FT.com / UK / Economy & Trade - Investors take fright at ‘fiscal fiction’ .
The markets have done what they said they would, almost certainly in an act of coordinated spite. As the FT notes:
Investors took fright on Thursday at the timidity of the government’s plans to balance the books with one of the biggest sell-offs of British gilts this year.
So let's ignore their petulant tantrums and take note of one of the best management philosophies ever written:
Keep Calm
Carry On
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Richard,
The idea that the bond market can manage “an act of co-ordinated spite” is, frankly, insane. The bond market is made up of a large number of different entities, all of which would happily stab the others in the back to make a profit.
Surely the simple fact is that the yield on bonds rose at least in part because of an expectation, which you have expressly supported, that the UK will have to inflate itself out of debt.
Interesting point of view. Actually it is something to worry about if the government wants to keep on printing money. If no one wants its gilts then it has a bit of a problem don’t you think? OR are you really suggesting management by sticking head in sand?
And now we know credit ratings will not change
And that there is no reason for them to change
So there were three explanations for what happened:
1) Coordinated action
2) Collective myth
3) Combined stupidity
And you believe in efficient markets?
I don’t – I believe in coordinated attacks by finance
It happened earlier this year when there was failure to buy a gilt issue
I think this is another example
Richard