Latest News

Britain heading for IMF bailout, warns Dr Doom

S&P Futures




Dow Futures




Nasdaq Futures




Russell 2000 Futures




Crude Oil
















10-Yr Bond




















CMC Crypto 200




FTSE 100




Nikkei 225




Dr Droom Pound Sterling Dollar Parity

Liz Truss’s £45bn tax cutting spree has set Britain on course for a bailout from the International Monetary Fund, a leading economist dubbed Dr Doom has warned, as fears grow that the pound could fall to parity with the dollar.

Nouriel Roubini, an economist who famously predicted the financial crisis, has warned that British investments are trading “like an emerging market” as he drew parallels with the economic chaos of the 1970s.

Mr Roubini said on Twitter that Britain is heading “back to the 1970s” and “eventually the need to go and beg for an IMF bailout” following huge tax cuts unveiled by Kwasi Kwarteng in his mini-Budget.

It came as Crispin Odey, one of Britain’s best-known hedge fund tycoons, warned that sterling risks heading to dollar parity for the first time ever after the Chancellor’s announcement contributed to a market rout on Friday.

The UK turned to the IMF for a bailout in 1976 after a plunge in the pound and tax cuts by then-chancellor Anthony Barber stoked inflation. The $4bn (£3.7bn) loan was granted in return for spending cuts and higher interest rates.

Mr Roubini, who earned the nickname “Dr Doom” for his frequently gloomy forecasts, won plaudits for forecasting the coming financial crisis in a paper in 2006. But he has also made mistakes, including a prediction that Greece would fall out of the eurozone and repeated suggestions of coming global recessions that failed to materiailise.

On Twitter, he said: “Truss and her cabinet are clueless.”

The unfunded cuts have stoked worries about a flood of debt and rising inflation, dragging sterling to its lowest level in 37 years against the dollar.

Fears are growing that the pound could slip to a record low and even parity with the dollar after it plunged by more than 3pc and UK borrowing costs soared by more than ever on Friday.

Mr Odey said: “The pound has been vulnerable all year and it must be odds on that it hits parity but there is much that I like in Kwasi’s budget. It is bravely Tory.”

However, the trader – who reportedly has been shorting UK debt – said he will become “long term optimistic” on UK assets if a Labour government is avoided.

Meanwhile, Mr Bailey is expected to discuss the market chaos from the mini-Budget with the Chancellor in the coming days at their newly instated bi-weekly meetings.

The historic rout in the pound and UK debt is likely to be near the top of the agenda at the meeting after it stoked speculation of emergency action by the Bank.

Some City analysts have warned the Bank of England could be forced to intervene to shore up sterling before the next scheduled monetary policy meeting in November.

Threadneedle Street declined to comment on the speculation. Its chief economist Huw Pill could provide the first hints of how the Bank will respond on Tuesday when he appears on a panel to speak about monetary policy at a Barclays event.

Markets are now betting that the Bank will increase rates by 1 percentage point in November, the biggest rise since Black Wednesday in 1992, to head off inflationary pressures.

Investors are rushing to protect themselves against wild swings in sterling in the coming weeks as bets on the currency reaching new record lows against the dollar increase. On Friday, one-month implied volatility in the pound – a market-based gauge of investors’ expectations for swings in the currency – jumped to its highest level since the start of the pandemic.

Speculators have also been ramping up their opposition to sterling this month. New weekly trading data has revealed that investors have amassed a £3.4bn bet against sterling, though short positions predicting a plunge have eased off the September high.

Derek Halpenny, head of global markets research at MUFG, said the Chancellor’s “additional surprise income tax cuts have reinforced concerns over adding stimulus to an economy currently running the highest inflation rate across G10”.

He said: “There is certainly no ‘happy-feel’ to this fiscal give-away and appears if anything to have increased the level of uncertainties that were already very elevated.”

Confidence has drained away for the pound and UK assets in recent weeks as market worries are fuelled by a combination of recession fears and higher borrowing.

Financial contracts data suggests investors now believe the odds of sterling tumbling to a record low of $1.05 by the end of 2022 are 50/50, compared to just 3.5pc at the start of the year. The market-based probability of the pound reaching parity with the dollar within the next 12 months is 40pc.

City analysts likened the pound’s slump to that of an emerging market currency as it coincided with a rise in bond yields.

Adam Hoyes, market economist at Capital Economics, said: “This is a pattern more often associated with emerging markets, and looks like a signal that investors are becoming more concerned about the new UK government’s approach, with fiscal and monetary policy increasingly working in opposite directions.”

Jane Foley, currency strategist at Rabobank, said the pound’s slump has fuelled speculation that the Bank of England will be forced into “huge emerging market style rate hikes to prevent further sharp losses”.



Elon Musk faces deposition with Twitter ahead of October trial

Tesla CEO Elon Musk is scheduled to spend the next few days with lawyers for Twitter, answering questions ahead of an October trial that will determine whether he must carry through with his $44 billion agreement to acquire the social platform after attempting to back out of the deal.

The Wall Street Journal

Buying the Stock-Market Dip Is Backfiring. Investors Keep Piling In Anyway.

It is the worst year for buying the stock-market dip since the 1930s. Instead of rebounding after a tumble, stocks have continued to fall, denting a strategy that soared in popularity over the past decade.

Yahoo Finance

Crypto bankruptcies could put some customers at the ‘bottom of the totem pole’

For the first time in the short life of cryptocurrency, major crypto platforms have turned to US bankruptcy law to salvage their insolvent businesses. Now it’s largely up to bankruptcy courts to determine how to divvy up customers’ frozen crypto assets.


Czech Opposition Wins Vote in Large Cities as Crisis Hits

(Bloomberg) — The main Czech opposition group won in most large cities in weekend municipal elections, mobilizing protest votes against the government’s handling of the energy crisis.The ANO party of billionaire former Prime Minister Andrej Babis came on top in eight of 13 regional centers, while losing to government parties in the capital Prague and in the second biggest city of Brno, according to results from the two-day ballot that ended on Saturday. ANO would have to find partners to rule i


Key Tips for Investing In REITs

Thinking of investing in REITs? Here’s what you need to know and to consider when evaluating a real estate investment trust.

Bearish Bets: 3 Big Name Stocks You Should Consider Shorting This Week

Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet’s Quant Ratings, we zero in on three names. While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names. Nvidia Corp. recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.


Trust Tax Rates and Exemptions That Could Save You Big Time

A trust is a legal entity that holds money and assets for future distribution or management. For example, you might create a trust for your children’s college education, putting money into it which they can withdraw when they go to … Continue reading → The post Trust Tax Rates and Exemptions for 2022 appeared first on SmartAsset Blog.


Crisis Level Risks Loom in Asia as Major Currencies Crack

(Bloomberg) — Asian markets risk a reprise of crisis-level stress as two of the region’s most important currencies crumble under the onslaught of relentless dollar strength.The yuan and yen are both tumbling due to the growing disparity between an uber-hawkish Federal Reserve and dovish policy makers in China and Japan. While other Asian nations are digging deep into foreign-exchange reserves to mitigate the dollar’s damage, the yuan and yen’s slump is making things worse for everyone, threaten

Elon Musk May Lose a Lot in Three Days

Tesla’s billionaire CEO has a chance to expand his influence, but he can also give his critics new ammunition.


Don’t panic about your 401(k)

It’s been a heckuva turbulent ride, including Russian defaults, emerging market crises, dot-com disasters, terrorist atrocities, global financial meltdowns, a U.S. housing collapse that rivaled the Great Depression, inflation panics, deflation panics, energy crises, sovereign debt crises, and a global pandemic. Read: What is a bear market? The people who panic and sell the stocks in their retirement portfolios right here will end up kicking themselves.


APPEC: Vitol expects Russian oil to flow to Asia and Mideast

SINGAPORE (Reuters) -Russian oil is expected to come to Asia and the Middle East, while refined fuel produced in these regions will flow to the West as the global oil trade is disrupted by sanctions, Vitol’s Chief Executive Officer Russell Hardy said on Monday. The Russia-Ukraine war has made energy security the top issues for governments as they grapple with inflation, and with bans on Russian oil looming and Moscow slashing gas supplies to Europe, policymakers are setting aside sustainability concerns for now. More than a million barrels per day of U.S. crude is expected to go to Europe to fill the gap in Russian supplies, he told a forum at the 38th Annual Asia Pacific Petroleum Conference (APPEC) 2022 conference, adding that Russian commodities would need to find a home in places outside the United Kingdom, United States and European Union.


Marketmind: Asia’s FX doom loops

Expect an ugly open to Asian markets on Monday as investors try to shield themselves from the fallout from the widespread selling that battered stocks, bonds, and currencies on Friday. The historic rout in UK bonds and sterling took center stage on Friday but at the heart of the gloom shrouding world markets is the Fed’s drive to raise rates far higher than most people had bargained for, and the effect that is having on global rates. The dollar’s ‘wrecking ball’ status is being painfully felt in Asia, where several currencies have sunk to multi-year or record lows, and central banks have intervened to try and stop the rot.

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News