odysseus2000 wrote:New presidents usually sweep house, especially at the FED.
Not even close to being true with respect to Chair of the Federal Reserve.
Obama didn't,
Bush didn't,
Clinton didn't,
Bush didn't,
Reagan didn't...
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odysseus2000 wrote:New presidents usually sweep house, especially at the FED.
TheMotorcycleBoy wrote:And the yields on the debt suggest that holders of US treasuries currently desired almost 4x as much risk compensation (i.e. the yield) than they do of UK debt. Which suggests that they are less certain of getting their money back if they hold the US debt!
dealtn wrote:odysseus2000 wrote:New presidents usually sweep house, especially at the FED.
Not even close to being true with respect to Chair of the Federal Reserve.
Obama didn't,
Bush didn't,
Clinton didn't,
Bush didn't,
Reagan didn't...
SalvorHardin wrote:TheMotorcycleBoy wrote:And the yields on the debt suggest that holders of US treasuries currently desired almost 4x as much risk compensation (i.e. the yield) than they do of UK debt. Which suggests that they are less certain of getting their money back if they hold the US debt!
Leaving asides the different expectations of future interest rates and inflation in the UK compared to the US, there's one factor peculiar to America which will give concern to many holders of US Treasury bonds.
The possibility of large scale civil unrest after the election.
I used to think that this was a fringe view, the sort of thing mostly discussed by doomsday preppers, communist hippy types and science-fiction fans. Nowadays I'm not so sure. Investors don't like civil unrest, it makes them jittery and if nothing else leads to them demanding higher returns on public debt to compensate for the increased risk.
The Democrats have spent the last four years refusing to accept the result of the last 2016 Presidential election and have vowed to contest the 2020 election result, refusing to accept it if Trump wins. There are ongoing investigations of Obama-era officials breaking the law by trying to bring down the Trump presidency which, if true, makes Watergate seem like a minor event. The Republicans are already claiming that the Democrats are engaging in voting fraud on an industrial scale; vowing to contest or ignore close votes.
It looks increasingly likely that the Presidential election result will end up being contested in numerous state supreme courts and the federal supreme court. We could end up with both sides claiming victory and trying to install their candidate as President in January.
In the last six months we've seen riots in many major cities, the burning down of entire neighbourhoods being cheered on by Democrat mayors and congressmen, with law and order breaking down in some city centres (notably Minneapolis and Portland). Meanwhile an increasingly large number of Republicans seem to believe that a Biden administration will strike down the constitution and swiftly impose communism.
Russ Robert, host of the economics podcast EconTalk, raised this possibility of post-election unrest leading to civil war in last week's discussion with journalist Anne Appebaum about her latest book and the state of American democracy today. For this to be seriously discussed on EconTalk was quite an eye opener for me (link below, the civil war is mentioned shortly after 32:40).
https://www.econtalk.org/anne-applebaum-on-the-twilight-of-democracy/
odysseus2000 wrote:dealtn wrote:odysseus2000 wrote:New presidents usually sweep house, especially at the FED.
Not even close to being true with respect to Chair of the Federal Reserve.
Obama didn't,
Bush didn't,
Clinton didn't,
Bush didn't,
Reagan didn't...
https://en.wikipedia.org/wiki/Chair_of_ ... al_Reserve
Trump sacked Yellen and appointed Powell
Obama appointed Yellen after Bernanke left
Bush appointed Bernanke after Greenspan retired
Regan appointed Greenspan after Volker left.
Carter appointed William Miller, then Volker
Nixon appointed Burns
Truman appointed McCabe then then Martin
There is a regular series of changes at the Fed, although Greenspan was there a long time.
Each of the appointments is political in that the President appoints whom ever he/she (maybe one day) feels is appropriate and although a Fed chair may not get tossed in January with the inauguration there is often a conflict between the President and the Fed and given an opportunity that is forced or unlikely to spook the markets, a President will put their own personal choice into the Fed chairs job often during the course of his presidency, although recent data is skewed by Greenspan’s long term.
Regards,
dealtn
Maybe "sweep house" means something else to you!
Obama appointed Yellen. This was 5 years after he was first elected. In fact Obama nominated Bernanke for re-election at the end of his term, and he served a second term.
Bush appointed Bernanke, and again this was 5 years after he was elected, so keen was he to replace Greenspan, with his "broom". Bush was more than happy to have Greenspan nominated to an unprecedented 5th term on his watch.
Clinton was perfectly happy with Greenspan, saw no cause to "sweep" him aside and reappointed him.
Bush senior had no reason or desire to replace Greenspan, and reappointed him.
Reagan appointed Greenspan as a replacement for Volker over 6 years after he was first elected President.
The only "sweeping" thing about this claim appears to be your statement.
odysseus2000 wrote:dealtn
Maybe "sweep house" means something else to you!
Obama appointed Yellen. This was 5 years after he was first elected. In fact Obama nominated Bernanke for re-election at the end of his term, and he served a second term.
Bush appointed Bernanke, and again this was 5 years after he was elected, so keen was he to replace Greenspan, with his "broom". Bush was more than happy to have Greenspan nominated to an unprecedented 5th term on his watch.
Clinton was perfectly happy with Greenspan, saw no cause to "sweep" him aside and reappointed him.
Bush senior had no reason or desire to replace Greenspan, and reappointed him.
Reagan appointed Greenspan as a replacement for Volker over 6 years after he was first elected President.
The only "sweeping" thing about this claim appears to be your statement.
When a new President comes in he wants to get things happening and not disturb the financial markets.
SalvorHardin wrote:TheMotorcycleBoy wrote:And the yields on the debt suggest that holders of US treasuries currently desired almost 4x as much risk compensation (i.e. the yield) than they do of UK debt. Which suggests that they are less certain of getting their money back if they hold the US debt!
Leaving asides the different expectations of future interest rates and inflation in the UK compared to the US, there's one factor peculiar to America which will give concern to many holders of US Treasury bonds.
The possibility of large scale civil unrest after the election.
I used to think that this was a fringe view, the sort of thing mostly discussed by doomsday preppers, communist hippy types and science-fiction fans...
Nowadays I'm not so sure. Investors don't like civil unrest, it makes them jittery and if nothing else leads to them demanding higher returns on public debt to compensate for the increased risk.
Russ Robert, host of the economics podcast EconTalk, raised this possibility of post-election unrest leading to civil war in last week's discussion with journalist Anne Appebaum about her latest book and the state of American democracy today. For this to be seriously discussed on EconTalk was quite an eye opener for me (link below, the civil war is mentioned shortly after 32:40).
https://www.econtalk.org/anne-applebaum-on-the-twilight-of-democracy/
TheMotorcycleBoy wrote:PS Thanks for opening my eyes to "econtalk"
AsleepInYorkshire wrote:Analogously I have suggested to myself that we are currently fighting World War III. But this time our enemy isn't another country. In context it has so far killed more in the UK than the blitz of WW II. I can't generalise about those who have passed as being old and frail. Each life cut short is nothing less than tragic.
Yesterday Rishi Sunak delivered a spending plan for the next 12 months. Scattered throughout that delivery were references toI will never be persuaded that we can step over this economic downturn by increasing government debt and kicking the can down the road to future generations by not looking to reduce that debt. But there's some strong arguments to suggest we cannot repay the amount we have borrowed over a short term. A government debt is effectively an uncollected tax in my opinion. I wonder if the current government is trying to repeat history and reduce the debt by increasing our GDP. Roads, hospitals, affordable housing and the military have all been identified to receive immediate increases in budget.
- Increased taxes
- Higher unemployment
- Economic difficulties
AiY
AsleepInYorkshire wrote:Analogously I have suggested to myself that we are currently fighting World War III. But this time our enemy isn't another country. In context it has so far killed more in the UK than the blitz of WW II. I can't generalise about those who have passed as being old and frail. Each life cut short is nothing less than tragic.
Yesterday Rishi Sunak delivered a spending plan for the next 12 months. Scattered throughout that delivery were references toI will never be persuaded that we can step over this economic downturn by increasing government debt and kicking the can down the road to future generations by not looking to reduce that debt. But there's some strong arguments to suggest we cannot repay the amount we have borrowed over a short term. A government debt is effectively an uncollected tax in my opinion. I wonder if the current government is trying to repeat history and reduce the debt by increasing our GDP. Roads, hospitals, affordable housing and the military have all been identified to receive immediate increases in budget.
- Increased taxes
- Higher unemployment
- Economic difficulties
AiY
ursaminortaur wrote:AsleepInYorkshire wrote:Analogously I have suggested to myself that we are currently fighting World War III. But this time our enemy isn't another country. In context it has so far killed more in the UK than the blitz of WW II. I can't generalise about those who have passed as being old and frail. Each life cut short is nothing less than tragic.
Yesterday Rishi Sunak delivered a spending plan for the next 12 months. Scattered throughout that delivery were references toI will never be persuaded that we can step over this economic downturn by increasing government debt and kicking the can down the road to future generations by not looking to reduce that debt. But there's some strong arguments to suggest we cannot repay the amount we have borrowed over a short term. A government debt is effectively an uncollected tax in my opinion. I wonder if the current government is trying to repeat history and reduce the debt by increasing our GDP. Roads, hospitals, affordable housing and the military have all been identified to receive immediate increases in budget.
- Increased taxes
- Higher unemployment
- Economic difficulties
AiY
Increasing GDP so as to reduce the debt/GDP ratio would be a lot easier if we weren't about to sabotage our economic prospects for a prolonged period (if not permanently) through this hard brexit.
odysseus2000 wrote:AsleepInYorkshire wrote:Analogously I have suggested to myself that we are currently fighting World War III. But this time our enemy isn't another country. In context it has so far killed more in the UK than the blitz of WW II. I can't generalise about those who have passed as being old and frail. Each life cut short is nothing less than tragic.
Yesterday Rishi Sunak delivered a spending plan for the next 12 months. Scattered throughout that delivery were references toI will never be persuaded that we can step over this economic downturn by increasing government debt and kicking the can down the road to future generations by not looking to reduce that debt. But there's some strong arguments to suggest we cannot repay the amount we have borrowed over a short term. A government debt is effectively an uncollected tax in my opinion. I wonder if the current government is trying to repeat history and reduce the debt by increasing our GDP. Roads, hospitals, affordable housing and the military have all been identified to receive immediate increases in budget.
- Increased taxes
- Higher unemployment
- Economic difficulties
AiY
There are two standard political remedies for difficult times:
1) Austerity, as in the 1930's, Cameron's administration and many others
2) Keyes, spending as in Roosevelt new deal and this is the route, as far as I can tell, that the PM is taking.
Regards,
AsleepInYorkshire wrote:ursaminortaur wrote:AsleepInYorkshire wrote:Analogously I have suggested to myself that we are currently fighting World War III. But this time our enemy isn't another country. In context it has so far killed more in the UK than the blitz of WW II. I can't generalise about those who have passed as being old and frail. Each life cut short is nothing less than tragic.
Yesterday Rishi Sunak delivered a spending plan for the next 12 months. Scattered throughout that delivery were references toI will never be persuaded that we can step over this economic downturn by increasing government debt and kicking the can down the road to future generations by not looking to reduce that debt. But there's some strong arguments to suggest we cannot repay the amount we have borrowed over a short term. A government debt is effectively an uncollected tax in my opinion. I wonder if the current government is trying to repeat history and reduce the debt by increasing our GDP. Roads, hospitals, affordable housing and the military have all been identified to receive immediate increases in budget.
- Increased taxes
- Higher unemployment
- Economic difficulties
AiY
Increasing GDP so as to reduce the debt/GDP ratio would be a lot easier if we weren't about to sabotage our economic prospects for a prolonged period (if not permanently) through this hard brexit.
I could be naïve but I don't see Brexit as an issue. The EU will want to continue to trade with the UK and there will be an 11th hour deal achieved based more semantics and euphemisms but ultimately allowing us to fish our own waters and trade with them successfully. There will, as ever there is, be more forms to fill in.
We've become more reliant upon our service industries and Covid is hitting parts of them hard. It's clear this government wants to build it's way out of this problem. I think it's the only option on the table regardless of who's in power. But I can say without any doubt that we don't have the skills in the industry that we once had. That could trigger wage inflation?
AiY
ursaminortaur Any deal achieved will be a bare bones deal which although slightly better than no deal won't be that much better. The hit on GDP of no-deal is expected to be pretty bad.
https://www.theguardian.com/politics/20 ... vid-report
“Our modelling with LSE of the impact of a no-deal Brexit suggests that the total cost to the UK economy over the longer term will be two to three times as large as that implied by the Bank of England’s forecast for the impact of Covid-19,” says the report.
LSE modelling puts the long-term economic hit from a no-deal Brexit at 8% of GDP, similar to that of the government’s own forecast in 2018 of 7.6%, which amounts to £160bn in today’s money, or £2,400 per person.
This compares with the Bank of England’s latest forecast of the impact of Covid which shows a reduction of 1.7% of GDP to the economy up to 2022.
odysseus2000 wrote:ursaminortaur Any deal achieved will be a bare bones deal which although slightly better than no deal won't be that much better. The hit on GDP of no-deal is expected to be pretty bad.
https://www.theguardian.com/politics/20 ... vid-report
“Our modelling with LSE of the impact of a no-deal Brexit suggests that the total cost to the UK economy over the longer term will be two to three times as large as that implied by the Bank of England’s forecast for the impact of Covid-19,” says the report.
LSE modelling puts the long-term economic hit from a no-deal Brexit at 8% of GDP, similar to that of the government’s own forecast in 2018 of 7.6%, which amounts to £160bn in today’s money, or £2,400 per person.
This compares with the Bank of England’s latest forecast of the impact of Covid which shows a reduction of 1.7% of GDP to the economy up to 2022.
Economic forecasts are educated guesses, often with a heavy layer of political bias.
Everything depends upon how the UK performs after Brexit (assuming it happens at the end of this year).
Whether we get a "great deal" or a "no deal" it still depends on how the economy performs and making predictions about that are impossible as its uncharted waters for everyone. Sure the EU can make things difficult, but to do so is to spite German auto in the face and various other European business too.
If Europe does this and the UK still manages to prosper it makes a Italxit much more likely. Better for the EU to be more helpful and to note that the UK only did well thanks to the EU etc, rather than have the UK re-connect with the commonwealth and leave UK politicians with bitter memories of the bad things the EU did.
My guess is that the UK will prosper after Brexit if the politicians want it to happen and will struggle if the politicians want us to. However, the danger for the politicians is that if they come over has being wreckers of the opportunity there is the Reform party in the wings and a general loathing of how the present government is handling the pandemic.
There are a lot of high stake political games being played and it is imho the height of folly to believe any economic forecasts.
History has shown time and again that the UK prospers no matter what. All the analysis at the start of the second war was that the UK would surrender. We did not. After the war the UK was bankrupt and ruined, but within 15 years we had the swinging sixties and in the meantime we fed a lot of Europe when the war ended.
Regards,
ursaminortaur wrote:
If you put up barriers to trade then trade will suffer.
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