Member Info for bald_eagle

I don't know if there is an Oxford dictionary definition of 'swivel-eyed loon' but I believe it is referring to members of the ERG (James O'Brien of LBC infamy uses it a lot). As such I don't think PM Truss is an actual member, more a tool....of the ERG.
Although I must say that I'm beginning to detect a nervous twitch or tic in her iron like demeanour.
This lady is not for....oh, she has?!

Apparently LGEN contacted pension funds on Sunday to say that their LDI hedging funds had losses that needed covering (presumably the margin call). So I believe the pension funds had to liquidate assets - e.g. sell shares - to raise the money to cover the LDI losses.
Whether LGEN psrent company was using LDI to leverage is unexplained, if they did then they will probably have incurred a loss too. But at the moment the pension funds have definitely lost out. Pension funds will also be reducing their exposure the LDI hedging because it is now too risky.
A right mess.
PS I don't really know what I am talking about. If anyone knows what actually happened then please tell us.

Has anybody seen a number for the liability for LGEN for the LDI crisis last week?
I think someone posted that the liability is with the pension funds.
Are there any ongoing dangers for LGEN?....reputational damage, loss of business, etc
I suppose some would argue that events of last week were beyond LGEN's control.....but perhaps 'someone' should have seen it coming and raised the warning flags.
Probably shouldn't mention the 'B' word but Tory credibility since 2016 may be an issue....perhaps this is all part of the big plan.....rather then an unintended cluster f*#k.

"Little-known outside of financial circles, LDIs help to manage financial risks and are designed to stabilise the assets and liabilities within pensions." [inews]

Obviously they don't provide the stability that some people thought they did!!

I presume the 'bet' on LDI's went catastrophically wrong and now pension funds have to reduce their exposure just in case there is another 'event' like on Wednesday. Seems that the BoE and the treasury aren't communicating very well (if at all).....and the Truss government seem intent on their 'growth strategy at any cost', which may present further 'opportunities' for the market to test their resolve. Presumably the market is awaiting the OBR analysis.....like waiting for one of Boris's many investigations to conclude.
Truss says she want to reshape the UK economy but last week she almost broke it. I wonder if she thought (after a long pause)....."Ooops, that wasn't supposed to happen!!"

I would tend to trust the FT rather than 'Motley Fool'!!....unfortunately I don't subscribe.

I imagine the Pension companies thought their 'houses' were built on granite foundations....the proverbial bedrock of the economy!! But they hadn't factored in a new neighbour with a liking for dynamite. Only took a few explosions for cracks to appear. Does it mean the house is going to fall down?....probably not but someone has to take the explosives away from the naughty neighbour because if the explosions continue or even get bigger then 'all bets are off'!!
Let's hope they don't upgrade from dynamite to a nuclear option!!!!

Should LGEN update the market on what happened on Wednesday?
I expect the temptation is to say nothing..."Nothing to see here!!".
An update/comment would draw attention to LGEN and more speculation. So better for them to say nothing and hope it all blows over.
The analysis must come from financial journalists and economists, who should be identifying any systemic weakness. The only question is whether they will actually do that....because only a few months/weeks/days ago some of them were 'probably' advising us to buy LGEN as being 'safe as houses', so they would be admitting they weren't very good at their jobs and opening up liability (perhaps). So..."Nothing to see here"!!
So 'hopefully' there isn't a systemic problem with companies like LGEN and the 'event' was a short sharp shock....and a buying opportunity.
I expect the Tories to be much more careful in how they handle budgetary change in the future...no more hand grenades, Please!!!! Credility has been shattered however, possibly lost for this government/Chancellor.

Is this the start of a recovery - of sorts - for LGEN. Has normal service been resumed, stability has been regained?
Or is this a pause until the next announcement by Kwasi.....who has a huge deficit in his credibility to fill (assuming he ever had any to start).
Perhaps in the future Liz & Kwasi will start to play by the unwritten rules....for one, listen to Sir Humphry (who has seen it all before) and don't believe everything whispered in your ear by ex-hedge fund special advisors.
The market is 'probably' waiting for some sign that they know what they are doing. I wish I knew.

Perhaps Lizzie's plan is working?!...China watch out, we are coming for you.

Casapinos, I for one appreciate what you bring to the table.
For the BoE to have behaved the way they did yesterday was exceptional. They must have been really worried. How it was allowed to happen is a question that needs answering. I suspect the market - hedge funds & shorters - will find other ways to test the government's resolve in implementing their 'growth' strategy! It's almost like Russian roulette....too stressful to watch but too gripping to ignore.
When you're swimming against the tide in shark infested waters then watch out.....I bet Liz looks good in a swimsuit (Kwasi too)!!!

"....do you think L&G have been financially hurt because of what has been happening over the last few days?"
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ah, the billion dollar question.....and has it blown a hole in its business model below the water line?....more succintly, has LGEN been left holding the baby?

There was 'talk' about Truss loosening the regulation for pension companies as part of our post 'B' freedoms.....which I suppose may have avoided the 'margin call' event (or whatever happened yesterday) but it wouldn't have entirely fixed the issue. The Bond market got turned on its head and LGEN's business model is inextricably linked to a stable (& boring ) UK bond market.
But out politicians at the moment seem to be in pure bake off mode and aren't afraid of breaking a few eggs to make a dazzling extravaganza....I wonder what it will taste like?! (four letters beginning in 'S', ends in...)

"I never get involved in political debate"
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Casapinos, very sensible. But to some extent it is impossible to ignore the B word.....we are being led by politicians who seem willing to cut their nose off to spite the people across the channel. Whether that 'thinking' is part of the equation here or it is merely a 'miscalculation' is I suppose irrelevant BUT the landscape looking forward is for even more idealogical policies and 'out there' economic experiments. Hold onto your hats!!
Led by donkeys (just popped into my head).

".....there is a view that the restraints placed by the EC Directives in the wake of the GFC are too inflexible and may lead to situations like yesterday's. It is the expressed intention of conservative governments to re-examine those rules and re-draft them."
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So it is part of the master plan?!.....and we can blame the EU which fits our post Brexit EU bashing agenda....brilliant!!
Shame about our pensions though but worth it in the end no doubt!!

"Yea but lgen will have been stressed test for shock events like this that why they hold massive reservses"
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I doubt the bond markets are expected to behave in such a way, especially in the UK?
John Redwood was manfully blaming the BoE for the whole thing last night.....perhaps they provided the fuel but someone else provided the spark.

Who advised the government on their policies in the mini-budget and was this an engineered resetting of the UK markets?
If this was part of the design then presumably it is all part of the plan and they will pat themselves on the back and continue or even double down. But if these were unintended consequences then an abrupt u-turn is imminent.....where is Boris when you need him? He is so good at 180 degree changes of attitude.
Personally I don't think Liz & Kwasi were anticipating such a reaction. Will she utter the immortal words?..."This lady is not for turning".....will she develop a nervous tick? (I know I would be!!). And Kwasi that stalwart old Etonian is now wishing he had paid more attention in economics O-level class.

"It will fall like ever other stock"
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That doesn't make sense.
Every stock can decrease in value, but when was the last time that every single stock fell on the same day?
There are always winners & losers. The money shifts between growth & value, defensive & speculative, and adjusts to government policy (with winners & losers). Even interest rate rises - and currency devaluation - have beneficiaries.
Even the amount of the fall can differ between categories and between individual stocks in categories. So to say "It will fall like ever other stock" is pretty meaningless IMO.
Like saying "It will rain just like it rains everywhere"....question is when, how much, duration, type (flash floods) and lots of other factors?....don't even mention Americans seeding clouds with silver iodide to steal the rain (a Mexican farmer said that to me once).

Put the money to use to leverage production but also keep account of where the money is going....try to avoid large amounts being handed out in brown envelopes. Far better to wire the money to a swiss bank account in their dogs name!!!
Got to keep the auditor happy.

I expect what the BOE and the Chancellor are really worried about is stagflation. Enduring high interest rates and low growth,....which is probably why interest rates are still rising AND the mini-budget is going hell for leather for growth through shotgun tax cuts.
The problems and risks of the Truss strategy are for economists to analyse.....but it is slightly worrying that the government hasn't asked for any forecasts of the effectiveness of their tax policies. So I expect senior ministers to be seen visiiting their local mosque or church regularly over months & years....thank gawd Rees-Mogg has a hot line to the big dog!!
Added problem for Truss & Kwasi is that shorters may continue to target the pound.....government spin: "Good news for exporters".....Reality: We don't have many exporters after Brexit.

"No defence against a bid at £5/6."
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Where do I sign?!
Reading an article in AJ Bell's (YouInvest) 'ShareMagazine' (dated 1st sept i.e. 01/09/22 to non-Americans) about 'possible' takeover targets.....and Tremor was on the list. But NOT because they are an actual takeover target (as far as I am aware). The criteria to be on the list was:
- EV to EBITDA ratio of less than 7.....(2.6 for TRMR)
- FCF to Asset % of greater than 10%..... (12 for TRMR)

Tremor had one of the lowest EV/EBITDA ratio's on the list. It doesn't mean they are going to be taken over. But it does show they are amazing value at the moment...IF one believes that the EBITDA numbers are sustainable (which may be the problem at the moment).