Is the end nigh for the Euro? [vol. 3]
Discussion
Twitter buzzing tonight with reports of a right old barney at the ECB over the level of QE, led by German and Austrian national bank representatives.
@L0gg0l: Rumor mill in high gear: Draghi now threatens to resign (via @purpleline ) #ecb
Don't know how much there is in it but clearly there's some sharp differences of opinion between the member states.
http://www.telegraph.co.uk/finance/economics/11207...
@L0gg0l: Rumor mill in high gear: Draghi now threatens to resign (via @purpleline ) #ecb
Don't know how much there is in it but clearly there's some sharp differences of opinion between the member states.
http://www.telegraph.co.uk/finance/economics/11207...
Digga said:
they are a significant disincentive for developers building speculative commercial and industrial property, which means there are shortages of buildings for new or expanding businesses to utilise.
Does that also imply that the would-be entrepreneur has to pay a higher price (due to shortage of suitable building stock) than he or she would have to pay if building stock was available? Or is it that some of the requirements are so specialised that speculative building makes little or no sense?
Near me is a 190 acre brownfield site where once a powerstation stood. It was demolished the best part of 20 years ago and the whole area was earmarked for use as a new build distribution centre.
Eventually, after a number of changes of ownership (or so it appeared) some units were built - a mix of sizes and a handful were taken but the larger ones remained empty. Then along came M&S and agreed to a vast construction that uses about 20% of the site. Maybe a little more. 2 years to build, another year or so to install the inner workings and a radical change to the landscape and local traffic flows. There is no way a developer could have built the place on spec.
The rest of the site, so far as one can tell, is still a construction free zone despite its location and decent transport link potential - including rail which is apparently why M&S chose it although there seems to be little evidence of rail being an important part of its operation.
Another fairly large green field development, previously a farm, that had to be acquired (and therefore developed) to allow for the creation of the link road for the main site is more complete but still has some empty buildings and undeveloped plots.
Despite this other developers are now seeking (and likely to gain) permission for an equally huge acreage of development on greenfield land about a mile away. Once again for very large "distribution" centres with an emphasis on rail links.
It seems to me that that the bigger developers are mostly interested in large and pre-sold developments because the smaller and less specialised opportunities to build on a speculative bases have, in recent times, not resulted in good tenant uptake and retention. The recent years of financial turmoil may have been partly responsible.
I suspect that the situation is a bit more complex, over all, than it would appear to be but it seems that the more "savvy" developers are not into speculation other than obtaining access to land with development potential and then seeking the right circumstances for development with guaranteed tenancy. If they need to they can build quite quickly with local councils salivating at the thought of the income, so speculative building makes little sense in many cases.
With smaller sites in areas where "standard unit sizes" might be in demand it may make more sense to throw up a few speculative boxes but the must be quite a few 60s and 70s developments of that type that are now ripe for complete redevelopment if the demand really exists. I suspect the older sites persist for now simply because they are going to be cheaper and for the businesses occupying them cheap comes before image.
Seek said:
If only...
Bit more nuanced background on Bloomberg...http://mobile.reuters.com/article/idUSKBN0IO1GY201...
Andy Zarse said:
Seek said:
If only...
Bit more nuanced background on Bloomberg...http://mobile.reuters.com/article/idUSKBN0IO1GY201...
France is continuing to slide steadily towards implosion and economic grief as this BBC article suggests:
see: http://www.bbc.com/news/world-europe-29686257
No doubt lots of QE printing by the ECB and Draghi will cover over the cracks short term. But not for long IMO because there are so many insurmoutable fundamental economic difficulties within the failing states within the EU who are all are sinking visibly all the time. France and Italy are leading the way downwards and the entire EU ediface just will not stand examination.
Regrettably feathering your own nest and ignoring the consequences may work for the elected EU MP's. It cannot work for the poor downtrodden EU taxpayers.
LongQ said:
Does that also imply that the would-be entrepreneur has to pay a higher price (due to shortage of suitable building stock) than he or she would have to pay if building stock was available?
It does mean a higher price is paid - supply and demand - but also means that in many cases business creation or expansion is hindered or prevented outright because they simply cannot find the space they need to exist within. Granted some more specialist operations will always need bespoke premises, but the variety of enterprises on any typical 'crinkly tin' industrial estate is testament to the adaptability of both the buildings and businesses within.LongQ said:
Near me is a 190 acre brownfield site where once a powerstation stood. It was demolished the best part of 20 years ago and the whole area was earmarked for use as a new build distribution centre.
We own businesses on almost exactly the same type of site - our a former colliery. Half of the site is now almost fully occupied, most units having been made speculatively, prior to the GFC and new business rates regime.The other half of the site - exactly as per your M&S example - was spunked away, to great media coverage, fanfare and backslapping of the usual local authority faces on what was (at the time the biggest, speculatively built warehouse in the UK, owned by the MetLife pension fund. The property is now occupied by a business from Luxembourg by the name of Amazon. Whilst it has, unquestionably, created employment and is not a 'bad' business per se, I defy anyone to say that the diversity and quality of jobs on the SME half of the site is in any way matched.
Ireland has the Euro, have a look at what an impact that has made on the US.
GULP:
http://www.telegraph.co.uk/finance/economics/11210...
GULP:
http://www.telegraph.co.uk/finance/economics/11210...
Draghi and the Germans are not best friends any more.
http://www.telegraph.co.uk/finance/comment/ambrose...
The real kicker, is the part the UK plays in this tangle.
"Tucked away in the report is a nugget that Britain alone accounted for almost all the EU's growth in 2013, half in 2014, and will still be the biggest contributor by far in 2015. This implies that the UK's net payments to the EU budget - already up fourfold since 2008 - will become ever more skewed. Or put another way, the more EMU makes a mess of its affairs, the more Britain must pay to prop it up."
http://www.telegraph.co.uk/finance/comment/ambrose...
The real kicker, is the part the UK plays in this tangle.
"Tucked away in the report is a nugget that Britain alone accounted for almost all the EU's growth in 2013, half in 2014, and will still be the biggest contributor by far in 2015. This implies that the UK's net payments to the EU budget - already up fourfold since 2008 - will become ever more skewed. Or put another way, the more EMU makes a mess of its affairs, the more Britain must pay to prop it up."
Just to lay the boot in a little more, the poor old Germans the European Court of Justice has ruled against them on a breach of free movement of goods case: http://www.khl.com/magazines/construction-europe/d...
QuantumTokoloshi said:
Draghi and the Germans are not best friends any more.
http://www.telegraph.co.uk/finance/comment/ambrose...
The real kicker, is the part the UK plays in this tangle.
"Tucked away in the report is a nugget that Britain alone accounted for almost all the EU's growth in 2013, half in 2014, and will still be the biggest contributor by far in 2015. This implies that the UK's net payments to the EU budget - already up fourfold since 2008 - will become ever more skewed. Or put another way, the more EMU makes a mess of its affairs, the more Britain must pay to prop it up."
It's wonderful how we have the sense to stay out of the madhouse then get demands to pay the inmates.http://www.telegraph.co.uk/finance/comment/ambrose...
The real kicker, is the part the UK plays in this tangle.
"Tucked away in the report is a nugget that Britain alone accounted for almost all the EU's growth in 2013, half in 2014, and will still be the biggest contributor by far in 2015. This implies that the UK's net payments to the EU budget - already up fourfold since 2008 - will become ever more skewed. Or put another way, the more EMU makes a mess of its affairs, the more Britain must pay to prop it up."
Draghi and the Germans have never been friends or allies! They usually propose the opposite then Draghi realises the Germans hold the purse strings and the Germans realise Draghi holds the "belief" strings and that without them both looking somewhat aligned it will all go pear shaped.
Oh look...
Oh look...
DJRC said:
Draghi and the Germans have never been friends or allies! They usually propose the opposite then Draghi realises the Germans hold the purse strings and the Germans realise Draghi holds the "belief" strings and that without them both looking somewhat aligned it will all go pear shaped.
Oh look...
Well here's another thing on that theme...Oh look...
Who knew that each EZ member states' central bank representative will lose its vote on the ECB council for two months of next year? ECB discord may yet be magnified if monetary policy loosening and more QE take place in those months when the Bundesbank (to pick a national central bank not entirely at random) does not have a vote (May and October 2015).
(H/T Shaun Richards)
From the ECB website:
“To ensure that the ECB will be able to continue to take decisions in an efficient manner, the Council of the European Union decided in 2003 to introduce a voting rotation system for the Governing Council of the ECB when the number of national central bank Governors in the Governing Council exceeds 18. That will be the case when Lithuania adopts the euro on 1 January 2015.”
As they will then be 19 you might think that they might take it turns to miss out. Oh no that would be far too simple!
“The Governing Council of the European Central Bank (ECB) decided today, by means of a draw, which national central bank Governors will be the first to relinquish their voting rights when the rotation system enters into force on 1 January 2015. As a result of the draw, the Spanish central bank Governor in group 1 and the Estonian, Irish and Greek central bank Governors in group 2 will relinquish their voting rights in January 2015. On 1 February 2015 in group 1 the Spanish central bank Governor will regain his voting right and the French central bank Governor will relinquish his. In group 2, the Estonian central bank Governor will regain his voting right, while the Cypriot central bank Governor will relinquish hers. The draw took place in the presence of all members of the Governing Council, with the Lithuanian central bank Governor as observer.”
Who wants to bet against policy loosening after February's meeting?
Andy Zarse said:
DJRC said:
Draghi and the Germans have never been friends or allies! They usually propose the opposite then Draghi realises the Germans hold the purse strings and the Germans realise Draghi holds the "belief" strings and that without them both looking somewhat aligned it will all go pear shaped.
Oh look...
Well here's another thing on that theme...Oh look...
Who knew that each EZ member states' central bank representative will lose its vote on the ECB council for two months of next year? ECB discord may yet be magnified if monetary policy loosening and more QE take place in those months when the Bundesbank (to pick a national central bank not entirely at random) does not have a vote (May and October 2015).
(H/T Shaun Richards)
From the ECB website:
“To ensure that the ECB will be able to continue to take decisions in an efficient manner, the Council of the European Union decided in 2003 to introduce a voting rotation system for the Governing Council of the ECB when the number of national central bank Governors in the Governing Council exceeds 18. That will be the case when Lithuania adopts the euro on 1 January 2015.”
As they will then be 19 you might think that they might take it turns to miss out. Oh no that would be far too simple!
“The Governing Council of the European Central Bank (ECB) decided today, by means of a draw, which national central bank Governors will be the first to relinquish their voting rights when the rotation system enters into force on 1 January 2015. As a result of the draw, the Spanish central bank Governor in group 1 and the Estonian, Irish and Greek cent'ral bank Governors in group 2 will relinquish their voting rights in January 2015. On 1 February 2015 in group 1 the Spanish central bank Governor will regain his voting right and the French central bank Governor will relinquish his. In group 2, the Estonian central bank Governor will regain his voting right, while the Cypriot central bank Governor will relinquish hers. The draw took place in the presence of all members of the Governing Council, with the Lithuanian central bank Governor as observer.”
Who wants to bet against policy loosening after February's meeting?
This is an outright fraud on the solvent states within the EU who are actually sticking to the EU rules and that is why in the end this whole lot must come tumbling down. None of the Solvent states will accept any of the losses of the insolvent states held within the EU therefore the crunch must and will come. I do think the very clear signs that are now emanating from the rise of UKIP in the UK and the realisation within the Government in the UK that there is going to have to be a referendum is part of the increasing pressure in UK politics for the unheard voices within the UK electirate to be heard at last.
The boys club has suddeny realised that the comfortable agreements that have kept these politicians in power over the last thirty years are beginning to be shaken to the core by events. Immigration is clearly a major concern to many within the UK and the ruling parties to date cannot contain this frustration evident widely in the UK, at all, effectively. There is going to be change in the representation of the electorate of the UK and that is going to have major consequences for the UK and for the EU. Pity is that we are, as ever on, our own in facing the problem.
I fervently hope that the other doubting Thomases in the EU also raise their concerns! The truth is that there are a number of concerned fellow EU members including Hollend (Not Hollande!!), Norway, Sweden, Denmark, Finland and many others incliding Germany itself, who are just as concerned about who is actually paying for the failed states when failure comes which it clearly will. But as we discovered about 75 years ago not many countries in Europe have our capacity to take on difficulties directly, preferring to let us sort out the troubles of the world.
I can only see one end to this nonsense. Unless the EU admits its errors, which driven as it is by self serving gravy train politicians it clearly most unlikely, then there must be a forced end to this nonsense. Tragically it seems to me that more and more QE by Draghi and co will simply make the end more and more inevitable and the financial consequences greater and greater. I cannot see how such an obvious fraud can possibly be kept going. Ponzi schemes always end with collapse. I just wish there was some way to circumvent this tragedy but deliberate fraud on this scale, must result in collapse.
Edited by Steffan on Thursday 6th November 17:01
Andy Zarse said:
Steffan, you're an Italian what's the word on the street about Mario leaving the ECB and returning to Italy to become the new President? I reckon he'd be a shoe-in. What do you think?
Interesting question Andy and by no means impossible IMO. Even critics of Draghi like me, recognise his outstanding ability as a very experienced articulate central banker. That is most definitely a possibility in consequence. However I would have thought that the fringe benefits of being the EU senior finance man are significantly greater than Italy could offer Draghi. In terms of gravy train opportunities and strutting on the World stages for a start. Something I rather think Mr Draghi enjoys. I also believe that any change at the top of the EU finance fiddling at tye presentbtime, could have knock on effects on the confidence within the markets for the Euro. For those reasons I have my doubts that it will happen. However it is certainly a possibility and Draghi is undoutedly well regarded internationally.I personally rather think that the old reascal Berlusconi is still very popular in Italy. The Italians all say (both men and women) that Berlusconi is a crazy man but he THEIR crazy man and they still love him despite all the bonking in all directions or possibly because of the multidirectional bonking that Mr B is noted for. It was remarkable how easily he was shoehorned out by the EU but he is certainly not finished politically in Italy. Something of a comeback kid in Politics is Berlusconi not unlike the ex USA President Mr Clinton. Who I suspect had the change not been made to the maximum term for a President, would certainly have served a fourth term and possibly (God willing ) longer.
Remarkable how forgiving the electorate of a country can be to politicians who they like and respect as leaders even when it is one such as Anerica where the bible belt is massive and religion is taken very seriously by hundreds of millions of voters. Strange business politics the undisputed champion of England in the Second World War Sir Winston Churchill suffered a massive election defeat after successfully grabbing the failing UK circumstances by the scruff of the kneck in 1940 and forcing Victory at all costs against seemingly impossible odds. Not exactly the result you would expect from a grateful country which England undoutedly was at the time towards Churchill. But England wanted change and the Labour party appeared to offer it. Strange business politics.
This EU business is becoming stranger by the week. Quite how we have allowed a situation to develop where completely unrepresented views have been allowed to remain unrepresented by our pathetic self serving politicians in the UK to the point where completely unexpected reversals are occurring in local byelections because of the depth of the unrepresented feelings running throughout the country is really strange because you would hope that the politicians would pick up the warning signs earlier than this process suggests.
In fact the Boys Club that has been running the country with successive right wing New Labour governments like those of Tony Blair and left wing (for a Conservative ) (largely) government have ensured that there are a massive number of unrepresented voters who are mad as hell at the waste and want a change, almost at any price. Funny business Politics and I suspect that the next election will underline how strange it can be. I would be very surprised indeed if there are not major changes in the EU before very much longer. Indeed the situation looks pretty dire for the EU to me. I just hope that those in charge can limit the damage this causes to the UK.
Andy Zarse said:
DJRC said:
Draghi and the Germans have never been friends or allies! They usually propose the opposite then Draghi realises the Germans hold the purse strings and the Germans realise Draghi holds the "belief" strings and that without them both looking somewhat aligned it will all go pear shaped.
Oh look...
Well here's another thing on that theme...Oh look...
Who knew that each EZ member states' central bank representative will lose its vote on the ECB council for two months of next year? ECB discord may yet be magnified if monetary policy loosening and more QE take place in those months when the Bundesbank (to pick a national central bank not entirely at random) does not have a vote (May and October 2015).
(H/T Shaun Richards)
From the ECB website:
“To ensure that the ECB will be able to continue to take decisions in an efficient manner, the Council of the European Union decided in 2003 to introduce a voting rotation system for the Governing Council of the ECB when the number of national central bank Governors in the Governing Council exceeds 18. That will be the case when Lithuania adopts the euro on 1 January 2015.”
As they will then be 19 you might think that they might take it turns to miss out. Oh no that would be far too simple!
“The Governing Council of the European Central Bank (ECB) decided today, by means of a draw, which national central bank Governors will be the first to relinquish their voting rights when the rotation system enters into force on 1 January 2015. As a result of the draw, the Spanish central bank Governor in group 1 and the Estonian, Irish and Greek central bank Governors in group 2 will relinquish their voting rights in January 2015. On 1 February 2015 in group 1 the Spanish central bank Governor will regain his voting right and the French central bank Governor will relinquish his. In group 2, the Estonian central bank Governor will regain his voting right, while the Cypriot central bank Governor will relinquish hers. The draw took place in the presence of all members of the Governing Council, with the Lithuanian central bank Governor as observer.”
Who wants to bet against policy loosening after February's meeting?
Let me take a wild guess... during January 2015, decisions will be made on economic steps in Spain, Estonia, Ireland and Greece. During February 2015, decisions will be made regarding France and Cyprus. Somewhere around June 2015 the economically viable countries like Germany, Holland, Denmark and Finland will be taking "their turn" - and it will be turkeys-voting-for-Xmas time.
And the decisions will be unanimious and can therefore not be contested at a later stage...
Northern Europe and the epicentre of the EU
http://www.bbc.co.uk/news/world-europe-29944648
Civil disturbance caused by economic policy, as has been widely predicted on this thread as the inevitable outcome of having a political class that are incapable of decisive action.
http://www.bbc.co.uk/news/world-europe-29944648
Civil disturbance caused by economic policy, as has been widely predicted on this thread as the inevitable outcome of having a political class that are incapable of decisive action.
Steffan said:
No doubt lots of QE printing by the ECB and Draghi will cover over the cracks short term.
But up until now has it really been QE? Yes the ECB has been financing the banks in the hope that they would thus lend money rather than overnighting their cash back with the ECB for security, yes they have now started buying covered corporate bonds. But isn't real QE à la Fed when the ECB starts buying sovereign debt, something that can't be done yet as the German constitution and the EU treaty clauses don't allow it?I accept that the ECB is already holding a trillion or so of potentially bad debt, but it is not yet loaded up with government bonds from from countries that seem to be heading down the stter. That doesn't alter the fact that the division of the ECB debt portfolio may be a very painful experience in the future when/if there has to be a decision of who pays what. The real question is whether the Germans, given their painful Weimar experience of the past, will ever be willing to accept true QE to save (or prolong the pain of) the €.
DJRC said:
EskimoArapaho said:
DJRC said:
So pretty much what my dago chaps have been saying Andy. The siZe of the majority is looking around 80% on current polling!
80%; can you supply a source?Just over 80% for 'should Catalonia be a state' and 50% for full independence from Spain.
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