Is the end nigh for the Euro? [vol. 3]
Discussion
Pan Pan Pan said:
Interestingly George Osborne`s visit to France today to discuss the UK`s request for changes, seems to be meeting with quite a different attitude, to what was in place only a few weeks ago.
It seems that even France might finally have woken up to the fact, that if the UK continues to be treated the way it has been since `its' admission to the club, it could well vote to leave, taking its second net largest annual injection of cash into EU coffers with it, (and one of the EU`s best markets) Interesting times lay ahead.
Indeed! Very interesting times!It seems that even France might finally have woken up to the fact, that if the UK continues to be treated the way it has been since `its' admission to the club, it could well vote to leave, taking its second net largest annual injection of cash into EU coffers with it, (and one of the EU`s best markets) Interesting times lay ahead.
My knowledge of Chinese affairs is less then minimal.
I will therefore make no other comment but post this Forbes `note which does seem well informed:
http://www.forbes.com/sites/oliverbarron/2015/07/0...
Seems trouble is brewing.
Steffan said:
Indeed! Very interesting times!
My knowledge of Chinese affairs is less then minimal.
I will therefore make no other comment but post this Forbes `note which does seem well informed:
http://www.forbes.com/sites/oliverbarron/2015/07/0...
Seems trouble is brewing.
Thanks for that My knowledge of Chinese affairs is less then minimal.
I will therefore make no other comment but post this Forbes `note which does seem well informed:
http://www.forbes.com/sites/oliverbarron/2015/07/0...
Seems trouble is brewing.
Mermaid said:
Steffan said:
Indeed! Very interesting times!
My knowledge of Chinese affairs is less then minimal.
I will therefore make no other comment but post this Forbes `note which does seem well informed:
http://www.forbes.com/sites/oliverbarron/2015/07/0...
Seems trouble is brewing.
Thanks for that My knowledge of Chinese affairs is less then minimal.
I will therefore make no other comment but post this Forbes `note which does seem well informed:
http://www.forbes.com/sites/oliverbarron/2015/07/0...
Seems trouble is brewing.
I do admire your knowledge of the markets!!Here's another one?
http://mashable.com/2015/07/27/shanghai-china-stoc...
Bit of a challenge methinks??
http://mashable.com/2015/07/27/shanghai-china-stoc...
Bit of a challenge methinks??
David McWilliams on the money again.
It's also worth taking the free trial for his globalmacro360 site. His daily notes are fantastic and he has a good one on the Chinese situation up recently.
Anyway...
http://www.davidmcwilliams.ie/2015/07/27/british-p...
It's also worth taking the free trial for his globalmacro360 site. His daily notes are fantastic and he has a good one on the Chinese situation up recently.
Anyway...
http://www.davidmcwilliams.ie/2015/07/27/british-p...
DMcW said:
I am on Shaftesbury Avenue in London, quite shocked. I have just put my card into an ATM to get £200 and realise that it has cost me nearly €300. I was aware that the British currency was rocketing, but this exchange rate difference is extraordinary and is brilliant news for Irish exporters.
We should do a deal with the British, fix the exchange rate here and simply transport Britain’s industrial base to Ireland and hit the restart button.
Of course, I am joking, but there is a startling divergence between the British economy, our biggest trading partner, and the eurozone economy that Official Ireland pretends is our biggest trading partner.
Employment in Britain is growing for a start. As George Osborne claimed in his recent budget, Yorkshire has created more jobs than France.
Thankfully, the Irish economy is not a European economy in any meaningful sense. We are an Anglo-American economy with a Franco-German currency grafted onto us.
Despite politicians and senior civil servants going over and back to Brussels all the time, we are actually part of the Anglosphere which maps a giant global arch from Dublin to London, across the Atlantic through North America and down to Australia and New Zealand.
This is our world. This is where we trade, where our investments come from, where our people live. It is an interlinked web of culture, language and family.
Granted, there are some significant differences, but if we are honest, these differences are dwarfed by commonalities.
Economically, when the Anglosphere does well, we do well. Period.
In the past five years, Ireland’s economy has been dragged upwards by Britain and the US. Ireland’s youth have sought opportunities in booming Australia, Britain, Canada and the US. We head to Boston or Birmingham, not Brussels to look for work. These are the facts.
We are the only eurozone country that actually does more trade outside the eurozone than within it.
But this type of anomaly describes much of Irish economic policy – it’s an economic policy made up without much reference to the actual economy.
However, thankfully for us, our major trading partner – Britain and the US – are motoring and they have dragged Ireland out of the mire and put us on the road to recovery.
Ahead of the election, the government’s line is that EU-imposed austerity sorted things out and led to some ‘magic’ recovery.
This is not only untrue, but economically impossible. In reality we do €1 billion a week worth of trade with Britain and its growth drives our growth.
As we head into 1916 anniversaries, we should be down on bended knee thanking the Brits for picking us up and dusting us down in the past few years.
I know this is unfashionable and not pro-EU; even after all these years, there is still an anti-London narrative of Official Ireland.
So what happens next in the British economy is crucial for Ireland and is more important than what happens in Germany, France or any other eurozone country.
On the surface, Britain is flying. Retail sales are booming, unemployment is half our rate, the budget deficit is falling and the housing market is strong. London continues to suck in enormous amounts of capital from the rest of the world.
But there are some problems that we in Ireland should like the British to address, not least because their prosperity is our prosperity.
What gives economies their underlying strength is if they are productive and this means if the people and the capital used in the economy are being used to their best and most productive.
Here Britain has a problem. Productivity has been falling for a long time there. Declining productivity has been a problem across the western world in the post-financial crisis period, but it seems to be a particularly severe problem for Britain.
In the league of the world’s seven most advanced nations, Britain is behind every one except Japan.
This means that Britain is not getting the most out of its workers and its capital and you can see this in the fact that British wages are not rising and the fact that it continues to run large current account deficits.
Some people argue that the reason British workers haven’t been as productive as their continental or American counterparts over the past few years is that British business never regarded the slowdown in the economy post the 2008 crash as permanent.
Rather than fire people straight away at the first sign of a wobble in demand, British employers kept their workers. This explains why unemployment in Britain didn’t increase nearly as much as expected after the financial crash.
This implied that companies seem to have preferred to retain workers but have worked them less hard, hence the decline in productivity.
In the years ahead, there needs to be massive investment in Britain – public and private – to push productivity upwards. The British government knows this and so too do British companies.
In fact, British companies have among the lowest ratio of debts to profits in the world, so there is no capital constraint on British corporations.
In a world of mobile capital there can be few more attractive destinations for innovative and high-tech investment.
Britain has four of the top ten universities worldwide, generating world-class academic research. This is evidenced in the disproportionate number of British-based Nobel prize winners in science.
With the City, Britain has the deepest capital market in the world, dwarfing New York. This implies there is lots of capital in Britain looking for a home.
All told, Britain is well placed for the years ahead. For this we should be grateful because – despite the rhetoric of 1916 and all that stuff – our two economies are still profoundly linked. We forget that at our peril.
We should do a deal with the British, fix the exchange rate here and simply transport Britain’s industrial base to Ireland and hit the restart button.
Of course, I am joking, but there is a startling divergence between the British economy, our biggest trading partner, and the eurozone economy that Official Ireland pretends is our biggest trading partner.
Employment in Britain is growing for a start. As George Osborne claimed in his recent budget, Yorkshire has created more jobs than France.
Thankfully, the Irish economy is not a European economy in any meaningful sense. We are an Anglo-American economy with a Franco-German currency grafted onto us.
Despite politicians and senior civil servants going over and back to Brussels all the time, we are actually part of the Anglosphere which maps a giant global arch from Dublin to London, across the Atlantic through North America and down to Australia and New Zealand.
This is our world. This is where we trade, where our investments come from, where our people live. It is an interlinked web of culture, language and family.
Granted, there are some significant differences, but if we are honest, these differences are dwarfed by commonalities.
Economically, when the Anglosphere does well, we do well. Period.
In the past five years, Ireland’s economy has been dragged upwards by Britain and the US. Ireland’s youth have sought opportunities in booming Australia, Britain, Canada and the US. We head to Boston or Birmingham, not Brussels to look for work. These are the facts.
We are the only eurozone country that actually does more trade outside the eurozone than within it.
But this type of anomaly describes much of Irish economic policy – it’s an economic policy made up without much reference to the actual economy.
However, thankfully for us, our major trading partner – Britain and the US – are motoring and they have dragged Ireland out of the mire and put us on the road to recovery.
Ahead of the election, the government’s line is that EU-imposed austerity sorted things out and led to some ‘magic’ recovery.
This is not only untrue, but economically impossible. In reality we do €1 billion a week worth of trade with Britain and its growth drives our growth.
As we head into 1916 anniversaries, we should be down on bended knee thanking the Brits for picking us up and dusting us down in the past few years.
I know this is unfashionable and not pro-EU; even after all these years, there is still an anti-London narrative of Official Ireland.
So what happens next in the British economy is crucial for Ireland and is more important than what happens in Germany, France or any other eurozone country.
On the surface, Britain is flying. Retail sales are booming, unemployment is half our rate, the budget deficit is falling and the housing market is strong. London continues to suck in enormous amounts of capital from the rest of the world.
But there are some problems that we in Ireland should like the British to address, not least because their prosperity is our prosperity.
What gives economies their underlying strength is if they are productive and this means if the people and the capital used in the economy are being used to their best and most productive.
Here Britain has a problem. Productivity has been falling for a long time there. Declining productivity has been a problem across the western world in the post-financial crisis period, but it seems to be a particularly severe problem for Britain.
In the league of the world’s seven most advanced nations, Britain is behind every one except Japan.
This means that Britain is not getting the most out of its workers and its capital and you can see this in the fact that British wages are not rising and the fact that it continues to run large current account deficits.
Some people argue that the reason British workers haven’t been as productive as their continental or American counterparts over the past few years is that British business never regarded the slowdown in the economy post the 2008 crash as permanent.
Rather than fire people straight away at the first sign of a wobble in demand, British employers kept their workers. This explains why unemployment in Britain didn’t increase nearly as much as expected after the financial crash.
This implied that companies seem to have preferred to retain workers but have worked them less hard, hence the decline in productivity.
In the years ahead, there needs to be massive investment in Britain – public and private – to push productivity upwards. The British government knows this and so too do British companies.
In fact, British companies have among the lowest ratio of debts to profits in the world, so there is no capital constraint on British corporations.
In a world of mobile capital there can be few more attractive destinations for innovative and high-tech investment.
Britain has four of the top ten universities worldwide, generating world-class academic research. This is evidenced in the disproportionate number of British-based Nobel prize winners in science.
With the City, Britain has the deepest capital market in the world, dwarfing New York. This implies there is lots of capital in Britain looking for a home.
All told, Britain is well placed for the years ahead. For this we should be grateful because – despite the rhetoric of 1916 and all that stuff – our two economies are still profoundly linked. We forget that at our peril.
Good link; DMcW has excelled with that analysis.
I think the reluctance to lose good staff - and conversely the flexibility and loyalty shown to firms by staff during the crunch - is a key strength to the UK economy. I have no doubt that, to get productivity (I hesitate in using the word, because to me, I'm sure it's a statistical fudge) up, there will need to be investment, but I do also get the impression that there's a lot of capital 'parked', waiting to be allocated to profitable investments.
I think the reluctance to lose good staff - and conversely the flexibility and loyalty shown to firms by staff during the crunch - is a key strength to the UK economy. I have no doubt that, to get productivity (I hesitate in using the word, because to me, I'm sure it's a statistical fudge) up, there will need to be investment, but I do also get the impression that there's a lot of capital 'parked', waiting to be allocated to profitable investments.
I'd been going along with the easy view of hard working northern europeans vs lazy southerners, except if this from the Adam Smith Institute is correct - The Euro is driving Finland to depression - it's not so one sided.
TL;DR - Non Euro = recovery, Euro = stagnation
TL;DR - Non Euro = recovery, Euro = stagnation
Art0ir said:
David McWilliams on the money again.
It's also worth taking the free trial for his globalmacro360 site. His daily notes are fantastic and he has a good one on the Chinese situation up recently.
Anyway...
http://www.davidmcwilliams.ie/2015/07/27/british-p...
Excellent article
As an aside, SNP supporters would do well to heed this article, playing Braveheart will have unpleasant consequences.It's also worth taking the free trial for his globalmacro360 site. His daily notes are fantastic and he has a good one on the Chinese situation up recently.
Anyway...
http://www.davidmcwilliams.ie/2015/07/27/british-p...
Excellent article
The Alex cartoon on the Chinese Crisis and interest rates.
http://www.alexcartoon.com/index.cfm?cartoons_id=4...
http://www.alexcartoon.com/index.cfm?cartoons_id=4...
LongQ said:
The Alex cartoon on the Chinese Crisis and interest rates.
http://www.alexcartoon.com/index.cfm?cartoons_id=4...
How True! How True!http://www.alexcartoon.com/index.cfm?cartoons_id=4...
On the basis I have no useful knowledge about the Chinese conundrum (my critics might shorten that a bit!) I throw the floor open to all those who do have an opinion about the probable consequences worldwide of such events in the biggest economy. In the world.
Not looking well controlled is jt? Where will it lead?
Over to those who have some knowledge of this matter!
Edited by Steffan on Tuesday 28th July 18:04
I recall a programme on tele about 12 months ago, looking at China's massive building programme, and how it was being done with equally massive sums of borrowed money.
About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
Cobnapint said:
I recall a programme on tele about 12 months ago, looking at China's massive building programme, and how it was being done with equally massive sums of borrowed money.
About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
Yes, colossal shadow banking input there and, a lot of what was built was useless:About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
a.) unfit for purpose; see man-eating escalator story this week, or the numerous tales of toppling tower blocks, or
b.) too expensive for sensible commercial rental returns, as most flats were about 10x average wages
As I've said before, there's been a huge miss-allocation of Chinese capital. Even that which has not been diverted out of the country to buy real estate in London and NY etc., or spunked-away on the Chinese stock market has been diverted from profitable and productive investment.
Cobnapint said:
I recall a programme on tele about 12 months ago, looking at China's massive building programme, and how it was being done with equally massive sums of borrowed money.
About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
You cannot believe the scale of development in the larger Chinese cities, it is absolutely mind boggling, when you see it up close. The really interesting part is when you start inquiring about occupancy rates in these monstrous buildings, entire floors empty, 30 percent occupancy is not unusual. About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
There is no way the credit to build those edifices, can be paid back from IPRE / CRE income or capital appreciation.
Digga said:
Yes, colossal shadow banking input there and, a lot of what was built was useless:
a.) unfit for purpose; see man-eating escalator story this week, or the numerous tales of toppling tower blocks.
Great. They're supposed to be building one of our two new nuclear power stations.........and the French the other!a.) unfit for purpose; see man-eating escalator story this week, or the numerous tales of toppling tower blocks.
LOL.
QuantumTokoloshi said:
Cobnapint said:
I recall a programme on tele about 12 months ago, looking at China's massive building programme, and how it was being done with equally massive sums of borrowed money.
About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
You cannot believe the scale of development in the larger Chinese cities, it is absolutely mind boggling, when you see it up close. The really interesting part is when you start inquiring about occupancy rates in these monstrous buildings, entire floors empty, 30 percent occupancy is not unusual. About a quarter of that money was coming from 'unofficial' sources ie, not proper banks.
It now sounds like things are coming home to roost with a Gordon Brown type boom and bust.
There is no way the credit to build those edifices, can be paid back from IPRE / CRE income or capital appreciation.
Cobnapint said:
Digga said:
Yes, colossal shadow banking input there and, a lot of what was built was useless:
a.) unfit for purpose; see man-eating escalator story this week, or the numerous tales of toppling tower blocks.
Great. They're supposed to be building one of our two new nuclear power stations.........and the French the other!a.) unfit for purpose; see man-eating escalator story this week, or the numerous tales of toppling tower blocks.
LOL.
A family member was involved in a reactor acquisition project, with bids from France, USA, China, Russia and India. The most impressive lot for him with technology, safety and construction know how, was our French cousins.
QuantumTokoloshi said:
The most impressive lot for him with technology, safety and construction know how, was our French cousins.
That thought alone doesn't fill me with confidence. I would have thought that given the same budget they would be equally similar. Russia makes incredibly advanced military equipment even if their private companies aren't lavished with the same level of funding.Edited by fido on Wednesday 29th July 11:25
QuantumTokoloshi said:
A family member was involved in a reactor acquisition project, with bids from France, USA, China, Russia and India. The most impressive lot for him with technology, safety and construction know how, was our French cousins.
Yup.As a result of successive UK Govt's allowing our own high level of expertise in Nuc Power to largely evaporate over the past 20+ years, it is indeed out gallic cousins across the channel that are who you'd want to go to rather than anyone else (as much as it pains me to say it
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