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Bloomberg: Exports- Another Ticking Time Bomb For Economy

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http://www.bloomberg.com/apps/news?pid=206...ps&refer=uk

Pound's Rally, Boon for U.K. Tourists, Hurts Exports (Update1)
Aug. 21 (Bloomberg) -- The British pound's biggest rally since 1990, a boon for U.K. tourists, is catching company treasurers by surprise and eroding profits at exporters.
Britain's currency has climbed 9.5 percent against the dollar since December after the economy expanded the most in two years, foreign takeovers of U.K. companies climbed 65 percent and central banks boosted their purchases of pounds for foreign- exchange reserves.
``Our exports are down this year,''
said Peter Matthews, managing director of Black Country Metals Ltd., a Stourbridge, England-based company that buys and sells scrap metal, and exports 95 percent of its production. ``We have to hedge everything, otherwise the profit line gets obliterated.''
Exports account for 29 percent of the 1.22 trillion-pound ($2.3 trillion) U.K. economy, Europe's second biggest. The pound's biggest quarterly advance since 2003 contributed to declines in exports in May and June, government data showed this month...../
``Exports are doing poorly,'' said David Kern, the London- based economic adviser to the British Chambers of Commerce
, which represents more than 135,000 U.K. businesses. ``The exchange rate isn't the only problem, but it is important.''
Pessimistic Banks
The pound is becoming a favorite currency for speculators
, figures from the Chicago Mercantile Exchange show. Trading in pound futures at the exchange, the world's largest market for the contracts, soared 126 percent in the second quarter from a year before, exceeding the 21 percent increase in trading of the euro against the dollar....../
Interest-rate futures show traders expect the [boE] to raise borrowing costs once more this year, to 5 percent. Investors started the year betting the central bank would remain on hold for the next 12 months, futures show.

Sterling, like HPI-MEW to which it is tied, is undermining what is left of Gordon's "Miracle Economy" by slowly strangling exports. The trade gap is already into negative territory and will only get worse as the pound continues to soar against not just the US$ but against the entire world's currencies. Once HPI-MEW is seen to be a negative for the economy sterling will be brought down to reality. How long will the speculators keep bidding it up? Will the cycle kick in and the focus will shift elsewhere--the Yuan or perhaps Swiss Francs?

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Sterling, like HPI-MEW to which it is tied, is undermining what is left of Gordon's "Miracle Economy" by slowly strangling exports.

It would if we made anything anymore. It has nowhere near the same effect on companies that do design work in the UK but have already shipped manufacturing to China and support to India... profits may drop a little, but costs are controlled by Chinese and Indian exchange rates, not Sterling.

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'The pound is becoming a favorite currency for speculators, figures from the Chicago Mercantile Exchange show. Trading in pound futures at the exchange, the world's largest market for the contracts, soared 126 percent in the second quarter from a year before, exceeding the 21 percent increase in trading of the euro against the dollar.'

Bye, bye sterling.

Wouldnt have happened if the UK had been in the Euro.....

I read (and posted) months ago that sterling was going to be the speculators biatch, just like 1992.

So it looks once again like a sterling crisis is coming, only this time the price will be bid up.

Exports will dive, jobs will be cut, inflation and immigration will rise and the UK will become a McEconomy. (McOnomy??)

Would you like fries with that, Herr Chirac?

Fries...they go very well with a stable economy....like the one you have....

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Bye, bye sterling.

Wouldnt have happened if the UK had been in the Euro.....

Would you like fries with that, Herr Chirac?

Fries...they go very well with a stable economy....like the one you have....

Economics really isn't your forte is it ?

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I misread the heading - I thought it said "Experts are doing poorly" which would be bang-on... :lol::lol:

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http://www.bloomberg.com/apps/news?pid=206...ps&refer=uk

Pound's Rally, Boon for U.K. Tourists, Hurts Exports (Update1)
Aug. 21 (Bloomberg) -- The British pound's biggest rally since 1990, a boon for U.K. tourists, is catching company treasurers by surprise and eroding profits at exporters.
Britain's currency has climbed 9.5 percent against the dollar since December after the economy expanded the most in two years, foreign takeovers of U.K. companies climbed 65 percent and central banks boosted their purchases of pounds for foreign- exchange reserves.
``Our exports are down this year,''
said Peter Matthews, managing director of Black Country Metals Ltd., a Stourbridge, England-based company that buys and sells scrap metal, and exports 95 percent of its production. ``We have to hedge everything, otherwise the profit line gets obliterated.''
Exports account for 29 percent of the 1.22 trillion-pound ($2.3 trillion) U.K. economy, Europe's second biggest. The pound's biggest quarterly advance since 2003 contributed to declines in exports in May and June, government data showed this month...../
``Exports are doing poorly,'' said David Kern, the London- based economic adviser to the British Chambers of Commerce
, which represents more than 135,000 U.K. businesses. ``The exchange rate isn't the only problem, but it is important.''
Pessimistic Banks
The pound is becoming a favorite currency for speculators
, figures from the Chicago Mercantile Exchange show. Trading in pound futures at the exchange, the world's largest market for the contracts, soared 126 percent in the second quarter from a year before, exceeding the 21 percent increase in trading of the euro against the dollar....../
Interest-rate futures show traders expect the [boE] to raise borrowing costs once more this year, to 5 percent. Investors started the year betting the central bank would remain on hold for the next 12 months, futures show.

Sterling, like HPI-MEW to which it is tied, is undermining what is left of Gordon's "Miracle Economy" by slowly strangling exports. The trade gap is already into negative territory and will only get worse as the pound continues to soar against not just the US$ but against the entire world's currencies. Once HPI-MEW is seen to be a negative for the economy sterling will be brought down to reality. How long will the speculators keep bidding it up? Will the cycle kick in and the focus will shift elsewhere--the Yuan or perhaps Swiss Francs?

indeed......sounds just like a re-run of the early 90's.

sterling reached the magic $2/£ level before that nice mr. soros sold it down the swannie.

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indeed......sounds just like a re-run of the early 90's.

sterling reached the magic $2/£ level before that nice mr. soros sold it down the swannie.

over the past 2 months investors have been selling shares to keep companies ticking along, in the 80s it was stock brokers making money, 90 IFAS and now mortage brokers each run has been for 4-5 years. i do think times are turning and recession is coming, it professional investors that make market crashs to buy back their stock from the sheep.

I say the shit has hit the fan and now its sliding down.

http://today.reuters.co.uk/news/articleinv...ETS-SELLOFF.xml

http://today.reuters.co.uk/news/articleinv...-PRUDENTIAL.xml

and i think the the trend has just started.

"Property was a great place to have been in recent times and it remains a key diversifier in the fund," said Brookes. "Our property weighting has drifted up over the last six months or so but we now have some concerns and have decided to sell down some of our exposure."

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  • 302 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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