Adam Ant once sang that "ridicule is nothing to be scared of." He was wrong. For a politician, all kinds of crises can be survived. Ridicule cannot. Once you've looked truly ridiculous on the public stage, you're done for. That leads to the extraordinary situation where the new government in the UK, installed only three weeks ago, looks so ridiculous after a revolt from international markets that the jobs of its new finance minister, and even the prime minister, have been called into question. Appalling misjudgments led to one of the greatest bond market implosions in history. The price of the current 30-year British bond, or "gilt," tells the story. From the Bank of England's scheduled meeting last Thursday until the early hours of Wednesday morning, it fell by more than 24%. Then the BOE announced that it would buy as many long bonds as were needed to restore stability to the market. The price rallied by 24% from its low in a matter of hours. It's still down a (massive) 6% since last Thursday: This was a staggeringly implausible event. Let's go through it in stages...
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