Eng£Aa1nd Downgrade: Citi's Take

Tyler Durden's picture


From Citi's Steven Englander, who confirms what we said previously: the UK is now officially in the hands of the monetary apparatus, which is controlled by, you guessed it, yet another Vampire Squid tentacle.

Quick UK/GBP downgrade comment


US, France, Japan have not paid up because of downgrades and it is unlikely that the bond market will be where the UK feels the most pain. With a CB willing to do large amount of QE, funding deficit is not an issue.


What is an issue is that it puts all the more pressure on monetary policy and the exchange rate to generate the growth that the UK needs, so while by itself the announcement merely accelerates what was expected to happen at some point, the need for GBP weakness will become more apparent to policymakers and investors.

The race for GBP-EUR parity is on.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/22/2013 - 18:47 | 3268460 maxmad
maxmad's picture

Watch out below!  Here comes the collapse!

Fri, 02/22/2013 - 18:48 | 3268464 maxmad
maxmad's picture

The race for GBP-EUR parity is on.


This is the death nail!

Fri, 02/22/2013 - 19:03 | 3268512 hugovanderbubble
hugovanderbubble's picture

China will decide on it...


i bet for massive massacre on EUR next days

Fri, 02/22/2013 - 19:19 | 3268553 tenpanhandle
tenpanhandle's picture

I bet whatever happens I'll be screwed.

Sat, 02/23/2013 - 05:08 | 3269499 hooligan2009
hooligan2009's picture

goooooooo beppe grillo!

Fri, 02/22/2013 - 20:36 | 3268783 unrulian
unrulian's picture

"With a CB willing to do large amount of QE, funding deficit is not an issue."

U....cough....SA..... cough..cough

Fri, 02/22/2013 - 22:36 | 3269026 Hedgetard55
Hedgetard55's picture

 With a CB willing to do large amount of QE, funding deficit is not an issue.


Yes, that is a howler, he has to be a moron to make such a statement.

Fri, 02/22/2013 - 18:54 | 3268483 JohnnyBriefcase
JohnnyBriefcase's picture

Ha! Wishful thinking Braugh!


They will keep this going until they run out of ways to rape the general public of their wealth.


Any guesses as to how long that will take?

Fri, 02/22/2013 - 18:58 | 3268498 magpie
magpie's picture

Good question. I assume the piecemeal QE will be abandoned and even fractional reserve banking supended at some point - the bailout to end all bailouts. And who might be so desperate ?

Fri, 02/22/2013 - 19:28 | 3268573 medium giraffe
medium giraffe's picture

It's already over guys, relax and think about how you want to contribute to society from here on in:


This is as real as you want to make it. :)

Fri, 02/22/2013 - 18:55 | 3268488 JustObserving
JustObserving's picture

There will be massive inflation in the UK as the pound falls,  What does the UK export?  Clipped British accents (like Piers Morgan), horsemeat lasagna,  and naked pictures of Prince Harry and the Duchess of Cambridge.

And, of course, financial fraud in the City.

Fri, 02/22/2013 - 19:07 | 3268520 Grimbert
Grimbert's picture



Not top any more but still 7th in Manufacturing. The company I work for makes stuff and we export a lot of what we make. We price in the local currency so devaluation means we get more £ for our foreign sales but sales stay the same.

I'm buying some Euros now for our summer holiday.

Sat, 02/23/2013 - 02:54 | 3269420 lasvegaspersona
lasvegaspersona's picture

Well Grimbert

you should do fine....nominally...as long as 'nominally' holds up

Fri, 02/22/2013 - 19:34 | 3268586 medium giraffe
medium giraffe's picture

We've actually got a wealth of talent and innovation in the the UK, if only the fekkers would take their foot off our throats for five minutes and let us get on with it....

But yeah, list of recent major 'contrubitions' verified 100% accurate.  And sorry about Piers 'Moron' Morgan, we'll send you a statue in reparation.  Of Wills. Naked. Proabably...

Sat, 02/23/2013 - 12:35 | 3269843 DosZap
DosZap's picture

As of the last census, the city of London is now officially a white minority.

650k Brits have moved out and the Asians #1, and Mooslims, etc,etc,etc, have now taken the lead.

Funny what those LOOSE Socialist programs can do.

Just like the one ObaMao is running now.

Bottom line London is F*#*$%!!!!!!!!!!!!!!!!!!

FROGS next.

Fri, 02/22/2013 - 19:50 | 3268614 harry555
harry555's picture

We could sell muslims to the Saudis.  It would help our balance of trade.

Fri, 02/22/2013 - 21:48 | 3268933 Harlequin001
Harlequin001's picture

You mean , like we sold Africans to the Americans?

Fri, 02/22/2013 - 22:17 | 3268975 harry555
harry555's picture


Fri, 02/22/2013 - 22:26 | 3268991 Harlequin001
Harlequin001's picture

Cool, I seem to remember that that worked rather well, for a while anyway.

Caused a few social problems if you were African but we can now print money for that can't we...

and let's face it, without British help, a lot of black Africans would have had immense difficulty obtaining US citizenship... and being taxed to death EVERYWHERE you go.

Freedom, not.

Fri, 02/22/2013 - 19:42 | 3268617 max2205
max2205's picture

Only Muslims live there, who cares bagdag,uk slum/Detroit

Fri, 02/22/2013 - 20:19 | 3268735 smacker
smacker's picture



Well, I'm not sure what your definition is of "massive" inflation. But we already have around 8% real CPI, not the trash 2.7% spewed from the lying mouth of Chancellor Osborne and "Mervyn "King of Inflation'". Couple that to the £ falling through the floor, zirp, Carney's plans to double up on QE when he takes office, austerity applied in name only, and I agree we might be seeing "massive" inflation sometime soon. At what point the economy implodes and workers unions go on strike until their wage demands are met, who knows.

These insane policies might be tolerable if they were ever going to work. But confidence is being hammered day after day.

Sat, 02/23/2013 - 12:40 | 3269851 DosZap
DosZap's picture

But we already have around 8% real CPI


9.2% according to John Williams Shadow Stats.

Sat, 02/23/2013 - 17:14 | 3270277 smacker
smacker's picture



If John Williams says it's 9.2%, then it's 9.2%!

Actual inflation will vary depending on age group...older people generally suffer more, younger ones less. My 8% figure probably applies to people in the 25-50 age group.

Fri, 02/22/2013 - 21:02 | 3268832 Edward Fiatski
Edward Fiatski's picture

Inflation is the name of the game.

We want the Pound slammed so hard, that the peasantry will rethink their stance on the Euro! I think the minimum wage, which the majority of the working plebs receive in Britain, is around £1.2k - a few more trading sessions and it's going to buy FUCK-ALL in terms of imported goods.


Fri, 02/22/2013 - 22:43 | 3269048 Oleander
Oleander's picture

They will make billions selling the trinkets with the photos of the new heir to the throne. The child shall save the kingdom.

Sat, 02/23/2013 - 07:14 | 3269560 Wile-E-Coyote
Wile-E-Coyote's picture

Yeah a real disgrace we will have to eat real beef as well, could the economic news get any worse.

Anyone noticed how the Royal family has toned down their posh accents in recent years, the rumour is Dick Van Dyke was their elocution tutor.

Fri, 02/22/2013 - 18:59 | 3268500 Panafrican Funk...
Panafrican Funktron Robot's picture


Dollar has been floating between 79 and 81 since last September.  If it jumps over 82, we're in for some fun.  

Fri, 02/22/2013 - 19:01 | 3268501 falak pema
falak pema's picture

the race to bottom is the plug that pulls the vortex into vacuum. 

The whole game of CBs : BOJ, FED, ECB is to AVOID race to bttom and to inflate money printed to make the liquidity pump overflow thus diluting debt, levitating assets and obliging the "bad banks" to go belly up to bring private sector under total CB control.

But this requires that all Cbs play ball. This new guy at BOE is a GS guy...he should know the score...so UK has to tag along and not fall out of step! 

Fri, 02/22/2013 - 19:02 | 3268506 hugovanderbubble
hugovanderbubble's picture

Fitzpatrick and Englander, both  great guys in forex.

Fri, 02/22/2013 - 19:04 | 3268517 hugovanderbubble
hugovanderbubble's picture

Vampires Bitchezzzzzzzz¡

Fri, 02/22/2013 - 19:15 | 3268539 buzzsaw99
buzzsaw99's picture

...to generate the growth that the UK needs,

Growth, I am so sick of that word. It is a bankers word. It is the word they use while ruthless fucking the people.

Fri, 02/22/2013 - 20:14 | 3268657 BigDuke6
BigDuke6's picture

Well said , and nowhere are the bankers more in charge than in the uk.
It's level of debt is now the same as Weimar Germany except this time TPTB have made sure the indigenous population are lazy, stupid and the numbers even on young males Muslim and white. Yep officially holocaust proofed
I'd bet on sharia with the same Jewish elite living large and buying off the mullahs within 15 yrs
The new normal for Europe

Fri, 02/22/2013 - 19:17 | 3268546 Seasmoke
Seasmoke's picture

God has been on quite a good investment roll, lately

Sat, 02/23/2013 - 05:02 | 3269496 hooligan2009
hooligan2009's picture

bacon roll? would you like a little hoof with that....it's crunchy!

Fri, 02/22/2013 - 19:57 | 3268674 MoneyThangs
MoneyThangs's picture

Wait... So this means they need more QE?!? Bet the farm on the FTSE100, imposssible for a sell off now

Fri, 02/22/2013 - 20:08 | 3268707 vs-trader
vs-trader's picture

It's a race to GBPUSD parity .... 1.25 target in near term

Sat, 02/23/2013 - 06:45 | 3269495 hooligan2009
hooligan2009's picture

confucious he say...beware the first dirty sheet you get back from the laundry...for who is to say that the laundry isn't dirty"

Sat, 02/23/2013 - 09:39 | 3269655 smacker
smacker's picture


<shock-horror ON>

But ...but ...but ... we had Chancellor Osborne on the TV this morning repeating the mantra that he and his boss Cameron have been saying for months: "we have reduced the govt deficit by 1/4 since taking office."

THAT govt debt % to GDP is still rising sharply must be due to unrelated factors which have nothing to do with them.

<shock-horror OFF>

Sat, 02/23/2013 - 04:57 | 3269493 hooligan2009
hooligan2009's picture

about time ...now who's next..UK debt to GDP is c. 80%..of course that hides the off 50% of GDP in smoke and mirrors, plus falsified accounting..that sounds familiar...germany? canada? i believe Moody's still has the US at AAA, pending the outcome of co-conspiracy suits .. dog tooth checked suits no doubt..

Sat, 02/23/2013 - 07:59 | 3269593 Venerability
Venerability's picture

I hope you realize your little Blacole Trojan Virus has now spread to millions upon millions of computers and is threatening to take down the entire Internet.


For a malicious joke.

Sat, 02/23/2013 - 12:38 | 3269847 DosZap
DosZap's picture

Blacole Trojan Virus

Nothing on SNOPES yet, source?

Sat, 02/23/2013 - 10:14 | 3269679 gould's fisker
gould&#039;s fisker's picture

Long on squids sucking the bone marrow from us all:  http://kingloaf.com/wp-content/uploads/2012/02/prometheus2.jpg


Sat, 02/23/2013 - 12:31 | 3269838 Catullus
Catullus's picture

Is that not the most ridiculous analysis ever?

The sovereigns are downgraded, now more then ever the BoE needs to further dilute the currency to payoff the debt.

This is really simpleton logic to respond by saying a weaker pound will make exports more competitive. That takes YEARS to develop and it's only true to the extent that the increased exports yield higher tax revenues. You could just export more and the sales revenue stay in foreign accounts.

Otherwise, you just increase inflation expectations, further justifying yet another downgrade.

Citi is just infected with horrible analysis.

Do NOT follow this link or you will be banned from the site!