From: Peter Mandelson cS. To: [email protected] [email protected]> Subject: Fw: Date: Sun, 20 Mar 2011 13:35:16 +0000 Ignore affectionate language... Original Message From: James Palumbo (MSHK) [mailto Sent: Sunday, March 20, 2011 08:50 AM To: Peter Mandelson BT Subject: Mr.Grumpy, Mr.Frumpy. Mr. Rumple - Rumple Stiltskin. Grrh, grrh, grrh, let's take this from the top. There are 3 main points to consider. I. What's the state of the world? My view continues to be bearish - Japan, Libya, oil price, UK Q4 GDP decline, US debt and unemployment, global inflation. I think there's now a good chance of a double dip recession and another shock of some sort - bank failure, sovereign debt crisis - Spain? What would be the result of this? Japan style stagnation on one end of the scale, all the way through to genuine turmoil on the other - economic collapse, riots. As you know I've built a compound in Thailand against the latter possibility. You need to check this view with Natty Nat Nat Nat Nat, J a7ards, and others you trust. Generally my stance would be cautious. 2. How might this effect global property prices? Unclear.The top end of the London market is currently strong because the city is seen as a safe haven against trouble in the middle east. But I don't think Candy & Candy are selling much of their Number One Knightsbridge development. Similarly I bought my pussy cat a flat in a fabulous new development in Bangkok, the Sukothai residence, behind the Sukothai hotel. It cost £1.5m which is a lot for Thailand and I believe sales are sluggish at best. I don't know how strong the market is in Rio, what the local factors are etc. I speculate there's quite a lot of wait and see at the top end of global residential property markets. 3. What's best practice for financing a property purchase? Well obviously buying for cash is best, but if you can't do this I'd be very wary about borrowing more than 50% as a point of principle. You then need