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Some interesting currency moves today

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Re: Some interesting currency moves today

Postby Primrose Hill » Tue, 19 Jan 2016 4:45 pm

JR8 wrote:Ah the Daily Mail, moaning about the ruined UK pensions system... again

Of more interest is the FTSE opening this morning (currently up 120) and trying to fight it's way through major resistance at 5900. If it hadn't already had to put on +120 to get to the hurdle I'd give it some hope; but I reckon it's going to run out of puff and give back some the gain and then wait for a cue from Wall Street later today...


Pension - however, sadly it is true. I have friends that have their caps imposed. Those of us that have BTL as a way of pension funding will be hit too. So, Daily Wail maybe wailing away, it is sprouting the truth and the measures that he has put in place are indeed rather untory like.
Agree, when Wall Street comes in, it will run out of puff.
Iran is back in the market this week, will be black stuff go lower?

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Re: Some interesting currency moves today

Postby JR8 » Tue, 19 Jan 2016 5:18 pm

The govt has semi-fixed outgoings plus Gordon Brown's black-hole to plug and the money has to come from somewhere. So I look it in more of a 'who moved my cheese' kind of way (as savage as some of the fall-out undoubtedly is).
As I've suggested before B2L has become so mainstream and established that it couldn't escape the Treasuries close attention much longer. The writing was on the wall, but IMO the new taxes etc are probably going to impact the rental sector pretty hard. >Reduced supply, higher rents, less job mobility... the impacts of that will take quite some time to shake out (years).
-
When the FTSE opens, the first say hour are when it moves reflecting what happened overnight in other markets. Then once that's figured in it tends to then feed off domestic and euro events. Then on a typical day that trundles on until noon/+ when early news starts coming out of the US, pre-open. At that time* the FTSE starts anticipating how the US will open and 'parallels' that anticipated move. Ding-dong at 2pm comes judgement hour, when anticipation meets actuality :) So again you can get major moves then, and the tone in the pm->close is focused on what happening in the US.
-
This morning (so far) what we've seen is the FTSE break 5900, where it must have hit a barrage of sell orders as at 5900.92 it wilted and reversed. Currently around 5855 where it's looking for a range to settle for a few hours, awaiting fresh cues pre NY open in c5hrs...

p.s/Edit to add an example from this morning, mid-morning UK time...
'Ahead of the open we expect the Dow Jones to start 224 points higher, at 16,212'
http://www.ig.com/uk/market-update/2016 ... main-30178

So the FTSE has re-gathered a bit of steam on the back of that, to get up to around 5890 again. But it's unlikely (IMHO) to get much closer to 6,000 as that is a major psychological level. It's going to take some compellingly good news later this pm to re-pierce and close above it...
Last edited by JR8 on Tue, 19 Jan 2016 7:43 pm, edited 1 time in total.
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Re: Some interesting currency moves today

Postby JR8 » Tue, 19 Jan 2016 5:42 pm

Primrose Hill wrote:Iran is back in the market this week, will be black stuff go lower?


Missed this bit. I'm glad I haven't any direct exposure to O+G right now as it's stuck between and rock and a hard place and I don't see an exit/recovery any time soon. But I reckon the bad news and and unknowns are largely already factored in. China slowing -> less imports + massive new shale-oil supply mostly in the US + Iran exporting again = triple-whammy.
Saudi must be hurting badly right now; the newly impoverished Wahabis robbed of wealth, power, and influence? It'll be interesting to see how Saudi responds to Iran pumping again, given they're long-time arch enemies.
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Re: Some interesting currency moves today

Postby Primrose Hill » Tue, 19 Jan 2016 6:29 pm

With the BTL whilst it is so mainstream, it is what norm middle class mom & pop like us will do due to so much pension miss-selling. And usual middle class folk work hard, save for our future & our children's future. To take CGT is one thing, the others are the tax reliefs & the extra 3% stamp duty.
The bigger picture means that there will be less folks buying properties that will mean property developers liquidity will dry up & at the end of the day less social housing will be built. Already the Treasury took less £900m in stamp duty for 2015, read it in one of the broadsheet. Buying anything above £915k will be hammered by stamp duty. The thing that people don't realize is that this isn't a London or SE issue, this will be a UK issue soon.

I have quite a few friends that are affected not just by the pension caps but also by the BTL. Us included.

With the black stuff, I do have some stocks in the majors not much but some. Even Apple shares are below par. Maybe going short is the way to go?

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Re: Some interesting currency moves today

Postby Primrose Hill » Tue, 19 Jan 2016 6:30 pm

I suspect Osborne will even out the playing field by taxing commercial BTL as well.

The OPEC or Saudis have to stop pumping out so much. It's at $29. Everyone will be going short. Shale gas will go south at this rate

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Re: Some interesting currency moves today

Postby JR8 » Tue, 19 Jan 2016 7:15 pm

It is indeed ironic that the party of Norman Tebbit's legendary mantra of 'Get on your bike' (i.e. be willing to move to find work, don't assume you have a right to find a job right on your doorstep) are implementing one of the greatest death-blows to the rental sector, liquidity in the sales market, and hence mobility in general!

I'm keeping an eye on the market in various UK south-east shire cities in preparation for returning to London in a couple of years and then later moving on to what might be a calmer place and semi-retirement (we'll see if it happens!). The balancing act is getting all the space we'd want in that place, as now the cost of moving is so huge I would hope to never have to move again.

The irony is the new stamp-duty levels are going to really distort the market. When they apply/applied to the 250k and 500k price levels you couldn't really market anything between say 250-275 and 500-550, because it was/is a 'slab-tax' rather than incremental. An agent friend of mine refers to those zones as 'Stamp Duty Death Valleys'. At least the new rates are incremental but it's likely to hit liquidity esp at the higher end... which will only send prices up even more. But 'higher end' isn't the right term, it impacts any decent sized and desirable house in a convenient location is most SE-UK cities...

... Then there's the feedback loop. I.e. Why should I sell my London home and realise the original entry costs? Secondly, what if we moved to the shires and realised it was a mistake, and wanted to move back to London. The SD alone to now repurchase my current place would be circa 6-figures... it's inconceivable...

Apple and oil are in fear of China...
Now if the Saudi's were to 'accidentally' sink an Iranian oil tanker...
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Re: Some interesting currency moves today

Postby Primrose Hill » Tue, 19 Jan 2016 7:40 pm

I have a friend that just had an offer accepted on a huge pile in one of the shires & he said it is now a buyers market as the £900k & above has been decimated. He offered nearly 50% off asking price & was just accepted

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Re: Some interesting currency moves today

Postby JR8 » Tue, 19 Jan 2016 7:50 pm

Amazing...!
Also amazing what the Tories have implemented and done to what might be considered largely their own voters. I reckon this newly savaged mobility might grow to become something that comes back to bite this government!
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Re: Some interesting currency moves today

Postby JR8 » Tue, 19 Jan 2016 9:36 pm

... and within an hour of me adding that p.s/Edit-Add to my 5.18pm post I've been proved wrong*, the FTSE has pierced 5900, and is hovering in the 5900-5910 range. I haven't looked at where the various Wall Street index futures are but presumably they're looking good, suggesting a positive start in the US.
Crossing 5900 is a pretty big deal, actually it's almost a 'really big deal' from a technical perspective. But what we have to see now is it settling there and hooooopefully holding there for the close. That *would* be a big deal IMPO!

As always it's great to see such barriers crossed, but it must me done with conviction. If the FTSE closes between say 5900-10 the first thing it might do tomorrow is immediately panic and sell-off to below 5900. And then we'd start this all over again.
A close above say 5925 would be pretty sweet. So.... all eyes to the US open...

The Saudis want to make shale oil/gas uneconomic to extract. There was a piece yesterday re: the oil major BHP Billiton moth-balling oil plants in - IIRC - the US. The Saudi's can do that short-term to protect their exports but they can't sustain it for ever... [time to get the popcorn in!]

* This is why I don't short! :-D You're deciding the collective wisdom of the entire market is wrong - a heck of a bold call.
An alt might be buying an active fund, and accepting the fees that come with it. Or, buying a low-fee index tracker, and shorting out the sectoral elements that concern you... via options I expect... hmmm... maybe all a bit too active and speculative for me...
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Re: Some interesting currency moves today

Postby JR8 » Wed, 20 Jan 2016 12:51 am

@PH and anyone else impacted by the changes to UK 'Stamp Duty Land Tax' on buying UK property.
This link from the UK National Landlord's Association has the precise detail on the proposed changes as they stand today. It's still in the consultation stage, but this is what the government are proposing.
http://www.landlords.org.uk/sites/defau ... iefing.pdf
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Re: Some interesting currency moves today

Postby Primrose Hill » Wed, 20 Jan 2016 9:41 am

FTSE close at 5876.80.
The BTL is at consultation stage, rumours has it, it will be finalised and become a reality in April.
JR8 in terms of moving to the shires, never say never - not just having the space or never moving again or potentially realising moving to shires is a mistake - there are other factors as well, like govt plans - nowadays nothing is sacred anymore, green belts, green open spaces. You may have HS3/4 or runway and an airport being built right on your country pile or govt decided that with the bigger population another M29 is needed. Alas, never say never - 10 year plans. Had 1st hand experience in the never say never.

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Re: Some interesting currency moves today

Postby JR8 » Wed, 20 Jan 2016 11:54 pm

I take your point. That said, although I was brought up a 'country boy' I'm not sure after my adult life-experiences I could return to it. It has idyllic aspects but also comes with a whole new lot of challenges ['being accepted into the village community/life'. Having to drive absolutely *anywhere*, and so on and so on]. That cranks up to the next level for my wife who has spent her entire life living in urban apartment buildings. Perhaps why my wife pines for a big garden, whereas I know full well how that can turn into a 'rod for your own back' as they demand a huge amount of work to maintain to even a tolerable condition :)

So as a first starting point, I'm considering a shire city, and close'ish into the centre. I.e. could probably even walk to the centre/high st/shops/F+B, but be quietly tucked away a mile or two out tucked down a side street. A half-way house as such?
The idea of not living towards the centre of a capital city is quite a leap, so the above is as far as I'd wish to test it at least initially.

The infrastructure changes you mention. Good point. But my outline idea of an inner suburb of a shire city... well most of them a protected heritage/conservation areas, so hopefully there'd be lower risk on that side of things... but of course you need to go in with your eyes open to such risks...
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Re: Some interesting currency moves today

Postby earthfriendly » Thu, 21 Jan 2016 1:05 am

I told my dearest. Please give me my condominium back. Just pay the monthly owner assocation fee and they will take care of all the rest. We still get to enjoy the beautiful communal landscaping without the hassles involved. No more big house with large lawn, pool and spa for me. Just thinking about the monthly maintenance $$$$ is enough to burn a hole in my heart (not just our pockets :P ). We move to a bigger house for our kids, thinking it will allow for more breathing room and sanity for everyone.

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Re: Some interesting currency moves today

Postby JR8 » Tue, 26 Jan 2016 5:36 pm

Is China going to replicate Japan's generation-long and counting dead-economy?

Excerpt/conclusion:
------
'As we sit here discussing "temporary" measures that often seem to last decades, we need to step back and ask: What caused this mess? The answer is ridiculous growth targets. To hit 7% growth targets for years on end, China had to waste a lot of money on projects, many of which are now worthless.
While the boom lasted, China, like Japan before it, was considered an "economic miracle". To top it off, China did not float the yuan, but now wants to defend an untenable target.

Unlike the above writers, I suggest China do what it should have done a decade ago: float the yuan and stop micro-managing the economy. Sure there will be a lot of short term pain. But short term pain is a lot better than three lost decades as Japan is experiencing

-----
Read more at http://globaleconomicanalysis.blogspot. ... fRfOT2g.99

If the above link expires, the title of the article is...
"Temporary" Capital Controls Coming to China?
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Re: Some interesting currency moves today

Postby JR8 » Thu, 28 Jan 2016 8:11 pm

Continuing on the topic of the Chinese economy; this from the UK's Daily Telegraph and respected financial columnist Ambrose Evans-Pritchard. Excerpt:
-----
...'This is the Impossible Trinity. A country cannot manage its exchange rate and keep control of monetary policy at the same time in a regime of free capital flows.

Haruhiko Kuroda, governor of the Bank of Japan, said one must give. He suggested that tougher capital controls "could be useful", the lesser of evils.

The Impossible Trinity is the nub of the issue. It is this that threatens to overwhelm the PBOC and ultimately force China to devalue - against its wishes - setting off a pan-Asian currency crisis to dwarf 1998, and transmitting a wave of deflation through the world economy.


[It concludes]
... 'Any hint of relative optimism on China in the currently wildly-polarized mood can easily be misunderstood. My view has long been - and continues to be - that China has left it too late to wean the economy off debt-driven growth and over-investment in industry, and will therefore drift into the middle-income trap.

Since China's banking system is an arm of the state, bad debts will be rolled over in perpetuity. There will be a slow loss of dynamism rather than a "Minsky" moment. It will be a denouement "a la japonaise", a landscape of soporose companies.

The Communist Party may have bought another year to 18 months. If so, the reckoning has been delayed again. Optimism means nothing more than that.


http://www.telegraph.co.uk/finance/econ ... ulous.html
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