The UK's Problem is... Dubai?
I think Market Ticker and I are going to have to diverge on opinion here. Dubai is a non-fucking-event. A burp and a ripple at the best, even a poorly functioning market can digest such a remedial, by-the-book bubble.
Oh, but that's why the pound is in trouble. Not because they're trying to print their way out of total financial meltdown.
Debase, debase, debase, it'safuckingdeflationscenarioOMG!!!!
Good. All that fake money needs to deflate. Keep going.
The pound fell to its lowest level in almost two months against the dollar on concern Dubai’s state-controlled companies will have to sell U.K. assets to pay for loan obligations.
The British currency weakened versus 15 of its 16 major counterparts after Moody’s Investors Service said yesterday that deteriorating public finances in the U.K. and the U.S. may test their Aaa ratings. The yen reversed earlier gains on speculation the Bank of Japan will take more credit-easing measures after a report showed the world’s second-largest economy grew less than earlier estimated in the third quarter.
“There are concerns that companies in Dubai, which are falling behind on debt payments, may need to sell U.K. property,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA. “Risk aversion is prevailing, so the dollar will probably be bought. The pound will likely be sold.”
The pound declined to $1.6261 as of 12:22 p.m. in Tokyo from $1.6287 in New York yesterday, after earlier falling to $1.6226, the lowest level since Oct. 15. The U.K. currency dropped to 143.70 yen from 144.03 yen, and fell to 90.61 pence per euro from 90.27 pence.
The yen traded at 130.20 per euro from 130.03 in New York yesterday, after earlier climbing to 129.66, the strongest since Dec. 1. Japan’s currency was at 88.36 per dollar from 88.43. The euro fetched $1.4734 from $1.4704.
You can get your UK economic outlook from PwC but after that jerk off presentation in Cnn on the part of the Big 87654 CEOs, I might be disinclined to trust much in said outlook report.
Speaking of Big 87654 fluff, Francine covered the piece (and other, erm, deficiencies) over at Re: the Auditors, you might be interested.
Anyway. It's Dubai.
Meanwhile, the UK's global economic standing - questionable at best in recent years - doesn't look promising moving forward. I'd giggle here but unfortunately the United States is in no better shape. [Legal disclaimer: that last one is pure opinion, not accusation. Don't send Treasury goons to my office trying to run their pitch by me]