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Sterling Falls As BOE’s Posen Says BIS Talking “Nonsense” And Stagflation “Unlikely” In UK

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Tue, 06/28/2011 - 07:12 | 1408179 hugovanderbubble
hugovanderbubble's picture

Tyler,

Short Spanish Banks for a 14-20% return

Spain till 7.700-8.700 index

 

Short BBVA,STD; EWP

Look our CDS http://www.rankia.com/respuestas/851561/fotos/49966

 

http://www.rankia.com/foros/bolsa/temas/851527-alerta-bankia-si

 

Tue, 06/28/2011 - 07:52 | 1408210 hugovanderbubble
hugovanderbubble's picture

I like when people click on junk... Because im telling the real thing about Spain.

 

BANKS -Rtrs headline saying up to 15 of 91 banks are expected to fail EU wide stress tests..will have a spec sales comment asap but remember that includes Cajas and Landesbanks..all this from euro zone sources..

 

Tue, 06/28/2011 - 07:12 | 1408180 Goldenballs
Goldenballs's picture

So many idiots in positions of power,would not know the truth if it ran over them.

Tue, 06/28/2011 - 07:22 | 1408192 squexx
squexx's picture

Idiots?!? I think you mean bought and paid for political whores!

Tue, 06/28/2011 - 08:44 | 1408333 snowball777
snowball777's picture

Can you be the latter without also being the former?

Tue, 06/28/2011 - 07:24 | 1408191 Yen Cross
Yen Cross's picture

 cable is one of the few currencies (trades) I'm Bullish on! Buy the deep dips!     Yen.

Tue, 06/28/2011 - 07:58 | 1408237 equity_momo
equity_momo's picture

I wouldnt. The market has largely left the UK alone as there have been riper , lower hanging fruit to go after , but if cable couldnt break into the 1.70s during the last 2 year risk on move , its not going to now. More likely you will see a fast move down through the 1.50s over the next quarter .  The UK cannot and will not raise rates so the stagflation will worsen. As soon as city jobs are lost in London you will see the 500k to 1.5m part of the housing market come unstuck fast. The BoE will end up printing as their next major policy move , not raising rates.

Tue, 06/28/2011 - 08:25 | 1408286 Yen Cross
Yen Cross's picture

 You pay attention to all those painful austerity moves that have happened over the last 6 months?  You watch how BOE deals with BIS and ECB junksters!

Tue, 06/28/2011 - 08:45 | 1408356 snowball777
snowball777's picture

Admirable, to a degree, at least they aren't completely incognizant of their situation, but they'll need to bring the cable back to ground in order to export and dig out, don't you think?

How much do you think people are willing to pay for Fish and Chips?

Tue, 06/28/2011 - 08:51 | 1408362 Yen Cross
Yen Cross's picture

  Yes I agree 777. Inflation in Sterling. Now a risk off currency, is not a bad thing.

Tue, 06/28/2011 - 07:27 | 1408194 oogs66
oogs66's picture

remember when the Greek finance minister was telling speculators they would lose their shirt betting on being short Greece?

Tue, 06/28/2011 - 07:28 | 1408195 Dr. Hannibal Lecter
Dr. Hannibal Lecter's picture

My Dear Friend Tyler,

Thank you for the posts.  Please keep them coming.  Glenn Beck is slowly moving off the front page.

Warmest Regards,

H.

Tue, 06/28/2011 - 07:25 | 1408196 murdomcsponge
murdomcsponge's picture

As a resident in UK, I have long adopted the approach - "earn your bread overseas and don't invest a penny in UK, Europe, or USA". Not done me badly so far.

Tue, 06/28/2011 - 07:29 | 1408200 Josephine29
Josephine29's picture

I think somebody has better tell Adam Posen that with economic growth being zero in the UK over the past 6 months and inflation being 4.5% on the CPI measure and 5.2% on the RPI measure that stagflation is already here! Although that would mean he would have to admit his policy errors over the past 2 years. Here is an interesting critique of his views from the economist Shaun Richards.

My critique of Adam Posen’s opinion piece in the Financial Times

http://t.co/kM3CMyh

 

Like a stopped clock one day Adam Posen's views will be correct but it is feeling like a very very long wait.

Tue, 06/28/2011 - 09:08 | 1408412 trav7777
trav7777's picture

economists don't appear to treat rising prices as evidence of inflation

Tue, 06/28/2011 - 07:36 | 1408203 agNau
agNau's picture

A show of hands; who here would like to live in Silver City?

Tue, 06/28/2011 - 07:46 | 1408216 Going Loco
Going Loco's picture

You are assuming that it exists. Does it exist?

Tue, 06/28/2011 - 08:32 | 1408314 Oh regional Indian
Oh regional Indian's picture

That was funny, more so in the context of the recent mirage city stories comign out of China.... http://www.foxnews.com/scitech/2011/06/27/lost-civilization-appears-above-chinese-river/?test=faces

 

And the pound getting pounded. Not quite a sterling currency anymore.

I think the Pound is the canary because it, because after 300-400 years of abuse, it's got to go/give. Way to one world currency that is. ;-)

ORI

http://aadivaahan.wordpress.com/2011/06/21/thunder-perfect-mind/

 

Tue, 06/28/2011 - 07:38 | 1408206 YHC-FTSE
YHC-FTSE's picture

Posen is a political whore. Just yesterday Mervyn King gave an interview which basically contradicts everything Posen says. 

 

If the BOE's policies are "Ultra Loose", then WTF is the Fed? We're running out of superlatives here. 

Tue, 06/28/2011 - 07:49 | 1408214 Going Loco
Going Loco's picture

Posen's position is dictated by this:

http://www.guardian.co.uk/business/2011/jun/27/house-repossessions-wave-interest-rates-rise

and this:

http://www.guardian.co.uk/business/2011/jun/28/thorntons-store-closures-retail-crisis

and this:

http://www.guardian.co.uk/business/2011/jun/28/gdp-figures-pressure-george-osborne

If they raise rates there will be a significant failure of the housing market, and a knock-on effect on the British banking system. It could lead to a full-scale depression. If they keep the ZIRP policy and (probably) add further QE the show can be kept on the road (probably) until the next general election. The only people who will suffer from this in the short term are savers, like me. That is why I naturally hate these bastards, but then that's just me. 

In the long run the big objection to this policy is that as others have said here capital cannot form in such an environment. Instead capital is steadily being eroded. Therefore in the long run this policy will lead to exactly the same result as an increase in interest rates would now. It just takes longer to get there.

Tue, 06/28/2011 - 08:00 | 1408242 equity_momo
equity_momo's picture

Indeed.

Tue, 06/28/2011 - 09:13 | 1408420 trav7777
trav7777's picture

JFC...savers?  Where do you think the interest comes from to pay your coupon...magic?

I love how you "savers" think the CBs are cheating you of your due when there is nobody out there who can generate a ROI sufficient to pay your stupid coupon.

The CBs are following the market; there's no demand for credit.  Nobody is lining up out there to borrow your "savings" and pay you the interest rate you think you're entitled to.

Tue, 06/28/2011 - 08:09 | 1408249 falak pema
falak pema's picture

The market is now so opaque/volatile and there are so many balls being manipulated up in the derivative air by the big boys that anybody who wants to win big has a good chance of losing his skin. Like a virgin.

Tue, 06/28/2011 - 08:24 | 1408282 Sambo
Sambo's picture

"You are talking 'nonsense'!"

"No, you are talking 'nonsense'!'

"No, you are talking 'nonsense'!'

"No, you are talking 'nonsense'!'

....7 hrs later....

"I am tired. Its time to go to bed."

 

Tue, 06/28/2011 - 08:38 | 1408315 Yen Cross
Yen Cross's picture

 Are you watching eur/gbp Tool time?  Get some exercise.  TZamboni!

Tue, 06/28/2011 - 08:40 | 1408324 Dreadker
Dreadker's picture

I left the UK because of the dire situation over there... and the fact I want guns when the SHTF... Its no better in the states IMO, but your devalued currency does have more purchase power within the US...

I earn about half what i did in the UK (if you take into account exchange rates etc.), but i pay less taxes and 100k will get you a hell of a lot more in the US than it will in the UK...

I chat with my family back in the UK and they all say that wages are being cut or staying the same but everything is costing more... and I have family members that range from low to high income families and they all say the same...

Tue, 06/28/2011 - 08:36 | 1408325 FunkyOldGeezer
FunkyOldGeezer's picture

UK has been in stagflation for almost 2 decades when one looks at wages versus general inflation.

The buying power of wages has been hammered down and down and down and...

Tue, 06/28/2011 - 08:49 | 1408371 Going Loco
Going Loco's picture

Sadly, as an employer, I have to report that part of the reason is the incompetence of a large part of the workforce.

It's easy to hire someone to sit in a call centre and talk (often incomprehensibly; almost always ungramattically) to customers.

Try hiring a good toolmaker... or CNC programmer.... or plumber...  I have been trying to hire a good fencer for a year. I have sacked two contractors. The last one lied so often about when he was going to come I sacked him before he arrived. I have asked one of my ex. Polish employees to come back and work for me again. 

We have bred a generation of unemployable twits. No wonder the buying power of wages is low.

Tue, 06/28/2011 - 08:45 | 1408341 Yen Cross
Yen Cross's picture

 The UK is 10 years ahead of the meltdown that's coming in Europe! 

Tue, 06/28/2011 - 08:44 | 1408352 Bohemian Clubber
Bohemian Clubber's picture

C'mon UK is not socialist like Europe!

Tue, 06/28/2011 - 08:49 | 1408373 Yen Cross
Yen Cross's picture

  Fine point Bohemian!  When BOE starts edging Rates up, I'm liking the Sterling!

Tue, 06/28/2011 - 09:46 | 1408514 FunkyOldGeezer
FunkyOldGeezer's picture

Wait a mo'. There may well be incompetent workers (from the boardrooms down), but I haven't seen pre-tax profits shrinking over the last 20 years. More profits being made should end up in the workforces' pockets (in part), BUT generally, they haven't. They've gone to shareholders ( and owners of the businesses in small companies) and management (in larger companies).

Simply put, the rich have got richer, the poor have got poorer.

 

Tue, 06/28/2011 - 09:54 | 1408521 FunkyOldGeezer
FunkyOldGeezer's picture

The minimum wage has been the best excuse ever for businesses to pay a bare minimum. It has had the effect of keeping wages in many industries artificially low, and all with the backing of the government.

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