Wednesday, September 28, 2022

There's Always Money In The Banana Stand

UK day on this blog, perhaps, because it's scary/funny. A phrase used for a dozen years in the UK to deride any attempt to spend money on nice things, repeated dutifully by every political reporter and the state broadcaster is, "there's no magic money tree."

Lads, they found the magic money tree.

They're now both fighting inflation and fighting a spike in government borrowing costs. If you want to give them credit for being clever, it's "raise short term rates and lower long term ones," but I don't think that's a trick they can pull off.

...after I typed this, but before it published, they stopped the "raise short term rates" part.

Right wing economics hits reality, blows up the economy yet again, but somehow never loses its credibility.

As for this: I honestly can't think of a obvious scenario such that pension funds would be blowing up, unless they were hideously mismanaged, which of course some of them are. Somehow "hedging" (making small side bets to reduce risk) became synonymous with "leveraging" (borrowing immense amounts of money generally to try to make large amounts of money on tiny swings in risky assets) so the discourse around this is all fucked up.