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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 3054
Posted: Feb 22, 2010 5:00
Comments: 3054
Forum Topic:
GBP
Discuss GBP
George, the GU made the recent low at the 78.6% level and has since retraced >61.8% level at 1.5377 (current 1.5408). The move back up does not yet look corrective on the daily chart. Implications are for higher prices even if we see a near term correction first.
As to your question I assume you refer to the current plan to promote new house builds. My opinion is this has the potential to ignore the mistakes of the past with the sub prime debacle. Can we trust the politicians and financial industry to employ strict affordability criteria for the tax payer sponsored mortgages ?
There is no evidence that credit reference agencies and banks have reformed. No one sent them back to primary school to learn the meaning of a "loan" and to learn once again how to calculate LTV's and earnings multiples. Who is going to administer and process the new mortgage applications. I have no faith in the financial industry as you know. The job would be better done by moderately well educated 10 year old children.
GBP actually is weak. Lives only off very weak USD.
Btw. London Tube stations/lines could be renamed under sponsorship proposals that is Merkel Place, Merkel Palace, Merkel Square etc. All these are serviced by Merkel Line ( uses right track )
Our house building initiative is still under debate, we don't want to repeat the sub prime debacle in a different guise. 95% mortgages must be incredibly tightly scrutinised for affordability and job security or the tax payer will yet again suffer the consequences of default. I have no faith in regulators and credit reference agencies.
The US macro position is still subject to a monumental pile of debt plus a CB which is stuck with QE purchasing. Short term stats can be encouraging but underneath lies an ever increasing black economy. Companies employ part time to avoid the healthcare liability. Potential job seekers are happy to be part time to continue receiving food stamps and state healthcare cover plus black economy activities. They can earn far more remaining under the radar and take what the state readily giveth. The net result is reflected in lower tax receipts and the need for further austerity measures = tax increases, spending cuts = low growth environment for many yrs to come.
It all means Obama has cocked up.