British Pound and real estate a "Screaming Buy"!!

[vinoveri]

Citigroup must have a lot of assets priced in sterling they're looking to unload


http://www.bloomberg.com/apps/news?p...ato&refer=home
...
“Weaker sterling makes U.K. property more attractive,” said Neil Turner, the Wiesbaden, Germany-based executive in charge of the money manager’s new 300 million-euro ($403 million) property fund. “The U.K. property market is a screaming buy compared to rivals in continental Europe.”
While the Bank of England said it expects a “protracted” economic recovery in the U.K., where unemployment is the highest since Prime Minister Gordon Brown’s Labour Party came to power in 1997, investors from Millennium Asset Management to Mellon Capital Management Corp. are betting the pound’s decline is coming to an end.
Strategists at New York-based Citigroup Inc. said in a report last week the pound is “among the most undervalued major currencies,” trading almost 15 percent below “fair value” versus the dollar. Barclays Plc predicts it will rise as much as 18 percent against the dollar and 11 percent versus the euro in the coming year. Goldman Sachs Group Inc. sees a 23 percent gain versus the dollar and 15 percent advance against the euro.
.....

[hayekvindicated]

Re: British Pound and real estate a "Screaming Buy"!!

Citigroup must have a lot of assets priced in sterling they're looking to unload


http://www.bloomberg.com/apps/news?p...ato&refer=home
...
“Weaker sterling makes U.K. property more attractive,” said Neil Turner, the Wiesbaden, Germany-based executive in charge of the money manager’s new 300 million-euro ($403 million) property fund. “The U.K. property market is a screaming buy compared to rivals in continental Europe.”
While the Bank of England said it expects a “protracted” economic recovery in the U.K., where unemployment is the highest since Prime Minister Gordon Brown’s Labour Party came to power in 1997, investors from Millennium Asset Management to Mellon Capital Management Corp. are betting the pound’s decline is coming to an end.
Strategists at New York-based Citigroup Inc. said in a report last week the pound is “among the most undervalued major currencies,” trading almost 15 percent below “fair value” versus the dollar. Barclays Plc predicts it will rise as much as 18 percent against the dollar and 11 percent versus the euro in the coming year. Goldman Sachs Group Inc. sees a 23 percent gain versus the dollar and 15 percent advance against the euro.
.....

And what happens to all that debt? Just disappears screamingly into the ether?

[phirang]

Re: British Pound and real estate a "Screaming Buy"!!

And what happens to all that debt? Just disappears screamingly into the ether?

They locked it up in the attic, and it gets uglier and uglier by the day...

[*T*]

Re: British Pound and real estate a "Screaming Buy"!!

And what happens to all that debt? Just disappears screamingly into the ether?

On the subject of that debt,

On Monday evening, De Montfort University will publish its annual, and influential, Commercial Property Lending Report. But thanks to the FT’s property correspondent, Dan Thomas, FT Alphaville has had a sneak preview of the survey, which retails at a cool £500 a copy.

During the next five years between 2009 and 2013 inclusive, 69% of all outstanding debt is due for repayment. At 69%, this proportion of debt due to mature within the following five years is higher than that recorded by previous year-end surveys.

The value of defaulted loans of £3,134m represents approximately 2.6% of the value of outstanding debt held by the organisations that reported fully to this aspect of the survey. If this proportion is applied to the total value of outstanding debt recorded by the research (£225bn) this would suggest that approximately £6bn of loans may have defaulted during 2008.
[...]
Interestingly many lenders were also self critical of their lending strategy. Borrowers making poor choices in property investments, paying too much but still being funded with stretched senior debt were regarded as a ‘massive’, but often repeated, mistake. Lenders also commented that trying to keep the loan ongoing was less expensive to the bank than dumping assets into a declining market. One lender commented that if the only loss is writing off provisions, then this will be a good result. Another said that their organisation had made provisions on every loan in the loan book. The whole book had problems because of declining values and a bespoke solution was required for each loan.

[2stick]

Re: British Pound and real estate a "Screaming Buy"!!

I liked the line,

Strategists at New York-based Citigroup Inc. said in a report last week the pound is “among the most undervalued major currencies,” trading almost 15 percent below “fair value” versus the dollar.

.

....so the dollar is trading at fair value

[The Outback Oracle]

Re: British Pound and real estate a "Screaming Buy"!!

'Fair value'? I presume that is according to some model that assumes return to 'equilibrium', record debt levels don't exist, and that, as a result, CAD's don't matter. I'd expect they also say that this recession is not happening.
Does anyone know what they mean by "fair value'?

[Starving Steve]

Re: British Pound and real estate a "Screaming Buy"!!

'Fair value'? I presume that is according to some model that assumes return to 'equilibrium', record debt levels don't exist, and that, as a result, CAD's don't matter. I'd expect they also say that this recession is not happening.
Does anyone know what they mean by "fair value'?

Economists to-day have a language of vague and meaningless terms all to themselves. "Fair value" is just one of those meaningless terms.

Another term I saw bashed-about just to-day was "imputed job creation", a term used by the Labour Department in the U.S. to measure job creation that they imagine exists but can not measure. So the Labour Department creates the jobs on paper, and few dare question them about this creative book-keeping. So unemployment statistics are made to read any way the government of the day wants them to read.

Ecologists have a language all to themselves, too. "Experts believe" or "scientists agree" are two of their favourite terms. If you listen to BBC World Television, every other sentence in an article or discussion on the environment begins with these terms, so all dispute or discussion on major scientific issues of the day is dismissed outright.

Interesting times we live in, aren't they? When you can't trust BBC, who can you trust?

Making-up one's mind on the basis of scientific reasoning or evidence is apparently a thing of the past. Asking questions and critical thinking is apparently passe, and snow-jobs like "fair value" in a currency is what is to be accepted as economic reasoning. Now buzz-words like "carbon-shift" or what opinion is most popular with the public is how thinking is to be done in environmental science...... No wonder scientific progress and technological growth in the Western nations has all but ground to a halt, and the BRIC nations may someday pull-ahead of the West.