The BillyB, Aster & JR8 roundtable!

[JR8]

Yeah.

[JR8]

http://www.youtube.com/watch?v=mANbl6QX9ok
Apocalypse Now - Do Long Bridge

[BillyB]

Well we have Greece on one side and Iceland on the other, but I wouldn't blame the Greeks' demise on being part of the Euro, and likewise I'd never say that Iceland fell apart because they weren't part of it. But I definitely know where I'd want to be as a regular person trying to protect their savings...

I'm not hedging anything at the moment, and as I'm not keen on any "funds" or the like it's either currencies, stocks, properties (that I would own directly) or commodities for me. Not sure what to do... any ideas?

I'm old school, like fundamentals with a hint of macro thrown in for good measure and have a fondness for equities and bonds. Hence I believe in researching the arse off something until you literally could run the company or government issuing them. Although I did have a rush of blood last year and took a punt on Silver. But commodities and currencies I don't profess to understand too deeply nor have much working experience.

Depends on the investment time frame you take, risk appetite, amount you can afford to lose, time you can spend on your investment's etc. A good rule of thumb is to find something you really enjoy and want to learn more about, and base your strategy around that principle.

Despite your dislike of funds - ETF's are a good way to get into the markets and cover all sorts of asset classes, structured products are worth a look if you like to preserve capital, equities for the sheer number to choose from, bonds if you like to take a more macro level view and are happy with fixed terms etc. The choice is wide and so too are the potential pitfalls.

My only advice would be research, research, research and remember Rome wasn't built in a day!!

[JR8]

Yeah and Carthage was wrecked in a day. So know your risk profile.

[JR8]

http://www.telegraph.co.uk/finance/fina ... ement.html
Portugal reaches bail-out agreement

Well that's the third country agreeing a bail out due to membership of the euro currency.

Next stop Spain?

Any views?

[aster]

Everyone in Portugal is happy they're part of the Euro, else their currency situation could have followed the Iceland scenario...

Or is that the idea, that it's best to have a separate currency so that you can turn it into shite in an effort to get the economy moving?

[JR8]

Everyone in Portugal is happy they're part of the Euro, else their currency situation could have followed the Iceland scenario...

Or is that the idea, that it's best to have a separate currency so that you can turn it into shite in an effort to get the economy moving?

That's rather a sweeping statement don't you think? What brought about the crisis in Portugal in double-quick time is the anxiety over the health of the euro. If Portugal were not under Germany's jackboot, and had an ability to set their own interest rate and steer their currency they likely wouldn't be where they are today.

Iceland is completely a different kettle of fish. There they could steer their rates and currency but the lack of private sector banking regulation, turbo-leveraging of banks balance sheets and the unwinding of the Yen carry-trade conspired to nuke the tiny economy in a perfect storm.

The difficulty for Portugal of course is now it is more or less Germany's bitch. It's debts are euro 78bn higher today (and lets not kid ourselves, that's just round one), EU interest rates are rising and they have debt of over 200% of GDP. How do you see them digging themselves out of that hole from within the constraints of the euro?

Anyway, back to the fun part. What's it going to be Spain or Italy? Go on you know you want to have a punt (excuse the pun).

[aster]

You mean if Portugal was able to turn its currency to shite then they could somehow help themselves? And what about the people whose life savings would also undergo the same "treatment"?

Secondly, countries don't have control over their own currencies. Do the Swiss control their currency? Do the Japanese?

You need to stop blaming the Euro for everything. Are the Greeks knee-deep in shit because of the Euro of because or... urh... themselves? Is Ireland in trouble because of the Euro or because their banking sector collapsed and everything was over-cooked anyway over there?

Did the financial crisis in the US happen because of the Dollar and could have been averted if every state had its own, separate currency?

P.S. What are good currencies to "hold" in case the US economy goes into a double-dip recession, Japan caves in under a pile of debt or Greece goes bankrupt?

[BillyB]

I think Spain will just about weather the storm. It's too big to fail, so I think it will get the necessary funding indirectly rather than through a bailout. I think it would tip the scales toward very negative sentiment if it were allowed to run its own path and need an official bailout. And we know what sentiment does to the markets. The world does seem on a bit of a knife edge at the moment. There is a lot of caution and many of the banks don't want to put their necks on the line and make sweeping statements or invest too greatly or commit too many resources in anything dynamic or risky. It seems they are sitting tight and waiting for someone else to make the first move.

Aster, for currency hedging, look at technical indicators that show a negative correlation to the $, Yen or whatever you are holding over time. Focus on the currencies or assets that moved inversely to them during down-trends.

If you are looking at preserving capital - explore $, Yen denominated structured notes. You can take a bull or bearish view on the options and use leverage ranging from the coupon rate if you want 100% protection on your capital to as much as 50% if you want to take more risk.

If you are feeling more 'exotic' just go straight for options to bet against either the currency, a correlated index or anything else you feel like.

[Barnsley]

I think Spain will just about weather the storm. It's too big to fail, so I think it will get the necessary funding indirectly rather than through a bailout. I think it would tip the scales toward very negative sentiment if it were allowed to run its own path and need an official bailout. And we know what sentiment does to the markets. The world does seem on a bit of a knife edge at the moment. There is a lot of caution and many of the banks don't want to put their necks on the line and make sweeping statements or invest too greatly or commit too many resources in anything dynamic or risky. It seems they are sitting tight and waiting for someone else to make the first move.

Aster, for currency hedging, look at technical indicators that show a negative correlation to the $, Yen or whatever you are holding over time. Focus on the currencies or assets that moved inversely to them during down-trends.

If you are looking at preserving capital - explore $, Yen denominated structured notes. You can take a bull or bearish view on the options and use leverage ranging from the coupon rate if you want 100% protection on your capital to as much as 50% if you want to take more risk.

If you are feeling more 'exotic' just go straight for options to bet against either the currency, a correlated index or anything else you feel like.

Hasn't Spain already "failed" unemployment is nearing 30% and with no signs of it heading in the opposite direction anytime soon.

Its Banks still have Billions on loans on their books for properties that have lost at least 30/40% of the value that the loan is for.

Its all going to end in a very big bucket of tears in Europe worldwide by the look of things sadly.

[BillyB]

I think Spain will just about weather the storm. It's too big to fail, so I think it will get the necessary funding indirectly rather than through a bailout. I think it would tip the scales toward very negative sentiment if it were allowed to run its own path and need an official bailout. And we know what sentiment does to the markets. The world does seem on a bit of a knife edge at the moment. There is a lot of caution and many of the banks don't want to put their necks on the line and make sweeping statements or invest too greatly or commit too many resources in anything dynamic or risky. It seems they are sitting tight and waiting for someone else to make the first move.

Aster, for currency hedging, look at technical indicators that show a negative correlation to the $, Yen or whatever you are holding over time. Focus on the currencies or assets that moved inversely to them during down-trends.

If you are looking at preserving capital - explore $, Yen denominated structured notes. You can take a bull or bearish view on the options and use leverage ranging from the coupon rate if you want 100% protection on your capital to as much as 50% if you want to take more risk.

If you are feeling more 'exotic' just go straight for options to bet against either the currency, a correlated index or anything else you feel like.

Hasn't Spain already "failed" unemployment is nearing 30% and with no signs of it heading in the opposite direction anytime soon.

Its Banks still have Billions on loans on their books for properties that have lost at least 30/40% of the value that the loan is for.

Its all going to end in a very big bucket of tears in Europe worldwide by the look of things sadly.

Join the Euro, milk the cow for low interest rates and short-term benefits and feel the plight when it comes back to bite you on the arse because you have been irresponsible as a consequence.

They'll likely side pocket the bad housing debt and keep if off balance sheet. I'm curious to see the leverage exposure they have. Some negative sentiment from investors could wipe out the some of the banks overnight if the ratio is too high.

I still think they'll survive the need for a bailout though. I think with the Spanish Government it's more about confidence and portraying calm so as not to induce a panic amongst investors, rather than placing too much focus on improving the economic fundamentals in the short-term.

[JR8]

You mean if Portugal was able to turn its currency to shite then they could somehow help themselves? And what about the people whose life savings would also undergo the same "treatment"?

Secondly, countries don't have control over their own currencies. Do the Swiss control their currency? Do the Japanese?

You need to stop blaming the Euro for everything. Are the Greeks knee-deep in shit because of the Euro of because or... urh... themselves? Is Ireland in trouble because of the Euro or because their banking sector collapsed and everything was over-cooked anyway over there?

Did the financial crisis in the US happen because of the Dollar and could have been averted if every state had its own, separate currency?

P.S. What are good currencies to "hold" in case the US economy goes into a double-dip recession, Japan caves in under a pile of debt or Greece goes bankrupt?

No disrespect but with the selective replying and continual repetition of points that simply defy fact, I have suddenly lost interest in the discussion.

[JR8]

Hasn't Spain already "failed" unemployment is nearing 30% and with no signs of it heading in the opposite direction anytime soon.

Its Banks still have Billions on loans on their books for properties that have lost at least 30/40% of the value that the loan is for.

Its all going to end in a very big bucket of tears in Europe worldwide by the look of things sadly.

The bail-outs are just sticking-plasters that will stop the bleeding for a few months.

Despite the bail-out Portugal is going to default on it's debt in the not too distant future, there is no alternative. Greece ditto. I reckon Ireland might be able to avoid if it commences the necessary austerity.

The euro will limp on with these throbbing bubonic boils upon it. The contagion might just stop before Spain, but how is the already gangrenous PIG-meat going to be cut-out?

[BillyB]

Hasn't Spain already "failed" unemployment is nearing 30% and with no signs of it heading in the opposite direction anytime soon.

Its Banks still have Billions on loans on their books for properties that have lost at least 30/40% of the value that the loan is for.

Its all going to end in a very big bucket of tears in Europe worldwide by the look of things sadly.

The bail-outs are just sticking-plasters that will stop the bleeding for a few months.

Despite the bail-out Portugal is going to default on it's debt in the not too distant future, there is no alternative. Greece ditto. I reckon Ireland might be able to avoid if it commences the necessary austerity.

The euro will limp on with these throbbing bubonic boils upon it. The contagion might just stop before Spain, but how is the already gangrenous PIG-meat going to be cut-out?

I heard off a few U.K brokers today that the Spanish Development Minister is trying to flog over 1 million unsold holiday homes on the cheap. Trying to target HNW, banks, special situation funds etc.

Now lets take this step by step. Low interest rates enticed borrowing. The banks threw money at everything and anything that moved that wanted to buy property. Economic downturn. Defaults on home loan repayments. Repossessions galore. Could the banks be sat with a shed load of crap assets on their balance sheets??!!! I believe they are and are trying to flog it off on the cheap to reduce the write-downs.

On a similar note, have you seen the U.S. court ruling that is stopping home repossessions because the court cannot understand who actually owns the property because the debt was sliced up into so many parts!! Oh the irony!!

[aster]

Billy, are we just witnessing a quick hiccup or are things beginning to get awry on a larger scale?