Nice People Thread Part 9 - and so it continues

michaels

Generali wrote: »

It looks likely to be a year or so yet. They will go up at some point though.

Normal interest (base) rates with inflation at 2% and GDP growth at 2-2.5% and unemployment at 5-6% would be about 5%. That implies mortgage rates of 6-7%. Just sayin' :cool:.

It was a glorious ride in to work again today. Home was a it uncomfortable as I didn't eat enough today to fuel the ride home. Still the weight is coming down so a little pain in the ride home is fruitful at least.

They've set up some old fashioned deck chairs on a patch of AstroTurf opposite my work so I went and sat in one of those and read the paper for half an hour at lunchtime. It was very relaxing although I probably should have used some sunscreen.

Perhaps it was the sun at lunchtime that also impacted on the ride home?

The election timetable of course needs to be factoered into any 'independent' boe interest rate decisions. There is also a lot of suggestion that the economy is more sensitive to interest rate rises than in the past so the 'neutral' rate may have decreased.

Generali

michaels wrote: »

Perhaps it was the sun at lunchtime that also impacted on the ride home?

Maybe. It felt a lot like I 'bonked' (runners call it 'hitting the wall') though. It's when you run out of easily accessible carbohydrates in your body. It's my own fault, I didn't eat enough today. I know what the consequences are. By the time I got home I was shaking like an old drunk with the DTs.

michaels wrote: »

There is also a lot of suggestion that the economy is more sensitive to interest rate rises than in the past so the 'neutral' rate may have decreased.

Perhaps. I'm not buying that though. 'This time it's exactly the same'.

PasturesNew

lemonjelly wrote: »

Is there going to be panic on the rest of the boards today? I ask, as there is now media talk of raising interest rates...

When I sold my house it was for a variety of reasons. One of them though was that I'd sat in it, unable to afford to turn it into a home or do anything beyond sitting in it and eating beans - and, at the time (2006 or so) they said interest rates were about to rise.

It's about bl00dy time they did!

PasturesNew

Generali wrote: »

. By the time I got home I was shaking like an old drunk with the DTs.

I'm often like that on a bike by the end of the second small road.

I stopped once as I came over all funny - and I sat on somebody's garden wall. A car driving along the road the other way pulled over and the driver came running over to ask if I was OK as apparently I'd got all grey.

michaels

Generali wrote: »

Maybe. It felt a lot like I 'bonked' (runners call it 'hitting the wall') though. It's when you run out of easily accessible carbohydrates in your body. It's my own fault, I didn't eat enough today. I know what the consequences are. By the time I got home I was shaking like an old drunk with the DTs.



Perhaps. I'm not buying that though. 'This time it's exactly the same'.

Cycle slower?

I'm not saying that the economy is more sensitive to interest rates but I don't think you can worry about it 'both ways' - either it is not so sensitive to rates so rate rises will not be the 'disaster' some seem to fear or it is sensitive to rates and so the level of rate rises needed to acheive a tightening will not be very large.

bugslet

Generali wrote: »

Maybe. It felt a lot like I 'bonked' (runners call it 'hitting the wall') though. It's when you run out of easily accessible carbohydrates in your body. .

Just finished Scott Jurek's autobiography and he uses the word bonk for hitting the wall, and I think the book is a few years old now. I have a fascination for ultra runners, even though I'm more of a three mile stroll kind of gal.

Generali

PasturesNew wrote: »

I'm often like that on a bike by the end of the second small road.

I stopped once as I came over all funny - and I sat on somebody's garden wall. A car driving along the road the other way pulled over and the driver came running over to ask if I was OK as apparently I'd got all grey.

Anything with sugar in will help. Fizzy drink, Kit Kat, jelly beans.

Generali

michaels wrote: »

Cycle slower?

Let's just pretend you didn't say that.

michaels wrote: »

I'm not saying that the economy is more sensitive to interest rates but I don't think you can worry about it 'both ways' - either it is not so sensitive to rates so rate rises will not be the 'disaster' some seem to fear or it is sensitive to rates and so the level of rate rises needed to acheive a tightening will not be very large.

I think that's going to be a very tough balance to strike. Does the BoE take away QE or increase interest rates or a bit of both? When to start? Once inflation starts to rise it may well be too late to increase rates but if you raise them too early then perhaps you kill the recovery.

The current ZIRP in so many countries means that any increase is likely to cause a disproportionate rise in the currency which probably will magnify the impact of rates rising. Does that mean that in the longer term the economy is more sensitive to rate rises? I have my doubts. I suspect it's more that a simple rise of 0.25% in the EZ means rates double!

My feeling is that the Fed is too in thrall to the markets and they face a very real risk of letting inflation get away from them as a result.

Who'd be a Central Banker? Not me unless they paid me a huge wedge of......ah hang on a sec.

Generali

bugslet wrote: »

Just finished Scott Jurek's autobiography and he uses the word bonk for hitting the wall, and I think the book is a few years old now. I have a fascination for ultra runners, even though I'm more of a three mile stroll kind of gal.

I like a really good long bike ride although I've not done one for a while. I might try to do a 200km over Christmas at some point just to see if I can. That could be fun. Just me, my bike, my podcasts and a shed load of water and grub.

chewmylegoff

There seem to have been some aspersions cast about the size of my letterbox. I would just like to say for the record that in my view the size of my letterbox is perfectly adequate and I have no complexes about it size, AT ALL.