Is there going to be a(nother) run on the Pound next week?

[centurian]

Nah, they definately have an eye on politics - in fact they declare this as a factor in soverign ratings - and they still have to do a fair chunk of their business in the City.

And remember they are not a public service, they are a business which aims to make money, which means they are not impartial - something that they often list as a caveat in their ratings reports.

They're not going to risk stirring up a tulipstorm by downgrading a G8 nation this close to a general election.

They just don't need to - the markets have priced us lower than AAA anyway, so they can wait until after the election in order to "provide additional clarification" about their expectations.

[AtW]

They just don't need to - the markets have priced us lower than AAA anyway, so they can wait until after the election in order to "provide additional clarification" about their expectations.

If the markets are pricing in such risks before they make their own ratings then their services are a bit ... useless, don't you find?

[Andy2]

Incidentally I received the information I ordered from First Direct about foreign currency accounts yesterday. I think I will used them, as I am an existing customer and this would save the hassle of opening up a new bank account elsewhere and needing to provide authentication required. Not sure how safe First Direct will be in the event of a major currency crash though.

They provide Euro, USD, AUD, Canadian dollar (CAD), Yen (JPY), New Zealand dollar (NZD), Norwegian krona (NOK), Swedish krona (SEK), Swiss frank (CHF) foreign currency accounts, paying a very small interest rate on some of them.

norwegian kroner is a good one. They have plenty of oil and a budget surplus unlike other western countries.
DYOR etc

[TimberWolf]

norwegian kroner is a good one. They have plenty of oil and a budget surplus unlike other western countries.
DYOR etc

Hmm. What about their banks, are they in good shape? They aren't planning any quantitative easing are they?

[centurian]

If the markets are pricing in such risks before they make their own ratings then their services are a bit ... useless, don't you find?

To a point. Ratings are there for two main reasons

a) Those that can't be arsed to do the research themselves
b) External governance - only being legally allowed to invest in funds of a certain 'quality'


In terms of pricing, people are bothering to do the research and realising that the risks don't fit with AAA and have pushed up the price. Hence UK CDSs are currently priced the same as AA+/AA countries.

But that doesn't stop very low risk funds from investing. They may still feel it is worth the risk. But if we lose our AAA rating, those funds will have to sell their UK bonds/gilts.

[Andy2]

Hmm. What about their banks, are they in good shape? They aren't planning any quantitative easing are they?

According to Time magazine they are one of the safest
http://www.time.com/time/business/ar...887090,00.html

[TimberWolf]

Day 1 went to DimPrawn. $ gained more against the £ than the €.

Day 2 goes to AtW. € gained more against the £ than the $ today.

[TimberWolf]

No more voting. Only 46% of people predicted correctly (although only 18% got it wrong), assuming some miracle doesn't happen to the £ in the remainder of the week.

[TimberWolf]

Okay, own up, who just voted?