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

[ArranP]

I don't know about anyone else but I reckon that a pretty full and complete reply and certainly mirrors the way I feel about things also.

Thanks ChiangMai.

[MJP]

I don't know about anyone else but I reckon that a pretty full and complete reply and certainly mirrors the way I feel about things also.

Second that. Arran, you are one smart kiddy!

[ArranP]

I don't know about anyone else but I reckon that a pretty full and complete reply and certainly mirrors the way I feel about things also.

Second that. Arran, you are one smart kiddy!

Thanks MJP, many hours of watching bloomberg, which my missus has had to endure also :-) Proof is in the pudding, hopefully will help preserve my capital through 2009.

Edited December 10, 2008 by ArranP

[MJP]

I don't know about anyone else but I reckon that a pretty full and complete reply and certainly mirrors the way I feel about things also.

Second that. Arran, you are one smart kiddy!

Thanks MJP, many hours of watching bloomberg, which my missus has had to endure also :-) Proof is in the pudding, hopefully will help preserve my capital through 2009.

You velcome!

http://www.dailyfx.com/story/bio1/Forex_Tr...8894809091.html

The US Dollar lost ground to the Euro and the British Pound in overnight trading as Asian stock markets registered substantive gains, pointing to improved risk appetite. US index futures are up well over 1% ahead of the opening bell in Europe, suggesting capital will continue to flow out of safe haven assets and pressure the greenback lower.

[chiang mai]

I don't know about anyone else but I reckon that a pretty full and complete reply and certainly mirrors the way I feel about things also.

Second that. Arran, you are one smart kiddy!

Thanks MJP, many hours of watching bloomberg, which my missus has had to endure also :-) Proof is in the pudding, hopefully will help preserve my capital through 2009.

You velcome!

http://www.dailyfx.com/story/bio1/Forex_Tr...8894809091.html

The US Dollar lost ground to the Euro and the British Pound in overnight trading as Asian stock markets registered substantive gains, pointing to improved risk appetite. US index futures are up well over 1% ahead of the opening bell in Europe, suggesting capital will continue to flow out of safe haven assets and pressure the greenback lower.

Since I've been involved with this GBP/USD business for the past three months I've read far more business reports and commentaries than I have for some years. I find that in a large percentage of cases the things I read are simply not true or never happened hence I tend now to verify what I read. Case in point your FX commentary quote, the Dollar DID NOT lose ground against GBP overnight thus their conclusion is false!

[VegasVic]

I go long sterling from this month end onwards, I entered into dollar june last year at 1.96.

In the next 2 to 3 months I may or may not miss out on further strengthening of the dollar, but I think 6 to 12 months from now the dollar will be weaker against the pound than it is now.

Arran, Just curious as to why you would choose this point in time to take a long position in Sterling? Perhaps there is something that I can't see from my vantage point, but no matter how I look at the situation I see the BOE having more rate cuts down the line, unemployment increasing and the real estate crisis in the U.K. getting worse Is there some immenent economic recovery that you expect in the U.K. that no one else can see?

Hi Vic, thanks for your interest in my thinking.. I am no expert, only accumulated views from watching bloomberg, but here goes I lay my cards on the table...

Whilst there maybe some movement in USD/GBP toward dollar strength in the next 2 or 3 months, I think 6 to 12 months from now the dollar will have weakened against the pound. Possible trade points for me are at each month end. I moved into the dollar at 1.96 june 2007. My reasons for moving out of the dollar and into sterling are:

De-leveraging... banks cutting back on lending, forcing investors to liquidate equity/commodity positions and re-patriating money back to the dollar and yen has given rise to the majority of strength observed in the dollar and yen. This de-leveraging story, I think, has run the major part of its course.

Monetary policy... whilst most of the movement in USD/GBP was observed before BOE rate cuts took place, therefore I think attributable to the de-leveraging story noted above. However, some USD/GBP movement has been attributable to rate cuts. The BOE probably has another 1% to 1.5% of cuts ahead in the 1st QTR of 09, this may cause sterling to weaken further, but also the FED will probably cut another .5% to 1% so would possibly offset the affect from BOE cuts a little.

Macro... I think dire for the most part of 09 in both economies... I think negative UK reports will offset negative US reports and visa-versa....

Cash.... people/institions have flocked to cash, with interest rates nearing zero, there will be little to no returns and therefore increased incentive to sell positions in cash and seek returns elsewhere....

Bonds... I am not an expert here, but I think yields are dropping here too, as it seems bond traders are taking a dismal view of things to come.

This leaves equities and commodities.... both of these have come a long way in one direction already, I think investors will start to move positions from cash and bonds (as they offer little return) into equities sometime next year (maybe in qtr1 / qtr2).

- Equities, it seems, tend to be 6 months ahead of the macro.... if the maco were to stabalise/improve toward the end of 09, then equity investment would pick around summer 09.

- As equity rise, so the dollar weakens, and so does the yen. These currencies, due to there low yield, have been used as funding currencies...

Obama... has indicated he will give priority to getting the US economy back on track, and a lesser priority to the US deficit. I think this means he will print money, this would weaken the dollar also...

I do not try, nor can I do, timings of the exact bottom or tops in currency movement.... I can only come part of the way then switch currency to lock in those profits and wait for the reverse. I do not see this switching to be taking place every month, but probably every few years as one currency gains strength against another.

An alternative strategy would be to hold capital in two or three currencies and withdraw livings expenses from the strongest of them.

Aaron, I don't have the time now to comment on your entire post, but you definately have a view and put your money where your mouth is, so you have my respect for that. You do need to pay a little more attention to Bloomberg news in the future though, because the FED funds rate is 1% not 1.5%, and it has been there since October 29th! With that said I think the FED will get down to .5% later this month, however the BOE has at least 1.5% more of cuts coming. There is also more deleveraging yet to come, but most of this will likely occur in the first Q so 12 months from now the Pound might be higher than it is now but for the time being it has further to drop I fear. GLTY in your investments!

[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........

I don't follow you. can you clarify?

Well that fell flat, I congratulated previousley, mentioning oil cheap at $60, when it bounced to $67. Now it's $45 so it got cheaper. FWIW I went for it at $55 so I got to wait a while (figures approx.)

[So1DoG]

Im gonna stop reading this thread now, haha

The only thing i can garauntee from reading it is that MJP has got to be the most depressing poster i have ever come accross on thaivisa.

MJP get yourself out of your bed in grey old england(as you say) soon to be a third world country(as you say) and get to thailand, You might be a little more happier if you stop bloody thinking to much. Your a long time dead.

THE END OF THE WORLD IS COMING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Edited December 11, 2008 by So1DoG

[So1DoG]

Actually MJP i have something for you to worry about...

With your focus on getting out of the "finished" uk :jerk: that will never recover Arent you forgetting about the 2 nice houses, plot of land and farm you have bought in thailand?? All in your ball and chains name. Hmmm now what would happen if..............?

No surely not?

:D :D

[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?

Well that fell flat, I congratulated previousley, mentioning oil cheap at $60, when it bounced to $67. Now it's $45 so it got cheaper. FWIW I went for it at $55 so I got to wait a while (figures approx.)

Oh, OK, good luck with that. Personally, I don't consider oil all that cheap. Cheaper, yes.

[MJP]

Im gonna stop reading this thread now, haha

The only thing i can garauntee from reading it is that MJP has got to be the most depressing poster i have ever come accross on thaivisa.

MJP get yourself out of your bed in grey old england(as you say) soon to be a third world country(as you say) and get to thailand, You might be a little more happier if you stop bloody thinking to much. Your a long time dead.

THE END OF THE WORLD IS COMING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

You're right, mush.

Time to get on a plane, this is ridiculous.

[live]

yes u can i think

[ArranP]

I go long sterling from this month end onwards, I entered into dollar june last year at 1.96.

In the next 2 to 3 months I may or may not miss out on further strengthening of the dollar, but I think 6 to 12 months from now the dollar will be weaker against the pound than it is now.

Arran, Just curious as to why you would choose this point in time to take a long position in Sterling? Perhaps there is something that I can't see from my vantage point, but no matter how I look at the situation I see the BOE having more rate cuts down the line, unemployment increasing and the real estate crisis in the U.K. getting worse Is there some immenent economic recovery that you expect in the U.K. that no one else can see?

Hi Vic, thanks for your interest in my thinking.. I am no expert, only accumulated views from watching bloomberg, but here goes I lay my cards on the table...

Whilst there maybe some movement in USD/GBP toward dollar strength in the next 2 or 3 months, I think 6 to 12 months from now the dollar will have weakened against the pound. Possible trade points for me are at each month end. I moved into the dollar at 1.96 june 2007. My reasons for moving out of the dollar and into sterling are:

De-leveraging... banks cutting back on lending, forcing investors to liquidate equity/commodity positions and re-patriating money back to the dollar and yen has given rise to the majority of strength observed in the dollar and yen. This de-leveraging story, I think, has run the major part of its course.

Monetary policy... whilst most of the movement in USD/GBP was observed before BOE rate cuts took place, therefore I think attributable to the de-leveraging story noted above. However, some USD/GBP movement has been attributable to rate cuts. The BOE probably has another 1% to 1.5% of cuts ahead in the 1st QTR of 09, this may cause sterling to weaken further, but also the FED will probably cut another .5% to 1% so would possibly offset the affect from BOE cuts a little.

Macro... I think dire for the most part of 09 in both economies... I think negative UK reports will offset negative US reports and visa-versa....

Cash.... people/institions have flocked to cash, with interest rates nearing zero, there will be little to no returns and therefore increased incentive to sell positions in cash and seek returns elsewhere....

Bonds... I am not an expert here, but I think yields are dropping here too, as it seems bond traders are taking a dismal view of things to come.

This leaves equities and commodities.... both of these have come a long way in one direction already, I think investors will start to move positions from cash and bonds (as they offer little return) into equities sometime next year (maybe in qtr1 / qtr2).

- Equities, it seems, tend to be 6 months ahead of the macro.... if the maco were to stabalise/improve toward the end of 09, then equity investment would pick around summer 09.

- As equity rise, so the dollar weakens, and so does the yen. These currencies, due to there low yield, have been used as funding currencies...

Obama... has indicated he will give priority to getting the US economy back on track, and a lesser priority to the US deficit. I think this means he will print money, this would weaken the dollar also...

I do not try, nor can I do, timings of the exact bottom or tops in currency movement.... I can only come part of the way then switch currency to lock in those profits and wait for the reverse. I do not see this switching to be taking place every month, but probably every few years as one currency gains strength against another.

An alternative strategy would be to hold capital in two or three currencies and withdraw livings expenses from the strongest of them.

Aaron, I don't have the time now to comment on your entire post, but you definately have a view and put your money where your mouth is, so you have my respect for that. You do need to pay a little more attention to Bloomberg news in the future though, because the FED funds rate is 1% not 1.5%, and it has been there since October 29th! With that said I think the FED will get down to .5% later this month, however the BOE has at least 1.5% more of cuts coming. There is also more deleveraging yet to come, but most of this will likely occur in the first Q so 12 months from now the Pound might be higher than it is now but for the time being it has further to drop I fear. GLTY in your investments!

Thanks Vic, I think maybe the way I wrote the post, I meant to convey between .5% to 1% of further cuts, ie interest rate could go to between .5% and 0%.

I think the same, the pound can go lower and probably will, but I cannot time exactly when it will strengthen, but I can choose to lock in what profits I have by making the switch here and wait for when pound stengthens again....

Edited December 11, 2008 by ArranP

[Marvo]

You're right, mush.

Time to get on a plane, this is ridiculous.

MJP, hope you won't need to exchange any £ for ฿ for that trip

Even the dollar is now sliding against the almighty Baht! Buddha preserve us all. I reckon your best place for Stirling today is the fire sale down at Woolies .

Reason for edit: Lazy original post

Edited December 11, 2008 by Marvo

[flying]

Wonder if it is the dollars turn at bat now?

[SomNamNah]

looks like a head n shoulders - 82 target?

todays Dow action could be interesting. And its a friday! I love the way markets work to create the most tension.

the ruskies are scared now: http://www.bloomberg.com/apps/news?pid=206...&refer=home

For the burgeoning middle class, investments of choice range from electronics to gold jewelry. Evroset, Russia’s largest mobile-phone chain, is telling people to buy anything they can.

“It’s better to feel happy that you own something than to fear losing the money you have earned,” Chairman Yevgeny Chichvarkin says in a letter posted at 5,200 Evroset stores. “If you need a car, buy a car! If you need an apartment, buy an apartment! If you need a fur coat, buy a fur coat!”

Edited December 12, 2008 by SomNamNah

[flying]

the ruskies are scared now: ]

Seems like just yesterday they were buying up Pataya.

Stuff moves fast when it goes doesn't it?

[SomNamNah]

...except the Thai Baht in the best direction for us! (and them - think of the exports mr Thai!)

The ruskies and Chinese had bigger stock market bubbles than the west.. something like 1000% (ten+ baggers on most stocks)... havent looked at the charts for them for 2 years now, bet they arent pretty.

baht hitting GBP/THB trendline... come on baby break on through! I want 62 baht to my pound for Christmas!

Dow Jones futures -290.00 at 8280.00 ..

Edited December 12, 2008 by SomNamNah

[MJP]

You're right, mush.

Time to get on a plane, this is ridiculous.

MJP, hope you won't need to exchange any £ for ฿ for that trip

Even the dollar is now sliding against the almighty Baht! Buddha preserve us all. I reckon your best place for Stirling today is the fire sale down at Woolies .

Reason for edit: Lazy original post

Not returning to Blighty once I leave in January. Off to Taiwan and will be back and forth to Issan. Just wonder which currency to get paid in.

[chiang mai]

Wonder if it is the dollars turn at bat now?

Can you tell me what the graph is that you posted, please?

[Naam]

baht hitting GBP/THB trendline... come on baby break on through! I want 62 baht to my pound for Christmas!

as a precautionary measure i suggest a heavy duty rubber sheet to protect your mattress from the results of your wet dreams.

[Bangyai]

The Telegraphs take on the plight of the pound :

http://www.telegraph.co.uk/finance/comment...till-sound.html

Er....if this is supposed to cheer me up........it failed

[SomNamNah]

Britain is doomed. Its the 70's all over again, except we spent all of Scottish oil wealth already on middle class 'skiing holidays' (according to mr torygraph) and now we have the doors open to any european peasant who wants work.

Cant the EU give back some of the tens of billions the UK has given it been conned out of to pay for german nursing homes, and spanish pavements? backstabbers.

Oz/Nz/Canada are the only sensible options now. Abandon ship! (actually dont abandon yet, wait till i get settled in first please)

but how on earth can the baht remain so strong, its insane!!!- getting my rubber blanket ready for when the traders pull the plug on the baht.

Where are my chill pills?

God im tired of all this moving around, my family seem to have been refugees from countries going tits up for 100 years now!

Russia 1917---> Germany 1945---> France 1968---> UK 2009 -----> Land of Oz?

Edited December 12, 2008 by SomNamNah

[flying]

Wonder if it is the dollars turn at bat now?

Can you tell me what the graph is that you posted, please?

Means the price of this stock may go up soon

Edited December 12, 2008 by flying

[VegasVic]

Wonder if it is the dollars turn at bat now?

The Dollar will retest 88 within the next 30 days I saw the Chinese import numbers and it looks as though deflation may even be hitting the Chinese soon! Also of note is that the Rubble is in free fall and the Russians are buying Dollars The next thing you know is that the Russians will be selling gold 2009 certainly will be an interesting year my friend!

[flying]

The Dollar will retest 88 within the next 30 days I saw the Chinese import numbers and it looks as though deflation may even be hitting the Chinese soon! Also of note is that the Rubble is in free fall and the Russians are buying Dollars The next thing you know is that the Russians will be selling gold 2009 certainly will be an interesting year my friend!

You know I was really surprised by the Russians

Seems like just yesterday they were doing so well.

But I dont know about selling their gold. I do know they are dumping rubbles on anything of value. I read they are buying anything they think they can maybe sell to change into another money later. If anything I think they may buy gold in that case? Yes I think 2009 (perhaps a lot longer )will be interesting & hard. I hope something helps but I do not see anything pain free on the horizon. We have been like fat people talking & talking about a diet but not wanting to exercise or eat less.

[SomNamNah]

Russian stock market.. and you thought the UK/DJI was a bubble!!

2400 --> 200

[JimsKnight]

Britain is doomed. Its the 70's all over again, except we spent all of Scottish oil wealth already on middle class 'skiing holidays' (according to mr torygraph) and now we have the doors open to any european peasant who wants work.

Cant the EU give back some of the tens of billions the UK has given it been conned out of to pay for german nursing homes, and spanish pavements? backstabbers.

Oz/Nz/Canada are the only sensible options now. Abandon ship! (actually dont abandon yet, wait till i get settled in first please)

but how on earth can the baht remain so strong, its insane!!!- getting my rubber blanket ready for when the traders pull the plug on the baht.

Where are my chill pills?

God im tired of all this moving around, my family seem to have been refugees from countries going tits up for 100 years now!

Russia 1917---> Germany 1945---> France 1968---> UK 2009 -----> Land of Oz?

Just be cool man, go half and half, keep your bridges open, don't burn them just yet.

The UKs been through worse sht than this and still kept on truckin'

[chiang mai]

Wonder if it is the dollars turn at bat now?

Can you tell me what the graph is that you posted, please?

Means the price of this stock may go up soon

[chiang mai]

Despite all, GBP/USD seems to be holding well and if anything is rising, news of the US car makers not withstanding - as a consequence it looks like GBP/THB is also holding at around 52, could this be the new medium term level at which it will hold I wonder, market watchers seem more and more inclined to talk up the story of Dollar demise rather than GBP demise! An emerging wild card I guess is the increasing level of talk about the UK joining the EURO which I personally have dismissed in the past as something that Brits would simply never go for, but with each new piece of bad news, seems more probable. As for Dollar parity, it's not even a consideration in my book.