Help . . . Is The £ Going Into Free-fall?

[chiang mai]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The most important precondition for a currency to rise, is that it must stop falling first.

We were never the ones to let a few simple facts get in the way of our firmly held beliefs.

Lot's of Sterling chat here,

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=22

i wonder what kind of people would be interested in Sterling

Recovering nicely I see Doctor! We can allow you a recovery period of only a few more days I'm afraid, during which time we will treat you with care, then its gloves off once again.

[chiang mai]

i wonder what kind of people would be interested in Sterling

ANS. Those living on a sinking island, who want to take what's left of their cash with them when they jump ship

Talking of things sinking, did anyone notice how GBP/USD reacted to the news of 500k unemployed in the US during November, GBP went North and USD went, er, into sinking mode! Tides they are a turning, perhaps.

[Naam]

I agree - The BOE will be doing something positive to help the economy , as the US

is doing , So sterling may strengthen against the euro .I also see both the dollar and baht as overvalued and both or one may fall which will help pound/baht , probably early next year . IMO

The most important precondition for a currency to rise, is that it must stop falling first.

We were never the ones to let a few simple facts get in the way of our firmly held beliefs.

Lot's of Sterling chat here,

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=22

i wonder what kind of people would be interested in Sterling

Recovering nicely I see Doctor! We can allow you a recovery period of only a few more days I'm afraid, during which time we will treat you with care, then its gloves off once again.

i appreciate your consideration Chiang Mai

[MJP]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

[lannarebirth]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

[MJP]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Normal logic would say we should see more USD technical strength off the back of the non-farm report for November (-533k). Equities should tank. More liquidation of USD denominated, but the market was up 3%!

I recently heard a friend say "A depression is when all bet's are off".

[chiang mai]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Tsk tsk LRB, I hope you're not changing your mind!

Edited December 6, 2008 by chiang mai

[lannarebirth]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Tsk tsk LRB, I hope you're not changing your mind!

No, I've just re-iterated it. No inconsistencies:

http://www.thaivisa.com/forum/Us-35-t224181.html

Of course I could be all wrong, but usually I'm not.

[ArranP]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Normal logic would say we should see more USD technical strength off the back of the non-farm report for November (-533k). Equities should tank. More liquidation of USD denominated, but the market was up 3%!

I recently heard a friend say "A depression is when all bet's are off".

US stocks rally as Hartford leads financial shares after profit forecast. As stocks rose the Dollar weakened.

Also there was the US Jobs Report, not sure how much of the dollar decline is attributable to the Jobs Report and how much is attributable to the stock rally.

One thing to note, the stock market is allegedly about 6 months ahead of the economic.

Edited December 6, 2008 by ArranP

[MJP]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Normal logic would say we should see more USD technical strength off the back of the non-farm report for November (-533k). Equities should tank. More liquidation of USD denominated, but the market was up 3%!

I recently heard a friend say "A depression is when all bet's are off".

US stocks rally as Hartford leads financial shares after profit forecast. As stocks rose the Dollar weakened.

Also there was the US Jobs Report, not sure how much of the dollar decline is attributable to the Jobs Report and how much is attributable to the stock rally.

One thing to note, the stock market is allegedly about 6 months ahead of the economic.

Arran, the non-farm was one of the worst on record and that's with GM/Fird/Chrysler etc. This being the start!

Stocks are completely irrational now. Listen to the recent Hugh Hendry interview on Bloomberg. Go with what the bond market is saying.

Point is, in a rational market, investors would be liquidating US denominated assets off the back of the dire non-farm report, driving technical strength in USD.

All bet's are off.

[MJP]

Transcript (partial) of that Hugh Hendry interview on Gloomberg.

If you go into the credit markets, you find that there's an expectation that interest rates will be rising within 12 months. I would disagree with that...we've almost exhausted the gains from government bonds...the next 36 months are going to be incredibly tough...the corporate bond market is telling you bad bad things, the equity market is telling you recovery...one of them is wrong...for me to lose on 2 year note, CPI has got to go to -6% - if that happens, the fabric of America is unhinged...they will destroy everything if that happens...

[ace]

Of course I could be all wrong, but usually I'm not.

$60 oil anyone....?

Don't worry, I'm laughing with you, not at you. But I do have a few hundred barrels I can let you have at that price........

[chiang mai]

Of course I could be all wrong, but usually I'm not.

$60 oil anyone....?

Don't worry, I'm laughing with you, not at you. But I do have a few hundred barrels I can let you have at that price........

Can I buy them please, I'd like to take delivery in late 2009? No need to deliver and I'll collect.

[lannarebirth]

Of course I could be all wrong, but usually I'm not.

$60 oil anyone....?

Don't worry, I'm laughing with you, not at you. But I do have a few hundred barrels I can let you have at that price........

I don't follow you. can you clarify?

[lannarebirth]

Of course I could be all wrong, but usually I'm not.

$60 oil anyone....?

Don't worry, I'm laughing with you, not at you. But I do have a few hundred barrels I can let you have at that price........

Can I buy them please, I'd like to take delivery in late 2009? No need to deliver and I'll collect.

Why would you, when it can be had for $5/bbl cheaper?

http://charts3.barchart.com/chart.asp?sym=...org=stk&fix=

[ArranP]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Normal logic would say we should see more USD technical strength off the back of the non-farm report for November (-533k). Equities should tank. More liquidation of USD denominated, but the market was up 3%!

I recently heard a friend say "A depression is when all bet's are off".

US stocks rally as Hartford leads financial shares after profit forecast. As stocks rose the Dollar weakened.

Also there was the US Jobs Report, not sure how much of the dollar decline is attributable to the Jobs Report and how much is attributable to the stock rally.

One thing to note, the stock market is allegedly about 6 months ahead of the economic.

Arran, the non-farm was one of the worst on record and that's with GM/Fird/Chrysler etc. This being the start!

Stocks are completely irrational now. Listen to the recent Hugh Hendry interview on Bloomberg. Go with what the bond market is saying.

Point is, in a rational market, investors would be liquidating US denominated assets off the back of the dire non-farm report, driving technical strength in USD.

All bet's are off.

Does this support the argument that the Dollar will weaken against the Pound ?

The macro in the UK is also likely to be not so good in 2009. If this is the case, can you see something else being the driver behind USD/GBP movement through 2009 ? Maybe the FED printing money/deflation ?

I thought it would be the end of the de-leveraging story and positions being re-established in global equities, causing out-flows from the Dollar, apparently there is a lot of cash on the side-lines waiting to buy into the markets at the right time.

Hugh mentions he believes the stratigists are wrong to think the bad news is already priced in.

Edited December 7, 2008 by ArranP

[dageshi]

When markets rally on bad news it's usually a sign of a turning point, it doesn't say on what timescale that turning point will be, could be a weeks rally could be more, but markets rallying on bad news and the nfp was bloody toxic is an interesting signpost. As for the dollar, not checked the charts this week but presuming it declined the same time as the stock market rose it would imply the inverse corrolation between the dollar and us stocks are very much still in place, has been for about 6+ years now not sure why it would end anytime soon.

Dollar was overbought, it's been bubbling around for a while now that might be a process of relieving the overbought compression or it could be rolling over.

Even more than that and here's an interesting if radical thought, we have declined some 45% in US stocks and most world stock markets in a relatively very short time, I think we're about bad news saturated at the moment, everything is coming in worse than expectations because everybody felt that things were going to get manifestly worse a few months ago and here we are at the moment we're just confirming in data what we already felt this recession is going to be a doozy.

[lannarebirth]

Dollar was overbought, it's been bubbling around for a while now that might be a process of relieving the overbought compression or it could be rolling over.

That's exactly right. Cycles suggest the former possibility, but we'll have to wait and see. Shouldn't be long.

[MJP]

Dollar weakening ahead.

http://ftalphaville.ft.com/blog/2008/11/05...r-danger-ahead/

Everything is relative isn't it. The $USD Index has just completed week 38 of it's 40 week Hurst Cycle. It should have broken sharply into this timeframe. It hasn't. Curent price is the best indication of future price. If it drops 9% or more in the next 2 weeks I'd probably go along with this appraisal you've posted. If price holds up reasonably well in that timeframe I expect it to go to higher highs.

Normal logic would say we should see more USD technical strength off the back of the non-farm report for November (-533k). Equities should tank. More liquidation of USD denominated, but the market was up 3%!

I recently heard a friend say "A depression is when all bet's are off".

US stocks rally as Hartford leads financial shares after profit forecast. As stocks rose the Dollar weakened.

Also there was the US Jobs Report, not sure how much of the dollar decline is attributable to the Jobs Report and how much is attributable to the stock rally.

One thing to note, the stock market is allegedly about 6 months ahead of the economic.

Arran, the non-farm was one of the worst on record and that's with GM/Fird/Chrysler etc. This being the start!

Stocks are completely irrational now. Listen to the recent Hugh Hendry interview on Bloomberg. Go with what the bond market is saying.

Point is, in a rational market, investors would be liquidating US denominated assets off the back of the dire non-farm report, driving technical strength in USD.

All bet's are off.

Does this support the argument that the Dollar will weaken against the Pound ?

The macro in the UK is also likely to be not so good in 2009. If this is the case, can you see something else being the driver behind USD/GBP movement through 2009 ? Maybe the FED printing money/deflation ?

I thought it would be the end of the de-leveraging story and positions being re-established in global equities, causing out-flows from the Dollar, apparently there is a lot of cash on the side-lines waiting to buy into the markets at the right time.

Hugh mentions he believes the stratigists are wrong to think the bad news is already priced in.

Macro in the UK's looking positively micro for '09. That said, it's all relative and the domino's are really starting to fall in the US. They're big one's too. The first auto industry bailout is likely to buck stocks, the second and the third later in 2009 will rattle the market. The realisation that bailouts don't work will show the bond market to be on the money . . . not that there will be any real money.

Under Obama the printing presses will be red hot. I'd buy equities, but only in ink and paper manufacturers.

Brown is the wild card. That guy is completely mental. ZERO RATES! will destroy lending/liquidity ratios of the UK banks, which are already running some 20+:1. But here's the big disconnect. Base rates will mean zilch. Market forces will take over the pricing of risk and real interest rates, money market rates will soar. Watch the LIBOR spread widen through 2009.

At some point base rates will have to rise in response to the lack of interest in UK government bonds. This is when the S really HTF.

There's too much evidence out there suggesting any deflation will simply be a temporary liquidation and product dumping. Expect a sudden surge of inflation late 2009. Not hyperinflation but high inflation. Commodities may become a bubble again. The bankers need another bubble to releverage their desperate positions on housing loans. They'll go for oil once it hit $25 bbl.

Thailand is really a bit of an unknown in these uncharted waters. To think their banks don't really have exposure to toxic debt (mainly CDO and MBS) I think is naive. Many poisons yet to hatch out in LOS, both economic and political. To have a country without adequate leadership (or the perception of adequate leadership, Brown et.al) at this point in time could prove disasterous.

I'm bearish on Thai Baht at this time. Not expecting it to collapse, but certainly not expecting it to strengthen from this point on. Probably be proved wrong, but my guess is the markets will see emerging market currency as a bad risk and price it accordingly.

[Marvo]

Macro in the UK's looking positively micro for '09. That said, it's all relative and the domino's are really starting to fall in the US. They're big one's too. The first auto industry bailout is likely to buck stocks, the second and the third later in 2009 will rattle the market. The realisation that bailouts don't work will show the bond market to be on the money . . . not that there will be any real money.

Under Obama the printing presses will be red hot. I'd buy equities, but only in ink and paper manufacturers.

Brown is the wild card. That guy is completely mental. ZERO RATES! will destroy lending/liquidity ratios of the UK banks, which are already running some 20+:1. But here's the big disconnect. Base rates will mean zilch. Market forces will take over the pricing of risk and real interest rates, money market rates will soar. Watch the LIBOR spread widen through 2009.

At some point base rates will have to rise in response to the lack of interest in UK government bonds. This is when the S really HTF.

There's too much evidence out there suggesting any deflation will simply be a temporary liquidation and product dumping. Expect a sudden surge of inflation late 2009. Not hyperinflation but high inflation. Commodities may become a bubble again. The bankers need another bubble to releverage their desperate positions on housing loans. They'll go for oil once it hit $25 bbl.

Thailand is really a bit of an unknown in these uncharted waters. To think their banks don't really have exposure to toxic debt (mainly CDO and MBS) I think is naive. Many poisons yet to hatch out in LOS, both economic and political. To have a country without adequate leadership (or the perception of adequate leadership, Brown et.al) at this point in time could prove disasterous.

I'm bearish on Thai Baht at this time. Not expecting it to collapse, but certainly not expecting it to strengthen from this point on. Probably be proved wrong, but my guess is the markets will see emerging market currency as a bad risk and price it accordingly.

MJP, Re commodities... do reckon there's any merit in getting the materials for the new house bought in (steel etc.) if signs of a hike in prices appears next year?

[SomNamNah]

THB (pink) caught between lowest low and trendline?, next few sessions weeks breakout up or new low?

apologies in advance to any members who are insulted by this etchasketch/chart

Jeremy Clarkson on car sales decline & the end of days.. :/

Edited December 8, 2008 by SomNamNah

[chiang mai]

THB (pink) caught between lowest low and trendline?, next few sessions weeks breakout up or new low?

apologies in advance to any members who are insulted by this etchasketch/chart

Jeremy Clarkson on car sales decline & the end of days.. :/

Are you suggesting there is a direct relationship between the DJI and GBP/THB? As for Jeremy Paddington Clarkson's comments I thought they were truly profound and should great insight!

Edited December 8, 2008 by chiang mai

[SomNamNah]

LOL, i aint suggesting anything Herr Chiang Mai! And i again apologise for my offensive data plots!

Did you see any textual reference to the DJI?

All i am commenting on is the disparity on the pink squiggle, ie: higher low...cf dji (the tide). A precurser to a bottom in many cases... or perhaps in this climate a whipsaw!?

Hey - the good thing about charting is you learn as you go along... set up a hypothetical trendline, watch what happens. And try to figure out where the rest of the herd (and black boxes ) have the trendlines. If you dont mind, i will watch and see what happens with the correlation/deviation of the two plots i am most concerned with - having cash in GBP, and yet waiting for DJI/UKX stocks to provide a haven for my Sterling. I can rely on seemingly qualified posters on this thread to provide economic insights I can attempt to understand, but I dont profess to be able to.. yet... hence my attempt to rationalise my loss of spending power, and look for patterns on my economic etcha-sketch.

Edited December 8, 2008 by SomNamNah

[chiang mai]

LOL, i aint suggesting anything Herr Chiang Mai! And i again apologise for my offensive data plots!

Did you see any textual reference to the DJI?

All i am commenting on is the disparity on the pink squiggle, ie: higher low...cf dji (the tide). A precurser to a bottom in many cases... or perhaps in this climate a whipsaw!?

Hey - the good thing about charting is you learn as you go along... set up a hypothetical trendline, watch what happens. And try to figure out where the rest of the herd (and black boxes ) have the trendlines. If you dont mind, i will watch and see what happens with the correlation/deviation of the two plots i am most concerned with - having cash in GBP, and yet waiting for DJI/UKX stocks to provide a haven for my Sterling. I can rely on seemingly qualified posters on this thread to provide economic insights I can attempt to understand, but I dont profess to be able to.. yet... hence my attempt to rationalise my loss of spending power, and look for patterns on my economic etcha-sketch.

Sorry, I'm just trying to understand what you presented on your chart because it looks like a graph of the DJI with a superimposed chart of GBP/THB on top? Hence I wondered what you thought the relationship was?

Also, the term Herr is a polite term used towards people from German and I am British hence a prefix of Mr is appropriate or even just plain Chiang mai will suffice. Once we really get to know each other I may consent to you calling me CM but not yet OK.

[SomNamNah]

Count yourself lucky I havent started my beer/baht purchasing power graphs.

gawd bless sterling! i want to buy my new 100,000 baht toy!

Edited December 8, 2008 by SomNamNah

[chiang mai]

Pushing 1.50 now, perhaps it's time for a rousing chorus or two of Rule Brittania?

[churchill]

Pound up , gold up - perhaps ?? the start of the dollar decline -

[cmsally]

Pushing 1.50 now, perhaps it's time for a rousing chorus or two of Rule Brittania?

Pound up, jolly good. Sold some US$ back to GBP as have had American friends staying. After being told for the past 2 weeks how the US economy is going down the toilet, thought should maybe ditch some $. Note to self - give them nice send off party tomorrow.

[chiang mai]

Best be careful, three hours of trading doesn't make a trend and after all, we're only talking about a three cent gain currently!

[lannarebirth]

Pound up , gold up - perhaps ?? the start of the dollar decline -

The dollar decline started over two weeks ago. It is expected that it will break hard into this next 1-10 day period into its 40 week cycle lows. That low will determine the character of its next 40 week trading period.