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

[VegasVic]

All interesting stuff for sure but this topic is about the fall of Sterling so perhaps helpful if we can redirect away from the US car companies et al!!!.

It now looks like a UK politician has done the unthinkable and stated the obvious by suggesting that there may be a run on Sterling. A little late for sure but nevertheless significant that it should get so much press. I wonder what the coming week will bring - either the Pound is going to nosedive and plumb new depths, in which case the Baht rate is going to plummet and a load of Thai based Brits will suffer. Alternatively this could signal a reversal or floor and be viewed as the point when things leveled off. Personally I don't have high hopes for the latter, can't see a real reason why that should happen, but we have to have something positive to look forward to.

Views anyone?

CM, For what its worth I use to hear the $1.35 number batted around frequently as the bottom of this Pound -Dollar realignment, now I am hearing more and more $1.20-$1.25, and there are some who fear the economic situation is the U.K. will get so bad that basically all bets are off and parity may not be out of the question. To be honest I just can't envision what positive event could occurr to change the dynamic of the droping Pound. This is basically uncharted territory so I don't think that even the sharpest TA folks have a handle on where this is going. I am sorry I couldn't be more upbeat about the Pound but there is apparently much more hedge fund selling coming down the line and much of this is overseas assets and derivative contracts that are taking a while to unwind, so the repartiation feature of this unwinding will continue to put upward pressure on the Dollar (which will in turn cause more "flight to safety" in the greenback). In the end a much stronger Dollar from these levels is very bad for U.S. exports so I would think that the U.S. will make a tough stand when the G-20 meets again in March and do everything it can to mitigate any further increase in the Dollar. Who knows by March there may be a groundswell of support for currencies to be linked, like the Euro at say $1.15, the Pound at $1.30, the Aussie dollar at $.50 and the Canadian dollar at $.75. I am not a believer in all of this new world order stuff but I was amazed at how the leaders of the 20 most powerful nations in the world spoke with such a common voice.

[Rinrada]

Sterling has fallen about 20% against the greenback in almost as many days but since it applies to everyone it aint worth worrying about..is it?

Europe is offically in Recession which means we are all in tyhe mire so just keep swimming and make the best of Xmas....how many days...?

Just paid off a bit of a bank loan (Bangers on some property and decided that the worse I could cover was at 50 to the £....

cleared it this week at 51 so made it... but now no more jollis until things improve again.....when of course is the 65 million $ ..??..until then...pull up the drawbridge and get in the el Dorado...

[MJP]

Sterling to be renamed in honour of the Dear Leader,

GBP = Gordon Brown Peso

[spiderman2]

I am not a believer in all of this new world order stuff but I was amazed at how the leaders of the 20 most powerful nations in the world spoke with such a common voice.

Gordon believes in the New World Order -

http://news.bbc.co.uk/1/hi/uk_politics/6277747.stm

http://www.telegraph.co.uk/finance/finance...-recession.html

Even the Sun says so -

http://www.thesun.co.uk/sol/homepage/news/article1912163.ece

[chiang mai]

In the current climate it is easy to be pessimistic about the Pound and I see now that there is a herding mentality in play where everyone is trying to come up with the lowest number - 1.35, 1.20 par or lower, who knows. For what it's worth I reckon we are pretty close to a stable rate and I see the Pound settling between 1.40 and 1.50. Why do I think this? Because 90% of the bad news is already known and priced in - the desire for further large scale rate cuts is an open secret, tax cuts are being planned, real estate prices are following a downward trajectory that is now confirmed and government borrowings are going to be very high. I may be very wrong on this but it feels like the right answer and as such I've taken profit on 70% of my USD bet as a hedge.

As far as the Baht is concerned: any dip below 50 will have, I think, a significant physiological impact on Brits thinking of coming to Thailand either permanently or for vacation. I will therefore be surprised if it breaks that barrier, despite the fact that it is even now only 80 Satangs away from it.

There you are, how's that for sticking out my neck on a Monday morning!

[chiang mai]

There was a wonderful article in one of the UK papers recently that mentioned a survey that was taken where homeowners were asked their feelings about property prices. The net of it all was that a whopping 80%+ felt that whilst the value of homes around them had fallen in value, almost none of them felt that the value of their own home had dropped. Denial? I would say so. But after so many years of the gravy train of rising house prices it is understandable to a degree, more than that it is very sad.

what difference does it make whether the home in which you live has appreciated 100% or fallen in value 50% if you have no intention to sell and move to another place?

It's a part of the national psyche that many UK homeowners are preoccupied with the value of their home. It provided an indicator of how much they could borrow against it and gave an indication of when they could move "up".

[Naam]

To what? Where did you learn this?

It's well documented that the Gulf states are moving towards a unified currency. I think estimations of 2010 implementation are optimistic but when they do it, it'll be pegged to a basket of currencies and not just the dollar. This will have repercussions for the greenback . .

yawn... that and a bunch of other fairy tales (China et al) i hear since a decade or more

1. Me too but I remember people just like you treating Nouriel Roubini's predictions of a collapse of the world's financial system with similar derision . . . and that was only in 2006 . . .

2. You obviously believe that the US will remain the world's premier economic power for years to come and that's fair enough but I'm afraid the playing field is changing under your feet. The worrying thing about all this is that the Chinese don't even want to be a world leader - they're far more concerned about their 1.3bn population and how they're going to provide employment for them. The US like their current role as No.1 economic power but, unfortunately, the world isn't going to play along for much longer. Why would you want to sell to a country that cannot pay ?

1. i am reading Roubini since many years and accepted quite some advice from him. he wasn't always right (sometmes he was dead wrong) but the fact is he was more often right than wrong. andthat's what counts.

2. the U.S. (much to my dislike) is and will be the powerhouse for years to come. not necessarily by its economy but by its military and political clout. on top of that the U.S. has proved since WWII that it can "shave" and "haircut" the rest of the world for its own benefit (exceptions prove the rule) starting with Bretton Woods and (not endng) with the prevailing subSLIME crisis.

anybody who believes that the U.S. will not dominate this planet for decades to come is influenced by wishful thinking or negating obvious facts.

[Naam]

There was a wonderful article in one of the UK papers recently that mentioned a survey that was taken where homeowners were asked their feelings about property prices. The net of it all was that a whopping 80%+ felt that whilst the value of homes around them had fallen in value, almost none of them felt that the value of their own home had dropped. Denial? I would say so. But after so many years of the gravy train of rising house prices it is understandable to a degree, more than that it is very sad.

what difference does it make whether the home in which you live has appreciated 100% or fallen in value 50% if you have no intention to sell and move to another place?

It's a part of the national psyche that many UK homeowners are preoccupied with the value of their home. It provided an indicator of how much they could borrow against it and gave an indication of when they could move "up".

that might be the case but it's impossible for me to understand that line of thinking. i have to admit however that you Earthlings display many other strange behaviour patterns which are beyond the grasp of a german Klingon.

[bingobongo]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

Edited November 17, 2008 by bingobongo

[chiang mai]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

When the article says, "The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56", I agree with that part. But the bit about a 13% drop is just headline and noise, or a LRB might suggest, a counter indicator?

[cloudhopper]

90% of the bad news is already known and priced in

And the 10% that is not yet known will cause 90% of the havoc to come.

[flying]

2. the U.S. (much to my dislike) is and will be the powerhouse for years to come. not necessarily by its economy but by its military and political clout. on top of that the U.S. has proved since WWII that it can "shave" and "haircut" the rest of the world for its own benefit

I am not sure about this at all.

Maybe it *was* true in the days when fighting or lack of it were done somewhat eye to eye. I would not want to see the result of a WWIII as I think there would be none. I also do not think in a one on one fight (non WW )with China we would do very well.

The USA of which I am a part of had better look within quickly. I personally have never seen so much civil unrest. I remember recently Lannabirth? posted a remark about gun sales today.

Well I said it was just the usual post election rush in a reply post. I was so very very wrong.

There are 27 companies here that make M-16 clones AR-15's every one of them is sold out with back orders going out 8+ weeks.

I have never seen anything like this period.

So .........I did not mean to detour but what I wanted to say is the USA can be a powerhouse if they have the support/power of their people only.

[MJP]

http://www.ft.com/cms/893ac9c8-757e-11dc-b...mp;fromSearch=n

Jim Roger's explains all.

[chiang mai]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

Oh my, what's this I see this morning, a two hour advance by Sterling, UP three cents already! An intraday blip or the start of a trend perhaps?

[lannarebirth]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

When the article says, "The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56", I agree with that part. But the bit about a 13% drop is just headline and noise, or a LRB might suggest, a counter indicator?

Refresh my memeory. Did JPM offer a prescient note to the effect, that the GBP would fall 33%, when it was trading at $2.11 ? If it were Goldman Sachs I'd say they were looking to create a spike down to switch from short to long. JPM I don't follow so well.

[chiang mai]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

When the article says, "The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56", I agree with that part. But the bit about a 13% drop is just headline and noise, or a LRB might suggest, a counter indicator?

Refresh my memeory. Did JPM offer a prescient note to the effect, that the GBP would fall 33%, when it was trading at $2.11 ? If it were Goldman Sachs I'd say they were looking to create a spike down to switch from short to long. JPM I don't follow so well.

I don't know the answer to your question but it does seem as though that is exactly what has happened today in that yesterdays bears just became today's bulls - profit taking, maybe. I also see what appears to be the BOE intervening in the market early on although I obviously cannot confirm it is them, maybe profit taking activity. Certainly someone was making some large scale and sustained upwards bids on Sterling from UK open onwards. Wait and see what Tuesday brings, at least GBP/THB went up a few points, might yet see a merry Xmas.

Edited November 17, 2008 by chiang mai

[syd barrett]

I am sure that like a lot of Thai Visa members I am bothered about the Thai Baht v GBP rate. The reason it is low is because of the near refusal for the Thai Baht to slip past the US$=35 mark. If it were to slip down to 40 we would all be happy..Yes? When will this happen? Then we would be back at 60=1GBP

[chiang mai]

I am sure that like a lot of Thai Visa members I am bothered about the Thai Baht v GBP rate. The reason it is low is because of the near refusal for the Thai Baht to slip past the US$=35 mark. If it were to slip down to 40 we would all be happy..Yes? When will this happen? Then we would be back at 60=1GBP

The BOT is keeping USD/THB in its current range hence we are at the mercy of the BOT in this respect so 4o baht is not on the short term radar - maybe look better if/when BOT cuts interest rates.

Having said that, the GBP/THB rate is not solely dependent on the USD rate and as things stand presently the factors that effect GBP alone are enough to prevent any significant rise.

[lannarebirth]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

When the article says, "The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56", I agree with that part. But the bit about a 13% drop is just headline and noise, or a LRB might suggest, a counter indicator?

Refresh my memeory. Did JPM offer a prescient note to the effect, that the GBP would fall 33%, when it was trading at $2.11 ? If it were Goldman Sachs I'd say they were looking to create a spike down to switch from short to long. JPM I don't follow so well.

I don't know the answer to your question but it does seem as though that is exactly what has happened today in that yesterdays bears just became today's bulls - profit taking, maybe. I also see what appears to be the BOE intervening in the market early on although I obviously cannot confirm it is them, maybe profit taking activity. Certainly someone was making some large scale and sustained upwards bids on Sterling from UK open onwards. Wait and see what Tuesday brings, at least GBP/THB went up a few points, might yet see a merry Xmas.

Happy Thanksgiving anyway. I think they're just reloading.

[chiang mai]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

When the article says, "The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56", I agree with that part. But the bit about a 13% drop is just headline and noise, or a LRB might suggest, a counter indicator?

Refresh my memeory. Did JPM offer a prescient note to the effect, that the GBP would fall 33%, when it was trading at $2.11 ? If it were Goldman Sachs I'd say they were looking to create a spike down to switch from short to long. JPM I don't follow so well.

I don't know the answer to your question but it does seem as though that is exactly what has happened today in that yesterdays bears just became today's bulls - profit taking, maybe. I also see what appears to be the BOE intervening in the market early on although I obviously cannot confirm it is them, maybe profit taking activity. Certainly someone was making some large scale and sustained upwards bids on Sterling from UK open onwards. Wait and see what Tuesday brings, at least GBP/THB went up a few points, might yet see a merry Xmas.

Happy Thanksgiving anyway. I think they're just reloading.

I had a feeling you might say something similar, a USD buy back soon could be attractive, or at least interesting - do I have the nerve and am I convinced I ask myself.

[neil324]

I am sure that like a lot of Thai Visa members I am bothered about the Thai Baht v GBP rate. The reason it is low is because of the near refusal for the Thai Baht to slip past the US$=35 mark. If it were to slip down to 40 we would all be happy..Yes? When will this happen? Then we would be back at 60=1GBP

The BOT is keeping USD/THB in its current range hence we are at the mercy of the BOT in this respect so 4o baht is not on the short term radar - maybe look better if/when BOT cuts interest rates.

Having said that, the GBP/THB rate is not solely dependent on the USD rate and as things stand presently the factors that effect GBP alone are enough to prevent any significant rise.

Bot are meeting December 3rd i think. Surely their going to cut, just a case of how much i would have thought. From what i can see on their MPC website they seem to have a history of .25 & .50 cuts. Can't see either having much effect on the Baht. I think its obvious they don't want a weak Baht otherwise they would let the Dollar exchange go.

[lannarebirth]

this should help answer your question...........its coming......are you ready?

this will do wonders for the UK expat population in LOS and thus the cycle of wealth destruction continues.......

Pound to Plummet 13% to Lowest Level Since 1985, JPMorgan Says

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

When the article says, "The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56", I agree with that part. But the bit about a 13% drop is just headline and noise, or a LRB might suggest, a counter indicator?

Refresh my memeory. Did JPM offer a prescient note to the effect, that the GBP would fall 33%, when it was trading at $2.11 ? If it were Goldman Sachs I'd say they were looking to create a spike down to switch from short to long. JPM I don't follow so well.

I don't know the answer to your question but it does seem as though that is exactly what has happened today in that yesterdays bears just became today's bulls - profit taking, maybe. I also see what appears to be the BOE intervening in the market early on although I obviously cannot confirm it is them, maybe profit taking activity. Certainly someone was making some large scale and sustained upwards bids on Sterling from UK open onwards. Wait and see what Tuesday brings, at least GBP/THB went up a few points, might yet see a merry Xmas.

Happy Thanksgiving anyway. I think they're just reloading.

I had a feeling you might say something similar, a USD buy back soon could be attractive, or at least interesting - do I have the nerve and am I convinced I ask myself.

hel_l, I don't know. It's due to correct into it's 40 week cycle lows. 36 weeks along now. If it holds 80ish $USD Index I'd be more positive on it.

[Rinrada]

Might be the start of a recovery now that some of the Shylock Merchants are out of the story...No love lost here.....

Got ATMs everwhere ...thanks to REG....so who needs them....so....

just noticed that the £ has got stronger ..not a lot but might be working..............more...

Citigroup job cull to hit 75,000

Citigroup is trying to combat the effects of the credit crunch

US bank Citigroup has announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made this year.

Citigroup said the 75,000 job cuts represented a reduction of about 20% of its staff, leaving it with 300,000 jobs worldwide "in the near term".

The cuts will come from redundancies, the sale of units and natural wastage, the bank said.

Citigroup has lost more than $20bn (£13.6bn) in the past year because of the global financial crisis.

It has reported four straight quarterly losses and some analysts believe the bank will not make a profit again until 2010.

Of the 52,000 job losses, around half are understood to already be accounted for with the previously announced sale of Citigroup's German retail banking business and an Indian outsourcing operation.

Citigroup is expected to cut the remaining 25,000 jobs by the first half of 2009. Citigroup declined to comment on the cuts

http://news.bbc.co.uk/1/hi/business/7733575.stm

[chiang mai]

I am sure that like a lot of Thai Visa members I am bothered about the Thai Baht v GBP rate. The reason it is low is because of the near refusal for the Thai Baht to slip past the US$=35 mark. If it were to slip down to 40 we would all be happy..Yes? When will this happen? Then we would be back at 60=1GBP

The BOT is keeping USD/THB in its current range hence we are at the mercy of the BOT in this respect so 4o baht is not on the short term radar - maybe look better if/when BOT cuts interest rates.

Having said that, the GBP/THB rate is not solely dependent on the USD rate and as things stand presently the factors that effect GBP alone are enough to prevent any significant rise.

Bot are meeting December 3rd i think. Surely their going to cut, just a case of how much i would have thought. From what i can see on their MPC website they seem to have a history of .25 & .50 cuts. Can't see either having much effect on the Baht. I think its obvious they don't want a weak Baht otherwise they would let the Dollar exchange go.

It looks like Sterling is holding the gains it made yesterday so I would guess there is an increased chance that we may be looking at around 1.50 (with dips) as an interim base of stability - maybe too early to tell yet. Certainly there was a lot of profit taking on Friday and Monday so that may account for some of the movement - I definitely don't see a recovery beyond 1.50 though. The BOE minutes are due out tomorrow but I can't imagine there could be any surprises in them, given the extent of the previous cut. An increasing consensus seems to believe that the December rate cut is already priced in, as do I - my guess is that we're looking at between a 0.75 and 1.00 cut in December. On balance I'm going to stick with my Monday morning guesstimate of 1.50 with dips to 1.40 something. I reckon it all looks to risky for me to want to play any more right now so will sit out and watch for a while.

[Mosha]

A friend has spent a significant amount in buying his own countries currency here and sending it back "home". Is and when it gets back to something like he will change back. On another note I did see that inflation has gone down in the UK, but this had nothing to doo with the govenment but more to do with the oil prices. IMHO labour are worse than useless in a financial crisis. Always have been and always will be. They have had a good run because they were following the finacial policies of the last tory government. Now it's time for them to go.

[jesimps]

A friend has spent a significant amount in buying his own countries currency here and sending it back "home". Is and when it gets back to something like he will change back. On another note I did see that inflation has gone down in the UK, but this had nothing to doo with the govenment but more to do with the oil prices. IMHO labour are worse than useless in a financial crisis. Always have been and always will be. They have had a good run because they were following the finacial policies of the last tory government. Now it's time for them to go.

It's a fact of life that Labour is bad for the economy. It's always been the same, as soon as they get voted in the stock market nose-dives, which says everything economically speaking. They're ok if you're a layabout and don't need to worry about high taxes, they're going to throw public money at you without wanting you to do anything in return. When you get to retirement age, you'll be given lots more pension than someone who's worked all his life and is bang up to date with his nhs contributions. This money has to come from somewere, hence the failing economy. Basic economics, if money isn't earned, it isn't there, even if you print shedloads of it. Only thing that worries me is that I don't have a lot of faith in the present Tory contingent.

[jesimps]

Wow! Pound still rising, methinks Boe buying pounds to stave off a possible run caused by unguarded comments in recent weeks on the state of the economy. Long may it reign.

[bingobongo]

blimey,

what is a sexpat to do, bangers and mash, fish and chips, guiness or bar girl (but not all)

- GBP/USD down around -25.07% ytd - worst performance vs. USD among G10 currencies. EUR/GBP down 15%, JPY/GBP down 33%

- A sterling crisis would be preceded by a sharp decline in sterling bilateral and effective spot exchange rates and sharply higher interest rates on sterling securities, reflecting expectations of future further currency depreciation. As the incipient crisis become more likely/moves closer, depreciation of the currency would accelerate.

Edited November 18, 2008 by bingobongo

[chiang mai]

blimey,

what is a sexpat to do, bangers and mash, fish and chips, guiness or bar girl (but not all)

- GBP/USD down around -25.07% ytd - worst performance vs. USD among G10 currencies. EUR/GBP down 15%, JPY/GBP down 33%

- A sterling crisis would be preceded by a sharp decline in sterling bilateral and effective spot exchange rates and sharply higher interest rates on sterling securities, reflecting expectations of future further currency depreciation. As the incipient crisis become more likely/moves closer, depreciation of the currency would accelerate.

Now there's a cheery thought! Who were you quoting there, what source?

[MJP]

A friend has spent a significant amount in buying his own countries currency here and sending it back "home". Is and when it gets back to something like he will change back. On another note I did see that inflation has gone down in the UK, but this had nothing to doo with the govenment but more to do with the oil prices. IMHO labour are worse than useless in a financial crisis. Always have been and always will be. They have had a good run because they were following the finacial policies of the last tory government. Now it's time for them to go.

Hey Mosha,

Bit of deflation at the moment, but not for long. These clowns at the BoE/Treasury just don't see it for what it is, a massive liquidation sale. Dumping of stockpiled products on one really wants. Once it's gone, it's gone, then you'll see the combined effect of weak Pound and reduced competition.

UK will get 'biflation' like Iceland. House prices and perhaps used car prices collapsing, everything else banging up.

Not a bright future for the UK. Don't know how many of you are in the UK at the moment, but I can tell you now, it's dire and the comments about Labour on this thread are spot on, 100% correct.