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S&p To Downgrade The Uk ?

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I think we should all take stock and consider the likelihood of S&P next issuing a downgrade on the UK. Its debt levels are worst than the USA and there is no question the UK has slipped back into recession.

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All country's, or trading blocks like the EU, can print. It is however inflationary as we are now starting to see in the USA and UK. So, by all means start the Sterling printing press. This would however lead to even higher inflation, higher interest rates and eventually the collapse of house prices in the UK. For these reasons it seems the UK is in the same position as the USA - in decline and at risk of downgrades.

In nominal but not real terms so isn't that a cut anyway?

Remember we can still print our own currency. :D

As Warren Buffet said only this July:

"We've got the right to print our own money"

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Will be interesting to see what happens in the US now, and wonder if the same may happen here. Going to be a fascinating week, and no I doubt I'll enjoy watching because probably going to have a negative effect on my savings or prospects

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I think we should all take stock and consider the likelihood of S&P next issuing a downgrade on the UK. Its debt levels are worst than the USA and there is no question the UK has slipped back into recession.

Who said we ever really came out of it?

The world didn't want a 'depression', which would have been called if we'd remained in a recession.

It's all lies and half truths. Anyone fancy sticking their head above the parapet and saying that the problems at the heart of this fiasco have been admitted let alone solved?

Every news story suggests that the credit crunch hasn't even started. Car sales declining, retail declining, stores closing, finance redundancies all this year. Yet public sector cuts haven't happened, private sector debt remains unrestrained (minimal reposessions and few bankruptcys), bubbles in investments still exist (most notably houses).

Someone please explain to me how we are now emerging from the problems, when the real problems haven't really begun.

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Will be interesting to see what happens in the US now, and wonder if the same may happen here. Going to be a fascinating week, and no I doubt I'll enjoy watching because probably going to have a negative effect on my savings or prospects

unlikely. Interest is at an all time low, lower than inflation so can it really be worse? I suppose if you have shares it could be squeeky bum time.

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As Warren Buffet Robert Mugabe said only this July in 2007:

"We've got the right to print our own money"

:lol:

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The UK is a pissant player in all of this at the moment.

Big money has its targets set on more spectacular gains.

Agree entirely that the UK is pissant in all this, but please could you elucidate regarding big money and more spectacular gains?

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is it fair to say we have run the mill here on HPC and that we are all agreed the UKs debts are worse than the USA? McKinsey debunked the nonsense that our external debts dont matter because they are backed by assets (most like property!)

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Maybe S&P found out that there was more money in the US's brown envelope to Moodys or Fitch? So if we put the same amount in all 3 envelopes we will be OK because non of them will be upset?

Maybe S&P realised the envelope was full of dollars? :ph34r:

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FT article suggesting S&P will downgrade other Triple A's

LINK

My guess is the UK and France are in for a BIG shock and will get AA-

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All country's, or trading blocks like the EU, can print. It is however inflationary as we are now starting to see in the USA and UK. So, by all means start the Sterling printing press. This would however lead to even higher inflation, higher interest rates and eventually the collapse of house prices in the UK. For these reasons it seems the UK is in the same position as the USA - in decline and at risk of downgrades.

...the US is downgraded due to the indecision and lack of cooperation between the two parties...each would have let the country go down to satisfy personal pride ...all for losers...strong leadership in the right direction is needed now ...the maths / arithmetic are immaterial.... :rolleyes:

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Every economy should be downgraded, since the grading is relative, problem solved. A similar solution to gcses when they came up with A*

I should be in government with ideas like that.

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Need to login to see article? Jist of it?

..the article was in fact an opinion column by the chief executive of PIMCO and is headed "downgrade heralds new era" By Mohamed El-Erian

...and concludes the US are their own worst enemies ....banging of heads together time is here....... :rolleyes:

Edited by South Lorne

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This is why most HPC'ers don't get economics its not logical, its a rigged game of cards and everyone central bank is playing their own game of bluff and counter bluff even

Ecomomics if played honest and faily should be a very subjective matter but its not and therefore its one of the most complex objective diciplines around.

I just hope Merve the swerve does'nt blow it and we get picked off by Warren and George again.

Edited by Conrad

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In summary the article says:

1. downgrade will result in higher borrowing costs

2. several other AAA rated countries (no names but you can guess who, France cited as a 'for instance') will suffer downgrades

3. S&P downgrade will lead to problems for the ratings agencies on the basis they are only supposed to downgrade every one else. The article at this point is a little comical since according to the FT its fine for S&P to downgrade the PIIGS but not the USA.

4. The downgrade could herald a dislocation in global finance because the whole world is beholden to the dollar.

Answering the comments above. Those who think the UK is a safe haven are kidding themselves and sound like the folks here in the USA who carped on about how the USA would never default, and would never be downgraded. The UK has for two long used financial services to offset the decline in manufacturing and production. This is set to backfire since it's clear the EU, Russia, China and India have seen how London is a shill for Wall St. Even Tim Geithner pointed out the role of London's LAX REGULATION in the fall of Lehman Brothers. I was talking to an Attorney last night who has an accounting specialisation. He confirmed what I have always thought and that is the USA used London as a vehicle to dump CDOs on the rest of the world. He told me it was common knowledge in 2007 that investment banks were sending people overseas to sell securities that everyone knew were toxic yet rated AAA. This was planned, and part of the reason London's investment banking sector grew so rapidly in the 2000s. This is now common knowledge amongst the leaders in Europe and there are two paths from here on: first disarray, default by the PIIGS, and an EU member nation haircut; or second 'emergency' measures that bring about greater integration and control from Brussels. The later is the more likely scenario and if that happens London will find itself out on a limb as the Wall St caves in. This will push the UK further into recession and raise the prospect of default by inflation caused by QE.

If you read Foreign Affairs you will have seen some interesting articles suggesting that the EU is toying with moving to a stronger EU-Asia axis with the USA and UK being marginalized by their corrupt financial practices. This could spell the end of the Dollar as the reserve currency. I also read today that the USA is looking at two strategies wrt China: one, give in and let China become the dominant world power, or two try and destabilize China in the hope there is a peaceful break up into several provinces. If the USA pursues the later then its clear the UK must make a choice between the EU and the USA. China can then fight it out with the USA with the EU sat on the sidelines.

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BPW

I am a Briton in Poland and I can tell you I have been amazed at what a busy, industrial place this is. Household name factories from Whirlpool to Pepsi to Cadbury, and also the techs like HP, Google, etc. The place buzzes with activity. Poland makes lots of things (great bicycles at budget prices, I was surprised to find out for a start) and they really knuckle down. If they keep going like this, Poland will not lag that far behind Germany. But, and you'll be surprised to hear this, property prices are still far higher than average workers can afford (eg a 1 bed flat in a city is about £60K, their wage would be £7K to £12K) and interest rates are 4.5%. Food is not cheap. (Beer's cheap, vodka's cheap, some fresh produce is cheap.)

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In summary the article says:

1. downgrade will result in higher borrowing costs

2. several other AAA rated countries (no names but you can guess who, France cited as a 'for instance') will suffer downgrades

3. S&P downgrade will lead to problems for the ratings agencies on the basis they are only supposed to downgrade every one else. The article at this point is a little comical since according to the FT its fine for S&P to downgrade the PIIGS but not the USA.

4. The downgrade could herald a dislocation in global finance because the whole world is beholden to the dollar.

Answering the comments above. Those who think the UK is a safe haven are kidding themselves and sound like the folks here in the USA who carped on about how the USA would never default, and would never be downgraded. The UK has for two long used financial services to offset the decline in manufacturing and production. This is set to backfire since it's clear the EU, Russia, China and India have seen how London is a shill for Wall St. Even Tim Geithner pointed out the role of London's LAX REGULATION in the fall of Lehman Brothers. I was talking to an Attorney last night who has an accounting specialisation. He confirmed what I have always thought and that is the USA used London as a vehicle to dump CDOs on the rest of the world. He told me it was common knowledge in 2007 that investment banks were sending people overseas to sell securities that everyone knew were toxic yet rated AAA. This was planned, and part of the reason London's investment banking sector grew so rapidly in the 2000s. This is now common knowledge amongst the leaders in Europe and there are two paths from here on: first disarray, default by the PIIGS, and an EU member nation haircut; or second 'emergency' measures that bring about greater integration and control from Brussels. The later is the more likely scenario and if that happens London will find itself out on a limb as the Wall St caves in. This will push the UK further into recession and raise the prospect of default by inflation caused by QE.

If you read Foreign Affairs you will have seen some interesting articles suggesting that the EU is toying with moving to a stronger EU-Asia axis with the USA and UK being marginalized by their corrupt financial practices. This could spell the end of the Dollar as the reserve currency. I also read today that the USA is looking at two strategies wrt China: one, give in and let China become the dominant world power, or two try and destabilize China in the hope there is a peaceful break up into several provinces. If the USA pursues the later then its clear the UK must make a choice between the EU and the USA. China can then fight it out with the USA with the EU sat on the sidelines.

There'll be a referendum vote on all that of course <_<

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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