UK “clown show” a “pension fund bailout”


Charlie McElligott of Nomura not holding back today.

Quick take—idiosyncratic fiscal largesse in midst of an already unstable monpol tightening creates a market accident which leads to an asymmetrically WILD policy response from the BoE…which creates more instability.

Just a massive change here in the past few hours on a STUNNING policy move from the BoE to arrest the Gilt / Sterling Vol by an announcement of long-end GILT BUYING mkt operations, coming at a time where they are supposed to be tightening policy and shrinking the balance sheet to fight inflation—but tactically, is causing an enormous short-cover in markets which is lifting all assets off earlier panic lows.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.