UniCredit Bank Warns Of Plunge In Sterling And Gilts, As Britain Is Next Country "To Be Pummeled By Investors"

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Kornelius Purps, director of fixed income at Europe's second-largest bank, UniCredit, has issued a stark warning to clients who wish to invest in the Britain: "I am becoming convinced that Great Britain is the next country that is
going to be pummeled by investors.
" Ambrose Evans-Pritchard reports reports that "Mr Purps said the UK had been cushioned at first by low debt levels but the
pace of deterioration has been so extreme that the country can no longer
count on market tolerance" and that "Britain's AAA-rating is highly at risk. The budget deficit is huge at
of GDP and investors are not happy. The outgoing government is inactive
due to the election. There will have to be absolute cuts in public salaries
or pay, but nobody is talking about that." And everyone was wondering why the U in STUPID stand for UK (actally make that just CNBC, who never really bothered to even read the original definition). So can the whole sovereign default wave skip the PIIS and go straight to the U?

From the Telegraph:

"Sterling is going to fall further over coming months. I am not expecting
a crash of the gilts market but we may see a further rise in spreads of 30
to 50 basis points."

Yields on 10-year gilts have already crept up to 4.14pc, compared to 3.94pc
for Italian bonds, 3.48pc for French bonds, and 3.19pc for German Bunds,
though part of this reflects worries about higher inflation in Britain.

Ian Stannard, currency strategist at BNP Paribas, said markets are fretting
over how the UK will cover its deficit following the pause in quantitative
easing by the Bank of England. The Bank has absorbed £200bn of debt, more
than total Treasury issuance over the last year.

"The UK may have difficulty in attracting extra investors to fill the
gap. We think they will have to do more QE as recovery falters," he

BNP Paribas expects sterling to drop to $1.31 against the dollar this year and
reach parity against the euro despite troubles in Club Med. "We're very
bearish on the UK," he said.

And the biggest insult to the island nation? The insinuation that Greece is actually better off that Britain.

UniCredit said Greece is better placed than the UK in coming months even if
deficits look comparable. "The polls point to a minority government in
the UK, while Greece's government can count on a majority to push austerity
measures through parliament. Secondly, the British tax system offers less
leverage for a rise in revenue," he said.

Paradoxically, Greek tax evasion creates scope for a surge in revenues from
tougher enforcement. "It is not out of the question that we will see a
positive surprise in Greece: is there any such hope for Britain?" said
Mr Purps.

Well Mr. Purps, this means that there is still hope for America. As the still sentient part of the population has decided to show the corrupt administration and the criminals on Wall Street the middle finger and maxed out their withholding exemptions, all it will take is an order from the US politbureau that the Treasury can withhold 100% of every paycheck, and in addition, garnish wages in perpetuity, DCFed at Ben Bernanke's favorite discount rate of -100%.