More from @darioperkins

Dario Perkins

@darioperkins

Oct 2

Yes, the BoE stepped in very quickly last week, even though they didn't see the problem coming & maybe didn't understand it at first. Huge contrast with 2008 when CBs were totally naive to systemic risk in markets. No worried about moral hazard either

https://twitter.com/FedGuy12/status/1576243844060176384?t=ZOeaj2cEf4clijXMY2lUQw&s=19

And CBs generally have a better understanding of what banks are doing than non-banks. My friend here is joking, but the substantive point is that regulators have had plenty of warning (unlike in 2008)

https://twitter.com/PolemicTMM/status/1576321920286326784?t=ZOeaj2cEf4clijXMY2lUQw&s=19

Or, put another way 😆

https://twitter.com/nomad_cap/status/1576451747521843201?t=ZOeaj2cEf4clijXMY2lUQw&s=19

Read 4 tweets

Dario Perkins

@darioperkins

Oct 1

1/ Crazy week, mostly spent answering questions from non-UK investors like "what the heck is going on over there". Nice for the UK to be relevant again, I guess. 😆 Some thoughts:

2/ global context matters. Rapid monetary tightening, especially from Fed, has changed whole mood music in markets. Risk premia widen & its harder to get away with dumb stuff. Every Fed tightening cycle causes problems in RoW, but EMs usually at epicentre

@kevinmuir

3/ In this environment, mkts pay more attention to shaky finances, incoherent/contradictory policies & bad politics. Meanwhile the strong USD always has the effect of "sucking all the oxygen out of the room" h/t @kevinmuir

Read 8 tweets

Dario Perkins

@darioperkins

Sep 21

An eclectic approach to macro:
- Keynes told us fiscal policy would definitely *work*
- MMT told us we could afford it
- monetarism predicted inflation at 40 year highs
- nobody has a clue what comes next (or what to do about it...)
😆

So here is a wild proposition: fiscal policy is super effective when inflation is low & monetary policy is super effective when inflation is high. After a century of alternating these two policy levers between their polar extremes, how about we find a way to combine them?

1920s-40s - monetary policy dominates, ends in deflation
1940s-70s - fiscal dominates, ends with inflation
1970s-2010- monetary dominates, ends with lowflation
2020s..... pendulum has swung again

Read 4 tweets

Dario Perkins

@darioperkins

Aug 19

Impressive collapse in New Zealand households' 5-year inflation expectations. Until you see they discontinued the series and changed to a new - much lower - one 😆