Exchange Rates ..... Waaaaaaaa!

[chiang mai]

It seems that no matter how good your credentials or reputation are in the financial services field your credibility is always going to be in doubt. Below the link to a 2008 forecast by a bunch of City brokers guessing where exchange rates and equities will be in twelve months time. It's almost comical.

http://blogs.telegraph.co.uk/business/mark...brokersknow.htm

[Pib]

The two remaining, functioning brain cells I have after too many years of buying overpriced beer in bars are saying (wild ass guessing...gut feel) that the GBP and USD will continue to slide against the baht, while the EUR does a much better job of maintaining its value. Just today I wired over a big chunk of USD so we can close on a house in Bangkok in about two weeks. And of course the USD has to drop approx 0.3 Baht since last week....and I see the GBP is pretty much sliding down the same slope with the USD. Oh well, guess I will just continue with my stock investment rule (my bad luck) of buying high and selling low.

[lannarebirth]

It seems that no matter how good your credentials or reputation are in the financial services field your credibility is always going to be in doubt. Below the link to a 2008 forecast by a bunch of City brokers guessing where exchange rates and equities will be in twelve months time. It's almost comical.

http://blogs.telegraph.co.uk/business/mark...brokersknow.htm

Here's Saxo Banks 2008 Forecast:

Saxo Bank’s Outrageous Predictions 2008

If you’ve read Saxo Bank’s yearly Outlooks over the last few years, you’ll know we don’t hold back in our

annual attempt to predict the black swan sightings in global markets for the year ahead.

Remember though, these predictions are made more in an attempt to provoke thought than at accuracy!

This year, we have to mention our predictions are a bit on the pessimistic side – so let’s hope that we’re

very wrong with the gloomiest of them.

1) Ron Paul elected President of the United States

We’re starting with the most outrageous first! One would imagine that a party with the least popular

president to inhabit the White House – ever – wouldn’t stand a snowball’s chance in Texas of getting a

new candidate elected to the presidency. But Ron Paul is no George Bush Jr., even if he is a Republican like

Bush and is from Texas like Bush. His libertarian, anti-war platform is about three standard deviations away

from the platform of any other Republican candidate — or even Hilary Clinton, for that matter. Paul’s share

in the Republican candidate polls has rocketed from 1 % to 6% in the space of a few months and there

is the best part of a year to go until the election. As should be clear from this year’s Outlook, we are quite

negative on the US economy in 2008. A general slowdown and stock market turmoil should increase the

odds of a Ron Paul nomination as he has been the only candidate to speak frankly about the budget and

current account deficits and the dollar crisis.

2) S&P500 falls 25% from its 2007 high to 1182

Why 1182? That would be an exact 25% drop from the 1576 high the S&P500 index reached in mid-

October of this year. History shows that a stock market drops 15-30% when housing markets fail. “Easy

Al Greenspan” and “the slice and dice any manner of junk and pass on the risk to your clients” investment

banking paradigm triggered the biggest housing bubble in US history. The unwind from the height has

already been severe – by some measures the most severe since the Great Depression – but it has further

to go. So we are daring to forecast that the fall in the major US index would lie at the extreme end of the

scale before we see the light at the end of the tunnel.

3) EURSEK falls to 8.8000 (now 9.4000)

In 2007, the SEK was a currency of many stripes. First, it was on a weak footing as the carry trade was in

focus, and its low interest rate attracted interest in selling SEK as a funding currency. Then the Riksbank

moved rates onto parity with the ECB for the first time in over two years and many speculated that it

could become an even higher yielder. But then a few weakish numbers from Sweden and a bout of risk

aversion have put the SEK on a weak footing as 2007 draws to a close. But we believe that 2008 could

be a stellar year for the currency as the still new government’s continued, more liberal-minded policy

initiatives support capital inflows and also because rate differentials offer relative support for SEK. As

an added bonus, the country sports one of Europe’s largest current account surpluses as measured by

percentage of GDP.

4) USDSGD falls to 1.4000, but then rises back to 1.6000 (now 1.6000)

The beginning of the righting of global imbalances has meant a stronger Singapore dollar over the last

year. The Monetary Authority of Singapore (MAS) has allowed SGD to strengthen to help ease the pressure

caused by strong capital inflows and inflation and as the country registered robust growth rates. This

process could continue for a while into 2008 and take USDSGD toward 1.4000, but eventually the pair

could rise sharply as Singapore has already taken a large share of the necessary adjustment to reflect

global imbalances. SGD could also weaken as capital flows ease sharply and possibly even reverse when

the market looks at the odds for a global growth slowdown and as Singapore’s own sovereign wealth fund

continues to look for overseas investments as a way to recycle its massive reserves.

6) At least three of the largest 10 US homebuilders will go bankrupt

As 2007 draws to a close, many of the stocks for the largest home construction outfits in the US are rallying

after Bush rolled out his desperate attempt to stem the subprime tidal wave by fiddling with rate reset

mechanisms and implementing other measures that all seem like pumping medicine into a dead horse.

These measures are too little and too late, as the last phases of the US housing boom were one of the worst

examples of overextension by any industry ever – driven by excess liquidity (see S&P500 prediction above).

Why is it that we think we need to abolish the economic cycle? The unwind of this bubble will continue

and we think at least three of the largest US homebuilders could go bankrupt in 2008. If you are reluctant

to go short stocks on this story, find companies that specialise in legal services. Why? This situation has the

potential for endless lawsuits as this legal precedent-setting legislative proposal is guaranteed to produce

a feeding frenzy for lawyers if no one else… To save you a bit of time, the tickers for the largest ten US

home builders, as of this writing, are DHI, TOL, CTX, PHM, NVR, LEN, KBH, RYL, BHS, and MTH.

7) Chinese stock market falls 40% by late summer

The Chinese stock market bubble in 2007 saw one of the most remarkable accumulations of paper wealth

in financial market history. The rise in Chinese equities is certainly due in part to solid fundamental

underpinnings, including a liberalisation of markets and remarkable economic growth. But there are a

number of factors that we believe may have resulted in an unhealthy overextension in equity prices that

could mean an ugly correction in 2008 – possibly around the psychologically important 2008 Summer

Olympics in Beijing. So what will provide the trigger for a sell-off? First, Chinese officialdom is showing

an increasing willingness to clamp down on excessive growth with liquidity tightening. Second, some of

the “fundamentals” in earnings are really a pyramiding of stock market gains as companies have booked

profits stemming from stock market gains! Also, much of the bubble has been caused by capital controls

that have kept too much liquidity bottled up in the domestic market. Signs are that those controls may

be eased significantly to allow domestic capital to flow abroad and ease this pressure. So the Shanghai

composite could fall as much as 40% or more in 2008. Look to buy any excessive fallout, however!

8) Grain Prices to double – again!

2007 saw the most spectacular gains in the grains complex in recent memory as wheat prices doubled

and soybean prices rose to levels not seen since the wild grain markets of the 1970s. The story of grains is

a simple one of supply and demand. Human population growth has slowed on a percentage basis, but per

capita consumption of grain is accelerating as emerging markets switch to higher protein diets, which have

a multiplier effect on the grain market. Every kilogram of beef requires 7 kilos of feed, for example. Chinese

meat consumption has doubled per capita since 1990 and milk consumption has tripled since 2000. Most

of the world that can be put to the till has been – this means that only pricing can stem demand in this

most inelastic of all markets. Add to this the ethanol phenomenon, which many view as stealing food from

people and putting into petrol tanks (watch for a growing ethics crisis in 2008 as the “starving stomachs

vs. SUVs” debate grabs headlines). In short, the average price for the grains complex (Corn, Wheat and

Soybeans) could double after having already doubled in the last 15 months. For those who would rather not

trade grain futures, have a look at the ETF called the PowerShares DB Agriculture Fund.

9) World oil prices accelerate to $175

Much of the conventional wisdom on oil has been proven wrong over the past few years, as previously

unimaginable new highs in the price of oil have only been a reflection of the strength of global growth,

rather than an obstruction in its path. And with the weak USD and shrinking profit margins for refiners,

the end consumer in many places throughout the world hasn’t noticed a difference between oil prices

at 99 dollars compared to oil prices at 75 dollars. Even if global growth slows in 2008, it will continue to

move ahead in the emerging markets of the world where marginal energy demand is growing the most.

As “peak oil” becomes a widely accepted principle and supply and demand do a nervous dance, the price

risk in energy remains firmly to the upside.

10) UK growth turns negative

The UK economy may go into a nosedive in 2008, weighed down by some of the same factors that have

toppled the US. The UK housing bubble is possibly worse than the US bubble and has only begun to

unwind. The Bank of England (BOE) has dragged its feet as the credit crisis has unfolded, which could

worsen the situation compared with the Fed, where “Helicopter Ben” has replaced “Easy Al”. The UK

consumer is even more overextended in terms of all forms of debt than his US counterpart. Need we say

more? Okay, we will: the UK terms of trade are awful and getting worse and its most important industry

– financial services – is likely to see its worst recession since the internet/telco blowup of 2000-1. By Q3,

UK GDP growth may flop into the negative column.

[chiang mai]

It seems that no matter how good your credentials or reputation are in the financial services field your credibility is always going to be in doubt. Below the link to a 2008 forecast by a bunch of City brokers guessing where exchange rates and equities will be in twelve months time. It's almost comical.

http://blogs.telegraph.co.uk/business/mark...brokersknow.htm

Here's Saxo Banks 2008 Forecast:

Saxo Bank’s Outrageous Predictions 2008

If you’ve read Saxo Bank’s yearly Outlooks over the last few years, you’ll know we don’t hold back in our

annual attempt to predict the black swan sightings in global markets for the year ahead.

Remember though, these predictions are made more in an attempt to provoke thought than at accuracy!

This year, we have to mention our predictions are a bit on the pessimistic side – so let’s hope that we’re

very wrong with the gloomiest of them.

1) Ron Paul elected President of the United States

We’re starting with the most outrageous first! One would imagine that a party with the least popular

president to inhabit the White House – ever – wouldn’t stand a snowball’s chance in Texas of getting a

new candidate elected to the presidency. But Ron Paul is no George Bush Jr., even if he is a Republican like

Bush and is from Texas like Bush. His libertarian, anti-war platform is about three standard deviations away

from the platform of any other Republican candidate — or even Hilary Clinton, for that matter. Paul’s share

in the Republican candidate polls has rocketed from 1 % to 6% in the space of a few months and there

is the best part of a year to go until the election. As should be clear from this year’s Outlook, we are quite

negative on the US economy in 2008. A general slowdown and stock market turmoil should increase the

odds of a Ron Paul nomination as he has been the only candidate to speak frankly about the budget and

current account deficits and the dollar crisis.

2) S&P500 falls 25% from its 2007 high to 1182

Why 1182? That would be an exact 25% drop from the 1576 high the S&P500 index reached in mid-

October of this year. History shows that a stock market drops 15-30% when housing markets fail. “Easy

Al Greenspan” and “the slice and dice any manner of junk and pass on the risk to your clients” investment

banking paradigm triggered the biggest housing bubble in US history. The unwind from the height has

already been severe – by some measures the most severe since the Great Depression – but it has further

to go. So we are daring to forecast that the fall in the major US index would lie at the extreme end of the

scale before we see the light at the end of the tunnel.

3) EURSEK falls to 8.8000 (now 9.4000)

In 2007, the SEK was a currency of many stripes. First, it was on a weak footing as the carry trade was in

focus, and its low interest rate attracted interest in selling SEK as a funding currency. Then the Riksbank

moved rates onto parity with the ECB for the first time in over two years and many speculated that it

could become an even higher yielder. But then a few weakish numbers from Sweden and a bout of risk

aversion have put the SEK on a weak footing as 2007 draws to a close. But we believe that 2008 could

be a stellar year for the currency as the still new government’s continued, more liberal-minded policy

initiatives support capital inflows and also because rate differentials offer relative support for SEK. As

an added bonus, the country sports one of Europe’s largest current account surpluses as measured by

percentage of GDP.

4) USDSGD falls to 1.4000, but then rises back to 1.6000 (now 1.6000)

The beginning of the righting of global imbalances has meant a stronger Singapore dollar over the last

year. The Monetary Authority of Singapore (MAS) has allowed SGD to strengthen to help ease the pressure

caused by strong capital inflows and inflation and as the country registered robust growth rates. This

process could continue for a while into 2008 and take USDSGD toward 1.4000, but eventually the pair

could rise sharply as Singapore has already taken a large share of the necessary adjustment to reflect

global imbalances. SGD could also weaken as capital flows ease sharply and possibly even reverse when

the market looks at the odds for a global growth slowdown and as Singapore’s own sovereign wealth fund

continues to look for overseas investments as a way to recycle its massive reserves.

6) At least three of the largest 10 US homebuilders will go bankrupt

As 2007 draws to a close, many of the stocks for the largest home construction outfits in the US are rallying

after Bush rolled out his desperate attempt to stem the subprime tidal wave by fiddling with rate reset

mechanisms and implementing other measures that all seem like pumping medicine into a dead horse.

These measures are too little and too late, as the last phases of the US housing boom were one of the worst

examples of overextension by any industry ever – driven by excess liquidity (see S&P500 prediction above).

Why is it that we think we need to abolish the economic cycle? The unwind of this bubble will continue

and we think at least three of the largest US homebuilders could go bankrupt in 2008. If you are reluctant

to go short stocks on this story, find companies that specialise in legal services. Why? This situation has the

potential for endless lawsuits as this legal precedent-setting legislative proposal is guaranteed to produce

a feeding frenzy for lawyers if no one else… To save you a bit of time, the tickers for the largest ten US

home builders, as of this writing, are DHI, TOL, CTX, PHM, NVR, LEN, KBH, RYL, BHS, and MTH.

7) Chinese stock market falls 40% by late summer

The Chinese stock market bubble in 2007 saw one of the most remarkable accumulations of paper wealth

in financial market history. The rise in Chinese equities is certainly due in part to solid fundamental

underpinnings, including a liberalisation of markets and remarkable economic growth. But there are a

number of factors that we believe may have resulted in an unhealthy overextension in equity prices that

could mean an ugly correction in 2008 – possibly around the psychologically important 2008 Summer

Olympics in Beijing. So what will provide the trigger for a sell-off? First, Chinese officialdom is showing

an increasing willingness to clamp down on excessive growth with liquidity tightening. Second, some of

the “fundamentals” in earnings are really a pyramiding of stock market gains as companies have booked

profits stemming from stock market gains! Also, much of the bubble has been caused by capital controls

that have kept too much liquidity bottled up in the domestic market. Signs are that those controls may

be eased significantly to allow domestic capital to flow abroad and ease this pressure. So the Shanghai

composite could fall as much as 40% or more in 2008. Look to buy any excessive fallout, however!

8) Grain Prices to double – again!

2007 saw the most spectacular gains in the grains complex in recent memory as wheat prices doubled

and soybean prices rose to levels not seen since the wild grain markets of the 1970s. The story of grains is

a simple one of supply and demand. Human population growth has slowed on a percentage basis, but per

capita consumption of grain is accelerating as emerging markets switch to higher protein diets, which have

a multiplier effect on the grain market. Every kilogram of beef requires 7 kilos of feed, for example. Chinese

meat consumption has doubled per capita since 1990 and milk consumption has tripled since 2000. Most

of the world that can be put to the till has been – this means that only pricing can stem demand in this

most inelastic of all markets. Add to this the ethanol phenomenon, which many view as stealing food from

people and putting into petrol tanks (watch for a growing ethics crisis in 2008 as the “starving stomachs

vs. SUVs” debate grabs headlines). In short, the average price for the grains complex (Corn, Wheat and

Soybeans) could double after having already doubled in the last 15 months. For those who would rather not

trade grain futures, have a look at the ETF called the PowerShares DB Agriculture Fund.

9) World oil prices accelerate to $175

Much of the conventional wisdom on oil has been proven wrong over the past few years, as previously

unimaginable new highs in the price of oil have only been a reflection of the strength of global growth,

rather than an obstruction in its path. And with the weak USD and shrinking profit margins for refiners,

the end consumer in many places throughout the world hasn’t noticed a difference between oil prices

at 99 dollars compared to oil prices at 75 dollars. Even if global growth slows in 2008, it will continue to

move ahead in the emerging markets of the world where marginal energy demand is growing the most.

As “peak oil” becomes a widely accepted principle and supply and demand do a nervous dance, the price

risk in energy remains firmly to the upside.

10) UK growth turns negative

The UK economy may go into a nosedive in 2008, weighed down by some of the same factors that have

toppled the US. The UK housing bubble is possibly worse than the US bubble and has only begun to

unwind. The Bank of England (BOE) has dragged its feet as the credit crisis has unfolded, which could

worsen the situation compared with the Fed, where “Helicopter Ben” has replaced “Easy Al”. The UK

consumer is even more overextended in terms of all forms of debt than his US counterpart. Need we say

more? Okay, we will: the UK terms of trade are awful and getting worse and its most important industry

– financial services – is likely to see its worst recession since the internet/telco blowup of 2000-1. By Q3,

UK GDP growth may flop into the negative column.

I have no data on 1 thru 5 but 6 thru 10 seem entirely believable if not probable.

[kerr17]

Euro or Pounds?

I know my question may be difficult to answer but as I'm getting paid English pounds i may also have the option to switch it in Euro, do you think is it wise for me in the long term to do that?

Thanks

[sometime]

UK Pounds - Thai Bht ....... 65.49 ........

Anyone take a stab in the dark as to when ...or if the rates will return to the norm?

I know the government's unsettled at the moment so obviously exchange rates are affected,but how long for?

We have a little UK cash to exchange and moneys from the UK to transfer. Start work in two weeks and paid in 6 weeks.... I'm dipping into the cash more often than I'd like and losing money all the time........

Any advice welcome.....

Thanks again............ and once again some of the posts on here have made me laugh so much that I nearly stayed in over the festive period just to read our ramblings....

All the best.........

65.49 I wish, I had a transfer Wednesday only got 64, of to the Kasikorn bank on Monday to find out why 64.

[jackr]

UK Pounds - Thai Bht ....... 65.49 ........

Anyone take a stab in the dark as to when ...or if the rates will return to the norm?

I know the government's unsettled at the moment so obviously exchange rates are affected,but how long for?

We have a little UK cash to exchange and moneys from the UK to transfer. Start work in two weeks and paid in 6 weeks.... I'm dipping into the cash more often than I'd like and losing money all the time........

Any advice welcome.....

Thanks again............ and once again some of the posts on here have made me laugh so much that I nearly stayed in over the festive period just to read our ramblings....

All the best.........

65.49 I wish, I had a transfer Wednesday only got 64, of to the Kasikorn bank on Monday to find out why 64.

Thought I'd did bad when I got 66.6 last week. 64? Ouch!

[cmsally]

65.49 I wish, I had a transfer Wednesday only got 64, of to the Kasikorn bank on Monday to find out why 64.

Weds 2 Jan from SCB Rates for 2 Jan

Kasikorn might have some explaining to do.

[tracer5050]

A lot of good info. But let see what happens to the dollar after the electtion this year? Some beleive

after that it may get better. Hope so

[thailand_tom]

UK Pounds - Thai Bht ....... 65.49 ........

Anyone take a stab in the dark as to when ...or if the rates will return to the norm?

I know the government's unsettled at the moment so obviously exchange rates are affected,but how long for?

We have a little UK cash to exchange and moneys from the UK to transfer. Start work in two weeks and paid in 6 weeks.... I'm dipping into the cash more often than I'd like and losing money all the time........

Any advice welcome.....

Thanks again............ and once again some of the posts on here have made me laugh so much that I nearly stayed in over the festive period just to read our ramblings....

All the best.........

there will be a recession here in the usa, we might be in one starting now..we are china's biggest country, by far for their exports..china already has inflation..and in 3-6 months when there is no more market for their products here..the usd will be the currency people will want to hold..the chinese currency will take a nose dive..bringing the thai balt along with it..it was the strength of the chinese yuan that brought the thai balt up..had nothing to do with the thai ecomony..since they rely on tourists..and produce nothing..to speak of..china has already lowered their forcast from 11-12% growth to 8%..thailand is talking 4.5% growth..and will have to revise that in 3-6 months..things are getting really bad here in the usa.. anyway i could be wrong..we will have to see..i would think thailand can not survive without investment from tourist and people buying house's, etc. 6 months from now 1 usd =43 balt

[thailand_tom]

It seems that no matter how good your credentials or reputation are in the financial services field your credibility is always going to be in doubt. Below the link to a 2008 forecast by a bunch of City brokers guessing where exchange rates and equities will be in twelve months time. It's almost comical.

http://blogs.telegraph.co.uk/business/mark...brokersknow.htm

Here's Saxo Banks 2008 Forecast:

Saxo Bank’s Outrageous Predictions 2008

If you’ve read Saxo Bank’s yearly Outlooks over the last few years, you’ll know we don’t hold back in our

annual attempt to predict the black swan sightings in global markets for the year ahead.

Remember though, these predictions are made more in an attempt to provoke thought than at accuracy!

This year, we have to mention our predictions are a bit on the pessimistic side – so let’s hope that we’re

very wrong with the gloomiest of them.

1) Ron Paul elected President of the United States

We’re starting with the most outrageous first! One would imagine that a party with the least popular

president to inhabit the White House – ever – wouldn’t stand a snowball’s chance in Texas of getting a

new candidate elected to the presidency. But Ron Paul is no George Bush Jr., even if he is a Republican like

Bush and is from Texas like Bush. His libertarian, anti-war platform is about three standard deviations away

from the platform of any other Republican candidate — or even Hilary Clinton, for that matter. Paul’s share

in the Republican candidate polls has rocketed from 1 % to 6% in the space of a few months and there

is the best part of a year to go until the election. As should be clear from this year’s Outlook, we are quite

negative on the US economy in 2008. A general slowdown and stock market turmoil should increase the

odds of a Ron Paul nomination as he has been the only candidate to speak frankly about the budget and

current account deficits and the dollar crisis.

2) S&P500 falls 25% from its 2007 high to 1182

Why 1182? That would be an exact 25% drop from the 1576 high the S&P500 index reached in mid-

October of this year. History shows that a stock market drops 15-30% when housing markets fail. “Easy

Al Greenspan” and “the slice and dice any manner of junk and pass on the risk to your clients” investment

banking paradigm triggered the biggest housing bubble in US history. The unwind from the height has

already been severe – by some measures the most severe since the Great Depression – but it has further

to go. So we are daring to forecast that the fall in the major US index would lie at the extreme end of the

scale before we see the light at the end of the tunnel.

3) EURSEK falls to 8.8000 (now 9.4000)

In 2007, the SEK was a currency of many stripes. First, it was on a weak footing as the carry trade was in

focus, and its low interest rate attracted interest in selling SEK as a funding currency. Then the Riksbank

moved rates onto parity with the ECB for the first time in over two years and many speculated that it

could become an even higher yielder. But then a few weakish numbers from Sweden and a bout of risk

aversion have put the SEK on a weak footing as 2007 draws to a close. But we believe that 2008 could

be a stellar year for the currency as the still new government’s continued, more liberal-minded policy

initiatives support capital inflows and also because rate differentials offer relative support for SEK. As

an added bonus, the country sports one of Europe’s largest current account surpluses as measured by

percentage of GDP.

4) USDSGD falls to 1.4000, but then rises back to 1.6000 (now 1.6000)

The beginning of the righting of global imbalances has meant a stronger Singapore dollar over the last

year. The Monetary Authority of Singapore (MAS) has allowed SGD to strengthen to help ease the pressure

caused by strong capital inflows and inflation and as the country registered robust growth rates. This

process could continue for a while into 2008 and take USDSGD toward 1.4000, but eventually the pair

could rise sharply as Singapore has already taken a large share of the necessary adjustment to reflect

global imbalances. SGD could also weaken as capital flows ease sharply and possibly even reverse when

the market looks at the odds for a global growth slowdown and as Singapore’s own sovereign wealth fund

continues to look for overseas investments as a way to recycle its massive reserves.

6) At least three of the largest 10 US homebuilders will go bankrupt

As 2007 draws to a close, many of the stocks for the largest home construction outfits in the US are rallying

after Bush rolled out his desperate attempt to stem the subprime tidal wave by fiddling with rate reset

mechanisms and implementing other measures that all seem like pumping medicine into a dead horse.

These measures are too little and too late, as the last phases of the US housing boom were one of the worst

examples of overextension by any industry ever – driven by excess liquidity (see S&P500 prediction above).

Why is it that we think we need to abolish the economic cycle? The unwind of this bubble will continue

and we think at least three of the largest US homebuilders could go bankrupt in 2008. If you are reluctant

to go short stocks on this story, find companies that specialise in legal services. Why? This situation has the

potential for endless lawsuits as this legal precedent-setting legislative proposal is guaranteed to produce

a feeding frenzy for lawyers if no one else… To save you a bit of time, the tickers for the largest ten US

home builders, as of this writing, are DHI, TOL, CTX, PHM, NVR, LEN, KBH, RYL, BHS, and MTH.

7) Chinese stock market falls 40% by late summer

The Chinese stock market bubble in 2007 saw one of the most remarkable accumulations of paper wealth

in financial market history. The rise in Chinese equities is certainly due in part to solid fundamental

underpinnings, including a liberalisation of markets and remarkable economic growth. But there are a

number of factors that we believe may have resulted in an unhealthy overextension in equity prices that

could mean an ugly correction in 2008 – possibly around the psychologically important 2008 Summer

Olympics in Beijing. So what will provide the trigger for a sell-off? First, Chinese officialdom is showing

an increasing willingness to clamp down on excessive growth with liquidity tightening. Second, some of

the “fundamentals” in earnings are really a pyramiding of stock market gains as companies have booked

profits stemming from stock market gains! Also, much of the bubble has been caused by capital controls

that have kept too much liquidity bottled up in the domestic market. Signs are that those controls may

be eased significantly to allow domestic capital to flow abroad and ease this pressure. So the Shanghai

composite could fall as much as 40% or more in 2008. Look to buy any excessive fallout, however!

8) Grain Prices to double – again!

2007 saw the most spectacular gains in the grains complex in recent memory as wheat prices doubled

and soybean prices rose to levels not seen since the wild grain markets of the 1970s. The story of grains is

a simple one of supply and demand. Human population growth has slowed on a percentage basis, but per

capita consumption of grain is accelerating as emerging markets switch to higher protein diets, which have

a multiplier effect on the grain market. Every kilogram of beef requires 7 kilos of feed, for example. Chinese

meat consumption has doubled per capita since 1990 and milk consumption has tripled since 2000. Most

of the world that can be put to the till has been – this means that only pricing can stem demand in this

most inelastic of all markets. Add to this the ethanol phenomenon, which many view as stealing food from

people and putting into petrol tanks (watch for a growing ethics crisis in 2008 as the “starving stomachs

vs. SUVs” debate grabs headlines). In short, the average price for the grains complex (Corn, Wheat and

Soybeans) could double after having already doubled in the last 15 months. For those who would rather not

trade grain futures, have a look at the ETF called the PowerShares DB Agriculture Fund.

9) World oil prices accelerate to $175

Much of the conventional wisdom on oil has been proven wrong over the past few years, as previously

unimaginable new highs in the price of oil have only been a reflection of the strength of global growth,

rather than an obstruction in its path. And with the weak USD and shrinking profit margins for refiners,

the end consumer in many places throughout the world hasn’t noticed a difference between oil prices

at 99 dollars compared to oil prices at 75 dollars. Even if global growth slows in 2008, it will continue to

move ahead in the emerging markets of the world where marginal energy demand is growing the most.

As “peak oil” becomes a widely accepted principle and supply and demand do a nervous dance, the price

risk in energy remains firmly to the upside.

10) UK growth turns negative

The UK economy may go into a nosedive in 2008, weighed down by some of the same factors that have

toppled the US. The UK housing bubble is possibly worse than the US bubble and has only begun to

unwind. The Bank of England (BOE) has dragged its feet as the credit crisis has unfolded, which could

worsen the situation compared with the Fed, where “Helicopter Ben” has replaced “Easy Al”. The UK

consumer is even more overextended in terms of all forms of debt than his US counterpart. Need we say

more? Okay, we will: the UK terms of trade are awful and getting worse and its most important industry

– financial services – is likely to see its worst recession since the internet/telco blowup of 2000-1. By Q3,

UK GDP growth may flop into the negative column.

I have no data on 1 thru 5 but 6 thru 10 seem entirely believable if not probable.

ron paul is all but done ..obama..is soaring and we want a dem..not a rep..in office..so i would say obama will be the next president..200.00 a barrel is what the stock market is predicting for 2008..the stock market is getting hammered..and the write off's for the subprime loans in the next few months ..are suppose to be so large that companies are trying to hide and delay as much as they can..