Pound Starting To Stenghen.

[ThaiPauly]

On Monday the GBP stood at 53.924

Today it's 53.355

[chiang mai]

its time to put the Great back in Britain

I think we all wish for that.

But before someone else mentions it let's be clear, unemployment only fell by 7,000 during December and that reflects seasonal staffing increases which, given the recent retail sales numbers, will almost certainly be temporary.

Edited January 23, 2010 by chiang mai

[mommysboy]

Certainly when I went back there it was like entering a 5* hotel. Everything was clean, the roads improved, the net worked, the buses ran reallywell, it seemed to me great changes had taken place.

I should warn you that treason is still a crime! Personally, I think hanging is too good.

[basjke]

"Sterling has hit a 4 month high of €1.14/£1 inter bank [the rate at which banks trade with each other in millions of pounds] against the Euro after strong UK economic data continues to impress and concerns over European sovereign debt grow.

Ever considered that it is the Euro which is in free fall rather then the pound strengthening?

[mommysboy]

What and where is the evidence that the UK is clearly on the rebuild, markets are getting ready to whip the UK because there is no evidence and no restructuring plan, you live in a world of your own MB and seem to make up "facts" of your own as and when they suit you, it's one thing to be patriotic but yet another to be plain stupid.

Manufacturing Up , Crime Down, Unemployment on the down, Run on the FT SE ,products made abroad returning to the UK because of bad workmanship and cost of transport, Foreign investment from America France Italy Germany. No not a lot of evidence.

And you know what? all that will go above turncoat's head.

[473geo]

its time to put the Great back in Britain

I think we all wish for that.

But before someone else mentions it let's be clear, unemployment only fell by 7,000 during December and that reflects seasonal staffing increases which, given the recent retail sales numbers, will almost certainly be temporary.

Not true....they will employ an additional 7000 delivering and putting salt on the roads and pavements in Jan & Feb.....

[MJP]

What and where is the evidence that the UK is clearly on the rebuild, markets are getting ready to whip the UK because there is no evidence and no restructuring plan, you live in a world of your own MB and seem to make up "facts" of your own as and when they suit you, it's one thing to be patriotic but yet another to be plain stupid.

Manufacturing Up , Crime Down, Unemployment on the down, Run on the FT SE ,products made abroad returning to the UK because of bad workmanship and cost of transport, Foreign investment from America France Italy Germany. No not a lot of evidence.

And you know what? all that will go above turncoat's head.

The poster hasn't actually presented any hard evidence, just a poorly constructed sentence.

I used to row like hel_l in 2006/7 with my MD about the development of the firm, capital expenditure, overhead levels and his seemingly uncontrolled expansive optimism. I warned of an impending recession/depression . . . he denied it would ever happen. 'There won't be a recession', he said.

He called the other day. 'This is a depression', were his exact words. A devout New Labour supporter he also said 'this is the end of the West'. He now understands 'Brownian' economics for what they really are.

However. We just won a job. It's one I wrote the tender and strategy for three years ago. It's funded by . . . wait for it . . . European development money. 70% of the employees have been laid off by the way and it's highly unlikely any will be recruited in the next two years as there are no tenders being received, there being no contracts.

Capital projects are actually being scrapped. Cross Rail was supposed to happen, well that trains delayed indefinitely from what I'm told by my former Halcrow colleagues. The UK hasn't renewed it's power grid, hasn't built any power stations, hasn't really invested in the future at all during the biggest credit boom in human history. It's shameful.

By the way, all that money that could have been used to spur real economic activity to provide infrastructure for the future has been given to the banks, who continue to pay astronomic bonuses. Even Billy Bragg is calling for a tax strike!

Really Mommysboy, please try and get your head round the truth that you're being played, right up to the election.

I mean maybe you're right . . . time can only tell, but the UK is running the largest fiscal deficits as a ratio of GDP of any country in the World. It's actually getting worse in my opinion.

[chiang mai]

What and where is the evidence that the UK is clearly on the rebuild, markets are getting ready to whip the UK because there is no evidence and no restructuring plan, you live in a world of your own MB and seem to make up "facts" of your own as and when they suit you, it's one thing to be patriotic but yet another to be plain stupid.

Manufacturing Up , Crime Down, Unemployment on the down, Run on the FT SE ,products made abroad returning to the UK because of bad workmanship and cost of transport, Foreign investment from America France Italy Germany. No not a lot of evidence.

And you know what? all that will go above turncoat's head.

Let's examine each of those shall we, some people here seem quite happy to quote headlines but without any understanding of the detail or context:

Manufacturing up - Manufacturing was actually down by 6% in November 2009 as the following government statistics reprot.

http://www.statistics.gov.uk/cci/nugget.asp?ID=198

Crime Down - this is not exactly a key economic indicator but if it is down, I'm very pleased, I doubt however that it really is!

Run on the FTSE - Fortunately for the UK the FTSE 100 is comprised of companies which in over 50% of cases derive their earnings from overseas. It therefore follows that the performance of the FTSE does not necessarily mirror the performance of the UK economy. Anyway, if we look at the performance of equities over the past week we will see that some market watchers are predicting that we're now entering a bear market since they have fallen quite markedly.

Cost of transportation - fuel costs and VAT have increased yet again this year hence I do not understand where any costs have fallen.

Foreign Investment - Foreign investment in the UK fell by 50% during 2009, as the following article describes. http://www.guardian.co.uk/business/2009/se...nvestment-slump

So yes, the contents of the post did indeed pass by me, thankfully, because they are all incorrect. And whilst posting on this subject let me set straight yet another misconception that MB seems to have and that is to do with currency strength:

In a recent post in this thread MB implied that the UK was keeping its currency low on purpose. MB no doubt thinks that there is a control dial in a special room at the BOE which the Governor BOE can adjust in order to set the strength of Sterling, economy not doing too well, best give the nob a turn to the left and let the Pound fall, economy overheating, turn it the other way. Regrettably this is not the case and I am assured that no such control lever exists! But what does exist is market forces and in particular, the FOREX market whereby individual companies/traders asses the worth of a currency and trade it according to that value, unless the BOE wants to spend huge sums trying to change that view, the value of the Pound is not under direct BOE control. So yes, the Pound is being kept low but not by the BOE, it's at a a level that markets think its worth so it's not where it is today by choice per se.

Edited January 23, 2010 by chiang mai

[MJP]

What and where is the evidence that the UK is clearly on the rebuild, markets are getting ready to whip the UK because there is no evidence and no restructuring plan, you live in a world of your own MB and seem to make up "facts" of your own as and when they suit you, it's one thing to be patriotic but yet another to be plain stupid.

Manufacturing Up , Crime Down, Unemployment on the down, Run on the FT SE ,products made abroad returning to the UK because of bad workmanship and cost of transport, Foreign investment from America France Italy Germany. No not a lot of evidence.

And you know what? all that will go above turncoat's head.

Let's examine each of those shall we, some people here seem quite happy to quote headlines but without any understanding of the detail or context:

Manufacturing up - Manufacturing was actually down by 6% in November 2009 as the following government statistics reprot.

http://www.statistics.gov.uk/cci/nugget.asp?ID=198

Crime Down - this is not exactly a key economic indicator but if it is down, I'm very pleased, I doubt however that it really is!

Run on the FTSE - Fortunately for the UK the FTSE 100 is comprised of companies which in over 50% of cases derive their earnings from overseas. It therefore follows that the performance of the FTSE does not necessarily mirror the performance of the UK economy. Anyway, if we look at the performance of equities over the past week we will see that some market watchers are predicting that we're now entering a bear market since they have fallen quite markedly.

Cost of transportation - fuel costs and VAT have increased yet again this year hence I do not understand where any costs have fallen.

Foreign Investment - Foreign investment in the UK fell by 50% during 2009, as the following article describes. http://www.guardian.co.uk/business/2009/se...nvestment-slump

So yes, the contents of the post did indeed pass by me, thankfully, because they are all incorrect. And whilst posting on this subject let me set straight yet another misconception that MB seems to have and that is to do with currency strength:

In a recent post in this thread MB implied that the UK was keeping its currency low on purpose. MB no doubt thinks that there is a control dial in a special room at the BOE which the Governor BOE can adjust in order to set the strength of Sterling, economy not doing too well, best give the nob a turn to the left and let the Pound fall, economy overheating, turn it the other way. Regrettably this is not the case and I am assured that no such control lever exists! But what does exist is market forces and in particular, the FOREX market whereby individual companies/traders asses the worth of a currency and trade it according to that value, unless the BOE wants to spend huge sums trying to change that view, the value of the Pound is not under direct BOE control. So yes, the Pound is being kept low but not by the BOE, it's at a a level that markets think its worth so it's not where it is today by choice per se.

http://www.bloomberg.com/apps/news?pid=206...id=a5NPz8dDJk2Y

U.K. Races to Bottom of Economies for Investors in Global Poll

By Mike "Michael" Dorning

Jan. 23 (Bloomberg) -- U.K. Prime Minister Gordon Brown and his country are winning a race they would rather lose: to the bottom.

Global investors are more pessimistic about the U.K. than any other major economy and Brown gets overwhelmingly negative reviews, according to a global quarterly poll of investors and analysts who are Bloomberg subscribers. It shows that 66 percent of respondents are pessimistic about the investment climate in the U.K., which tops the list...../

The prime minister’s struggle to win re-election and protect himself from dissent within Labour is “becoming more important to Gordon Brown than controlling the budget deficit, building confidence in the consumers or controlling inflation,” said Andrés Caballero Gálvez, a fixed-income and equities trader at BT Casa de Bolsa in Caracas.

“The government needs to build a realistic plan to bring borrowing under control without negative impacts on the economic recovery,” he said.

[MJP]

http://uk.news.yahoo.com/4/20100123/tuk-br...ti-dba1618.html

Gordon Brown's Government has become "utterly dysfunctional" and is failing to prepare the way for essential spending cuts, the leader of the top civil servants' union has claimed.

Jonathan Baume, the general secretary of the First Division Association, said 10 Downing Street was seen as a "blockage" by Whitehall mandarins because of the difficulty of getting a clear decision from the Prime Minister.

He said some Labour ministers had "given up the fight" and were already focusing on the aftermath of the election.

Behind the scenes, top civil servants were informally preparing for the possibility of a Conservative government with a new policy agenda.

Mr Baume told The Guardian newspaper: "The dysfunction is partly political and partly organisational. No-one is clear how the Treasury, the Prime Minister's office and the Cabinet Office actually loop together and come up with a coherent policy initiative.

"When Gordon Brown became Prime Minister, no clear direction ever emerged from him."

Unusual for Civil Servants to rebel against their political masters. This may be an invitation to the "men in grey suits" to remove him from office before he does any more damage to the country. Poor old Gordon lacked the temperament, personality and skill for the job. What a terrible disaster for the country that we have suffered him this long.

Edited January 23, 2010 by MJP

[MJP]

http://www.iea.org.uk/record.jsp?type=release&ID=171

So When Labour came to power we were #4 today we are 11th.

"These are deeply depressing numbers for those longing for a sustained economic recovery in the United Kingdom. Just when we need to set free and empower the private sector, Britain is moving in precisely the wrong direction. We need reduced taxation, less regulation and a smaller role for government. What we're getting is exactly the opposite"

The UK performs extremely poorly on government spending, scoring just 41.9 out of a maximum 100. According to the report’s authors:

"…the government’s size and spending have grown significantly under successive Labour governments, damaging Britain’s competitive edge. Prime Minister Gordon Brown plunged Britain further into debt at the onset of the recent financial crisis with bank bailouts and stimulus packages."

This is particularly worrying because increased government spending has not improved economic crisis performance. In light of the global financial and economic storm, many advanced economies’ governments have stepped up spending to promote growth and employment. The early evidence is that such spending did not work.

The report provides further evidence that the UK is falling behind her economic competitors, particularly those in the Far-East and Australasia.

Hong Kong (score: 89.7) once again tops international rankings for economic freedom, with Singapore second (on 86.1) and Australia in third spot (82.6).

[MJP]

Found this hilarious. Saved a .pdf of it from ebay before the spoof ad got pulled.

See attached.

BRIBO_Laptop__270_000_avail..pdf

[Abrak]

Obviously forecasting exchange rates short term is pretty difficult.

But can anyone think of any reason - you know the basics - C/A surplus, PPP, fiscal surplus, forex movement, debt etc - that say on a 5 year view GBP will be stronger against the baht than it is now.

[chiang mai]

Obviously forecasting exchange rates short term is pretty difficult.

But can anyone think of any reason - you know the basics - C/A surplus, PPP, fiscal surplus, forex movement, debt etc - that say on a 5 year view GBP will be stronger against the baht than it is now.

I cannot and I've thought about this for several hours now.

[MJP]

Obviously forecasting exchange rates short term is pretty difficult.

But can anyone think of any reason - you know the basics - C/A surplus, PPP, fiscal surplus, forex movement, debt etc - that say on a 5 year view GBP will be stronger against the baht than it is now.

Nope.

[Abrak]

Obviously forecasting exchange rates short term is pretty difficult.

But can anyone think of any reason - you know the basics - C/A surplus, PPP, fiscal surplus, forex movement, debt etc - that say on a 5 year view GBP will be stronger against the baht than it is now.

I cannot and I've thought about this for several hours now.

Well I thought a bit about it too... and, at first, thought that all Thailand's strong fundamentals is 'already reflected' in the exchange rate.

Then I sort of extrapolated everything ten years and came to the conclusion that at the end of it Thailand could basically buy the UK in its debt restructuring. Mind you I didnt buy the current Chancellor's reduce the deficit, strong growth based on Oxford and Cambridge graduates (who obviously go to GS) and wind, solar and wave power. (Obviously when you say 'the importance of global warming on the economy cannot be overstated' it implies (1) an oxymoron (or maybe another long word) and (2) you cant get a girlfriend.)

Obviously if that is the buy story, its a sell. I dont really understand why a country with a 9% current a/c surplus and forex reserves as a percent of GDP higher than China has an overvalued currency (not to mention the 17% of the money supply that has been sterilized by the BoT to prevent appreciation relative to the dollar.) (Theoretically, that is reverse QE.)

Incidentally I believe the best performing currency in the world over the last 2 months has been the Burmese Kyat (based on the tradeable rate which has appreciated over 20% against the US$) so clearly there is hope for sterling.

Edited January 24, 2010 by Abrak

[chiang mai]

They say a picture is worth a thousand words:

[cookstar]

i think i've got a few thousand burmese kyat kicking around somewhere guess it's time to change it up then. lol

[pkrv]

Obviously forecasting exchange rates short term is pretty difficult.

But can anyone think of any reason - you know the basics - C/A surplus, PPP, fiscal surplus, forex movement, debt etc - that say on a 5 year view GBP will be stronger against the baht than it is now.

I cannot and I've thought about this for several hours now.

Well I thought a bit about it too... and, at first, thought that all Thailand's strong fundamentals is 'already reflected' in the exchange rate.

Then I sort of extrapolated everything ten years and came to the conclusion that at the end of it Thailand could basically buy the UK in its debt restructuring. Mind you I didnt buy the current Chancellor's reduce the deficit, strong growth based on Oxford and Cambridge graduates (who obviously go to GS) and wind, solar and wave power. (Obviously when you say 'the importance of global warming on the economy cannot be overstated' it implies (1) an oxymoron (or maybe another long word) and (2) you cant get a girlfriend.)

Obviously if that is the buy story, its a sell. I dont really understand why a country with a 9% current a/c surplus and forex reserves as a percent of GDP higher than China has an overvalued currency (not to mention the 17% of the money supply that has been sterilized by the BoT to prevent appreciation relative to the dollar.) (Theoretically, that is reverse QE.)

Incidentally I believe the best performing currency in the world over the last 2 months has been the Burmese Kyat (based on the tradeable rate which has appreciated over 20% against the US$) so clearly there is hope for sterling.

I sort of came to the same conclusions too. I think I will be able to exchange my condo in Bangkok for Buckingham Palace in about 10 years. BUT I still feel a blip is in the air. I stick to my prediction 1 year ago that in 1 to 2 years there will be an improvement (GBPTHB=). If for no other reason than positions unwind and the USD MAY not fair so well. I am still on for my bet with an expiry date (on my original prediction) of 2011 (Jan ish).

[Abrak]

Well luckily the UK remains one of the banking capitals of the world.

[pkrv]

Well luckily the UK remains one of the banking capitals of the world.

You're not perchance saying they have already been there and done that?

Edited January 25, 2010 by pkrv

[churchill]

LONDON, Jan 28 (Reuters) - European shares turned negative in afternoon trade on Thursday as banks retreated from earlier gains after S&P said the UK banking system was no longer classified among the most stable and low-risk.

http://www.reuters.com/article/idUSLDE60R1...ype=marketsNews

[Thongkorn]

LONDON, Jan 28 (Reuters) - European shares turned negative in afternoon trade on Thursday as banks retreated from earlier gains after S&P said the UK banking system was no longer classified among the most stable and low-risk.

http://www.reuters.com/article/idUSLDE60R1...ype=marketsNews

Thanks to Mr Obama shares have dropped globally

[aitch52]

Dennis Healeys Eyebrows! ( Former totally incompetent British Chancellor of the Exchequer to the uninformed)

seems to me we have been here before

There is one thing that Britain does indeed outperform the world in.

Corrupt and self serving politicians.

Harold Mcmillan 1959, "You've never had it so good"

Sir Alec Dougla Home "EEEERRRRRRM"

Harold Wilson " Let's secretly devalue the Pound" funny old thing the speculators heard about it 4 days before the British people and really made a killing. At that time Britons were forbidden to take more than £10 out of the country.

Sunny Jim Callahan "Winter of Discontent*

Michael Foot (who?)

NIgel Lawson "Yes Maggie"

John Major "Which Grey Suit should I wear Norma?" Even better on Black Friday, as Chancellor, when a computer glitch forced the sale of Billions of pounds worth of stocks and shares, leading to a death dive,( Cecil Parkinsons de-regulation) "Whats the interest rate? 7%, put it up to 15% then" then on Monday, "eeeerrrrrm seems a bit a bit high, 8% sounds good"

Blair and Brown enough said

I, and many of my countrymen do regret the passing of John Smith, perhaps he could of provided the leadership that has been so sadly lacking since Maggie was stabbed in the back. It also cleared the way for the gruesome twosome, Blair and Brown and New Labour.

Don't get me wrong I am a patriot, I am just totally disenchanted by the disgraceful behaviour of our so called public servants.

The pox on them all

As I said at the beginning of my post nothing new here, was enjoying my retirement until the free fall, had to get off my backside and get a job.

Disgruntled Constituent

PS Anyone need a moat cleaning out?

Edited January 28, 2010 by aitch52

[chiang mai]

So GBP has remained steady against USD but on the back of the problems with the Greek deficit has strengthened against EUR.

GDP has improved from negative to +0.1% although the IMF reckons it's a bigger improvement, something in the order of +1.4% as I recall.

UK inflation is starting to look nasty but the chances of an increase in the BOE rates is simply not even imaginable, cessation of QE is however.

GBP/THB has fallen slightly over the past month but the strength of THB looks like it will hold at the current level - I suppose if China puts the breaks on it could weaken THB.

Looming budget deficits in Spain, Portugal and Ireland hang over the future strength of the Euro, perhaps even its viability and continued existence.

Meanwhile, UK house prices have risen (allegedly) by 1.2% this month, my but Nationwide was quick off the mark in getting those numbers out, the months not even over yet.

So what does all of this mean for a point in time, say three months out? Election in May probably holds the short term answer. Longer term, the last six months of this year are forecast to be highly turbulent times with a wall of new debt that banks must refinanced and a new stage in the crisis where the effects of post QE are acutely felt globally. I don't know about anyone else but I feel as though a large bomb has already left the bomb bay and is on its way down! One of my chums in the UK advocates buying Euro (personally I think he's slightly mad) , another suggests USD, nobody suggests holding GBP. Almost impossible to know what's right at this juncture.

[chiang mai]

Things not looking too great out there, GBP/USD at 1.56 and GBP/THB at 52 and the FTSE trying to break 5,000 on the way down, question is, will the non ram payroll numbers stop this slide or are we headed further down, I was rather expecting this a little bit later than now, opps!

[mommysboy]

Things not looking too great out there, GBP/USD at 1.56 and GBP/THB at 52 and the FTSE trying to break 5,000 on the way down, question is, will the non ram payroll numbers stop this slide or are we headed further down, I was rather expecting this a little bit later than now, opps!

Well, we will probably both be right, I predicted a collapse in the Euro and you a further collapse in sterling and more besides. But do I detect once again that this latest turn of events is a downturn solely effecting the UK? It seems to me the Euro states are the prime mover this time. Surely the obvious explanation fo dollar strength is that investors have taken fright again and returned funds to the dollar as a reserve currrency.

There has actually been good (well better) news coming out of the UK! end of initial recession, and phasing out of QE. Plus a pick up in manuafacturing and housing. It appears to me UK has at least taken it's medicine whereas Euroland wont even go to the doctors.

I'm personally convinced that a very low pound continuing for many years will be a good thing for the beloved homeland - so if it continues to fall so be it.

[chiang mai]

Things not looking too great out there, GBP/USD at 1.56 and GBP/THB at 52 and the FTSE trying to break 5,000 on the way down, question is, will the non ram payroll numbers stop this slide or are we headed further down, I was rather expecting this a little bit later than now, opps!

Well, we will probably both be right, I predicted a collapse in the Euro and you a further collapse in sterling and more besides. But do I detect once again that this latest turn of events is a downturn solely effecting the UK? It seems to me the Euro states are the prime mover this time. Surely the obvious explanation fo dollar strength is that investors have taken fright again and returned funds to the dollar as a reserve currrency.

There has actually been good (well better) news coming out of the UK! end of initial recession, and phasing out of QE. Plus a pick up in manuafacturing and housing. It appears to me UK has at least taken it's medicine whereas Euroland wont even go to the doctors.

I'm personally convinced that a very low pound continuing for many years will be a good thing for the beloved homeland - so if it continues to fall so be it.

Be careful with the housing figures, both Nationwide and Halifax reported an upturn but both have a vested interest since a large part of their businesses depend on selling new mortgages. Hometrack on the other hand is largely independent and they reported a fall! It will be interesting to see how The Land Registry Office reports January, in a month or so's time, but I reckon it will report a drop in sales/prices.

[churchill]

Housing in the UK will go down - Sell now whist you can .

Sterling Down along with the Euro and $ to follow / Asian currencies will be forced up as everything else goes down .

Interest rates ARE going UP as are Taxes - Wages probably down - House prices down .

[chiang mai]

Housing in the UK will go down - Sell now whist you can .

Sterling Down along with the Euro and $ to follow / Asian currencies will be forced up as everything else goes down .

Interest rates ARE going UP as are Taxes - Wages probably down - House prices down .

I agree, it's all a question of time scales, as usual! If anyone reads Mish's blog he's calling for a UK implosion by mid year whilst Rouhbini (sp) looks to the second half of this year, any advance on that?