Commentary on the bond market (traders) claims Gilts' yields (the price of servicing public debt) may rise if Labour's prospective losses in this week's local elections prompt either a shift to the Left (in fiscal terms) or a change of leadership (or both).
'Threats' of adverse market reaction by traders to shifts in fiscal policy are really aimed at the Green Party of England & Wales, suggesting Zack Polanski needs a clear bond market strategy to deal with such pressure.
@ChrisMayLA6 Well, I have to agree. I'd rather not lend out money to socialists and communists because there would be a high risk of never seeing the money again.
Lending out money to capitalists and people on the financial right is associated with less risk, because they depend on their financial reputation for their credibility.
Communists just shrug and blame the "capitalist pigs" when not returning borrowed money.
Hmmm.... I'm not so sure that's what the history of bond defaults would tell us.... especially where capitalist states have inflated their way out of their obligations & corporations have abused bankruptcy laws to avoid their debt obligations.
@ChrisMayLA6 Ahh, but here we must make an important distinction... the laws, which have been abused, are the laws of the government, so ultimately the government bears the responsibility here. Absent those, it is what's in the contract between lender and borrower that governs what happens.
Besides... there are credit rating companies which help with this, but, note that no matter the credit rating or the law, if the government just refuses to pay, that's it. Not much can be done about it.
Indeed, but I'm unconvinced that there are no problems in the privately contracted sector that are not covered by the rating agencies.... but as you noted at the start in a sense that is the investors' risk assessment
@ChrisMayLA6 This is the truth! We must remember Enron, as an example, I do not think they had the lowest credit rating.
