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[stewart64] 09/1/2025 12:17

Advfn ahead of the game on Starmer's defamatory statement. It was someone on this Trig thread that said Truss should sue.

[stewart64] 09/1/2025 12:09

Truss has sent a legal cease and desist notice to Starmer over his defamatory message that she crashed the Economy, which unless you are up to Political Mischief or work for the BBC, she clearly didn't. The real Economy was untouched and we certainly didn't have 30 year bond rates at 5.3% one quarter out because the Markets no longer believe the Economy can meet the Government's spending commitments. I had optimism back in 2023, I am now very pessimistic two years on as we buy growth by inflating public sector wages with zero productivity gains.

[red ninja] 09/1/2025 09:55

Yesterday's Times P2 has article "Chancellor 'within a whisker' of breaching main fiscal rule."

Apparently Rachel Reaves is within a whisker of being forced to raise taxes or cut spending due to borrowing hitting a 27 year high.

Economists warned their is a significant risk that she could breach the governments main fiscal rule when Office For Budget Responsibility meets in March.

..

[red ninja] 02/1/2025 13:27

As stated the Truss changes were not made and she was out of office in 2 weeks.

Thus any economic changes were as the Critic article states were not due to Liz Truss, but due to money printing to pay for all that cash given out in the pandemic.



If you happened to take out a mortgage (or remortgaged) in the autumn of 2022, you can reasonably blame Liz Truss for getting a rate closer to 6 per cent than 5 per cent, but it is absurd to blame the mini-budget for mortgage rates today. As one mortgage expert said a year after the mini-budget: “Would we be in the same situation now if the budget hadn’t happened at all? I think we would probably be here or hereabouts, certainly in terms of rate.”

The main determinant of UK mortgage rates is Bank Rate and that is determined by inflation and expectations of inflation. It was the same across Europe and in the USA: inflation rose therefore interest rates rose therefore mortgage rates rose. Liz Truss had about as much impact on long term interest rates and mortgage rates in the UK as she did in America. A mini-budget that was undone before it could be implemented caused a month of chaos but has made virtually no difference to any macroeconomic variables since October 2022 when inflation peaked.

The Conservative Party’s reluctance to challenge the narrative that Liz Truss caused the cost of living crisis is understandable on one level. Rishi Sunak’s claim to Downing Street rests on being the grown up who took the car keys off a drunk. But all the electorate really hears is that the Conservatives crashed the economy with a mad experiment that they would probably repeat if they got the chance.

Sunak could level with the public and tell them that the Bank of England printed a tremendous amount of money for him to give away back when he was popular during lockdown. This caused inflation, as it did in other countries where QE was tested to destruction, and he had warned about the risks of rising inflation and higher interests in 2020 when many people thought the magic money tree would last forever. Getting inflation down required higher interest rates and therefore higher mortgage rates, but interest rates had been insanely low for years and most other western countries had to tackle inflation in the same way. There are no free lunches and the last two years have been payback time. It’s been painful but the British public were generally very keen on lockdowns, furlough and “free” tests. Even today, only 21 per cent of Britons think Covid rules were too strict while 38 per cent think they didn’t go far enough. Everything that has happened since has been the inevitable consequence of policies that were wildly popular at the time and which the opposition parties wanted to do more of.

This might be too bitter a pill for the public to swallow, but Sunak has tried everything else, so why not try telling the truth?"

[cc2014] 02/1/2025 10:15

These attempts to re-write history by choosing particular facts are flawed.


Choosing the US 30 gilt as a comparator is just plain wrong. Further even choosing the 30 year UK gilt is not much better. The reason it didn't move so much is because the BOE intervened and was the sole buyer in the market due to the Truss fiasco.

As someone who traded bonds at this very difficult time I made alot of money. The prices available were just crazy. And anything in the 2-10 year maturity area sure didn't reverse in a month. I know as I held my positions for around 6-9 months.

[spectoacc] 02/1/2025 09:43

Reeves is inept, we agree there.

"I accept it may have caused some people a problem with their mortgage rate renewals" isn't the half of it. It isn't even 10% of the fiasco Truss/Kwarteng caused. You wouldn't trust them with the school PTA funds, let alone the economy - it'll take the Tories a generation or more to live it down.

Reeves you wouldn't trust with an individual school's budget.

[red ninja] 01/1/2025 14:07

Yump

Repeated just for you :-

The Critic view is that Liz Truss did not crash the economy, see the gdp graph ie no real change.



Liz Truss only in power for around 2 weeks and no real economic changes made.

as article states :-

"The more controversial parts of the mini-budget — freezing Corporation Tax and abolishing the 45p rate of income tax — did not crash the economy for the simple reason that they never happened.

What did happen is that bond markets became alarmed by a debt-financed dash for growth that was likely to be inflationary at a time when inflation was already at 10 per cent. Interest rates had been rising steadily since December 2021 as the Bank of England slowly woke up to the inflationary threat, but the fear of steeper rate hikes in response to the mini-budget led to a spike in bond yields and mortgage rates, both of which had also been rising for some time in Britain and around the world. But the spike in bond yields lasted less than a month (30 year bond yields in the UK and USA are shown below) and the spike in mortgage rates did not last much longer."

[yump] 01/1/2025 10:52

I didn’t see any media showing of the interest rate chart to challenge the Truss-trashing mantra.

The blip in a continuous rise from early 2022 can easily be seen and the straight line continued up for ages afterwards while the mantra was still being chanted.

Not one challenge to it on any TV that I saw.

[stewart64] 01/1/2025 10:24

Meanwhile on Trig, I note my account received the dividend, currently 8.95% on a quarterly accruing basis..( 7.68/85.8 bid). I think the only way I will recoup here is via dividends. Meanwhile, brokers will be reinvesting the dividend in the next few days which may support the bounce.

[stewart64] 01/1/2025 07:56

Fantastic summary of the Truss impact on the Economy and that it had zero impact on Bond yields one month out ( proven by the charts) Red Ninja. Interest rates were on an unstoppable steep rise world wide and she has been a convenient scapegoat for the Central Bank incompetence and for lefties to whip up hysteria in the general population. Reeves deserves all the hyperbolic language coming to her because she shamelessly used it against the Tories without any regard for the Pandemic and the mistakes of Central Banks all around the world.

[red ninja] 31/12/2024 10:09

Before the election I was encouraged by Labour's pitch. Rachel Reeves explained she wanted to promote growth in the economy to pay for expenditure.

After the election, there was a prolonged period of budget worries and then the budget came out ie a huge employer NI hike a clear tax on jobs in the UK.

A tax hike on CGT to encourage to drive people out of UK investments and allow foreign buyers the opportunity to snap up corporate UK on the cheap.

A tax hike on the inheritance rules also encouraging people out of equities generally.

Meanwhile the government is going for a series of vanity expenditure projects based on more lending.

These measures have produced gloom in the UK markets and potentially put the UK on track for a recession.

[adam] 31/12/2024 10:05

I think it was LDI as much as anything.

In short, after gilt yields soared on the back of the mini-Budget, pension funds scrambled to sell assets, particularly UK government bonds, in order to meet so-called margin calls on their LDI hedges.


Pension fund trustees fell over themselves to sell gilts in order to meet these collateral obligations, driving down the value of the bonds even further and creating what is dubbed a ‘doom spiral’.
hxxpS://www.portfolio-institutional.co.uk/features/goodbye-to-ldi/

[red ninja] 31/12/2024 09:58

The Critic view is that Liz Truss did not crash the economy, see the gdp graph ie no real change.



Liz Truss only in power for around 2 weeks and no real economic changes made.

as article states :-

"The more controversial parts of the mini-budget — freezing Corporation Tax and abolishing the 45p rate of income tax — did not crash the economy for the simple reason that they never happened.

What did happen is that bond markets became alarmed by a debt-financed dash for growth that was likely to be inflationary at a time when inflation was already at 10 per cent. Interest rates had been rising steadily since December 2021 as the Bank of England slowly woke up to the inflationary threat, but the fear of steeper rate hikes in response to the mini-budget led to a spike in bond yields and mortgage rates, both of which had also been rising for some time in Britain and around the world. But the spike in bond yields lasted less than a month (30 year bond yields in the UK and USA are shown below) and the spike in mortgage rates did not last much longer."

[sleveen] 30/12/2024 16:46

Reeves has crashed the economy further than Truss.

[stewart64] 27/12/2024 10:32

It was in a sad place because of the Pandemic, Labour wanted lockdown as long as possible and as much debt expended as possible (and the Tory's went along with that too). Most of it unnecessary imo, with far worse long term health outcomes on longevity etc. ( excess deaths are already in the 10,000s each year because of the seeds sown then).

[tourmaline44] 26/12/2024 11:00

Absolutely correct, Stew. Thanks for reminding us. Liz Truss did crash the economy, which was already in a sad place under the Tories, after the Brexit mess. Who are now trying to blame newly-elected Labour. With little success.

[stewart64] 25/12/2024 20:49

I'm just returning her own hyperbole, she deserves it. She made mischief over a Global rise in Bond yields and dimwits parroted it...Uh Truss crashed the economy, Uh Truss crashed the economy.

[spectoacc] 25/12/2024 08:03

Crashed is much too strong, but she is inept, & sees economics/economies as a zero sum game between public sector (good) and private sector (bad), with herself/Labour as the champion of the former.

It may all come to a head this year, or we may limp through.

In the meantime - merry Christmas to all.

[stewart64] 24/12/2024 17:33

The Reeves' Budget whence the 10 year swap has risen from 4.0% to 4.3% impacting the attractiveness of Bond Proxies. The gloomy rhetoric has also Crashed the Economy from the fastest growing Economy in the G7 in Q2 to last. Tbf US interest rates have also risen sharply; not the Euro, the 10 year swap has actually fallen since our Budget. In 2022 there was a Global Bond Crisis and our interest rates moved in lockstep with the entire World, barring a blip that lasted days. This time Reeves has Crashed the Economy on her own.

[saltaire111] 24/12/2024 09:13

I took a small position in this at £1 and it has let me down so far.

Can anyone who follows this company closely enlighten me as to why the share price is continually falling? Why is this so out of favour? The revenues look copper-bottom, the yield is high, sentiment in the sector seems OK. What’s the problem with it?

Thanks.

Salty.

[my retirement fund] 24/12/2024 08:30

Decided to join the party here.

[drectly] 19/12/2024 13:41

I have the intention of increasing my holding here, the dividend gives excellent yield and is well covered, share price well below assett value. Each week I delay' it seems one of my better decisiions. I will not catch the bottom, or if I do it is just a fluke, but downward moomentum does say, continue too wait a bit. That or I am missing something which means the divi is under some sort of threat.