Meltdown

[BachQ]

Jim Rogers, chairman of Singapore-based Rogers Holdings, said the "U.K. is finished" and investors should sell the currency. Commonwealth Bank of Australia said there was a high risk of a cut to the country's credit rating outlook and lowered its pound forecast. Prime Minister Gordon Brown authorized a 100 billion pound ($142 billion) bailout for banks.

"I would urge you to sell any sterling you might have," said Rogers. "It's finished. I hate to say it, but I would not put any money in the U.K." Rogers correctly predicted the start of the commodities rally in 1999.

Nice little "reminder" at the bottom there that he's usually correct. Bugger 

Looks like forex traders listened to Jim Rogers today:

Sterling plunges on public debt concerns (London Times 20 Jan 2009) Sterling today fell below $1.40 to its lowest point in seven and a half years because of concerns about the depth of Britain's banking crisis and the Government's rising debt levels as it seeks to bail out the struggling sector. The pound, which declined by 2.67 cents to $1.4529 yesterday, fell further to $1.396 this morning over fears that the Government's borrowing levels may exceed £118 billion, equal to 8 per cent of national income, for the next financial year.  Yesterday, the Goverment unveiled a package of measures designed to rescue the country's flailing banking sector. However, sterling continued to plunge today and Jim Rogers, who co-founded the Quantum fund with George Soros, the billionaire investor, told Bloomberg: "I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK".



Sterling crashed to $1.3884 against the dollar, a fall of 6.46 cents on the day. Against the euro, the single European currency was trading 2.44p stronger at 93.04p, with the pound valued ever closer to parity at just €1.2926. In fact the pound was in reverse against all 16 major actively-traded currencies in the world as latest inflation figures saw economists predicting a stagnating economy in the UK would be further mired by deflation. "The British economy is in deep trouble and investors are in no mood to hang around and wait for a pick-up," said IdeaGlobal's foreign exchange head Maurice Pomery.

Other currency specialists warned there is now a real risk credit-rating agencies could follow their move on Spain and downgrade British sovereign debt, making it more expensive and more difficult for the Treasury to raise money on the world's capital markets.  With official GDP figures at the end of the week expected to show the depths to which the UK economy has contracted, the rate of decline shown in today's consumer and retail price indices indicate, say the City, a lurch deep into deflation in the coming months.  Other official figures tomorrow will show the huge borrowing hole in the public finances and give the latest snapshot on soaring unemployment.  Out today, the headline Consumer Prices Index, which the Bank of England is meant to control at or around 2%, fell to 3.1% in December from 4.1% in November as the price of oil further collapsed from its midsummer highs.That is the sharpest fall in inflation since the last recession in 1992.

[BachQ]

where cable rests today on a long-term chart. Screw you JR

LOL.  But you love Jim Rogers!

We'll see whether cable falls below its record low of $1.0520 (Feb 1985).  The US will be printing money nonstop under Obama, so the dollar's value will sink in due course.

[BachQ]

Prostitutes forced to slash prices amid economic meltdown: The economic meltdown that has triggered massive layoffs and production cutbacks in the formal business sector has spread to the illegal sex industry as prostitutes and sensual massage parlours have reported at least a 50 per cent decline in profits and clientele.  ,... "Men who used to take on three girls have to limit to one, as well as men who used to take a double round have to limit to strictly one time and so I am losing big time," one parlour manager lamented.

[BachQ]

[ezodisy]

LOL.  But you love Jim Rogers!

We'll see whether cable falls below its record low of $1.0520 (Feb 1985).  The US will be printing money nonstop under Obama, so the dollar's value will sink in due course.

Yeah I love him, but he's such a relentless salesman that it gets a bit tiresome when you know what he's doing (and when he's against you).

cable should fall to 1.36 and change (this week) before any possible correction. For the past two months it was forming this attractive falling wedge which looked ripe for reversal but that's been smashed through now. Who wants a rally?

Jan. 20 (Bloomberg) -- The Dow Jones Industrial Average fell 14 percent between Barack Obama's election and Inauguration Day, the biggest decline ever. The second-biggest drop gave way to a 75 percent rally in 1933.

[BachQ]

Jan. 20 (Bloomberg) -- The Dow Jones Industrial Average fell 14 percent between Barack Obama's election and Inauguration Day, the biggest decline ever. The second-biggest drop gave way to a 75 percent rally in 1933.

And another record was broken today: the Dow closed below 8,000 and had its worst Inauguration Day performance in the Dow's 114 year history.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ai_7M8Bahjm8&refer=home

[BachQ]

ah it's The Torygraph.

More from the Torygraph:


As to Sterling's slide, Ambrose Evans-Pritchard is more alarmed than usual.  "For the first time since this crisis began eighteen months ago, I am seriously worried that British government is losing control. ... England has not defaulted since the Middle Ages. There is a real risk it may do so now."


Iain Martin: "Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic. ... The PM and the Chancellor , both looking a year older every day, tell us that for their next trick they will buy more bank shares, create a giant insurance scheme for bad debt, pledge to honour liabilities without limit, cross their fingers and hope it all works. The phrase 'bottomless pit' springs to mind for a reason: that is what they have designed."

[ezodisy]

Iain Martin: "Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic. ... The PM and the Chancellor , both looking a year older every day, tell us that for their next trick they will buy more bank shares, create a giant insurance scheme for bad debt, pledge to honour liabilities without limit, cross their fingers and hope it all works. The phrase 'bottomless pit' springs to mind for a reason: that is what they have designed."

It is bloody scary. This country is digging a giant hole and won't get out of it for years (and might need someone to burrow through to rescue it). If you step back to look at it I suppose it's quite possible that the UK is in a much worse position than the US, or at least on par. And at least the US has god 

[BachQ]

London Times: Ecologists warn the planet is running short of water

The warnings, in an annual report by the Pacific Institute in California, come as ecologists have begun adopting the term "peak ecological water" — the point where, like the concept of "peak oil", the world has to confront a natural limit on something once considered virtually infinite. The world is in danger of running out of "sustainably managed water", according to Peter Gleick, the president of the Pacific Institute and a leading authority on global freshwater resources.

[BachQ]

According to Pemex, Mexico's 2008 oil production fell at an annual rate of 9.2%.  This is STAGGERING, and represents the fastest rate of decline since WWII. 

http://www.bloomberg.com/apps/news?pid=20601086&sid=a1Umdxuv7HxE&refer=latin_america

[BachQ]

Reuters: Antarctic ice shelf set to collapse due to global warming

[ezodisy]

According to Pemex, Mexico's 2008 oil production fell at an annual rate of 9.2%.  This is STAGGERING, and represents the fastest rate of decline since WWII. 

http://www.bloomberg.com/apps/news?pid=20601086&sid=a1Umdxuv7HxE&refer=latin_america

hmm yeah a few months back I read about the coming end of Cantarell, and that is very bad news both for Mexico and the US. It won't be all that long until we have another peak oil crisis (life gets a bit boring without them).

[BachQ]

Ron Paul on Glenn Beck (21 Jan 2009)

http://www.youtube.com/v/M0ZK7kaD80Q

Bailouts are a disease, contangious and ongoing, resulting in the destruction of the dollar, and culminating in runaway inflation.

[ezodisy]

I was just watching a video on the BBC news website and noticed they have a Jim Rogers interview up 

THE UK IS FINISHED

http://news.bbc.co.uk/1/hi/business/economy/7844963.stm

might not work if you're outside the UK, not sure

[BachQ]

hmm yeah a few months back I read about the coming end of Cantarell, and that is very bad news both for Mexico and the US. It won't be all that long until we have another peak oil crisis (life gets a bit boring without them).

Yeah, it's devastating news for Mexico, which will become a net importer of oil in a few years, at which time the Mexican economy will utterly collapse.

Given that Mexico is a top-6 global oil producer (using 2007 data), it's also a signal that peak oil has already arrived.

Here are the top 20 oil producers (2007):

#1     Saudi A.:   10,250,000 bbl/day (2007)
#2     Russia:   9,876,000 bbl/day    (2007)
#3     U.S.:   8,457,000 bbl/day (2007)       
#4     Iran:   4,033,000 bbl/day    2007 ....
#5     China:   3,725,000 bbl/day    2008 ...   
#6     Mexico:   3,501,000 bbl/day    2007 ...   
#7     Canada:   3,425,000 bbl/day    2007 ...   
#8     UAR:   2,948,000 bbl/day    2007 ...   
10     Venez.:   2,667,000 bbl/day    2007 ...   
11     Kuwait:   2,613,000 bbl/day    2007 ...   
12     Norway:   2,565,000 bbl/day    2007 ...   
13     Nigeria:   2,352,000 bbl/day    2007 ...   
14     Brazil:   2,277,000 bbl/day    2007 ...   
15     Algeria:   2,173,000 bbl/day    2007 ...   
16     Iraq:   2,094,000 bbl/day    2007 ...   
17     Angola:   1,910,000 bbl/day    2008 ...   
18     Libya:   1,845,000 bbl/day    2007 ...   
19     UK:   1,690,000 bbl/day    2007 ...   
20     Kazakhstan:   1,445,000 bbl/day    2007 ...   

[ezodisy]

at which time the Mexican economy will utterly collapse.

lol! 

Given that Mexico is a top-6 global oil producer (using 2007 data), it's also a signal that peak oil has already arrived.

Here are the top 20 oil producers (2007):

#1     Saudi A.:   10,250,000 bbl/day (2007)
#2     Russia:   9,876,000 bbl/day    (2007)
#3     U.S.:   8,457,000 bbl/day (2007)       
#4     Iran:   4,033,000 bbl/day    2007 ....
#5     China:   3,725,000 bbl/day    2008 ...   
#6     Mexico:   3,501,000 bbl/day    2007 ...   
#7     Canada:   3,425,000 bbl/day    2007 ...   
#8     UAR:   2,948,000 bbl/day    2007 ...   
10     Venez.:   2,667,000 bbl/day    2007 ...   
11     Kuwait:   2,613,000 bbl/day    2007 ...   
12     Norway:   2,565,000 bbl/day    2007 ...   
13     Nigeria:   2,352,000 bbl/day    2007 ...   
14     Brazil:   2,277,000 bbl/day    2007 ...   
15     Algeria:   2,173,000 bbl/day    2007 ...   
16     Iraq:   2,094,000 bbl/day    2007 ...   
17     Angola:   1,910,000 bbl/day    2008 ...   
18     Libya:   1,845,000 bbl/day    2007 ...   
19     UK:   1,690,000 bbl/day    2007 ...   
20     Kazakhstan:   1,445,000 bbl/day    2007 ...   

That's interesting, thanks for linking it. There are several countries there which will do very well over the next couple of decades, one in particular being Nigeria which has many deep sea wells that will be drilled over the next several years, including a couple of the best prospects anywhere in the world.

The UK better rush to become self-sufficient otherwise there could be trouble 

[BachQ]

I was just watching a video on the BBC news website and noticed they have a Jim Rogers interview up 

THE UK IS FINISHED

http://news.bbc.co.uk/1/hi/business/economy/7844963.stm

Yikes!  He's so nonchalant about it: "It's pretty simple ... the UK is finished" 

might not work if you're outside the UK, not sure

Works great, thanks!

[ezodisy]

Yikes!  He's so nonchalant about it: "It's pretty simple ... the UK is finished" 

question is, why is he going onto all these TV channels and talking down the UK & £ now? On the BBC, on Sky, this morning on Bloomberg debating with a couple chaps (on a programme called Broken Britain), he is being much more aggressive than normal, both with other economists and even the TV presenters. Must be a reason for him to come out and do this as he claims not to have a position and to love the country (studied here after all).

That's an excellent Ron Paul video by the way (that and the one just under it on FinancialTruth, where he speaks in congress). Thanks for posting it.

[ezodisy]

The Chinese Devil Wears Prada: Why 0% Growth is the New Size 6.8%
Nouriel Roubini  | Jan 22, 2009

The Chinese came out today with their 6.8% estimate of Q4 2008 growth. China publishes its quarterly GDP figure on a year over year basis, differently from the U.S. and most other countries that publish their GDP growth figure on a quarter on quarter annualized seasonally adjusted (SAAR) basis.

When growth is slowing down sharply the Chinese way to measure GDP is highly misleading as quarter on quarter growth may be negative while the year over year figure is positive and high because of the momentum of the previous quarters' positive growth.

Indeed if one were to convert the 6.8% y-o-y figure in the more standard quarter over quarter annualized figure Chinese growth in Q4 would be close to zero if not negative.

Other data confirm that China was in a borderline recession in Q4 and that it may be in an outright recession in Q1: production of electricity plunged 7.9% in y-o-y basis; the Chinese PMI has been below 50 and close to 40 for five months now.

And with manufacturing being about 40% of GDP , manufacturing is certainly in a sharp recession (negative growth) and the overall economy may be close to a recession

So the 6.8% growth was actually a 0% growth – or possibly negative growth – in Q4; and the Q1 figures look even worse.  So China is in a recession regardless of what the highly massaged official numbers claim.

[BachQ]

he claims not to have a position and to love the country (studied here after all).

Yeah, he's been very adamant that he has nothing to gain financially by bashing Sterling.

question is, why is he going onto all these TV channels and talking down the UK & £ now? On the BBC, on Sky, this morning on Bloomberg debating with a couple chaps (on a programme called Broken Britain), he is being much more aggressive than normal, both with other economists and even the TV presenters.

Jim Rogers has recently become increasingly pro-Asia, and, correspondingly, anti-West.  I don't think he fancies the policies of the US or the Eurozone very much, either.  Perhaps the reason he's been on TV all week bashing the UK is that he sees things unfolding rather dramatically.  But he does seem to be excessively negative.  It could also be that he wants other nations (i.e., the US) to avoid the quasi-nationalization the UK is undertaking.  But he seems genuine (as always).

On the other hand, there's always the Swedish example of nationalization.



NYT:

... News that widening bank losses in Britain have necessitated another round of government life support provides a stark example to the United States. Washington's attempts to stabilize financial institutions have failed so far, as well. And now the Obama administration, along with the rest of the world, could watch Britain to see what a bank nationalization might look like, and what it might suggest for American banks.

http://www.nytimes.com/2009/01/22/business/worldbusiness/22pound.html?ref=businessTumblingpound