Sunday, Jun 11, 2006
Roger Bootle on the strengthening euro and rising interest rates
Sunday Telegraph: The euro on a roller-coaster ride
Bearish article from Bootle who foresees a strengthening euro and rising interest rates globally. Seems to have changed his mind on UK rates which he has previously forecast to fall : "Rates here (UK) have so far held steady but the odds against a rate rise have been shortening".
Predicts asset valuations to come under pressure : "central banks (have been) running very low interest rates and presiding over huge rises in liquidity. This has produced extremely buoyant asset markets, which took valuations to excessive levels.
And this set the markets up for a fall. The realisation that central banks are in the pro-cess of backtracking from their expansive mode, coupled with rather worse inflation news, made markets realise how vulnerable valuations were and how it was about time that they recognised the notion of risk - and priced for it accordingly.
There is probably more market turbulence - and weakness - to come."
8 Comments
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1. harold said...
Of course, what Bootle - the faithful foot soldier - doesn't outline are the prospects for the pound given an increasingly attractive euro, err... down?
2. denzil said...
Bootle seems to change his tune more often than the weather. One minute it's interest rate cuts the next minute it is a rise. I normally agree with many of his points but that is not hard because if he were a weatherman he would forcast:
Sun
Rain
Cloud
Clear
Windy
Calm
Along with David Smith of the Times who recently said "Too early for a rate cut" Bootle is a prize chump who hums whatever tune the payer wants.
3. Magnifico said...
I agree with Denzil and add if anyone had made half the mistakes/ wrong predictions/ u-turns of this guy they would have lost their job long ago.
4. Thebritishbrickie said...
absolutley
5. Paul said...
David Smith is a twit. He's the king of throwaway unsubstantiated comments, and he depends on his readers having short memories - some of his comments in the last 3 months:
"After things have settled down soon, oil will fall back to $40/barrel"
"it's too soon for a rate rise with rising unemployment"
"Borrowing against your home is wealth generation"
6. denzil said...
Paul said
[Quote]
David Smith is a twit. He's the king of throwaway unsubstantiated comments, and he depends on his readers having short memories - some of his comments in the last 3 months:
"After things have settled down soon, oil will fall back to $40/barrel"
"it's too soon for a rate rise with rising unemployment"
"Borrowing against your home is wealth generation"
[END QUOTE}
And don't forget "Inflation dog is still not barking".
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