The BillyB, Aster & JR8 roundtable!

[JR8]

They only need to become insolvent and default to have the so-called "ratings agencies" raise their outlook for them.

It's coming together very nicely, Spain entered recession today. So give it time and I expect your scenario will pan out...

[JR8]

Interesting article in the Economist about the property market,historical prices and where this could all be heading...

http://www.economist.com/node/21553459

I'm having a hard time believing the "Europe is going in the same direction as America. It is just getting there more slowly" line, but I guess it's just another opinion worth looking at...

I found it lazy, ill-informed, and tiresome. One can not even compare Notting Hill with Newham, never mind compare England and Europe, never mind the rest of the world in one statistic ('1% annual growth').

'Europe awaits recovery'. Recovery from what? My portfolio is up 20% (pre-leverage) over 5 years, that's from the supposed peak at the end of 2007. The article is irrelevant to central London. So who is he writing for with his one size fits all approach? In trying to write for everyone, he is in fact writing for no one.

[JR8]

Greece lied to get into the euro, and the EU/EC knew it at the time, but they felt it 'impolite and unfraternal' to point it out.

Germany still thirsts to take over the world, despite having failed twice in the last century, everyone knows it, but feels it 'impolite and unfraternal' to point it out.

[aster]

Are you saying the Nobel Laureate Paul Krugman is mistaken, and if so in what way

Interesting you should mention him.

He just had the living daylights knocked out of him by Ron Paul on Bloomberg TV. And I'll take RP's side any day over an advocate of turning a currency to shit and driving inflation up in the process...

Ron Paul = common sense.

Krugman believes in the massive printing of new US Dollars to solve the problem, as well as increasing the already ridiculous deficit to even more insane levels...

Are you sure you're still on his side?

[JR8]

Are you going to come back on the points made one at a time over the next few months, or just as and when you can find convenient soundbites to try and form a rebuttal?

Guess it will be one of those...

lol


p.s. F me Aster are you feeling alright? You're a Marxist advocating a Libertarian over a socialist.... well, you've got me confused

[aster]

I'm sure the euro will remain in some form, but a different one from the present. At a wild guess I'd say that the PIIGS will leave, and the euro will remain in the stronger northern economies. For example Spain facing debt funding costs of say 6% are simply unsustainable.

The only country in danger of leaving - or rather being forced out - is Greece. Portugal might be lumped in the same category, but there's no way Italy, Spain or Ireland are going anywhere.

Spain should do what Greece has done and slice&dice their bonds according to who owns them. So basically other gov'ts won't get hit, just the shylocks. Look how well-behaved that thieving mob has become nowadays - all that snarling, barking and acting aggressive has stopped once they received a boot in the mouth in the form of a shylock-targetted default. So there is a silver lining in all this after all.

He honestly thought the people and Greece and the other PIIGS could all be like upstanding German citizens. No 2hr siestas, no back-handers to the taxman. Talk about cultural imperialism and wishful thinking!

People said the same thing about Korea when it was a backwards nation, with a primitive economy, shabby education system, etc. I'm not saying that Greeks will ever be as hard-working as Germans, but they will have to learn to spend what they earn and crack down on corruption. Don't think this has anything to do with German cultural imperialism... that would work in these parts of the world more than Europe, just look at Singapore where the "made in Germany" label seems to give people instant, multiple orgasms...

There is no plan and no clear method by which the PIIGS could ever become functioning, or perhaps even successful, euro-zone members.

You keep blaming things on the currency when it has nothing to do with that. Over-borrowing is the problem here, and the Euro currency simply means that the costs of doing that were low, so certain govt's decided to over-borrow and over-spend. Blaming the currency is not the issue here. If you have a CC and you over-borrow/over-spend and have trouble paying it off then whose fault is it in the first place? Especially if you sent false documentation about your earnings to the CC issuer to get an even bigger limit?

I would love to see American consumers who have trouble paying off credit cards some out and blame it all on the... US DOLLAR!

the euro, with Germany at the helm, is currently doing a pretty good job at destroying the EU.

Here we go again...

Well, that is the PR-line from Brussels, but back in the real world it is certainly a fringe minority view.

The fringe minority view is that the Euro won't collapse? I think you've got it the other way around: the fringe view is that of a Euro apocalypse. Unfortunately it's all talk and no action, after all the Euro isn't going into freefall and losing value at the pace of Zimbabwe's currency...

Again the broad dismissal leads nowhere. Could you please quote from the articles what you consider 'these jokes', as otherwise no one knows what you're referring to.

Well, basically all these cry-baby articles about how the Euro is done and finished are written by clowns, for clowns. Add to that the blind Euro-hating crowd ("since we aren't part of it, we'll just hate it and hope it goes down") that will beat the meat at the sight of such an article and you have a target group already.

I think you need to follow the money, the vested interests. Ratings agencies certainly have those.

BINGO!!! Who's losing out due to the common currency? Is it not... the banksters? There you have it...

[JR8]

The only country in danger of leaving - or rather being forced out - is Greece. Portugal might be lumped in the same category, but there's no way Italy, Spain or Ireland are going anywhere.

I find it interesting how you talk in absolutes. I write ‘I think that’, I’m sure that’, ‘at a wild guess’, you write ‘It will’, ‘As everyone knows’ etc. Oh to have your crystal ball! ':)

So it’s Greece and maybe Portugal? It wasn’t long ago you denied any country would have to leave, because ‘the euro is so rock-solid and immune to er, everything’. But how do you think Portugal might get ejected and Spain won’t. Are Germany going to fund Spain in perpetuity? I don’t see that myself, the Germans will never wear it. Or have you fallen for the ‘Spain is too big to fail’ line? Ok, either way we’ll see somewhere down the road

Spain should do what Greece has done and slice&dice their bonds according to who owns them. So basically other gov'ts won't get hit, just the [bankers]. Look how well-behaved that thieving mob has become nowadays - all that snarling, barking and acting aggressive has stopped once they received a boot in the mouth in the form of a [banker]-targetted default. So there is a silver lining in all this after all.

I think you are mis-informed. Greece divided it’s bonds into those issued under Greek law, and those issued under international law. The vast majority were the former, and it is they that got the c.75% haircut. As I understand it the latter, a relative fraction, have yet to be settled.

And of course governments (actually their respective tax-payers) did get hit. The Japanese government certainly got so burned they’d said no more. The Norwegian sovereign wealth fund said likewise. I read the French and Germans had exposure too... as one would expect.

I think you need to face up to the fact that these days banks are being treated as quasi-governmental organisations, and that is why almost none of them, but the totally irredeemable, have been allowed to fail. Banks fund governments >< governments fund banks with taxpayers money, simple to grasp really.

Bankers haven’t received a kicking beyond 'useful idiot' media opprobrium. Consider the e1Tn ECB carry trade, and what that does. It lets EU banks borrow essentially unlimited funds (taxpayers money) at 1%, in order to encourage them to buy up PIIGS debt at 5%+, i.e. to keep the whole charade going for a while longer for the sake of politicians' images, and to earn a shed-load of money along the way for the banks. And you call that a kick in the teeth for bankers? The only people being kicked once again are the taxpayers who are funding this circus.

People said the same thing about Korea when it was a backwards nation, with a primitive economy, shabby education system, etc. I'm not saying that Greeks will ever be as hard-working as Germans, but they will have to learn to spend what they earn and crack down on corruption. Don't think this has anything to do with German cultural imperialism... that would work in these parts of the world more than Europe, just look at Singapore where the "made in Germany" label seems to give people instant, multiple orgasms...

But who made the Koreans change? Who installed the equivalent of the German appointed/annointed puppet prime-minster like Papademos there? Or did, Koreans decide themselves to move in that direction? They’re very different tracks. My surprise was that this German guy seemed to honestly think that the Greeks want to be like Germans. They don’t, they hate the Germans, simple.

You keep blaming things on the currency when it has nothing to do with that.

I disagree, I see almost all of the current problems as being caused by the inflexible strait-jacket of the euro fiscal policies, oh and plus the ineptitude of EU politicians to find a plan, any plan #B.

Over-borrowing is the problem here, and the Euro currency simply means that the costs of doing that were low, so certain govt's decided to over-borrow and over-spend. Blaming the currency is not the issue here.

That is precisely the problem, and it was caused by the euro. The costs of borrowing for the PIIGS were inappropriately low, that was completely obvious at the birth of the euro (trust me I was there with sleeves rolled up). If countries were not herded into the ‘promised land’ of the euro back then this, it, could never have happened.

If you have a CC and you over-borrow/over-spend and have trouble paying it off then whose fault is it in the first place? Especially if you sent false documentation about your earnings to the CC issuer to get an even bigger limit?

If the card issuer knew ‘you’ were flagrantly lying (as the EC did), and did nothing about it, then it’s their fault. If your budget and borrowing were meant to be governed with oversight by the likes of the Growth and Stability pact (they were meant to be), which everyone starting with Germany and France simply bull-dozed and breeched, then I’d blame the EU.

I would love to see American consumers who have trouble paying off credit cards some out and blame it all on the... US DOLLAR!

I don’t expect the Fed have ever caused the the interest rate to half or more overnight (from say 12% to 5%) in any state, do you? I mean that would be a recipe for suicide anywhere wouldn’t it? Plus the Fed has the power of inter-state fiscal transfers.... but hello, the EU does not!

Here we go again...

chill, it’s called having a discussion.

The fringe minority view is that the Euro won't collapse? I think you've got it the other way around: the fringe view is that of a Euro apocalypse. Unfortunately it's all talk and no action, after all the Euro isn't going into freefall and losing value at the pace of Zimbabwe's currency...

No, please don’t put words into my mouth in order to build a strawman. I said I don’t think the euro will continue in it’s current form.

If you think my scenario is so fringe and way-out, please go ahead and post links/quotes to articles that back up your case. No, not press releases from the Brussels machine, but from the mainstream media. I don’t recall you doing so before, just blindly railing against what I link...

Well, basically all these cry-baby articles about how the Euro is done and finished are written by clowns, for clowns. Add to that the blind Euro-hating crowd ("since we aren't part of it, we'll just hate it and hope it goes down") that will beat the meat at the sight of such an article and you have a target group already.

They’re written by ‘clowns’ but you haven’t and won’t rebut anything specific that they say? Why not?

BINGO!!! Who's losing out due to the common currency? Is it not... the banksters? There you have it...

Bankers are losing out on nothing. I think your fuming hatred is blinding you once again.

[JR8]

An article by the Canadian finance minister. I think he nails it...


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'In order for any IMF action in Europe to be successful, a sense of direction and a comprehensive blueprint to return to sustainability are necessary. The question of sustainability cannot be separated from that of the future of the European monetary union. As such, its members should take the lead in defining a comprehensive and credible blueprint. This requires more than incrementalism and wishful thinking. Europe has taken important steps in this direction with the fiscal compact, with economic and fiscal reforms in Italy and Spain, with an enhanced firewall, and with the recent actions of the European Central Bank to provide liquidity support. However, more is needed to return the eurozone to sustainability and to address the systemic internal imbalances that threaten the monetary union.' ...
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http://www.telegraph.co.uk/finance/fina ... -mess.html

I.e. FFS get on and make a fully functioning fiscal union complete with transfers if that is what you want, or accept that a region of 'One region, seventeen treasuries, piecemeal policy, and no fiscal transfers' is doomed to fail.

[JR8]

'Everyone loves the euro, part 94'

-------------------------------
'Euro area manufacturing takes a hammering

Major economies across Europe reported declines in manufacturing output in April.

Across the eurozone Markit's manufacturing Purchasing Managers Index dropped to 45.9 in April, down from 47.7 in March.

Anything under 50 denotes a contraction in output and the latest figure comes close to a three year low. ... [continues, with the hideous country specific statistics]'
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http://www.digitallook.com/news/2006954 ... ering.html

[JR8]

-----------------------------------
The eurozone crisis is back with a bang

The eurozone crisis is back with a bang, with the pain, once again, most visible in Spain. The Spanish IBEX is being hammered on the latest PMI data, which points to an ever deepening recession.

But it's not just Spain. The data on the eurozone labour market and manufacturing sector as a whole is appalling, with the recession now manifestly metastasising out from the euro area periphery to the core. Even the German unemployment rate is now rising.

Up until now, it's been a tale of two eurozones in the employment data (see chart below), but it may be that everyone will soon be in the same boat, albeit, some more doomed that others. ... [continues]
---------------------------------------------
http://blogs.telegraph.co.uk/finance/je ... th-a-bang/

It's getting ugly!


p.s. 'Oh no, it really wasn't meant to be like this!'... lol

[JR8]

Recently I gave the 'word on the street' anecdotes of this phenomenon, well, now it is starting to hit the mainstream press

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'French and Greek elections could spark property boom in London as rich buyers flood to the UK to escape euro crisis
- In some areas French buyers are second biggest group after Brits
- Estate agents are hiring French-speaking staff to sell property in London

Estate agents are expecting a flood of buyers from the Continent if the euro is left unstable by elections in France and Greece.

Experts say the price of property in some of London's most exclusive areas is already being fuelled by an apparent exodus of the rich to the UK.

But if the socialist leader Francois Hollande wins the second round of France's presidential election it is claimed that flow could become a flood. [continues in full gory detail ]

http://www.dailymail.co.uk/news/article ... risis.html
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You should read it Aster I expect it will enrich your knowledge of what is really happening in the euro-zone. Interesting also that it mentions the UK Treasury potentially having to do something like the Swiss-'peg' due to Sterling's safe-haven qualities vs the euro.

Meanwhile the French presidential polls wrap up tomorrow pm, with Hollande firmly on track to win. Oh and some Greek drama to add to the mix too.

Time to get the popcorn in and sit back and enjoy the show...

[JR8]

Well, part of the reason is because the Pound has gone down the crapper in recent years. From 2:1 to 1.2:1 makes properties much cheaper today than they used to be. Of course I'm willing to bet that the weak Pound has obliterated a large segment of the property market in Spain which was focused on British expats.

Sterling has not traded at lower than 1.7:1 never mind 2:1, so you're a mere 17% out . Can I suggest that you debate using facts in future, you know, it is just simpler discussing things with a person hinged in reality? You'll like this, though probably not a lot
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Sterling hits 22-month peak vs euro, tipped for more gains
Thu May 3, 2012 3:55pm BST

* Sterling rises to 22-month high vs euro
* Benefits as UK economy outperforms euro zone
* Euro gains reprieve after ECB but seen falling further
* Pound shrugs off weaker-than-forecast UK services PMI
LONDON, May 3 (Reuters) - Sterling rose to a 22-month high against the euro on Thursday as concerns about debt and economic weakness in the euro zone pushed investors towards the relative safety of the UK currency. [continues]
http://uk.reuters.com/article/2012/05/0 ... 7X20120503
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I mean if Germans were scared their currency savings were going to disappear with the Euro going into disarray they could just as well get rid of their cash by buying properties in Germany, no?

Or converting it into Swiss Francs since the Germans are a nation of renters, and their property market is in long-term decline, no?

[JR8]

A reader comment from the linked article. Nail/head/hit.

-----------------------------------------
georgej
Today 12:49 AM
'So real, live, democratically elected Nazis are back in Europe. The one thing the EU was established to prevent. And what of all those promises of economic stabilty, growth and prosperity? The euro is on the point of collapse, entire countries are in recession, growth is non-existent, and unemployment is soaring to catastrophic levels.

Well, at least our fishing industry is intact. No, wait...

What were the benefits of joining again?

http://blogs.telegraph.co.uk/finance/je ... e-has-won/
--------------------------------------------

[JR8]

'Hey Angela, what's your plan for the euro?'

[nakatago]

"Nearly 70 years after the end ofWorld War II, Germany controls all of Europe. The irony...they don't have an army. Who would have thought? The key to German world domination would wind up being an international banking conspiracy."

Heard this tonight.