Wednesday, 15 April 2009

Max Keiser: The British pound is doomed

The British Pound is doomed. Three years ago, while doing our ResonanceFM 104.4 show, “The Truth About Markets,” Stacy and I commented on news that Bradford & Bingley was offering customers 120% mortgages. At the time we pointed out that this was guaranteed to bankrupt B&B and the entire banking sector if they were allowed to continue locking in negative equity deals for customers who were clearly being victimized by predatory lending and banking abuse. Sure enough B&B needed a bailout and that extra 20% on top of the 100% mortgage that the UK tax payer is paying for - is now providing leverage for short sellers to continue to attack the British Pound. The remedy? Halifax just announced 120% re-mortgages for home owners in negative equity. More debt to get out of debt. Reminds me of the woman in Terry Gilliam’s “Brazil” who plastic surgeried herself to death. The British pound, after its recent ‘dead cat bounce’ is a one way bet down as banks are permitted, without any government intervention, to hollow out Britain’s economy unchallenged by law or common sense.


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