Munchau in the FT on why Hard Brexit would also be bad for the EU

“Just consider the following three effects of a sudden Brexit. First, the eurozone remains dependent on the City of London for financial services and especially on settlement and clearing, the plumbing of the financial system. Mark Carney, governor of the Bank of England, who is not a Brexit cheerleader, said recently there was a bigger risk of a financial crisis in the EU than in the UK. The eurozone is unfortunate in that it allowed its main financial centre to be outside its borders. There is a clear potential for blackmail here.

Second, it is trivially true that Britain has a smaller weight in eurozone trade than the eurozone has in UK trade. This is because the eurozone is bigger. But do not underestimate that manufacturing supply chains work in both directions. A sudden break could disrupt manufacturing production everywhere. Remember that a single bank, Lehman Brothers, was able to blow up the global financial system in 2008. Dynamic effects are harder to calculate than the static ones but they can be much bigger.

Third, the UK is a member of the UN Security Council, the Group of 20 advanced industrial nations, and the Group of Seven. If EU countries want to fight tax avoidance by multinational companies, manage globalisation in a fairer way, reduce greenhouse gas emissions or come up with policies to combat terrorism, they will need the UK.”

Deflation

From a rather different perspective Richard Batley of Lombard Street Research argues that global deflationary pressure has also increased as a result of the relative decline in US economic power. For much of the postwar period the US acted as a clearing house for global demand and supply by maintaining open markets that absorbed the rest of the world’s goods. But the supply clearing capacity of the US ran out after 2008 because it had exhausted its debt capacity. Instead of excess supply being cleared through ever higher US household debt, it is now being cleared through lower prices.

Krishna Guha on Scottish independence

The onset of divorce negotiations would lay bare that Scotland faces an impossible trinity: full independence, financial stability and deep economic integration with the UK. It can have any two of these but not all three.

The declared objective of the pro-independence campaign is to unwind the British political and fiscal union while retaining a common currency. But the eurozone crisis demonstrated that monetary unions without deep integration are debt intolerant: they become unstable at relatively low levels of debt and deficits, particularly absent banking union.

Buiter on Helicopter Drops

Three conditions must be satisfied for helicopter money always to boost aggregate demand. First, there must be benefits from holding fiat base money other than its pecuniary rate of return. Second, fiat base money is irredeemable – viewed as an asset by the holder but not as a liability by the issuer. Third, the price of money is positive. Given these three conditions, there always exists – even in a permanent liquidity trap – a combined monetary and fiscal policy action that boosts private demand – in principle without limit. Deflation, ‘lowflation’ and secular stagnation are therefore unnecessary. They are policy choices.

The FT on Abe

On target? Selected objectives of Abenomics’ ‘third arrow’

Labour and demographics 
● Goal: Make Japan’s labour market more flexible; diversify and expand the labour force by increasing opportunities for women and bringing in more foreign workers
● What has been done? Day care-related spending increased by a third to about Y700bn ($6.8bn) this fiscal year; visa periods for “technical trainees” in the construction sector extended temporarily (ends 2020)
● But . . .  More aggressive rollback of job protections for full-time workers shelved; proposal to open door to 200,000 immigrants a year shot down

Corporate tax 
● Goal: Lower Japan’s corporate income tax rate from roughly 38 per cent to something closer to the OECD average of 25 per cent
● What has been done? 2.4 per cent surcharge to fund tsunami reconstruction lifted in April, one year early
● But . . .  Mr Abe has won backing to cut the base rate starting next fiscal year but the policy update may not contain a detailed timetable or an ultimate target level

Trade 
● Goal: Increase ratio of Japan’s international trade that falls under free-trade deals from 20 per cent to 70 per cent
● What has been done? Japan-Australia bilateral trade deal signed in April, including limited reduction of Japanese tariffs on Australian beef and other agricultural products
● But . . .  Bilateral Japan-US trade talks remain deadlocked, stalling broader negotiations over the proposed 12-nation Trans-Pacific Partnership; Japan-EU trade deal also in limbo

Medical care 
● Goal: Turn Japan’s pharmaceutical and healthcare sectors into engines of economic growth
● What has been done? Pharmaceutical law amended to allow online sales of non-prescription medicines (with some exceptions); restrictions on testing of regenerative therapies such as stem-cell treatments loosened; approvals process for advanced drugs changed to allow for faster approval
● But . . .  Doctor-supported rule that prevents patients from collecting insurance payouts if they try experimental therapies is seen as a big obstacle. The policy update may contain a goal of relaxing this rule, but how aggressively?

Special economic zones 
● Goal: allow specified cities and regions to carve out exemptions from national regulations
● What has been done? Law allowing creation of “national strategic economic zones” passed; six zones named in March: Tokyo (promotion of foreign investment); Osaka-Kyoto-Kobe (medical research); Fukuoka (employment); Okinawa (tourism); two cities in Niigata and Fukui (agriculture)
● But . . .  Zones are more policy tool than policy, and no specific deregulation plans have been drawn up yet

James Meet on the Right To Buy

To understand how it came to this, you have to go back to 1979, when Margaret Thatcher began forcing local authorities to sell council houses to any sitting tenant able and eager to buy, at discounts of up to 50 per cent. It was one of those rare policies that still seems to contain in its very name the entire explanation of what it means: ‘Right to Buy’. Cherished by Tories and New Labour alike as an electoral masterstroke, it offered a life-changing fortune to a relatively small group of people, a group that, not by coincidence, contained a large number of swing voters.

Right to Buy differed from the period’s other privatisations in many ways. It was tightly linked to the buyer’s personal use of the asset being privatised. If the Royal Mail had been sold on the same principle buyers would have got a discount on the share price based on the number of letters they’d posted over their lifetime. According to Hugo Young, Thatcher had to be talked into Right to Buy by a desperate Edward Heath, then her leader, who’d been persuaded by his friend Pierre Trudeau after his electoral defeat in February 1974 that he needed a fistful of populist policies. No wonder Thatcher baulked. Right to Buy violated basic Thatcherite values: that self-reliance was good, state handouts bad. Right to Buy was a massive handout to people who weren’t supposed to need handouts. In fact, that was why they got the handout – because they were the kind of people who didn’t need handouts.​1

It was Britain’s biggest privatisation by far, worth some £40 billion in its first 25 years. But the money earned from selling Britain’s vast national investment in housing – an investment made at the expense of other pressing needs by a poor country recovering from war – was sucked out of housing for ever. Councils weren’t allowed to spend the money they earned to replace the homes they sold, and central government funding for housing was slashed. Of all the spending cuts made by the Thatcher government in its first, notoriously axe-swinging term, three-quarters came from the housing budget.

Robert Buckland says equities are the new bonds

Buckland has a suspicion that QE is doing the exact opposite of what polcymakers intended. It’s destroying jobs, rather than creating them. Theory: QE is forcing bond investors out of fixed income into equities, where they are demanding income rather than capital growth. This, in turn, is pressing corporates into boosting dividends and share buybacks. Example: Pfizer closed its Viagra lab in the UK, sacked more than 2000 white-coat workers, announced a buyback and watched its share price spike 7 per cent.

Is the RMB overvalued?

If the Chinese continue with their efforts to open up the capital account — which increasingly suits them if these pressures are indeed boiling over — there is a growing risk that the capital flight might accelerate, triggering a major financial crisis. Not only that, those foreign investors and trading counterparties who have bought into the idea that settling in RMB is a good idea, could find themselves holding a much less valuable currency than they originally expected.

When the Chinese themselves are putting their money in anything but RMB — London, Canadian property, gold, luxury, commodities, equities — you have to wonder does it really make sense to buy into the hype about RMB settlement. 

Is it really the hot new currency that will change global settlements, or are the Chinese perchance looking for as many ways as possible to recycle RMB into currencies that will genuinely protect purchasing power?

On which note, the following comment from Euromoney is worth a read.

As they note, while speculating that the renminbi could be overvalued by as much as 30 per cent.:

The evidence that RMB is overvalued is the deflationary effect it is exerting – seen in exporters cutting prices to compete, causing a profits squeeze, which in turn impacts investment. The transition requires careful management because if export- and investment-led growth fall away before domestic consumption is sufficient to fill the void, economic growth could fall sharply. The trade surplus bottomed out at 2.1% of GDP in 2011 rebounding to 2.8% last year, according to official figures. It has continued to widen this year, hitting $20.4 billion in May – not so much because exports are surging but because hoped for growth in imports has faltered, in line with a slowdown in consumption growth.

And the most important views of all may be those by Lombard Street’s Hong-Kong based economist Freya Beamish. As Euromoney reports:

Lombard Street Research’s Hong Kong-based economist Freya Beamish believes the exchange rate is a smokescreen and that RMB could be overvalued by as much as 30%. “Because China hasn’t been willing to allow the currency to appreciate nominally, it’s happened through a back-door way of inflation and that has persisted for a number of years, driving up the RMB,” she says. “Overvaluation of the RMB is now exerting a deflationary force on the economy and that’s causing a profits squeeze, which is the main factor curtailing growth.

“The symptoms are the product price deflation that China’s facing. If you look back to mid-2011, product prices went from inflation of about 7% annually to deflation of about 2% to 3% and that situation has persisted for the six intervening quarters, which strongly suggests there is some kind of overvaluation force from the RMB.”

Beamish adds: “So you have hefty product price deflation and it also makes sense from the macro story because adjusted unit labour costs of productivity have been inflating at about 11% in dollar terms since 2005 but that’s not the case for the major trading partners that China faces. “If a currency can’t appreciate in nominal terms, it will appreciate in real terms. So either you’ll have nominal appreciation of the RMB, or you’ll have prices in China inflating at a far greater rate than in, say, the United States, which is what we’ve seen. RMB has appreciated much more in real terms than in nominal terms.”

Yikes!

Economically suicidal statistic of the day: the EU accounts for 9pc of the world's people, 15pc of its GDP and 50pc of its welfare payments.

Julian D. A. Wiseman on IR Swaps in a Euro Break Up

In 1998, new swaps were being transacted against LIBOR in any of ECU, DEM, FRF, ITL, ESP, NLG, and PTE (LIBOR is the London Inter-Bank Offered Rate, and is computed by the British Bankers’ Association). New swaps were also being transacted against FIBOR (the cost of borrowing DEM in Frankfurt, computed by the German Bankers’ Association), PIBOR (FRF in Paris), RIBOR (ITL in Rome), MIBOR (ESP in Madrid), AIBOR (NLG in Amsterdam),BIBOR (BEF in Belgium), HELIBOR (FIM in Helsinki), VIBOR (ATS in Vienna), DIBOR (IEP in Dublin), and others.

EMU brought on a simplification. There are no longer separate London ‘fixings’ of ECU, DEM, FRF, ITL, ESP, NLG, and PTE: there is one fixing of the cost of EUR money in London, and this is copied across for the other currencies. On the continent, the European Banking Federation has created a eurozone fixing called Euribor. And (for example), the German Bankers’ Association no longer fixes the cost of borrowing DEM in Frankfurt; instead it has specified that the FIBOR fixing shall be equal to the Euribor fixing.

For the most part, this has worked smoothly. (The one exception is that the French Bankers’ Association messed up the transition from FRF PIBOR to Euribor*3.)

Consider the position of two parties who have traded a BIBOR swap (the former Belgium-franc fixing), using German-law documentation. This swap is, well, whatever German law says it is. And it settles against, well, whatever the Belgium Banking Association says it does. Of course, for now and the foreseeable future, each jurisdiction’s law says that swaps are properly enforceable, and the various eurozone national banking associations say that their national IBORs have been properly succeeded by Euribor (with a modest exception for the French mess-up). But if either of these countries leave EMU, legal uncertainty would surely increase.
Conclusion

1. The old national currencies are irrecoverable. For good or for ill, Germany cannot recover the old Deutschmark — it has been too stirred up with the other national currencies.

2. A nation can leave EMU, by introducing a new currency. In doing so, it can leave euro obligations to be paid in euro, or it can cause varying degrees of trouble by doing something different.

3. Because governments have a lot of power over their legal jurisdictions, and over the legal definition of their own currency, both past and present, and over the definition of their former national ‘IBOR’, a government that wanted to cause trouble could cause a lot of it.

*3 PIBOR used to settle T+1. So if money was borrowed today for three months, the money would arrive on the business day after the trade date, and be repaid three months after receiving it. Euribor is T+2: money arrives the two business days after trading. The logical thing would have been for the French Bankers’ Association to say that a day’s PIBOR fixing is equal to the previous business day’s Euribor fixing, so that the old PIBOR fixing and the new Euribor fixing always span the same period of time. However, for ‘simplicity’, the French decided that today’s PIBOR fixing is to be today’s Euribor fixing. So, if you had traded a swap that was to fix against 3-month PIBOR on 29 September 1999, you might have thought that you were trading the cost of borrowing money from 30 September 1999 to 30 December 1999. But the rules by which PIBOR rolled into Euribor changed this to the cost of borrowing money from 01 October 1999 to 04 January 2000; changing the fixing from one that didn’t cover the turn-of-the-century weekend, to one that did. That made a big difference, and it seems that the whole sorry business is to end in court. (This problem was predicted in advance by William Porter of LEDR.)

Gavekal on the coming Eurozone balance of payments crisis

Over the past two years, the euro crisis has morphed from a sovereign crisis in a peripheral country (Greece), to a banking crisis, and back to a sovereign crisis in core countries (Italy, Spain). At every turn a "solution" is devised whose purpose is to "save" the euro but whose actual result is simply to push the crisis into new and more desperate terrain. The latest solution - aggressive easing by the ECB - means that the next phase of the euro disaster will be a balance of payments crisis. Indeed, the ECB's change of operating procedures undeniably "solves" last year's problem of eurozone governments financing themselves. But what kind of solution is it when, as Jacques Rueff put it 50 years ago, the ECB's move amounts to "financing expenditures which have no return with money that does not exist"? The highest-odds scenario is thus that the bloated eurozone public sector, having guaranteed its financing for the next three years, will stop all effort at reform, and that the southern European countries will become even less competitive than they are now. In turn this means that -- barring a collapse in oil prices -- their dollar trade deficits will grow larger and that a classic balance of payments crisis is thus right around the corner.

So far, this crisis has not materialized because of the generosity of the Fed, whose swap lines already total US$100bn. To all intents and purposes, the Fed is now financing not only the US budget deficit but also the southern European trade deficits, while the ECB gets to carry the exchange rate and solvency risks. (This Fed-dependence carries a delicious historical irony: one of the prime goals of the euro architects was to create a powerful alternative to the dollar, ensuring that Eurocrats would never again be subservient to Washington. Yet today, thanks to the euro, Europe must go cap in hand to Washington to stay solvent).

Hans Kundnani on the German question

Hans Kundnani, editorial director of the European Council on Foreign Relations, recently argued in the Washington Quarterly that “Germany’s economy is too big for any of its neighbours, such as France, to challenge…but not big enough for Germany to exercise hegemony.” This, he concluded, is an economic statement of the “German question” that tormented Europe for 75 years after German unification in 1871.

Gavekal on China

The dynamism of China's industrialization process is such that it is easy to both exaggerate the upsides ("a billion customers") as well as the downsides ("ghost cities abound!"). As we see it, it seems the downsides are currently being exaggerated. This is not overly surprising, because China's policymakers have indeed been fighting the dragon of excessive liquidity creation since 2009, and this has been neither easy nor pretty. But while there are undoubtedly very real financial risks, with some companies and individuals facing very real stress, investors should put the situation in context. Indeed, we refer readers to Joyce's ad hoc published yesterday, The Shadow Knows-Exploring China's Hidden Financial System, which highlights that:

* The unofficial funding channels which have evaded official credit restrictions in the past year, and thus made it harder for Beijing to control inflation, have always existed. Moreover, these unofficial channels are actually a long-term positive: in the state controlled financing sector, credit is not only irrationally (cheaply) priced, but it is often allotted to favored parties (such as state-owned companies). In "shadow financing" activities, we are now witnessing market pricing of both deposits and loans-which is the exact structural direction in which China's financial system needs to move. In the long run, this is a good thing.

* No doubt, however, shadow financing activities have gotten out of hand recently, and have complicated Beijing's effort to fight inflation. We estimate that shadow financing activities made up about 16% of total outstanding credit in the past decade; however credit extended through channels other than the formal bank loans and the bond market reached about RMB17 trillion by mid-2011, or about 25% of the total. Moreover, shadow financing accounted for more than 40% of new credit creation in 2010 and 1H11.

....Our view is that China is likely to continue to tighten shadow financing, but will, in small, quiet ways, such as through open market operations, start to loosen official liquidity conditions.

Charles Gave on market intervention

Such distortions reverberate throughout the system, affecting every asset class from commodities to real estate. They also create a domino effect of spreading interventions, wack-a-mole style. So to summarize, after ten years of "smart" interventions by astute policymakers we are now left without any proper market pricing mechanism for:

1) US interest rates and exchange rates - both manipulated by the Fed

2) Oil prices - which are manipulated on a second order by the undervalued Dollar

3) The Euro exchange rate - manipulated by the ECB and China

4) Sovereign yields in Europe - manipulated by the ECB and the PBOC

5) The Swiss France and the Yen - now both manipulated by the local central banks.

It is no wonder international liquidity is vulnerable to a squeeze and markets are nervous. Why anybody is surprised that we have been in bear markets for the better part of the last ten years is beyond me. Never in my 40 year career have I seen such a combination of incompetence and intellectual arrogance in the ruling class.

Sir Martin Jacomb on Greece in the FT

The euro gave the peripheral countries a standard of living above their earning power and, at the same time, took away their ability to correct this by devaluation. It is the same process which led to the permanent impoverishment of southern Italy, when the lira became the national currency after Italy was united under the Risorgimento 150 years ago. At the turn of the 19th century Naples was the largest city in Italy and the region was relatively sophisticated. But its economy declined relative to the north. Although it had started to build railways in the 1830s, before any other part of Italy, the effort was soon discontinued. Moreover, railways were unable to reach the length of the country because Pope Gregory XVI forbade their construction in the Papal States. He called them “chemins d’enfer”. The economies of north and south thus became progressively divergent. Southern Italy’s economic decline continued but, with the introduction of the lira, it lost its ability to correct its uncompetitive position. Able and enterprising people moved to the north or emigrated, and the situation became permanent, as it remains today. This tragedy endures.

GaveKal on the weak US$

The markets have clearly started to signal that further weakness in the US$ is no longer a positive development for the macro-environment (see A Roadmap for the Coming Changes in Fed Policy). After all, with the US trade deficit being almost entirely made up by China and oil, a weaker US$ from here probably means a deteriorating trade balance for the US' non-China/non energy trade partners (a theme we will explore further in an upcoming ad-hoc). Simultaneously, a weaker US$ accentuates inflationary pressures around the world, eating into margins and forcing other central banks (e.g., Poland's surprise rate hike yesterday) to adopt tighter monetary policies...

However, the real reason most of the clients we have talked to lately seem to be so uncomfortable is the growing perception that, with QE2, the "weights and measures" of our financial system have been tinkered with and who knows what consequences this will have? Indeed, investing is all about "value"-figuring out where the value is and why "values" move over time. To measure this we use money-even if it is very hard to explain why money itself has any "value," since, in our world of fiat money the marginal cost of producing money is zero. So the investment business has two sides. The easy side is trying to understand how the values are going to move versus one another (i.e., equities vs bonds, or Japan vs China...), making in the meantime the assumption that the value of money will not. The difficult side is trying to understand whether the value of money itself is about to change.

Now money has two prices: a domestic price (interest rates), and an international price (the exchange rate). Thus, the only way for a fiat monetary system to work is if the different monies, each corresponding to different economic and political systems, can compete freely against one another. Which is why things are so tricky today: there are three major economic blocks (US, EMU, China...) which now account for more than half of global GDP. But their currencies are completely out of whack and heavily manipulated by governments and central banks. This leaves investors without a proper "weight and measure" system to establish how to invest-and the feeling that this status quo cannot last. No wonder the level of discomfort is high.

The wisdom of Herb Stein

“IF something cannot go on for ever, it will stop,” Herb Stein once observed caustically. The American economist’s aphorism has proved apt of late—as applicable to Hosni Mubarak’s regime as it was to America’s rising property prices....


From The Economist.

Quis custodiet ipsos custodes?

A US colleague of mine thoughtfully sent through a memo on the Greek crisis and European economic outlook from a chap at Oaktree Capital. It was the usual pillory of the Greeks for being lazy tax-dodgers and praise for the fiscally prudent Germans. It prompted the following response.

"The Euro was basically a political compromise: West Germany was allowed to reunify with East Germany (the French hated this because it made Germany without doubt the premiere power in Europe) if the French were allowed to have the Deutsche Mark (i.e. a lower cost of borrowing). It was explicitly framed in these terms by Mitterand and Kohl. From the same source of French insecurity comes the decision to allow the fiscally weak countries such as Belgium, Italy and Greece to join despite the fact that they did not, and were not likely to, meet the Maastricht Convergence Criteria. The idea was to create a voting block of nations that France could commander as a counter-veiling force to Germany on the ECB and the Council of Economic Ministers.

"I also get a bit cheesed off when commentators describe the current crisis as being caused by the profligate South in the teeth of opposition from the fiscally prudent North. The South is profligate – not to mention inefficient, unproductive and crippled by an unjustified sense of entitlement (if Portugal didn’t exist, would you invent it (unless you were a golf-fanatic)?). But the North – while possessing a decent manufacturing export sector – is also crippled with over-generous and inefficient social security programmes. The key fact is that Germany – the apparent paragon of fiscal virtue – broke the Maastricht Stability and Growth Pact rules on budget deficits in 2002, 2003, 2004 and 2005. Not to mention to 2009 and 2010(f). By contrast, Spain passed the test with flying colours – posting SURPLUSES in 2004, 2005 and 2006. So, enough of the anti-South propaganda. Germany, France, Belgium etc all over-spent and that’s why they didn’t come down hard on Greece – because they would’ve had to come down on themselves too.

"The amazing thing is not that bond market vigilantes have finally caught onto this – but that between 2000 and 2008 they gave the Eurozone the benefit of the doubt. We are now in a situation where bond markets and rating agencies are enforcing the fiscal discipline that Eurozone politicians should’ve enforced themselves. All of which goes to show that there is nothing new in European politics. Juvenal had it exact in 180 AD – you can’t trust the people who are subject to the law to enforce it.

From The Economist

"The barrier to (EU structural) reform has always been political, not economic. Jean-Claude Juncker, prime minister of Luxembourg, put it best in 2007: “We all know what to do, but we don’t know how to get re-elected once we have done it.”"

Thoughts on listening to the Today programme

An Education minister says our curricula used to be "designed upwards" to suit the universities and that now they should be "designed downwards" to suit the needs of, you know, actual students. An unfortunate turn of phrase but it does hint, subconsciously, at the troglodytically poor standards of inner city secondary education.

Ten minutes later the Afghan ambassador to the Court of St James is talking about "time", "having enough time", and "this being the time to take time, not having enough time notwithstanding". He sounds like Culture Club.

Overall I'm, like, totally, like disturbed about the declining standards of public discourse on Radio 4, innit.

Maybe I have over-sensitized to the corruption of public discourse by last night's experience, on a "hot date" watching "Get Him to the Greek". I've always complained about having to choose between a career as an economist and as a film programmer. It seemed to me that these worlds were very different and rightly so. And now I find Nobel Prize winning economist Paul Krugman in a cameo in a Judd Apatow comedy. It's like seeing your dad crop up as a background singer in a Miley Cyrus video.

When I first started reading Krugman it was 1998 and he was but a humble trade economist with a lo-rent website out of MIT upon which he opined about the Liquidity Trap. (That was back in the day when the only liquidity trap was Japan, as opposed to now, when you could be referring to anywhere in the developed world.) Reading Krugman was a niche interest for Econ students at Oxford. It was the geek equivalent of being into Vampire Weekend before they put out "I Stand Corrected" as Free Song of the Week on iTunes. And then Krugman went to Princeton. I guess we should've seen it coming. From the third best University in Jersey, but the only one with a Gucci store, it was just a mere hop, skip and jump to the NY Times Op Ed page. Ever since then, Krugman's university page has been abandoned, and while he won the Nobel for his trade work, he hasn't written anything of substance since. Rather, he seems to have become enmeshed in political spats and ad hominem attacks. It's a crying shame. Krugman, in his old guise, could've been instrumental in actually rolling up his sleeves and sorting out the mess we're in - at the Fed, Treasury, IMF, whatever. Now, he's reduced to just another Huffpost contributor - and to being a cameo in a Judd Apatow movie.

I genuinely wonder how Krugman views this latest venture. Does he see it as part of his apparent mission to popularise economics? Is it just a vanity project? Or is he just a little bit embarrassed? He looked bewildered in the movie. But maybe that was just his "character". All I know is that he has probably ruled himself out of being Fed Chief. Or maybe not. In a world where Arnold Schwarzenegger can be elected Governor of California, anything is possible, maybe even the first Bank of England MPC member who simultaneously reviews flicks in The Grauniad?