Oh dear - Forward Guidance - but not forward thinking.

[CliveH]

http://www.bbc.co.uk/news/business-23595418

 

Oh dear - the announcement that interest rates will go up if our economy hits certain key parameters will ensure market volatility.

 

I do wonder about these people that make such announcements.

 

So if we get good news such as unemployment falling then the BoE will seek to raise the base rate.

 

This in turn will cause the markets to fall on the expectation of borrowing costs going up.

 

Which if history repeats itself has the knock on effect of people losing their jobs.

 

Does anyone have the ability to do joined up thinking these days?

 

 

[BGD]

Seems very sensible macro-economic policy to me.

 

It's a signal to show that they are prepared to choke off demand-pull inflationary pressure. Such a signal (and action if it should become necessary) helps with inwards capital investment, and helps UK export sales. Eminently sensible.

[Guest Had Enough]

The man making this policy is Mark Carney, the governor of the Bank of England and a man with a proven track record as a very successful governor of the Bank of Canada.

 

But it's nice to know from our resident expert that Mr Carney is not only wrong but isn't even capable of 'joined up thinking'!

 

What was the government thinking when they gave him the job? They only had to visit this site to find the right kind of people to transform the economy, reduce unemployment and give us all a huge boost in our standard of living.

 

I've no doubt we'll now get loads of 'proof' as to how Mr Carney is wrong but you know who is right! ;-)

[CliveH]

Oh dear - Frank does again what he accuses others of doing - Yawn!

 

But I think both Frank and Bruce miss the point that is being made. Because the markets reaction to the announcement is such that it has forced a backtrack for exactly the reasons I stated.

 

If borrowing costs increase because they are linked to a reduction in employment figures then this will have an effect on the Market.

 

The Markets did not like the announcement first thing and it looks like Carney is having to back track a bit:-

 

 

"Reacting to the Bank of England’s latest announcement, Kathleen Brooks, research director at Forex commented that ‘this announcement makes one wonder whether Carney is a banker or a lawyer. He couched the announcement on forward guidance with an economic threshold with so many escape clauses it sounded more like he was reading a disclaimer.'

 

This is in reference to the caveats Carney outlined when unveiling the unemployment threshold. He said that the threshold 'is not a promise on rates and a breach won’t imply immediate rate rise', adding that the 'policy stance will depend on economic conditions'. He continued that the Bank of England will not jeopardise 'financial market stability', and that the 'primary focus remains inflation and price stability'.

 

 

So he is now saying that the link will NOT be such that one leads to the other. And that the BoE "will not jeopardise 'financial market stability' "

 

Thank Christ for that!

 

 

[CliveH]

The Evening Standard has an interesting report on Carney's announcements effect on the £.

 

Looks like the currency market went a bit loopy on the basis that unemployment will stay above 7% (because of immigration it is cited 8-) 8-) 8-) ) and so we will have low interest rates for a considerable time.

 

 

"New Bank of England Governor Mark Carney sent turmoil through currency markets today as he braced Britons for years of low interest rates.

 

The Bank’s pledge to keep interest rates at record lows of 0.5% until unemployment falls to 7%, subject to financial stability and inflation staying under control, triggered an initial sell-off in currency markets.

 

Financial markets had been pricing in an interest rate rise in the second half of 2015. But the Bank’s forecasts for unemployment put it above 7% until at least the end of 2016, while the Office for Budget Responsibility predicts the jobless rate will not fall below the new threshold until 2017."

 

http://www.standard.co.uk/business/business-news/mark-carneys-low-interest-rates-pledge-sends-the-pound-yoyoing-8749973.html

 

So like I say - a lack of joined up thinking gives the markets volatility we really do not need right now.

 

 

[CliveH]

Now we have virtually a complete climbdown with the Monetary Policy Committee of the BoE stepping in to say:-

 

 

"The Committee will continue to set the level of Bank Rate and the size of the asset purchase programme each month, taking these criteria into account. The action taken by the MPC if any of these knockouts were breached would depend upon its assessment at the time as to the appropriate setting of monetary policy in order to fulfil its remit to deliver price stability.

 

There is therefore no presumption that breaching any of these knockouts would lead to an immediate increase in Bank Rate or sale of assets."

 

 

As I said earlier - Thank Christ for that.

 

 

 

[Guest Had Enough]

Climb down? What are you on about? God, you're so desperate to show how clever you are and that you actually know how to run the economy better than the government and Carney!

 

Why aren't you a multi-millionaire Clive instead of a small town IFA?

 

From the BBC:

 

'On the markets, shares rose and the pound fell immediately after the Bank's statement was released, although the movements were quickly reversed.'

 

It seems that the 'loopiness' in the money markets didn't last long!

 

But what I find pathetic is that he's criticised for adding a few caveats to his policy. That's because he's not stupid and knows that however sensible his ideas are there are so many unexpected and external factors that could affect them.

 

Business likes it and I have no doubt that we'll now see an increase in investment as companies are much more certain of their future borrowing costs.

 

By the way, the interest rate is set by the MPC, not the governor, so I'm not sure how they're now stepping in?

 

 

 

[malc d]

CliveH - 2013-08-07 11:06 AM

 

 

Does anyone have the ability to do joined up thinking these days?

 

 

 

Patience Clive.

 

I'm sure the government will call on you eventually.

 

;-)

[CliveH]

calm down Frank - just because I have made you look foolish (lol) there is no need to get all worked up and burst a blood vessel.

 

On a serious note - you have to realise that we have been watching this story unfold - so the BBC report you cite is a synopsis.

 

The timeline is this

 

1) Carney makes his announcement

 

2) Market reaction was "Oh $hit" that means the economy/borrowing rates will be driven by new factor - unemployment - pundits view is not positive and predicts problems - "Lack of joined thinking" cited.

 

3) Evening Standard then points out the Money Market did not like it.

 

4) The MPC - feels the need to come out with a statement that IT is the organisation that sets Base rate and ALL factors will be taken into account - not just one "driver".

 

And yes the MPC does set the BoE base rate - that is exactly why they had to step in because Carney intimated that Unemployment Figures would be more influential on the Base rate than it is now.

 

And Frank - as for who and what i am - you just cannot help yourself with a puerile little dig.

 

I suggest you stop - you are embarrassing yourself.

 

 

 

 

[CliveH]

malc d - 2013-08-07 2:12 PM

 

CliveH - 2013-08-07 11:06 AM

 

 

Does anyone have the ability to do joined up thinking these days?

 

 

 

Patience Clive.

 

I'm sure the government will call on you eventually.

 

;-)

 

If they ever did I would tell them where to go. :-S

 

 

 

[Guest Had Enough]

malc d - 2013-08-07 2:12 PM

 

CliveH - 2013-08-07 11:06 AM

 

 

Does anyone have the ability to do joined up thinking these days?

 

 

 

Patience Clive.

 

I'm sure the government will call on you eventually.

 

;-)

 

And the sooner the better for all of us! Our membership of the EU, global warming, the U.K.'s economic policy, all the questions regarding the way forward on any of these subjects can be solved by Clive.

 

It's a well known fact that all the other experts are idiots with no vision and as for 'joined up thinking' they don't know the meaning of the words.

 

It must be so satisfying to know that you are cleverer, better informed and more capable of running the country than any of these other numpties (another of Clive's favourite words!). I do envy him his certainty.

 

Me, I'm really not too sure on any of these complex subjects. I suppose must be a failure.

 

 

[Guest Had Enough]

CliveH - 2013-08-07 2:16 PM

 

 

I suggest you stop - you are embarrassing yourself.

 

 

 

I learnt a lot about this from you Clive! ;-)

[CliveH]

I am not sure you are capable of taking on board anything from anyone else - so I suppose, if this is the case - then we should be thankful for small mercies.

 

And small they certainly are. (lol) (lol) (lol)

[Guest Had Enough]

CliveH - 2013-08-07 2:26 PM

 

I am not sure you are capable of taking on board anything from anyone else - so I suppose, if this is the case - then we should be thankful for small mercies.

 

And small they certainly are. (lol) (lol) (lol)

 

Honestly, I am. But I'm just a bit fed up of Clive-overload on every subject under the sun! Is there anything that you're not an expert on? Is there anything where the real experts in all the fields you bore us with actually know more than you? It would appear not! They're all idiots and numpties!

 

Give us a rest for God's sake!

[CliveH]

This seems a fair analysis

 

MARC OSTWALD, MONUMENT SECURITIES

 

"This looks like a big mistake to us: UK ILO labour data may be better "qualitatively" than many other official statistical series, but as the MPC has discussed in hushed tones (due to the political and social sensitivity) in previous minutes, it is difficult to assess how many of the longer-term unemployed are in fact largely unemployable. If, for example, this were as much as 1/4 or even 1/3 of the current number of unemployed, then the UK labour market would in fact be very tight. Secondly and conversely, the hot topic of zero hours contracts, these people are not counted as unemployed if they work zero hours.

 

"Still it looks like rates are not going to rise in the next 3 years, though they could, as Carney has stressed they are not pre-committed, so again this is a rather valueless bit of "forward guidance" as is the case with the ECB."

 

GEORGE BUCKLEY, DEUTSCHE BANK

 

"The Bank opted for a specific target of unemployment at 7%, a level which the combined IMF and OBR forecasts does not fall through until 2017. The Bank's view is that the unemployment rate remains above 7% throughout its entire forecast horizon, ie until the second half of 2016, so that implies they don't expect to raise rates (or take back any easing for that matter) probably until early 2017.

 

"Of course we have break clauses - if the Bank thinks inflation will be 2.5% or higher in 18-24 months or if inflation expectations become unanchored or if financial stability is threatened then the unemployment guidance would be void. As the financial crisis proved, inflation volatility and financial stability issues can sometimes only become apparent well after the event."

 

---------------

 

So in summary - Carney says X - then realises not a good idea - so adds that there is no "pre-commitmant."

 

 

[RogerC]

Had Enough - 2013-08-07 2:38 PM

CliveH - 2013-08-07 2:26 PMI am not sure you are capable of taking on board anything from anyone else - so I suppose, if this is the case - then we should be thankful for small mercies.And small they certainly are. (lol) (lol) (lol)

Honestly, I am. But I'm just a bit fed up of Clive-overload on every subject under the sun! Is there anything that you're not an expert on? Is there anything where the real experts in all the fields you bore us with actually know more than you? It would appear not! They're all idiots and numpties!Give us a rest for God's sake!

 

 

My turn....once again HE you have hijacked an OP and turned it into a personal vendetta....so speaking for myself and I suspect a great many others on here please sod off and return to the 'wastelands' you were annoying before you deemed it time to come back here.

 

 

 

[Guest Had Enough]

Oh God, he's still at it. I'm going out to bang my head on the wall! It must be more pleasant than reading all this self-serving drivel.

 

We all believe you Clive, you know better than Mark Carney what the UK needs. We give in!

 

Go away!

[Guest Had Enough]

RogerC - 2013-08-07 2:44 PM

Had Enough - 2013-08-07 2:38 PM

CliveH - 2013-08-07 2:26 PMI am not sure you are capable of taking on board anything from anyone else - so I suppose, if this is the case - then we should be thankful for small mercies.And small they certainly are. (lol) (lol) (lol)

Honestly, I am. But I'm just a bit fed up of Clive-overload on every subject under the sun! Is there anything that you're not an expert on? Is there anything where the real experts in all the fields you bore us with actually know more than you? It would appear not! They're all idiots and numpties!Give us a rest for God's sake!

 

 

My turn....once again HE you have hijacked an OP and turned it into a personal vendetta....so speaking for myself and I suspect a great many others on here please sod off and return to the 'wastelands' you were annoying before you deemed it time to come back here.

 

 

I didn't hijack anything. I just pointed out that once more our resident expert on all things is showing us how he knows more than the people who really know! And you're not exactly neutral! ;-)And as for personal vendettas - it's the only thing that drives Clive where I'm concerned! (lol)As someone else said higher up, I'm sure that the government will be calling on him soon! *-)

[CliveH]

Had Enough - 2013-08-07 2:38 PM

 

CliveH - 2013-08-07 2:26 PM

 

I am not sure you are capable of taking on board anything from anyone else - so I suppose, if this is the case - then we should be thankful for small mercies.

 

And small they certainly are. (lol) (lol) (lol)

 

Honestly, I am. But I'm just a bit fed up of Clive-overload on every subject under the sun! Is there anything that you're not an expert on? Is there anything where the real experts in all the fields you bore us with actually know more than you? It would appear not! They're all idiots and numpties!

 

Give us a rest for God's sake!

 

I see it differently of course - I just post things that I think others might find interesting.

 

Now I have a stalker who objects to my doing this.

 

I cannot help having experience/knowledge on a range of things Frank.

 

Just like you cannot help having limited amounts either .......or indeed civility.

 

 

 

[Guest Had Enough]

CliveH - 2013-08-07 2:49 PM

 

Had Enough - 2013-08-07 2:38 PM

 

CliveH - 2013-08-07 2:26 PM

 

I am not sure you are capable of taking on board anything from anyone else - so I suppose, if this is the case - then we should be thankful for small mercies.

 

And small they certainly are. (lol) (lol) (lol)

 

Honestly, I am. But I'm just a bit fed up of Clive-overload on every subject under the sun! Is there anything that you're not an expert on? Is there anything where the real experts in all the fields you bore us with actually know more than you? It would appear not! They're all idiots and numpties!

 

Give us a rest for God's sake!

 

I see it differently of course - I just post things that I think others might find interesting.

 

Now I have a stalker who objects to my doing this.

 

I cannot help having experience/knowledge on a range of things Frank.

 

Just like you cannot help having limited amounts either .......or indeed civility.

 

 

 

You still don't get it do you? It's not that you post something interesting, you may well do. It's your know-all dogmatic attitude that your opinion on global warming, the EU and now the actions and strategy of the governor of the Bank of England is always the right one.

 

They're all numpties and idiots and can't do 'joined up thinking'. But you, you're certain that you have all the answers!

 

How did you get to be so clever and better informed than economists, geologists, international bankers et al?

 

Just for once try posting something without telling us that you know better than everyone else!

 

[Guest Had Enough]

CliveH - 2013-08-07 2:49 PM

 

[i cannot help having experience/knowledge on a range of things Frank.

 

 

 

And there we have it! What a polymath you are! *-) Jack of all trades and master of none more like! (lol)

[CliveH]

You are boring me now Frank - Your Ad Homs are dull and tedious and come over as rather desperate.

 

I am happy to play with you because I believe it is educational for you - and lets face it - you need it.

 

Have a look at the following please and see if you can make sense of it.

 

It is from a range of "Jack of all trades" in the Financial world on the OP subject.

 

You have 20 minutes to write a short essay on their probable High Street Location, the technical expertise they have at their disposal and their ability to run the country.

 

Please include as many personal attacks as you can muster - and remember that quality of post in your case is not as important as quantity.

 

 

___________________________________________

 

Remember what follows is real dialogue from another forum on the subject of Carney's announcement :-

 

michael ******

Aug 07, 2013 at 11:34

 

Oh dear. Another one needing L plates.

 

M.******

Aug 07, 2013 at 11:38

 

Good news, good start. We now have a Governor who considers his job is to assist the country and does intend to worry about the politics and creosoting his arse.

 

Hoover

Aug 07, 2013 at 11:58

 

Keep them printing presses rolling....haha

Cant wait for the next crash.. gonna be a doozy

 

Keith *****

Aug 07, 2013 at 12:24

 

Those people who have worked and find themselves unemployed should receive much higher non-means tested benefit for a fixed period to help them back into work. Those who have not worked should receive less benefit.

 

Rob ********

Aug 07, 2013 at 13:10

 

Inflation it is then

__________________________________________________________

 

Time starts now.

 

 

 

 

[RogerC]

HE instead of your 'having a dig' response posted at 12.26 you might consider the post prior to yours which, whilst it disagreed with the OP's opinion, didn't resort to provocation as did yours.

 

It is honestly my opinion that you are an extremely argumentative, unpleasant person(Troll?).  Otherwise why do you persist in these constant personal attacks?  They might be direct or at times oblique but they are there nonetheless.

 

Please try very hard to allow an OP to flow on track for once instead of turning into an abuse festival.

 

Oh and your 'smileys', given your track record, simply look as though you're being sarcastic.  Unfortunately there has been very little humour in your posts to support a 'smiley' so they are a bit pathetic.

 

[Brian Kirby]

Had Enough - 2013-08-07 12:26 PM

 

The man making this policy is Mark Carney, the governor of the Bank of England and a man with a proven track record as a very successful governor of the Bank of Canada.

 

But it's nice to know from our resident expert that Mr Carney is not only wrong but isn't even capable of 'joined up thinking'!

 

What was the government thinking when they gave him the job? They only had to visit this site to find the right kind of people to transform the economy, reduce unemployment and give us all a huge boost in our standard of living.

 

I've no doubt we'll now get loads of 'proof' as to how Mr Carney is wrong but you know who is right! ;-)

Frank, we know Clive gets on your wobbly bits, but how about debating the point raised, instead of Clive? This continual boorishness all gets so boring!

[Guest Had Enough]

RogerC - 2013-08-07 3:39 PMHE instead of your 'having a dig' response posted at 12.26 you might consider the post prior to yours which, whilst it disagreed with the OP's opinion, didn't resort to provocation as did yours.

 

It is honestly my opinion that you are an extremely argumentative, unpleasant person(Troll?).  Otherwise why do you persist in these constant personal attacks?  They might be direct or at times oblique but they are there nonetheless.

 

Please try very hard to allow an OP to flow on track for once instead of turning into an abuse festival.

 

Oh and your 'smileys', given your track record, simply look as though you're being sarcastic.  Unfortunately there has been very little humour in your posts to support a 'smiley' so they are a bit pathetic.

Well, you may not know that Clive and I have a history and I'm afraid that I'm just sick to death of his constant vanity where he's the expert on every subject under the sun. And have you seen his posts to me, all of which with some snide insult?This thread is just typical. He really expects us to believe that he is better qualified to guide Britain's monetary policy than the governor of the Bank of England.I'm unsure as to the threat of global warning and the efficacy of alternative energy sources. I'm unsure as to the benefits of our membership of the EU and I'm unsure as to Governor Carney's latest proposal.Not Clive, he knows better than any of the experts but what's worse is that they're all idiots and numpties who can't even do joined up thinking!And anyone dares to challenge his omnipotence we'll get reams and reams of evidence carefully selected to reinforce just his view.And you may have noticed that just recently I had to ask him to stop his snide asides about me in posts that were nothing to do with me and to stop what I thought was a silly vendetta just because we had a big row some weeks ago when he challenged my credentials and lost - big time!Just for once I'd like him to acknowledge that he isn't God's gift to the UK and that he doesn't know better than every economist, business accountant, geologist and other real experts!And as I said, I suspect that you're not exactly non-partisan here!