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Let the Bailout's Begin for the Square Mile and Wall Street - Bank of England launches £65bn move to calm markets allow on the cusp of hyper inflation
Financial Times ^ | 9/28/2022 | Chris Giles, Emma Dunkley, George Parker, Owen Walker, Peter Foster, Josephine Cumbo, Jim Pickard an

Posted on 09/29/2022 4:07:37 AM PDT by PK1991

The Bank of England took emergency action on Wednesday to avoid a meltdown in the UK pensions sector, unleashing a £65bn bond-buying programme to stem a crisis in government debt markets.

In a nutshell what happened is that a whole lot of UK pensions (technically called liability-driven investment, or LDI funds) failed to appropriately hedge their rate risk - despite it being telegraphed months in advance - and got margin called on billions in gilt securities, forcing them to sell treasuries into a thin market that suddenly froze and turned bidless, creating a "death spiral", and then realizing they were this close to being wiped out, cried to the government to save them from their own incompetence.

It turns out that we were this close from another "Lehman" collapse, only this time most if not all UK pensions were facing total annihilation.


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: bailout; bonds; england; pensions
Who manages the pension funds, hedge funds. Translation: this was just another bailout: Firms including BlackRock, Legal & General and Schroders manage LDI funds on behalf of pension clients. The pension firms use them to match their liabilities with their assets, often using derivatives. Effectively the BOE bailed out these multi billion fund managers.
1 posted on 09/29/2022 4:07:37 AM PDT by PK1991
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To: PK1991

.


2 posted on 09/29/2022 4:19:12 AM PDT by griswold3 (There are no solutions; there are only trade-offs. – Thomas Sowell)
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To: PK1991

Spending more money they don’t have....

Wait, that reminds me of what this dementia-Ridden moronic idiot-filled US Administration is doing.

Weimar Republic and Zimbabwe should have been an historical lesson and warning, but yeah, I digress.


3 posted on 09/29/2022 4:19:36 AM PDT by cranked
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To: cranked

What did THAT meeting look like?

“I say, our money is rapidly losing value. What should we do?”

“Simple, old bean. We’ll make more of it”

“Brilliant!”


4 posted on 09/29/2022 4:35:24 AM PDT by ferret_airlift
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To: ferret_airlift

I am quite cynical, to the point that I am near almost thinking that all this is purposely being implemented.


5 posted on 09/29/2022 4:37:20 AM PDT by cranked
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To: ferret_airlift

None of this is an accident.

All of this is purposed.


6 posted on 09/29/2022 4:42:47 AM PDT by Lazamataz (The firearms I own today, are the firearms I will die with. How I die will be up to them.)
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To: Lazamataz

I agree 100%, this is completely planned.

No one is this stupid that gets to the level of decsion making to let this happen, even novices are smart enough to see this coming a mile off.


7 posted on 09/29/2022 4:50:00 AM PDT by Abathar (Proudly posting without reading the article carefully since 2004)
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To: cranked

Yes, likely intentional.

Regardless of intentional or just 40 years of power-hungry stupidity, the only way through this is a 10-15 year Depression: high interest rates, low consumption/high savings, 20-30% unemployment, almost zero Fed spending, no wars and overseas troop, minimal Social Security, debt defaults, cheap energy (no wind and solar), commodity-back currency.

But no politician will ever allow this, not even as markets move that way.

Otherwise, with the media to promote and Big-Tech to execute, they will implement The End: digital programmable currency. For the 99%, this will result in tyranny, rationing, and slavery (work requirements).


8 posted on 09/29/2022 4:51:41 AM PDT by ReaganGeneration2
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To: PK1991

Like dropping a grenade in your shorts


9 posted on 09/29/2022 4:55:09 AM PDT by stocksthatgoup (There will come a time when those screaming Fascists are in fact the actual Facists. )
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To: PK1991

some of this is hard to believe

a huge risk may be difficult to hedge due to
a limited amount of market liquidityy
(huge meaning huge $$$ or in this case huge LLL)

you cant always get somebody to buy your risk


10 posted on 09/29/2022 5:00:10 AM PDT by RockyTx
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To: cranked

You’re not alone.


11 posted on 09/29/2022 5:01:55 AM PDT by ArcadeQuarters (Remember the 2020 backstabbers. No more RINOs ever!)
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To: ReaganGeneration2

I think you are right. They are just waiting for optimal misery to spring it. When it looks like protesters are taking to the streets to stop the crazy fuel sanctions causing massive inflation blow up the fuel line to take that option away. Probably deep into winter the reset will come.


12 posted on 09/29/2022 5:02:12 AM PDT by PK1991 ( )
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To: RockyTx

Its always about the pensions or the 401Ks why they need to do it. We have to give billions to wall street to save your 401k and we will do nothing about the malfeasance afterward and you will be happy to pay for the hyperinflation.


13 posted on 09/29/2022 5:05:09 AM PDT by PK1991 ( )
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To: Lazamataz

I quite agree. One nation doing that could be straight incompetence. However, basically all Western nations doing it? It’s been amply demonstrated that most politicians have no loyalty to their homeland, so breaking their country’s economy as long as they make bank is fully plausible.


14 posted on 09/29/2022 5:15:06 AM PDT by ferret_airlift
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To: PK1991

Energy cap limit increases this weekend. More pain for the UK. BOE had to enter the chat because Kwarteng and crew don’t want to cut spending.


15 posted on 09/29/2022 6:23:00 AM PDT by Theoria
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To: ReaganGeneration2
Regardless of intentional or just 40 years of power-hungry stupidity, the only way through this is a 10-15 year Depression: high interest rates, low consumption/high savings, 20-30% unemployment, almost zero Fed spending, no wars and overseas troop, minimal Social Security, debt defaults, cheap energy (no wind and solar), commodity-back currency.

And the thing is, with the time compression gained through technology, it would not actually take 10-15 years to resolve the problems if the perpetrators are allowed to go down the tubes, as they deserve. It’s the attempt to keep those zombies alive - as Japan has done - that prolongs the agony. Real people still produce real products with real value and sell them to other real people. The faster government gets out of the way and lets a free economy operate, the faster real valuations are restored.

Ultimately, though, I guess it depends on which zombies have access to the Epstein videos and how they intend to use them to stay solvent.

16 posted on 09/29/2022 6:31:06 AM PDT by Mr. Jeeves ([CTRL]-[GALT]-[DELETE])
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To: PK1991

Financial suicide ensured.


17 posted on 10/04/2022 1:41:23 AM PDT by cranked
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