion similar where you NJ were adamant it was the fault of the haulage industry that there were no truckers due to a recently implemented government policy.
You don't believe a word the government says, and when anything goes 'bad' it seems like always the fault of private industry. You seem like an intelligent bloke and I'm genuinely interested in what you think the government actually 'does'. You don't think they are accountable for anything they say, that's been established but what do you think they are actually responsible for?
You don't believe a word the government says, and when anything goes 'bad' it seems like always the fault of private industry. You seem like an intelligent bloke and I'm genuinely interested in what you think the government actually 'does'. You don't think they are accountable for anything they say, that's been established but what do you think they are actually responsible for?
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