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Recession Has Further To Run -- Sterling Starting To Wobble

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http://www.bloomberg.com/apps/news?pid=206...id=aWiRNy947lrs

U.K. Pound Declines Against Dollar, Euro as Economy Contracts

By Lukanyo Mnyanda

Aug. 29 (Bloomberg) -- The pound declined for a fourth week against the dollar as reports added to concern the U.K.’s worst recession since World War II may have further to run, reducing demand for the nation’s assets.

The currency weakened to more than 88 pence per euro for the first time since June as government reports showed the economy contracted for a fifth consecutive quarter and business investment slumped by the most in 24 years. The yield on two- year gilts fell to a record low after the central bank extended its asset purchases this month to revive the economy and said the recession was deeper than anticipated.

Those who think the disease that led to the mess is coming back (HPI) anytime soon are out of touch with the reality that things do, indeed, have a long way to run yet before thgere is even a hint of a turnaround. The Piper has yet to be paid and mounting job losses (Halifax announced huge layoff today) coupled with a catastrophic decline in business investment points to worse yet to come.

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http://www.bloomberg.com/apps/news?pid=206...id=aWiRNy947lrs

U.K. Pound Declines Against Dollar, Euro as Economy Contracts

By Lukanyo Mnyanda

Aug. 29 (Bloomberg) -- The pound declined for a fourth week against the dollar as reports added to concern the U.K.’s worst recession since World War II may have further to run, reducing demand for the nation’s assets.

The currency weakened to more than 88 pence per euro for the first time since June as government reports showed the economy contracted for a fifth consecutive quarter and business investment slumped by the most in 24 years. The yield on two- year gilts fell to a record low after the central bank extended its asset purchases this month to revive the economy and said the recession was deeper than anticipated.

Those who think the disease that led to the mess is coming back (HPI) anytime soon are out of touch with the reality that things do, indeed, have a long way to run yet before thgere is even a hint of a turnaround. The Piper has yet to be paid and mounting job losses (Halifax announced huge layoff today) coupled with a catastrophic decline in business investment points to worse yet to come.

RB, I often wonder what Mervyn King would do without your nod to the markets to sell off sterling.

Edited by AvidFan

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I just got a spam email from ADVFN, the share dealing and info site, entitled 'get out of the suckers' rally now' !!!!

The turn in the stock markets will start this week.

wile_e_coyote_gravity.jpg

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The turn in the stock markets will start this week.

wile_e_coyote_gravity.jpg

Why - cos the bosses are back at work after their 4 week break in the south of France/Tuscany. :lol:

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U.K. Pound Declines Against Dollar, Euro as Economy Contracts

We're screwed aren't we. This country is going to be economically devastated.

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Guest The Relaxation Suite
http://www.bloomberg.com/apps/news?pid=206...id=aWiRNy947lrs

U.K. Pound Declines Against Dollar, Euro as Economy Contracts

By Lukanyo Mnyanda

Aug. 29 (Bloomberg) -- The pound declined for a fourth week against the dollar as reports added to concern the U.K.’s worst recession since World War II may have further to run, reducing demand for the nation’s assets.

The currency weakened to more than 88 pence per euro for the first time since June as government reports showed the economy contracted for a fifth consecutive quarter and business investment slumped by the most in 24 years. The yield on two- year gilts fell to a record low after the central bank extended its asset purchases this month to revive the economy and said the recession was deeper than anticipated.

Those who think the disease that led to the mess is coming back (HPI) anytime soon are out of touch with the reality that things do, indeed, have a long way to run yet before thgere is even a hint of a turnaround. The Piper has yet to be paid and mounting job losses (Halifax announced huge layoff today) coupled with a catastrophic decline in business investment points to worse yet to come.

I love the way they try to make out that the "recovery" was real and that now the recession "may" have more in it. The fact is there was never a recovery, only a breathing space bought by printing money. Stock markets all over the place are going to fall like dominoes over the next few months - just look at the volumes. Plus, gold doesn't its **** from its elbow at the moment, so there's no hiding there.

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Guest The Relaxation Suite
We're screwed aren't we. This country is going to be economically devastated.

The only thing worse than my short-term forecast for Britain is my medium-term forecast, and the only thing worse than that is my long-term forecast.

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sterling already down over 170 pips against the yen and not doing so well against the euro or dollar either. Going to be a bad week for the £ me thinks.

Edited by richyc

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Guest The Relaxation Suite
sterling already down over 170 pips against the yen and not doing so well against the euro or dollar either. Going to be a bad week for the £ me thinks.

It's sliding against the commodity currencies as well - AUD and CDN getting stronger by the minute. Sterling has gone from 2.52 AUD to 1.93 AUD in about eight months and continues on its current trajectory round the S bend. Currently 1.7 CDN - I remember the heady days of nearly 2.5. This could easily go way lower against both CND and AUD as well.

Edited by D-503

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Darling has changed his tone according to BBC Radio 4

He used to say he'll send whatever is necessary.

Today, he is going to spend what he can. Ths sun has risen in the slow brain.

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http://www.bloomberg.com/apps/news?pid=206...id=aWiRNy947lrs

Those who think the disease that led to the mess is coming back (HPI) anytime soon are out of touch with the reality that things do, indeed, have a long way to run yet before thgere is even a hint of a turnaround. The Piper has yet to be paid and mounting job losses (Halifax announced huge layoff today) coupled with a catastrophic decline in business investment points to worse yet to come.

RB, I am now exercising caution in being too negative in my predictions as I don't want to appear hideously wrong in the face of stagnant house prices coupled with inflation.

You may get further 40% real falls, but I am pretty certain we won't be getting 40% nominal drops from here.

There is a massive dam of Queased Liquidity waiting to flood the economy. I am getting more worried now about my STR fund than during the banking crisis when Lehman's fell.

You suggest Sterling is going down the toilet, and that is precisely the mechanism I am again concerned about. If wages keep falling and we deflate, your pound will actually buy you more not less and this is the opposite of currency devaluation. This doesn't sit so well with what Merve and co have been upto.

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Darling has changed his tone according to BBC Radio 4

He used to say he'll send whatever is necessary.

Today, he is going to spend what he can. Ths sun has risen in the slow brain.

With the Chancellor you generally have to listen to what he is saying carefully and then realise they he's worried about the exact opposite of the implications of what he is saying. (Yes I know that's a hard sentence).

So here goes.

He will "spend what he can", ie the intended implication being - we are now going to be sensible and reduce spending, so I want you to see me now as a hawkish chancellor who will tackle waste and who will cut the budget according to our cloth. So don't bother worrying about all that Queased Money and the risk of inflation.

Of course what this actually means is - "damn those bankers the mess they have made has caused me to monetise so much debt that there is now a huge ocean of cash waiting to break out, especially if we do introduce negative interest rates. I better now appear grave and prudent and lead people to think I am hawkish."

He isn't so much as lying, as rather trying to use his position to prevent natural events in the market from occurring by trying to alter the market's perception. Of course this ultimately ends up appearing as lies.

Edited by mikelivingstone

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sterling already down over 170 pips against the yen and not doing so well against the euro or dollar either. Going to be a bad week for the £ me thinks.

What f**king idiots think the Yen is worth investing in??????

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With the Chancellor you generally have to listen to what he is saying carefully and then realise they he's worried about the exact opposite of the implications of what he is saying. (Yes I know that's a hard sentence).

So here goes.

He will "spend what he can", ie the intended implication being - we are now going to be sensible and reduce spending, so I want you to see me now as a hawkish chancellor who will tackle waste and who cut the budget according to our cloth. So don't bother worrying about all that Queased Money and the risk of inflation.

Of course what this actually means is - "damn those bankers the mess they have made has cause me to monetise so much debt that there is now a huge ocean of cash waiting to break out, especially if we do introduce negative interest rates. I better now appear grave and prudent and lead people to think I am hawkish."

He isn't so much as lying, as rather trying to use his position to prevent natural events in the market from occurring by trying to alter the market's perception. Of course this ultimately ends up appearing as lies.

I dont think he knows any other way than to spend.

he knows sentiment is turning against more tax and spend, so he changes his tone...look, we are doing what we can and it IS constrained and measured....whereas the Tories just want to cutback..

anyone would think he had control over the millions of elements that make up the economy.

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What f**king idiots think the Yen is worth investing in??????

I don't think its as stupid as you think.

Now let me see, has anything big happened in Japan recently that might cause them to dump USD and repatriate their savings and which might also drive inflation from bottom up spending? Hmmmm let me think.

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I don't think its as stupid as you think.

Now let me see, has anything big happened in Japan recently that might cause them to dump USD and repatriate their savings and which might also drive inflation from bottom up spending? Hmmmm let me think.

Well, if it was my money, the fact that their YoY exports for July were -36.5% would be a more significant consideration.....

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Well, if it was my money, the fact that their YoY exports for July were -36.5% would be a more significant consideration.....

This was priced in before the recession when stock markets dived and the Yen fell back following an earlier surges. The latest news seem to be Global recovery with the UK and US lagging and Japan coming out of recession.

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