£ Sterling Up Sh*t Creek?

[Plutarch]

Safe in the long run with bricks & mortor,short term blip on the housing front,nothing to worry abt.I've got properties in the UK which rent out and things are fine.Give it another 5-10 years things will be fine and property UP TO 50% more than now.Pointless panic selling.

EPG

Given that the house price boom was solely driven by an irrational exuberance fuelled by what the herd considered to be an inexhaustible supply of cheap money, I somehow doubt that the status quo of last spring in the UK will ever be restored to the level that this optimistic poster might imagine.

Feeding the frenzy of the past 8 years has brought fractional reserve banking to its knees, forced all the erstwhile building societies which converted into banks to merge with existing banks or have/will be nationalised and has seen the end of western investment banking as we know it.

Somehow, once the dust has settled, I can't quite see the governments of the day permitting a return to the reckless, irresponsible madness of fraudulent lending that precipitated this calamity.

Property prices in Britain will in all likelihood revert to those of 2000- 2003 and any increases will be in line with income. This is already on the agenda and when the finance industry is put back on its feet it will have to conform with new legislation enforcing what many of us already knew to be basic commonsense.

Property as an investment vehicle and a pension fund has had its chips my friend and they are well and truly fried.

There is however a possibility that prices may increase but not in the manner you may have had in mind.

Out of all the countries at risk, the UK is perhaps the most exposed given its ratio of debt to GDP. The panic driven knee jerk reaction to the crisis of reducing interest rates has already set the ball well and truly rolling and frankly the £'s natural peg is probably round about the Euro.

Devaluation, stagflation, higher taxation and unemployment here we come.

We're in trouble, unless of course you have an inflation proof final salary based pension from the government ...........

[Naam]

Checked out the rates this evening and we are down to around 57Bt !

I was only joking a while back about down to the old 45 Bt. Seems to be a case of me and my big mouth again!

By year end, I expect a green Thai 20 Baht note to be worth one English pound sterling.

i expect my male dog to be pregnant by year end.

[JimsKnight]

Yeah, somehow I think the 'Almighty baht' believers will be laughing on the other side of their face once the full wave of the financial crisis hits home....

[Chaimai]

Somehow, once the dust has settled, I can't quite see the governments of the day permitting a return to the reckless, irresponsible madness of fraudulent lending that precipitated this calamity.

Property prices in Britain will in all likelihood revert to those of 2000- 2003 and any increases will be in line with income. This is already on the agenda and when the finance industry is put back on its feet it will have to conform with new legislation enforcing what many of us already knew to be basic commonsense.

Property as an investment vehicle and a pension fund has had its chips my friend and they are well and truly fried.

We're in trouble, unless of course you have an inflation proof final salary based pension from the government ...........

First of all, I have an inflation-proof final salary based pension from a solvent bank they even let me take it at age 52.

The UK economy has been under-pinned by property since the 60's and it will, in my view, retain appeal as a "long-term investment". I have lost 10%-12% on my property values, had I been in equities I would have lost 41% in the same period - I wonder where I would rather have my money ?

Your comments are reminiscent of housepricedrop.com (I wonder what sentiment they are expressing) and only add to the doom and gloom of the negative sentiment that drives the markets. Chickens with heads cut off come to mind or lemmings following other up one day, down the next. The markets are full of pimps and whores whose main interest is not in helping to create a long-term investment vehicle for the populous of the UK (read ANY country) but is more geared to extracting bonuses from a volatile market. Stability does little for bonus structures.

With property, there remains a pent-up demand for housing; Prescott wanted 1m+ new houses built in the south east - there are not many of those being built at the moment. Fortunately, most people are holding their nerve and NOT selling at fire-sale prices - few have to. The UK never had a sub-prime market anywhere near the size of the States and, whilst repossessions will inevitably increase I do foresee wholesale foreclosures. If the greedy banks had not fcuked up in their chase for high-interest (shoddy)loan portolios and gutless government had taken decisive, timely action we would not be in <deleted> now. I have had to make 3 people redundant and that did not make me feel good.

I think interest rates will be globally managed and, finally, inflation will be sacrificed for the sake of instilling more confidence lower rates. Tesco's taking 3p off a litre of fuel was probably more important to the majority of Brits than £250bn wiped off the stock market.

For an explanation of why this all happened try and pick up this link:-

http://www.boingboing.net/2008/02/26/subpr...rimer-stic.html

It is powerpoint presentation of how it all went wrong - very funny.

[VegasVic]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

[BalthazarBeefheart]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

But be careful not to trip over your ego on the journey !

Cheers BB

[VegasVic]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

But be careful not to trip over your ego on the journey !

Cheers BB

B.B., Trust me when I tell you that my humility is checked on a daily basis these days Cheers to you as well!

[BalthazarBeefheart]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

But be careful not to trip over your ego on the journey !

Cheers BB

B.B., Trust me when I tell you that my humility is checked on a daily basis these days Cheers to you as well!

Well VV, would it be viable that if oil dips as much as you believe then the USD would appreciate against the THB - as a return to a rate of around 40 would help the beleagured Brits - well at least stop them crying in their beer so much - stiff upper lip I say !

Cheers BB

[Naam]

Yeah, somehow I think the 'Almighty baht' believers will be laughing on the other side of their face once the full wave of the financial crisis hits home....

there are "almighty Baht" as well as "almighty Dollar" believers, some believers "expect", others "hope", "think" or predict the Pound, Kiwi, Euro (insert your preference currency) will "soon" or perhaps "later" reach the point they are envisaging in their wet dreams.

[chiang mai]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

Given that I am heavy with USD and have been since it was trading at 2.04 against GBP, it can head for 1 to 1 if it likes and I will not object too much!

[lannarebirth]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

Given that I am heavy with USD and have been since it was trading at 2.04 against GBP, it can head for 1 to 1 if it likes and I will not object too much!

You thanks is payment enough.

[lannarebirth]

As for the Pound. I don't think it's ever coming back. It's been in a 20 year "rectangle pattern" in a Very Very Long Term downtrend. Those resolve to the dowside generally.

http://www.chartsrus.com/chart.php?image=h...hp?ticker=FUTBP

Might be wrong.

[chiang mai]

I reckon the likely bottom on all of this is GBP/USD at around 1.60 and GBP/THB around 52. Not too bad if you're holding USD but distinctly poor if you hold GBP.

C.M., I use to think that the bottom for the pound would be $1.60-$1.65/Dollar range, but that was before I found out just how troubled the situation is in G.B. I think that the pound could easily test the $1.50 level (especially if oil breaks down below $60/bbl) sometime over the next 6 months, of course if you remember there was a voice in the wilderness here on thaivisa a few months back that told everyone to short oil and gold and get out of the Euro and Pound and go long the Dollar, at a time when the Euro was $1.60/Dollar, the Pound was $2.00/Dollar and oil was in the upoper $130's/bbl and gold was $1000/ounce. As you remember I was ridiculed by all the regular U.S. bashers here, but in the end I was correct and as we go further along on this journey I will become even more correct

Given that I am heavy with USD and have been since it was trading at 2.04 against GBP, it can head for 1 to 1 if it likes and I will not object too much!

You thanks is payment enough.

Can you say just a few more words on this?

[Murf]

So... 57 to the £...

How much lower is it going to get? Or is this the bottom?

[chiang mai]

So... 57 to the £...

How much lower is it going to get? Or is this the bottom?

Extremely unlikely that this is the bottom in my view but who knows, Naams dog does but I suspect but he's not telling! My pain threshold kicks in at 50 and I'm already starting to shop around for best prices on Novocaine.

Edited October 12, 2008 by chiang mai

[lannarebirth]

So... 57 to the £...

How much lower is it going to get? Or is this the bottom?

This is just my opinion, and as such such has no value, like the other people who offer opinions. Generally I like to "show my work" as my math teacher encouraged me to do. With that caveat, I'd say the GBP is going to fall further than it has ever fallen before, against just about every currency on earth. Might be wrong.

[RAZZELL]

Somehow, once the dust has settled, I can't quite see the governments of the day permitting a return to the reckless, irresponsible madness of fraudulent lending that precipitated this calamity.

Property prices in Britain will in all likelihood revert to those of 2000- 2003 and any increases will be in line with income. This is already on the agenda and when the finance industry is put back on its feet it will have to conform with new legislation enforcing what many of us already knew to be basic commonsense.

Property as an investment vehicle and a pension fund has had its chips my friend and they are well and truly fried.

We're in trouble, unless of course you have an inflation proof final salary based pension from the government ...........

First of all, I have an inflation-proof final salary based pension from a solvent bank they even let me take it at age 52.

The UK economy has been under-pinned by property since the 60's and it will, in my view, retain appeal as a "long-term investment". I have lost 10%-12% on my property values, had I been in equities I would have lost 41% in the same period - I wonder where I would rather have my money ?

Your comments are reminiscent of housepricedrop.com (I wonder what sentiment they are expressing) and only add to the doom and gloom of the negative sentiment that drives the markets. Chickens with heads cut off come to mind or lemmings following other up one day, down the next. The markets are full of pimps and whores whose main interest is not in helping to create a long-term investment vehicle for the populous of the UK (read ANY country) but is more geared to extracting bonuses from a volatile market. Stability does little for bonus structures.

With property, there remains a pent-up demand for housing; Prescott wanted 1m+ new houses built in the south east - there are not many of those being built at the moment. Fortunately, most people are holding their nerve and NOT selling at fire-sale prices - few have to. The UK never had a sub-prime market anywhere near the size of the States and, whilst repossessions will inevitably increase I do foresee wholesale foreclosures. If the greedy banks had not fcuked up in their chase for high-interest (shoddy)loan portolios and gutless government had taken decisive, timely action we would not be in <deleted> now. I have had to make 3 people redundant and that did not make me feel good.

I think interest rates will be globally managed and, finally, inflation will be sacrificed for the sake of instilling more confidence lower rates. Tesco's taking 3p off a litre of fuel was probably more important to the majority of Brits than £250bn wiped off the stock market.

For an explanation of why this all happened try and pick up this link:-

http://www.boingboing.net/2008/02/26/subpr...rimer-stic.html

It is powerpoint presentation of how it all went wrong - very funny.

Very interesting post

I think what a lot of non-Brits forget is:

1) UK is the most populous country in Europe, especially in the south-east. People have to have a roof over their heads.

2) UK has a "own your own home" fixation. Unlike a lot of other European countries where people rent for years.

3) Sub-prime is nowhere near like USA where "Ninja" loans were given to all and sundry. Also, in the UK you're personally chased by the banks for the outstanding money!

4) Buy to let (new build flats) were vastly overpriced and oversupplied - Leeds, Liverpool, Sheffield, Manchester etc Hence the price falls and losses for amateur investors who's numbers simply didn't add up.

Finally, back on topic.

Pound will fall, I can't see it going lower than 60 odd baht to the pound for too long. In a 6 months to a year it will stabilise at mid to high 60's.

Baht is horrifically over-valued.

RAZZ

Edited October 12, 2008 by RAZZELL

[Naam]

UK is the most populous country in Europe, especially in the south-east.

ahemm... cough... cough... you mean of course "give or take 21 million". isn't it?

U.K 60,943,912

Germany 82,369,552

source: CIA Factbook

[chiang mai]

Somehow, once the dust has settled, I can't quite see the governments of the day permitting a return to the reckless, irresponsible madness of fraudulent lending that precipitated this calamity.

Property prices in Britain will in all likelihood revert to those of 2000- 2003 and any increases will be in line with income. This is already on the agenda and when the finance industry is put back on its feet it will have to conform with new legislation enforcing what many of us already knew to be basic commonsense.

Property as an investment vehicle and a pension fund has had its chips my friend and they are well and truly fried.

We're in trouble, unless of course you have an inflation proof final salary based pension from the government ...........

First of all, I have an inflation-proof final salary based pension from a solvent bank they even let me take it at age 52.

The UK economy has been under-pinned by property since the 60's and it will, in my view, retain appeal as a "long-term investment". I have lost 10%-12% on my property values, had I been in equities I would have lost 41% in the same period - I wonder where I would rather have my money ?

Your comments are reminiscent of housepricedrop.com (I wonder what sentiment they are expressing) and only add to the doom and gloom of the negative sentiment that drives the markets. Chickens with heads cut off come to mind or lemmings following other up one day, down the next. The markets are full of pimps and whores whose main interest is not in helping to create a long-term investment vehicle for the populous of the UK (read ANY country) but is more geared to extracting bonuses from a volatile market. Stability does little for bonus structures.

With property, there remains a pent-up demand for housing; Prescott wanted 1m+ new houses built in the south east - there are not many of those being built at the moment. Fortunately, most people are holding their nerve and NOT selling at fire-sale prices - few have to. The UK never had a sub-prime market anywhere near the size of the States and, whilst repossessions will inevitably increase I do foresee wholesale foreclosures. If the greedy banks had not fcuked up in their chase for high-interest (shoddy)loan portolios and gutless government had taken decisive, timely action we would not be in <deleted> now. I have had to make 3 people redundant and that did not make me feel good.

I think interest rates will be globally managed and, finally, inflation will be sacrificed for the sake of instilling more confidence lower rates. Tesco's taking 3p off a litre of fuel was probably more important to the majority of Brits than £250bn wiped off the stock market.

For an explanation of why this all happened try and pick up this link:-

http://www.boingboing.net/2008/02/26/subpr...rimer-stic.html

It is powerpoint presentation of how it all went wrong - very funny.

Very interesting post

I think what a lot of non-Brits forget is:

1) UK is the most populous country in Europe, especially in the south-east. People have to have a roof over their heads.

2) UK has a "own your own home" fixation. Unlike a lot of other European countries where people rent for years.

3) Sub-prime is nowhere near like USA where "Ninja" loans were given to all and sundry. Also, in the UK you're personally chased by the banks for the outstanding money!

4) Buy to let (new build flats) were vastly overpriced and oversupplied - Leeds, Liverpool, Sheffield, Manchester etc Hence the price falls and losses for amateur investors who's numbers simply didn't add up.

Finally, back on topic.

Pound will fall, I can't see it going lower than 60 odd baht to the pound for too long. In a 6 months to a year it will stabilise at mid to high 60's.

Baht is horrifically over-valued.

RAZZ

Well matey, this Brit suggests you are very wrong, unfortunately. My first years in Thailand were spent here exchanging Pounds at the rate of 1 Pound for 35 Baht. Is there any special reason why you think we might not return to that scenario because I don't see any. Before you reply you might want to think about the degree to which the UK economy is driven by financial services and the extent to which the "new builds" and their predecessors might suffer substantial price deflation.

Edited October 12, 2008 by chiang mai

[Chaimai]

UK is the most populous country in Europe, especially in the south-east.

ahemm... cough... cough... you mean of course "give or take 21 million". isn't it?

U.K 60,943,912

Germany 82,369,552

source: CIA Factbook

In defence of Razz I think you will find he was referencing:-

Main Entry: pop·u·lous Pronunciation: \ˈpä-pyə-ləs\ Function: adjective Etymology: Middle English, from Latin populosus, from populus people Date: 15th century 1 a: densely populated

In which case, with 61 million people 50,351 sq miles of land versus 82 million on 137,000 sq miles - he is indeed correct. And I am using England (rather than include the Celts) versus your reunified Germany.

Semantics, I know - but you started it Naam

[Naam]

UK is the most populous country in Europe, especially in the south-east.

ahemm... cough... cough... you mean of course "give or take 21 million". isn't it?

U.K 60,943,912

Germany 82,369,552

source: CIA Factbook

In defence of Razz I think you will find he was referencing:-

Main Entry: pop·u·lous Pronunciation: \ˈpä-pyə-ləs\ Function: adjective Etymology: Middle English, from Latin populosus, from populus people Date: 15th century 1 a: densely populated

In which case, with 61 million people 50,351 sq miles of land versus 82 million on 137,000 sq miles - he is indeed correct. And I am using England (rather than include the Celts) versus your reunified Germany.

Semantics, I know - but you started it Naam

i don't know what the effect "popoulus" on "housing" and "roof over heads" but to be on the safe side i surrender and say "touché"

[Naam]

just thought of something. although my wife always claims my english is rather poor i am well aligned with the CIA which claims (obviously wrong):

"Germany... second most populous country in Europe after Russia"

going one step further and assume that "popolous" means "density" let's take a look.

Germany: 236 inhabitants per km²

U.K.: 252 inhabitants per km²

Netherlands: 491 inhabitants per km²

but the winner is Monaco: 16,818 inhabitants per km²

[chiang mai]

But Mong Kok in Hong Kong is the winner by several tens of thousands!

[Naam]

But Mong Kok in Hong Kong is the winner by several tens of thousands!

sure, once Hong Kong joins the European Union

[Chaimai]

but the winner is Monaco: 16,818 inhabitants per km²

Naam - please try and get out more

I was only trying to referee between you and Razz on the UK versus Germany position. Had I known that we were talking Europe-wide (or far East as well now chiang mai has joined the debate) I would have undertaken greater research.

[chiang mai]

But Mong Kok in Hong Kong is the winner by several tens of thousands!

sure, once Hong Kong joins the European Union

They have already, really, they have. Why else would there be so many goods in Europe stamped, "made in Hong Kong".

[RAZZELL]

UK is the most populous country in Europe, especially in the south-east.

ahemm... cough... cough... you mean of course "give or take 21 million". isn't it?

U.K 60,943,912

Germany 82,369,552

source: CIA Factbook

Sorry for not being more precise...But I think you know what I meant.

Per sq km.

RAZZ

[RAZZELL]

Well matey, this Brit suggests you are very wrong, unfortunately. My first years in Thailand were spent here exchanging Pounds at the rate of 1 Pound for 35 Baht. Is there any special reason why you think we might not return to that scenario because I don't see any. Before you reply you might want to think about the degree to which the UK economy is driven by financial services and the extent to which the "new builds" and their predecessors might suffer substantial price deflation.

I wasn't saying there wouldn't be substantial price deflation on "new-builds". Did I not say overpriced and over-supplied?

Remember, it was only in the late 1990's that you got 90 baht to the pound

Any reason why we won't see that again?

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

If the world goes into a "mini-recession"? What will happen to Thai export's - the major driving force behind the economy?

http://en.wikipedia.org/wiki/Economy_of_Thailand

UK:

http://en.wikipedia.org/wiki/Economy_of_the_UK

Although I agree there are troubled times ahead for the £. When the current bunch of jokers get voted out in the next year or so, perhaps thing's might improve

RAZZ

Edited October 12, 2008 by RAZZELL

[VegasVic]

I was just talking to someone who has many dealings with hedge funds in the U.K. and throughout Europe and his view on the Pound and Euro was fairly negative. In particular he sees the Pound dropping to below 1.50/Dollar. If the BOT continues selling those Dollar reserves in order to keep treading water with the Dollar, then that could mean a pretty big drop in the Pound/baht relationship over the coming months

[Chaimai]

I was just talking to someone who has many dealings with hedge funds in the U.K. and throughout Europe and his view on the Pound and Euro was fairly negative. In particular he sees the Pound dropping to below 1.50/Dollar. If the BOT continues selling those Dollar reserves in order to keep treading water with the Dollar, then that could mean a pretty big drop in the Pound/baht relationship over the coming months

And they will run out at some point ?

I still can't help thinking that the BOT is sticking it's fingers in the dyke. I know I have a vested interested in seeing GBP back at 65+ but even so ........... the Thai economy feels fragile.