Financial fuckery thread

[Cain]

ECONOMY FAIL

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQGG.mWeZ4eU&refer=worldwide

he U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.

Gilts slumped after the London-based Debt Management Office, which manages bond auctions on behalf of the Treasury, said investors bid for 1.63 billion pounds of the 40-year securities. The last time the U.K. government was unable to attract enough investors was in 2002 when it tried to sell 30- year inflation-protected bonds. The yield on the 4.25 percent gilt due 2049 rose 10 basis points to 4.55 percent.

Brown’s government aims to sell a record 146.4 billion pounds of debt this fiscal year and as much as 147.9 billion pounds in 2010 as he tries to pull Europe’s second-largest economy out of its worst recession since 1980. The prime minister’s plan drew criticism yesterday when Bank of England Governor Mervyn King told lawmakers in Parliament in London the government should be “cautious” about spending and deficits.

“This is a warning signal investors are sending to the government,” said Neil Mackinnon, chief economist at hedge fund ECU Group Plc in London, who helps manage about $1 billion in assets and is a former U.K. Treasury official. “Investors are giving the thumbs down to the gilt market.”

“This sinks Brown below the waterline,” said Bill Jones, professor of politics at Liverpool Hope University. Brown’s “whole strategy is based on borrowing and now he can’t get anyone to buy his gilts. This means the prospect of going cap in hand to the IMF hovers increasingly into view.”

Despite it being the Tory Libertarian wet dream, I do not want the IMF to undertake structural reform here.  Not after seeing the results of such reforms in South America and SE Asia.

[Xooxe]

Apparently they've now found the rest of that £1.75 billion, but it's in safer gilts that don't get buggered up by inflation.

In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.

[Elder Iptuous]

What, you don't want to owe debt to the emerging world government?

also, please expand on the 'Tory Libertarian wet dream" comment.  Why would they support the IMF?

wait.....
not terribly important, but does this make sense?

The yield on the 4.25 percent gilt due 2049 rose 10 basis points to 4.55 percent.

that seems like 30 basis points, no?

[Elder Iptuous]

also, don't worry too much... out bond auction was rather weak yesterday, as i understand it, too.
We're be right behind you...

hey, check this out:
US GDP down 6.3%, Profits decline 16.5%! but don’t worry, the bottom is in! the FED and the great stimulator are making everything better!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aemO.zzB7LlE&refer=home

[Idem]

In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.

[Elder Iptuous]

So has Russia.  and Geitner said he's open to expanded use of IMF SDRs...
http://www.cnbc.com/id/29866259

Of course SDRs are just backed by the same currencies that are backed by shitty debt, so....

IMF head thinks the discussion is 'legitimate'
http://uk.news.yahoo.com/18/20090325/tbs-talks-on-new-world-reserve-currency-8cc5291.html

But, don't worry...
Obama said in a prime-time televised news conference on Tuesday: "I don't believe that there's a need for a global currency'', and noted that the dollar was "extraordinarily strong right now."
Is he looking at the same USDX chart i am? it's at 84 right now, and it would be lower still if the other nations weren't monetizing their debt, too, right?

[fomenter]

more on the same http://www.politico.com/blogs/bensmith/0309/Geithner_open_to_China_proposal.html?showall

[Cain]

What, you don't want to owe debt to the emerging world government?

also, please expand on the 'Tory Libertarian wet dream" comment.  Why would they support the IMF?

Because they know they cannot privatize everything via Parliament - that even if they controlled Parliament members of their own party, along with the opposition and practically everyone else would oppose it.  However, if was part of the conditions of getting money from the IMF, as part of its 'structural reform package' then they could shrug and go "well, that's our deal.  We certainly didn't want to do this, but, oh dear, it seems like we have no choice."

And of course, IMF privatization is like pretty much every other privatization scheme of the last thirty years, in that the same select groups of investors and companies would get first pick of the newly outsourced government services and to turn government monopolies into personal ones.

I keep an eye on the Tory blogosphere, especially among the more supposedly libertarian elements, and there have been a lot of statements essentially welcoming IMF economic dictatorship because of the above.  That's Tories for you - if they can't do something democratically, they'll find a non-democratic method of doing it, and say "fuck you" to anyone who disagrees or protests.

[Elder Iptuous]

Ah. i see. they aren't really 'libertarian' in their thinking...

[LMNO, PhD (life continues)]

In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.

Isn't China the one that links their currency to ours to keep the trade deficit skewed to their favor, even when we've asked them not to?

[Misery's Fried Dough]

I heard the Russians might go along with it.  If so, look out. 

[Elder Iptuous]

In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.

Isn't China the one that links their currency to ours to keep the trade deficit skewed to their favor, even when we've asked them not to?

Yeah.  they had to do that to keep the balance of trade, but they're between a rock and a hard place being pegged to a sinking ship (and having a ton of $ denominated reserves)...
i suspect any rhetoric to the effect of making a different reserve currency is meant to spur action on our part to strengthen the dollar...

[Cain]

In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.

Isn't China the one that links their currency to ours to keep the trade deficit skewed to their favor, even when we've asked them not to?

What makes you think the US asking is anything more than a song and dance for the rubes at home?  Argh, Yellow Peril, etc etc, look at those evil Chinamen, as we write a blank cheque for Goldman Sachs AIG...

http://jamesfallows.theatlantic.com/archives/2009/01/might_as_well_make_this_an_all.php Data on Chinese currency control and its effect on trade.  Seems to be negligible, by my reading.

[Cain]

Also China is just reminding the Fed that if they get fucked over at the G-20, they have options.

They don't.  Not really.  They've bought $2000 billion in debt and they're going to have to put up with it for the forseeable future.  But they like to act crazy now and again to make sure people are paying attention.

[Honey]

What, you don't want to owe debt to the emerging world government?

also, please expand on the 'Tory Libertarian wet dream" comment.  Why would they support the IMF?

Because they know they cannot privatize everything via Parliament - that even if they controlled Parliament members of their own party, along with the opposition and practically everyone else would oppose it.  However, if was part of the conditions of getting money from the IMF, as part of its 'structural reform package' then they could shrug and go "well, that's our deal.  We certainly didn't want to do this, but, oh dear, it seems like we have no choice."

And of course, IMF privatization is like pretty much every other privatization scheme of the last thirty years, in that the same select groups of investors and companies would get first pick of the newly outsourced government services and to turn government monopolies into personal ones.

I keep an eye on the Tory blogosphere, especially among the more supposedly libertarian elements, and there have been a lot of statements essentially welcoming IMF economic dictatorship because of the above.  That's Tories for you - if they can't do something democratically, they'll find a non-democratic method of doing it, and say "fuck you" to anyone who disagrees or protests.

Oh the Shock & the Awe of those schemes!  In a short 30 years this *awsomeness* migrated from Chile to Bolivia, to Argentina, China, South Africa, Poland, Russia, UK (Falklands War) & so on & so forth & continues to the present day, like a "White Sale" for private investors only. 

However, have no Fear!  All those good ole boys have oh such good intentions, doncha know?  Y'see all you have to do is have Faith?  We can (if we're lucky) eat cake!