3 ms·

The other craziest thing is that the Bank of England isn't just saying "We'll have a recession" but they're specifically selling it as the longest recession eve

by munk-a 4y ago

The other craziest thing is that the Bank of England isn't just saying "We'll have a recession" but they're specifically selling it as the longest recession ever. If you ever want to have the longest recession ever a great first step is for your central bank to say "Hey - this one is going to be a lot worse than most of them". One of the responsibilities of central banks (which the Fed has taken quite seriously) is to carefully control messaging - if you're overly optimistic when things are clearly bad you'll cause a loss of faith and it'll make things worse... but there's also never a reason to go above and beyond expectations in how bad you think things will be because that causes people to batten down even more hatches and prolong the recession. Markets are weird and they're essentially gigantic tabloids - the image of what's going on counts much more than tangible things like a shortage of widgets.

yakak 4y ago
The US is still entirely driven by its own consumers and the way its behavior reflects off the international economy, driving all that voodoo noise, but the UK? I think they should kill zombie businesses quicker (yay, interest rates!) and try to pick up as many international worker positions from companies least likely to be zombies. Their downward slope locally is pretty inevitable but puts them in a good position like a weak currency for exports. Giving up on a shoot the moon strategy that has gone this far usually means shooting yourself.
c7b 4y ago
> One of the responsibilities of central banks is to carefully control messaging That might be exactly what they're doing. The article says that their forward guidance for interest rate hikes is substantially below market expectations. Maybe they are hoping that a bit of gloomy talking will do some the work of slowing down price dynamics, reducing the need for them to take more drastic measures.
- smingo 4y ago
  Philosophers may consider this a "performative utterance".

by munk-a 4y ago

yakak 4y ago

The US is still entirely driven by its own consumers and the way its behavior reflects off the international economy, driving all that voodoo noise, but the UK? I think they should kill zombie businesses quicker (yay, interest rates!) and try to pick up as many international worker positions from companies least likely to be zombies. Their downward slope locally is pretty inevitable but puts them in a good position like a weak currency for exports. Giving up on a shoot the moon strategy that has gone this far usually means shooting yourself.

c7b 4y ago

> One of the responsibilities of central banks is to carefully control messaging That might be exactly what they're doing. The article says that their forward guidance for interest rate hikes is substantially below market expectations. Maybe they are hoping that a bit of gloomy talking will do some the work of slowing down price dynamics, reducing the need for them to take more drastic measures.

smingo 4y ago
Philosophers may consider this a "performative utterance".