Sterling finished.

[Chancer]

I just saw on France24 todays Independant headline "Sell any Sterling that you have, the pound is finished".

I have probably managed to muddle the sentence in the few seconds that I memorised it but those were the words.

Has it started falling again?

[Gluestick]

Oh boy!

I just love times like these!

I was working (as a dealer) in the City of London in the early 1970s, when the Heath-Barber Boom-Bust, had turned to bust.

Exciting times............

I was frequently lunching with the head honchos of major banks, insurance and finance companies in our In-House dining rooms.

Day after day we heard the Chinese Whispers and false stories of how (e.g.) NatWest was going and major insurance companies.

One day I was sitting next to the CFO of one of the biggest insurers and asked him (as I would!) was the current rumour true: are you going bust?

We both enjoyed a good laugh.

Look here: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

Despite the idiocy of it's politicians and venality and slavering incompetence of its major bankers and the "Lost-The-Plot" brain of Mervyn King, how could the World's 6th largest economy be bankrupt? (And fifth really if one takes out the EU as it represents a number of states including Germany which is in the list twice!).

If one can be bothered to work through the maze of statistical reports here: http://www.bankofengland.co.uk/

It will be seen how large are the values of for example, US Treasury Bills held and other foreign securities.

Additionally, Britain enjoys vast investment in overseas corporations.

The UK presently is like a major company suffering from dumb directors: it will recover when someone starts making correct fiscal and economic decisions.

Expect Brown and his coterie of clowns gone by May, probably.

 

[Ron Avery]

Gluestick  I am surprised that despite your claims to high office you think that the UK is run by the Cabinet and not by the Civil Servants in the Treasury, its advisors and the boards of the big financial institutions.  Ministers get a number of options on a particular issue and advised as to the pros and cons of each and they make the decisions on which option to take, the options are not of their making or necessarily party political driven, whoever was in power today would get the same options. Are you seriously suggesting that had Cameron and his Eton dorm mates been in power the UK would be in a different position today? Do you really believe that Cameron or Osbourne would not have bailed out the banks? I agree with you that the credit crunch or downturn has become a media circus, but it helps pass the 24 hours of continuous news that these news channels have to fill, the BBC even have a downturn logo, how good of it[:@].  The cynics might even think that this level of news output is showing the DG and Government just how much the BBC needs funding to better serve the public, but I digress.....

It does seems nowadays that the media are talking the UK economy down non-stop. Whose interests are served by this do you think?  Whose interests are served by highlighting every tom, dick and harry that loses his job creating a crisis of fear amongst UK workers when in normal times people lose their jobs every day?  Do you hear the French media harping on daily about the crisis?  For most of the French the crisis matters not a jot probably due to the low uptake of credit in any of its forms.  It seems to me that the rest of Europe is getting gets on with its lives and letting the actions being taken by their governments and those of the other EU nations take their course hoping and believing that in time this money being ploughed into the economies will create consumer confidence, encourage investment and more importantly demand which will in turn allow industry to produce, invest and create jobs.

[Gluestick]

[quote user="Ron Avery"]

Gluestick  I am surprised that despite your claims to high office

[/quote]

What claims?

Dear Ron! I have missed your concealed invective and assumptions!

[quote] you think that the UK is run by the Cabinet and not by the Civil Servants in the Treasury, its advisors and the boards of the big financial institutions.[/quote]

Check Hansard for March 2007 and Hard Eddie George's confession on interest rates to the Treasury Select Committee, tasked with investigating how successfully the Bank of England's "Independance" had progressed.

 

  [quote] Ministers get a number of options on a particular issue and advised as to the pros and cons of each and they make the decisions on which option to take, the options are not of their making or necessarily party political driven, whoever was in power today would get the same options. Are you seriously suggesting that had Cameron and his Eton dorm mates been in power the UK would be in a different position today? Do you really believe that Cameron or Osbourne would not have bailed out the banks? I agree with you that the credit crunch or downturn has become a media circus, but it helps pass the 24 hours of continuous news that these news channels have to fill, the BBC even have a downturn logo, how good of it[:@].  The cynics might even think that this level of news output is showing the DG and Government just how much the BBC needs funding to better serve the public, but I digress.....[/quote]

Yes; frequently!

[quote]It does seems nowadays that the media are talking the UK economy down non-stop. Whose interests are served by this do you think?  Whose interests are served by highlighting every tom, dick and harry that loses his job creating a crisis of fear amongst UK workers when in normal times people lose their jobs every day?  Do you hear the French media harping on daily about the crisis?  For most of the French the crisis matters not a jot probably due to the low uptake of credit in any of its forms. [/quote]

One can talk down a share or other negotiable fiscal instrument, but not an economy.

Do you really believe that Asian investors pay much if any attention to the UK's gaggle of talking heads?

The current core problem with the British economy, banking and finance, is that it over-relied on ongoing infusions of foreign cash: in simplistic business strategy terms, Britain was overtrading: since it had failed to replace the wealth and job creational industrial base, which creates fresh, new capital.

When I carried out an in depth research for an article back in early 2004 (wherein I warned precisely what would happen) I found the ONS stats showed that circa 2/3rds of Britain's Total Wealth (i.e. factories; offices, ports, airports, roads; shops; businesses) was represented by residential housing!

Thus banks had to borrow, as their capital bases and deposits were too small to meet the insane stampede of those desperate to commit financial suicide: and they broke the primary rule of banking: borowed short to lend long.

Only their then ability to re-cycle this accumulated debt into packages, as MBS warranted by dangerous CDOs and marketed often via SIVs, allowed them to keep on lending: and lending: and lending.

Now the Asian and indeed global Capital Markets and Interbank market will lend to them no more.

Since they are already chock full of Toxic Debt.

Nothing much to do with the BBC, I'm afraid.

 

[quote] It seems to me that the rest of Europe is getting gets on with its lives and letting the actions being taken by their governments and those of the other EU nations take their course hoping and believing that in time this money being ploughed into the economies will create consumer confidence, encourage investment and more importantly demand which will in turn allow industry to produce, invest and create jobs.

[/quote]

Excepting, of course, that the member states of the Eurozone cannot adjust their base rates separately and must rely on a flawed One Size Fits All "solution".

[quote]Are you seriously suggesting that had Cameron and his Eton dorm mates been in power the UK would be in a different position today? Do you really believe that Cameron or Osbourne would not have bailed out the banks?[/quote]

I am no proponent of Call Me Dave, or indeed any other British politician.

What's urgently needed is a Coalition, with party politics and all the nonsense shelved for the duration, until this almighty mess is sorted out.

You don't seem to realise, BTW that Government have the ability to adjust a nation state's economy by intervention of various types.

For example, early on in this fiasco, Government ought properly to have ensured the Bank of England invoked the "Corset" (Special Deposits). Which would have prevented an excess of foreign cash over-heating the economy and bank's excessive and insane lending.

Of course, whilst the smug BLiar-Brown duopoly could continue on their way, with Brown spouting off about his "Miracle Economy" and "Prudence" when in reality, the complete reverse was true it, was against their common interest to face reality.

Trouble with reality, though: it has an unhappy habit of biting you savagely in your rear end!

[Rose]

[quote user="Ron Avery"]

I agree with you that the credit crunch or downturn has become a media circus, but it helps pass the 24 hours of continuous news that these news channels have to fill, the BBC even have a downturn logo, how good of it[:@].  The cynics might even think that this level of news output is showing the DG and Government just how much the BBC needs funding to better serve the public, but I digress.....

It does seems nowadays that the media are talking the UK economy down non-stop. Whose interests are served by this do you think?  Whose interests are served by highlighting every tom, dick and harry that loses his job creating a crisis of fear amongst UK workers when in normal times people lose their jobs every day? 

[/quote]

Just wanted to add my thoughts on this as it's something that has been bugging me for days!  I totally agree with the comments above about news coverage and daily talk about the impending doom. 

I don't profess to have answers but... A few days ago when the figures December sales figures were released the BBC had a reported in Exeter (my hometown).  They ran his report throughout the day on the main news and news 24.  He said quite clearly, whilst stood on Exeter High Street that there were clear sings of the down-turn everywhere. 

The reporter pointed to a row of three shops, one national retail chain, one national mobile phone shop and another empty shop.  The first two were in the midst of January sales so naturally they had SALE signs all over the windows (not un-common for this time of year) the third shop he reported had not survived the down-turn and had closed.  This statement was total fabrication.  The shop in question had moved to a new, bigger premises across the street in the huge, very busy, new shopping centre, where many new up-market national chains have also opened large new branches.  And the empty shop... just about ready since it's re-fit and will be opening soon with another national chain.

This kind of reporting makes my blood boil - I cannot see any reason for this... ARGGGGGHHHH

Now I'm mad all over again just thinking about it... I could go on [blink] [:@]

[Gluestick]

Interesting article from Robert Peston, published last year by BBC.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/newcapitalism.pdf

 

 

[Patf]

Gluestick - I'm trying to understand what you have written. I think you were trying to be reassuring in your first post, but the bit about US treasury bills acting as security, are they worth anything now? Taking into account that the US economy seems to be based on loans from ?China.

And Rose, I agree with you that the BBC seems to want to pull down the UK economy. And the labour govt. with it.

[Gluestick]

If the USA defaulted on its Treasury Bills, Patf, then the World as we know it would be over.

There are vast numbers of them out  in the market: China and Japan (e.g.) hold billions each.

Whilst it would be nice to ignore the news, the reality is what economists call "The Metrics" which is simply a fancy way of a saying statistical data, are all bad. I'm listening to Classic FM Radio as I work and on their news (no connection with BBC) they have just reported that UK unemployment has now breached the 2 million level if the latest round of job losses are added to core unemployment.

The pound has also fallen further against both the US$ and the Euro.

Yes, I was trying to reassure: despite the incompetence of NuLab for the past 10 years or so, there is quite obviously core residual value in Great Britain plc.

Just imagine if Government cut their budget by 50%, by stopping throwing our tax money around like the prodigal son!

Instant feel Good Factor, I'm sure you would agree.

Of course, Britain is in for a tough time to pull itself around.

It is back to reality time for a good few years.

Far too many people have been dwelling in Cloud Cuckoo land for too long.

On borrowed money.

 

[Rose]

Can I add a P.S. in that I don't disagree that the situation is bad, but I also don't see the need for false reporting and using factual information in such a way as to make things appear far worse... almost to create a headline.  Another tactic that is often seen is when figures and stats are reported in such a way to give them the worst possible slant... As an example, we hear that the christmas retail figures were the worst for decades.  What we don't hear is any perspective in that last year apparently we had the best year ever etc... 

I apprecaite that no growth is still no growth and declines are still that, and it would be foolish indeed to think that economies were not in for a rough ride however, bad reporting is still bad reporting.

sorry if I'm going off on a tangent a bit here... it just really gets under my skin.

[suein56]

[quote user="Gluestick"]

Interesting article from Robert Peston, published last year by BBC.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/newcapitalism.pdf

[/quote]

Certainly opened my eyes; for me his is a blog to keep my eye on in future. Thank you.

Sue

[Gluestick]

[quote user="Rose"]

Can I add a P.S. in that I don't disagree that the situation is bad, but I also don't see the need for false reporting and using factual information in such a way as to make things appear far worse... almost to create a headline.  Another tactic that is often seen is when figures and stats are reported in such a way to give them the worst possible slant... As an example, we hear that the christmas retail figures were the worst for decades.  What we don't hear is any perspective in that last year apparently we had the best year ever etc... 

I apprecaite that no growth is still no growth and declines are still that, and it would be foolish indeed to think that economies were not in for a rough ride however, bad reporting is still bad reporting.

sorry if I'm going off on a tangent a bit here... it just really gets under my skin.

[/quote]

Doesn't the media do this all the time, Rose?

Im my experience, whenever there is a subject I know something about, invariably reporting is nonsense, in terms of fact.

The core mantra today seems to be, "Don't let the facts get in the way of a good story!"

Having worked with a few BBC and Channel4 editors and producers on certain items, I found they were usually totally clueless.

Peston is a pretty sound guy: and has been right through the build up to this crisis. The rest, however, have been pretty useless, IMHO.

Sadly 99% of journalism today is either scaremongering or total fabrication/exaggeration concerning otherwise non-entities called Celebrities.

Right now, what is needed is some straight facts and analysis: not wild speculation like "Britain is bankrupt! Sterling is finished!".

Pity all these talking heads and scribbling teenagers weren't warning about this when a few including myself were, over five years ago............................

 

[Gluestick]

[quote user="suein56"][quote user="Gluestick"]

Interesting article from Robert Peston, published last year by BBC.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/newcapitalism.pdf

[/quote]
Certainly opened my eyes; for me his is a blog to keep my eye on in future. Thank you.

Sue
[/quote]

Peston is a good source of sound analysis, Sue.

 

[Chancer]

I can answer one of your questions Ron.

[quote user="Ron Avery"]

 Do you hear the French media harping on daily about the crisis?  [/quote]

The answer is a resounding YES!

But then I do listen to and read the French media everyday, this forum is pretty much my only link to the British media, I do have BBC news bookmarked but rarely go there, several hours of French and world news concerning the French is enough for me.

To be fair it is not all doom and gloom and they do try and balance it with success stories, especially on the regional news but these are always stories of some young fluffy start up "poised" to meet success, sometimes I just shake my head at the naivety and innocense of these future entrepeneurs but I guess I too was once like that and France more than any country needs people to launch businesses with their eyes firmly closed.

For those who dont speak French try watching France24 news which I think can still be found on Sky to see the French perspective and get a little return on your relevance audiovisuelle [:)]

It has also now just become avaiable on Free.fr channel 95, a vast improvement on the other English speaking Sky news which consists of constantly regurgitating very few stories mainly concerning "celebs" and "sport heros" (overpaid celeb sporting stars)

[Ron Avery]

I can see why you like Peston Gluey, apart from coming from the Sunday Torygraph, he also talks down to people as if they are beneath him and IMHO has one of the most annoying voices and delivery style on TV except for the geordie twat who does Big Brother.  Peston is actually credited with talking down the shares of HBOS when he could not keep his big gob shut when given some confidential information.  In the City shares can now be "pestoned", so good bloke to have around in a crisis or not.....[blink]  Peston is however marginally preferable to that other self promoting bag of wind and doom merchant and also a torygraph staffer Geoff Randall.

[Rose]

Thanks Gluestick... what you said had a strangly calming effect!  at least I know I'm not going mad! 

Problem is, amongst all of this array of mis-information I'm left wondering where is the best place to put my savings!  now that's the big question I wish someone could answer for me! [Www]

[Chancer]

Ron

On the french news tonight as well as the usual reporting on the state of the french motor industry they showed the banking heads leaving the Elysée with a €10.5 billion bale out promise from Sarkozy, one of his conditions was that they must give up their 2008 bonusses.

They must have some clever sort of performance measuring that allows them to trouser bonusses whilst needing €10.5 billion.

[Gluestick]

[quote user="Ron Avery"]

I can see why you like Peston Gluey, apart from coming from the Sunday Torygraph, he also talks down to people as if they are beneath him and IMHO has one of the most annoying voices and delivery style on TV except for the geordie twat who does Big Brother.  Peston is actually credited with talking down the shares of HBOS when he could not keep his big gob shut when given some confidential information.  In the City shares can now be "pestoned", so good bloke to have around in a crisis or not.....[blink]  Peston is however marginally preferable to that other self promoting bag of wind and doom merchant and also a torygraph staffer Geoff Randall.

[/quote]

Peston has a boring voice and delivery; agreed. However, he is not a shiny-toothed celeb. He's an analyst; and the only BBC or indeed, mass media commentator to call the shots as they were.

What total ineffable rubbish to suggest that a BBC business commentator can "Talk down HBOS shares"!

It just demonstrates why the City and the financial genii earning millions in bonuses weren't worth the space they occupy, if their analysis is so very poor, they react to a lone BBC commentator! It is known, of course as Lemming Instinct!

If any of these overpaid clowns had have actually bothered one day, to sit own with a pencil and the sort of calculator often given free with 5 litres of engine oil, then common sense and the level of financial knowledge possessed by an A level Economics student would have told them summat was rather wrong.

Geoff Randall was perhaps the ONLY mainstream economics and business journalist to warn of the impending problems. Some few years ahead

Something wrong with being right and prescient is there?

Shame NuLab didn't listen then really......................................[Www]

Trouble is, realists and pragmatists are invariably ignored when everybody else is making hay whilst the sun shines.................................. or perhaps more correctly, appears to be.

Sadly now, the little guy and his family have to pick up the tab for the next ten years or so.

Until another motormouth snakeoil saleman like BLiar comes along to persaude them that fiscally, it is quite reasonable to square the circle.

 

[Ron Avery]

Funny that your mate Peston blames it all on the Chinese!! 

[Gluestick]

[quote user="Ron Avery"]

Funny that your mate Peston blames it all on the Chinese!! 

[/quote]

It was probably Dr Fu Manchu, Ron.

One wonders if you can reach any valid conclusions.

But of course you are right.

It was the Chinese who forced British consumers to sign mortgages on insane terms of reference.

It was the Chinese again, who persauded such as Thatcher to promote reliance on the mythical so-called Service Economy.

And they were there once more egging on idiot bankers to invest in US Sub Prime MBS.

And the British consumers to spend, spend, spend on their credit cards and unsecured personal loans to buy imported junk and 4X4s.

And there they were once more, convincing Godron, AKA Prudence that he was in charge of a Miracle Economy and that all was well and he could continue wasting billions on silly schemes for biometric ID cards and Olympic games and Magic Mushrooms at Greenwich and all sorts of wonderful ways to spend the taxpayer's cash and when that ran out, increase the PSBR time and time again!

Apparently, it was millions of tonnes of genetically modified Monsodium Glutenate, heaped into Chinese takeaways by Triads in Bejjing's pay wot dun it.

[Www]

 

[Ron Avery]

[quote user="Gluestick"][quote user="Ron Avery"]

Funny that your mate Peston blames it all on the Chinese!! 

[/quote]

It was probably Dr Fu Manchu, Ron.

[/quote]

No it was Peston, one wonders whether you are so full of your self importance that you bother to read anything other than your own words.  Outside of that tube that you live in are other people who have opinions which they are as entitled to as you.  In my experience people who can recall a lunch with a bank CEO  were probably standing there with a tray in their hand....[kiss].

Google Pestoned, then grovel with an apology.

[Scooby]

[quote user="Ron Avery"]

In my experience people who can recall a lunch with a bank CEO  were probably standing there with a tray in their hand....[kiss].

[/quote]

I normally have a glass of wine in my hand [;-)].  For what it's worth I think Gluestick is spot on.

[PaulT]

[quote user="Ron Avery"]

I can see why you like Peston Gluey, apart from coming from the Sunday Torygraph, he also talks down to people as if they are beneath him and IMHO has one of the most annoying voices and delivery style on TV .

[/quote]

Ron totally agree with you about Peston. That slow delivery with all the errs etc. I always think that in his mind he is addressing the peasants who are hanging on to his every word.

Paul

[Gluestick]

[quote]No it was Peston,[/quote]

What was? Are you suggesting that this whole financial fiasco can be blamed on a BBC and newspaper commentator and analyst?

Unreal!

 [quote]one wonders whether you are so full of your self importance that you bother to read anything other than your own words.[/quote]

I do indeed read what others write on threads such as this: sadly you do not actually seem to; perhaps worse, you jump to weird conclusions and then burst into print.

[quote]  Outside of that tube that you live in are other people who have opinions which they are as entitled to as you.[/quote]

Indeed, everyone is totally entitled to his and her opinion. The World is full of people with "Opinions": in my experience, when dealing with interactive and inter-related matters such as this, I find those opinions all too often short on fact, since few actually bother to research basic facts surrounding a subject and simply regurgitate a sort of pre-digested, secondhand view, culled from their favourite media source. 

This currrent financial and economic crisis is a prime example, surely?

Yet you roundly criticise Peston and Randall, two who stand out as (i) Forecasting the problem drivers, causal factors and etc well before anyone else much, in the media; & (ii) Accurately predicting the likely outcomes!

[quote] In my experience people who can recall a lunch with a bank CEO  were probably standing there with a tray in their hand....[kiss].[/quote]

No doubt you are here alluding to my earlier comment.

Well, I hate to disallusion your typical Ron deductive process, (based on scramble a few comments together + add a soupcon of vitriol and reach an erroneous conclusion) but at the times I was relating back to, I was not "Standing with a tray in my hand", but rather sitting in a recreated Georgian dining room,( I'm sorry to say this Ron, but the Director's Dining Room: we had two) of the then largest international company of its type globally, based in the heart of the old City of London. No doubt the waiters used trays, if this helps your self-created vision!

The whole point of the tale - which you seem to have missed; or ignored -  is that rumours are endemic to markets when they have reached panic mode: and that is precisely what is happening now.

Rumours are abounding that "The UK is bankrupt! And "We're all doomed!"

[quote]Google Pestoned, then grovel with an apology.[/quote]

Nope!

Simply because the core thrust of your premise, is that one lone voice, a BBC commentator is suggested as having the power to move markets!

As I suggested before, if one commentator/analyst has the sole power to destroy one stock, despite all the Risk Analysis systems and highly paid stock analysts employed by investment banks, then this is somewhat indicative of the current malaise. Soros can't do it: neither can the Sage of Omaha (Warren Buffet).

Well, If I were Robert Peston, I would be shorting a number of major shares ahead of announcing their imminent demise: and thereafter, off to the Caribbean and a large yacht and a life of utter luxury!

More seriously, markets are always fickle: and always will be and tend to react negatively and positively to a range of extraneous stimuli, often not much to do, directly with that market.

You seem to have developed three core premises within the context of this thread:

One: That Britain's present wilting economy has been caused mainly by negative press:

Two: We can blame Robert Peston rather than the true architects of the problem:

Three: It was the Chinese wot dun it!

[Ron Avery]

Frankly Gluey, your long posts bore me and I will not bother to respond to any more, I have a life to get on with.

[Chancer]

[quote user="Ron Avery"]

Frankly Gluey, your long posts bore me and I will not bother to respond to any more, I have a life to get on with.

[/quote]

Well thats a relief, maybe the pound can now recover, I was beginning to regret starting the thread.

Ironically it was the English language of France24 that ran the item including showing what appeared to be the front page headline urging people to dump sterling, conspiracy?..............

As an aside I used to masochisticaly monitor the pounds decline on Sky news, that and the £/$ exchange ticker was always part of the revolving banner at the bottom of the screen and also popped up every 10 to 15 minutes on a major currency chart, both of these dissapeared when the £ approached parity and have not come back, conspiracy?..............

Is there a link to the exchange rates in near to real time anywhere?  the one I use uses the end of previous day figure