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House Price Crash Forum

mattyfc

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Everything posted by mattyfc

  1. Agree, the BOE seem to be experts in weakening sterling. The problem they may have is that the US are in a much stronger position to weaken than us. They have much lower inflation and also the world "reserve currency". They can print with much less risk of an all out rout in the $. It looks almost certain now the Fed will print and the only question is the exact details. With the CPI at over 3% ,producer price inflation rising (http://www.businessweek.com/news/2010-10-08/u-k-producer-prices-increase-more-than-forecast.html), The VAT rise in January and general increases in key commodoties. I can see inflation being 4-5%+ by the end of the year. If the BOE print with inflation at such a high level there would be a substantial risk of a sterling / inflation crisis. The MPC would be finished.
  2. Growth for the whole first half of the year is already 1.6%, no one really thinks we are going to the same in Q3 & Q4. Most forcasts for the year seem to be 2-2.5%, implying growth of 0.5% ish in Q3 and Q4. If we can grow even by 1-2% next year whilst we are cutting the defecit and house prices are falling I think that would be a good result. If sterling does strengthen it will be because of extreme dollar weakness (Priniting Presses?) rather than sterling strength .
  3. No surprises. Will be interesting to see if Posen really voted for more QE on the 20th. I think (hope) they are bsing and have no real intention of more QE. If we were in a full double dip with inflation less than 1% I could understand it. Not at the moment though. Looks more like inflation will be double figures than 1% by January the way commodities are going and sterling is sinking. Oil will probably be $150 again if the dollar keeps getting trashed / more QE. Will be interesting to see what Trichet has to say at the ECB press conference later.
  4. Why can't he just declare bankruptcy? Wright off the fine and then publish a book about his experiences. He can write it in prison, rogue trader 2 or similar. He has 3 years, plenty of time, get a film deal sorted out. Back on his feet in no time.
  5. The unbelievable rates that were offered were sent in promotional "cancelled contracts" emails and were above the interbank rates. They were selling Dollars at $1.61 ish and € at 1.24 when sterling had not traded at such rates for about a year. They were clearly operating a ponzi scheme and trying to suck in cash with no intention on honouring these deals. You would think the police could form a fraud case against the directors with this evidence. The main companies in the sector are covered by the financial services compensation scheme as if they were a high street bank. So you can do £50k a time with no risk.
  6. Not really surprising. It looks like there is some solid downward momentum going on now. The market will correct itself until first time buyers are able to purchase at reasonable income multiples & mortgages (including repayment not IO) become much cheaper than rental. I think we will see another 10-30% come off and the only question is timescale. All eyes on unemployment and interest rates for the next 12 months. Very happy not be sitting on a large mortgage right now.
  7. Still the same story. Germany and France doing great. Spain, Greece, Portugal, Ireland etc all looking like heading back in to recession from Q3 / Q4 Onwards. Major structural imbalances remain and further divergence will occur until a proper solution is found. Spain will probably trigger the reforms needed; it may take a while though.
  8. With a normal broker you can do a forward to lock in a good rate for delivery sometime in the future and remove the future exchange rate risk by securing the current rate. They take a deposit, usually 10% or so and you pay the balance just before the delivery date. You normally have no risk if the company is registered with the FSA properly. They will use a separate client account for your funds and they are covered under the financial services compensation scheme as if your money was in your own bank account. CCE seemed to take the entire payment upfront and there is a suspicion that they were paying out due contracts by pulling in new cash with ridiculously high rates. A ponzi scheme. They were not registered with the FSA as they were supposed to have a turnover of under £3m.
  9. That really sucks. The law needs to be changed with much tighter regulation of firms engaged in currency exchange and all firms should be forced to have separate client account not just those turning over £3m +. This has all the hallmarks of a Ponzi scheme to me. They have been offering rates ABOVE the wholesale rate for the last few months from the look of some posts on MSE and here. Also they seem to have been sending “cancelled contract” promotional offers to snare big customers in to sending them more cash. These contracts make no sense as they could be sold back in to the market at a nice profit, no need to sell them on to another customer. They must have been desperate for short term cash as there is no way they could have made any money out of these trades. Barclays are only their bankers and would have no idea where money was coming from or going to. Considering the reported size of the company they should have had separated client accounts and been regulated by the FSA with protection from the financial services compensation scheme. My guess would be it was the management’s responsibility to inform the FSA of their exchange turnover. If they have not done this the directors could be liable for the losses. I expect there will be criminal proceedings once the police have investigated thoroughly. Hopefully the directors will do some serious time.
  10. How can there be much argument about this? We need to cut the deficit. This move will affect 15% of the working population who while not rich cannot be considered poor. We are going to have the 50% Tax rate for massive spending cuts for the bottom. The cuts in public services will already hit the other 85% much harder than those earning at the top. Everyone is going to have to make sacrifices to save the £400 million we are overspending on a daily basis. This is a gigantic amount of cash, almost inconceivable. This is just the beginning, I am sure eventually the winter fuel allowance will go for top rate taxpaying pensioners as well. Just giving money away indiscriminately is going to have to stop. The welfare state is meant to support the poor and needy. Not doll out cash as some kind of politically motivated tax break for the upper middle class. Obviously it would be better to means test it and make it 100% fair for families with two working parents earning just under the threshold. The bureaucracy involved in such a system would negate any cost savings and is therefore a non starter. We need less government bureaucracy not more.
  11. The BOE’s forecasting has been dreadful for the last 4 years. They have got there Growth and Inflation predictions wrong almost every time. Inflation is already 1.1%over target and has been consistently all year. We have a VAT and Duty increase coming up. Commodities prices are rocketing. I think inflation will be 5-10% by early next year and they will push the panic button yanking up rates , probably crushing the economy in the process. More QE would surely be crazy unless inflation is pretty much 0 or - and we are back in deep recession.
  12. Seem to be be legit: http://www.thisislondon.co.uk/standard/article-23884587-george-osborne-cuts-welfare-with-pound-26000-a-year-benefit-cap.do Another good move, assume this is to stop people claiming 100k a year housing benefit and the rest. Why should the state pay housholds more than the average wage in benefits. Disability and working benefits seem to be excluded.
  13. Very Sensible decision. We are going to have to get used to the fact that indiscriminately handing out cash is not fiscally sustainable. The western European welfare system build over the last 50 years is going to be dismantled as it is wholly unsustainable. The only alternative is a fiscal crisis, then child benefit will be the least of your worries. Next to go, Winter fuel payments , Free public transport, The state pension (50 year phase out), tax credits and the rest for anyone on top rate tax. The whole set up of the welfare state needs to be changed so money is allocated to those who need it. Not millionaires who need some extra holiday / haircut cash.
  14. Did you know your money was at risk? It seems strange anyone would use a company like this when you can get the same rates and services with a company with no risk at all. Been reading the forums and really feel bad for some of the people caught up in this. It seems to be really hard to tell the difference between a proper currencies firm with separate client accounts and companies like this one. I am sure if people were aware of the risk, and the zero risk alternative no one would use them in a million years.
  15. China looking after.. China. They need a strong Euro so Europeans can buy lots of nice Chinese exports. Can you imagine how much less purchasing power the periphery of Europe would have outside of the Euro. 30-50% less at least I would think. They Need to keep the Chinese working or they may turn on the government.
  16. Really no need to use cowboy companies like this. You can use currencies direct or similar with no risk to your own cash. The law should be changed so people are aware of the difference between currency companies. No harm in them operating if the customers know of the risk they are taking.
  17. We were never going to maintain such a high level of manufacturing expansion. No one expects growth to continue at 1%+ Q on Q, a growth rate of even 0.5% a quarter would be pretty impressive considering. The Euro PMI was even worse, Germany and France going along great but Spain & Ireland back in Manufacturing recession, along with Greece obv. German retail sales falling also. More divergence, makes the ECBs job even more difficult. That being said I am not sure what Barclays are smoking, if sterling was going to strengthen as they have predicted the B of E would counteract it with all guns blazing. They want a weak currency and are very good at achieving it going by current performance.
  18. Very Long term it would make sense, they are an export based economy and no doubt the punt would sink by about 50% against the Euro on introduction. Problem would be all the euro denominated contracts, loans, bonds etc. There would have to be capital controls whilst this was done to prevent the biggest bank run in history as depositors transferred money to other Eurozone countries. They could default on everything, Wright it all off. Probably would not make them to popular with the rest of the Eurozone / EU. Yields for all the periphery countries would rocket and they would probably end up defaulting as well. They could be slung out of the EU? The Eurozone would collapse and the resulting financial crisis would make the credit crunch look like a picnic. I think the only realistic long term solution is for Germany / Holland and maybe France to withdraw to thier own currencies or a euro mark 2. The old euro would crash and the countries in it would start to recover.
  19. I can't see a way to return to sustained growth for Ireland, Greece, Spain,or Portugal in the monetary straight jacket of the single currency. The German economy will keep improving as their main European trading partners have no currency defence against their wages structures and productivity. The structural issues in the Eurozone have not been addressed and most European leader seem to be completely unaware there is even a problem. I expect these economies to be back in recession by Q4 and once the bailout cash runs out they will have to find a real solution to structural problems of the Eurozone.
  20. Absolutely agree with this. Incredible how short sighted we can be. The US needs to start paying back debt fast, not piling up more and printing. The public sector is strangling the economy, it should be obvious. Especially to the US, so called bastion of the free market. Less Government, Less tax, Less Debt = Sustainable recovery. Tax, Spend and Print is the highway to ruin.
  21. So no $ are being created? If so sensible. The sooner the real problems are dealt with, the sooner a proper economic recovery can begin. To much debt, to much government spending, asset bubbles...
  22. More QE would be another nail in Obama's coffin. The US, pioneers of free market economics think they can print and spend there way to prosperity. Wasting 1.5trn a year with little to show for it. Why would they want to do more? The US needs a new president, $200-300bn in government cuts for the next 5-10 years. This is the way back to sustainability and long term growth.
  23. House prices stagnating / falling is entirely expected and inline with the real data coming out. This is barely news at all. They will continue to fall slowly as interest rates rise back to normal levels in the next few years. This is unavoidable. This and reducing the size of the public sector will be very good for the economy in the long term.
  24. The austerity measure are going to help the economy not damage it. "Austerity" is terribly misleading as it makes it sound like excessive government spending, over 45% of GDP is a good thing. Removing wasteful government spending (225m on that database child etc) and giving the money back to the private sector will help the economy grow short and long term. The government can normally only raise money from taxation and selling Guilts. Excessive spending and taxation seriously damages the economy. Excessive issuing of Guilts drains investment out of corporate bonds, stocks and other investments. The media in this country are completely unable to put across a balanced view on this. The government has grown far too large and is wasting taxpayers' money left right and centre.
  25. The government spends money terribly. They have no reason what so ever to be efficient and get taken to the cleaners by every firm they do business with. Think of your taxes being wasted on this kind of crap. All the more reason to have the smallest government possible.
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