{"text":[[{"start":11.74,"text":"Contrition can be disarming. "},{"start":14.032,"text":"But Kwasi Kwarteng’s U-turn on the abolition of a 45p tax rate for high earners will not restore the UK’s fiscal credibility. "},{"start":21.436999999999998,"text":"The measure accounted for under 5 per cent of the £45bn package of unfunded tax cuts in the “mini” Budget 10 days ago. "}],[{"start":29.58,"text":"Moreover, the reverse ferret has proved a damaging thesis about the UK chancellor and Prime Minister Liz Truss. "},{"start":36.071999999999996,"text":"It is this: they lack the judgment to intuit the mood of markets or their own party. "}],[{"start":41.06,"text":"Their original unforced error led to an extreme jump in gilt yields. "},{"start":45.314,"text":"The disarray is ominous. "},{"start":47.194,"text":"Markets are febrile. "},{"start":48.787000000000006,"text":"Modest bad news can trigger massive sell-offs, as US tech stocks have also shown. "}],[{"start":54.74,"text":"The gyrations of the UK bond market are exceptional. "},{"start":58.332,"text":"But signs of stress are widespread. "},{"start":60.612,"text":"In the US, the Move (Merrill Lynch Option Volatility Estimate) index rose to its second-highest level since 2009 last Wednesday. "},{"start":69.004,"text":"This index, derived from options on Treasuries, captures bond market volatility, much like the Vix index does for stocks. "}],[{"start":77.38,"text":"The UK has made itself vulnerable to a battering from bond vigilantes. "},{"start":81.984,"text":"Kwarteng put the UK’s reputation at risk by dispensing with forecasts from the Office for Budget Responsibility, firing the Treasury’s top official and implausibly targeting 2.5 per cent growth. "}],[{"start":93.64,"text":"But he is right to point out that the UK has a lower debt burden than most other G7 countries. "},{"start":99.119,"text":"Its peers are swallowing the same toxic cocktail of high inflation, slowing growth and tightening monetary policy. "},{"start":105.537,"text":"For many, the fight against inflation is handicapped by the surge in the dollar. "}],[{"start":110.76,"text":"The war in Ukraine and tensions with China add to the uncertainties. "}],[{"start":115.45,"text":"This is treacherous territory for investors. "},{"start":118.504,"text":"But there are opportunities too. "},{"start":120.47200000000001,"text":"High volatility can help global macro hedge funds, which try to anticipate moves across interest rates, currencies, equities and commodities. "},{"start":128.327,"text":"The HFRI Macro index is up 9 per cent this year. "}],[{"start":132.62,"text":"Good quality shares with low indebtedness and high dividend yields should prove resilient. "},{"start":137.549,"text":"Value stocks outperform growth equities in periods of high inflation and rising bond yields, according to a UBS analysis of data going back to 1975. "}],[{"start":147.67000000000002,"text":"The price of 30-year gilts is down nearly a third over the past year. "},{"start":151.88700000000003,"text":"The FTSE 100 has fallen by less than a tenth as much. "},{"start":155.42900000000003,"text":"That is not the normal pattern. "},{"start":157.459,"text":"As markets move further into uncharted territory, there will be more nasty surprises. "}],[{"start":162.3,"text":""}]],"url":"https://creatives.ftacademy.cn/album/85320-1664854026.mp3"}