17 Oct 22
Wrap
Incredibly, the appointment of Jeremy Hunt, and the unpicking of the Kwarteng ‘mini’ budget has boosted risk assets globally. I’m not sure about the logic of this. Supposedly, the budget itself was dictated to the UK government by the evil forces of global capitalism via their outposts in 55 Tufton Street, on the basis that it would enrich those said capitalists. Although some hedgies get rich by shorting government bonds and currencies, the vast bulk benefit from risk assets increasing in price, in which case they’re either playing some very complicated game, or they’re hopelessly bad at influencing governments in the right way. Neither sounds plausible.
Anyway, bonds and equities were generally up, commodities mixed but not particularly lively, and the USD significantly down (DXY around 112).
The BoE
The admirable Dario Perkins (@darioperkins) tweeted:
a little self-reflection from the IMF.
— Dario Perkins (@darioperkins) October 17, 2022
Imagine anyone on #fintwit producing a chart like this 😉 pic.twitter.com/blcTbMzl9Z
He also pointed out that the Bank of England forcing the Treasury (well, the Chancellor, anyway) to reverse course, as has effectively happened over the past week is profoundly undemocratic.
Russell Napier
Napier is an economic historian. I think that economics would work better by copying history than it manages to do by copying physics .. well, by trying to copy physics. His view is that we’re going back to the post-WWII boom, funded by very cheap money acquired through fiscal dominance. Governments will prefer to trash their currencies than trash their economies. They can bail out mortgagers.
Comments !