Monday, September 24, 2007

We always knew HPC could do better forecasts

BNP, UBS, Pounded by Forecast, are proving Prescient

"The world's three biggest currency traders advised investors at the start of the year to bet against the British pound when it traded at $1.9588".....Doh!

Posted by alan @ 09:41 PM (800 views)
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5 thoughts on “We always knew HPC could do better forecasts

  • Well.. they would have hit their stop losses and they are betting against a relative index of toilet paper versus brand X .. however…

    there are still a good 3 months of the year to go. no?

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  • planning4acrash says:

    “Lehman forecasts the pound will fall to $1.85 in 2008”

    The Yuan is pegged to the dollar, so Chinese imports will rise by anything up to 10%, + the 6% inflation experienced by China internally. Outlook? Not good.

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  • “The U.K. economy is housing-dominated,” said Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California. “They have had their own housing bubble, and the central bank will have to lower interest rates to salvage that situation. I’ve sold my pound sterling based on that hazardous situation in the U.K.”

    They HAVE HAD their own housing bubble

    Uh ???

    Does this imply he thinks our bubble has burst some time ago and we are far on the downcurve hence needing interest rates reduced ?

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  • I think it unlikely that the yuan will remain pegged to the dollar.

    China will need to get rid of their inflation. Internally raising rates wont cut it.

    Hence look for even more significant import prices rises.

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  • They think STG will fall because rates will be cut to protect the housing market. So they are dumping sterling. If this this turns into a run on sterling then the BOE will face pressure to raise rates to protect sterling and also because of the inflationary pressure of rising import costs.

    So its catch 22 for housing..

    Also any decling in STG will see a rush of pension funds into UK equities as most have large overseas earnings. Suddenly the stock market looks a lot more attractive than property based investments.

    Oh dear for the housing market.

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