1. SOUNDBITE (English) Max Wolff, Economist, Manhattan Venture Partners
"So we see the pound exploring and taking out new lows. There are starting to be forecasts now for major banks of a dollar twenty range on the pound so we are seeing quite a fall here. We are a little bit under a dollar thirty now. It looks like what we are seeing here is a little bit more of a wild readjustment of expectation as opposed to the underlying fundamentals. We know that Brexit particularly in the run up to the triggering of Article 50 will be sort of an orgy of weakness for the pound and it's going to bring out every bump, wart, boil and hair this economy has ever had. So we are going to have a little bit of a sentiment test here and it's going to be uglier than probably the ultimate fundamentals. The economy will be hurt but probably less than people think right now. But we are going to over, and then under, estimate so we have the initial over-estimation of damage, followed by a somewhat a little big un-sanguine underestimation of damage. It looks like we are moving back to over-estimation. Our guess is that a mid-dollar twenty range, a dollar twenty-five, a dollar twenty-six, is probably reasonable. I don't see it staying much below a dollar twenty. That's still a massive reduction and you're looking at multi-decade lows in the British Pound Sterling."
2. SOUNDBITE (English) Max Wolff, Economist, Manhattan Venture Partners
"The European Union is the biggest economy in the world. It's the big neighbour for England. England is small relative to the EU and we don't know what kinds of trade deals we are going to have. But here is what we do know: they can't be all that good because the rest of the European Union has to self-preserve and they have to make a little bit of an example out of England so it's probably not a great sign. And the other truth is that this will probably reveal other divisions inside British society, already has. And so you are going to have a divided country with unknown leadership going into a period of weakness in a weak global economy with a lot of negative scrutiny on them and that is kind of a recipe for a lot of tumult, turmoil and negative sentiment and we are seeing that price right now into Pound Sterling."
3. SOUNDBITE (English) Max Wolff, Economist, Manhattan Venture Partners
"I mean I think a lot of people in other countries maybe watch with a little bit of what the Germans sometimes call the Schadenfreude here. They look at, and they sort of enjoy the suffering of the United Kingdom. I think that's always a mistake. One thing that the United Kingdom got wrong that spectators should get right is we live in a global economy. However you feel about it. Whatever happens somewhere else hits you at home. And whatever happens somewhere else to someone else will hit you in your pocket at some point. So sitting in New York City I bump into folks who think this is sort of good because money will run to New York real estate. A: I think that's been happening for 25 years. I'm not so sure I buy it. But the other thing try to remind people of is the single largest tourism group coming to New York City is English and they just looked at a 15 percent raise in every single price they face here. I'm not sure that's going to inspire them to come here while they are afraid of their economy at home and everything is on the 25 percent more sale. I'm not so sure that's unambiguously good. So in a modern global economy the corner store operator anywhere in the world who has United Kingdom tourists coming in and buying goods from her or from him has to worry about this too. Global economy don't make the mistake the British made while you sort of sit back and look at them and their problem and think it's not yours."
Sterling continued its post-Brexit fall on Wednesday by plummeting to a 31-year low against the dollar.
The pound hit 1.2861 dollars, more than 15 percent below the levels seen on referendum day, in early trading.
"Our guess is that a mid-dollar twenty range, a dollar twenty-five, a dollar twenty-six, is probably reasonable. I don't see it staying much below a dollar twenty. That's still a massive reduction and you're looking at multi-decade lows in the British Pound Sterling," said Max Wolff, an Economist from Manhattan Venture Partners.