Is the end nigh for the Euro? [vol. 3]
Discussion
DJRC said:
Normally the random bloke off the net line is a viable come back. To me, on this thread, on this subject - esp when my profile still says Zurich! - then no. As most on here will confirm whoring myself around Europe, living in said places and reporting back on what's happening across the Manche is kinda what I do. Steffan knows the Lucca prices as he has a gaff out there, Garg does a fair bit in Zurich and Zarse knows his Dutch s
t also. We ARE the first hand knowledge whether you like it or not.
Budapest, Tallinn, Bratislava and Dusseldorf here t also. We ARE the first hand knowledge whether you like it or not.
Budapest was 'relatively' cheap for a UK citizen being paid in GBP but expensive for locals.
Tallinn was very cheap for a UK citizen being paid in GBP but very expensive for locals.
Bratislava is an odd one. Live in the town centre and some of the prices can start getting very high. Much much higher than the standard Slovak can even possibly afford. Move over the bridge to Petrzalka and the prices fall significantly.
Dusseldorf was slightly pricey but more or less comparable to UK prices but then the Germans earn fairly well.
fblm said:
Snoggledog said:
Tallinn
You lucky bd. The Chinese problem is a concern for everyone now I think. If China struggles then so will the rest of the world. "Events dear boy events" to quote the experienced Macmillan replying to an inexperienced political underling asking what could go wrong for such a well founded government.
I would be interested to hear the opinions of others on how difficult this coud get. Could be a game changer?
Steffan said:
I would be interested to hear the opinions of others on how difficult this could get. Could be a game changer?
Personally I don't think so. The Shanghai index took off like a rocket when the Chinese got the idea that there was money to be made in stocks, it went from 2000ish to over 5000 in about a year and has now fallen back to 3000ish. I'm no expert but I don't think there are any major structural problems behind the crash, just the usual greed driven boom and bust.On a side note, GBP has fallen about 8 cents against the EUR in the last month and risen slightly against the USD, for once both movements suit me.
RYH64E said:
Steffan said:
I would be interested to hear the opinions of others on how difficult this could get. Could be a game changer?
Personally I don't think so. The Shanghai index took off like a rocket when the Chinese got the idea that there was money to be made in stocks, it went from 2000ish to over 5000 in about a year and has now fallen back to 3000ish. I'm no expert but I don't think there are any major structural problems behind the crash, just the usual greed driven boom and bust.On a side note, GBP has fallen about 8 cents against the EUR in the last month and risen slightly against the USD, for once both movements suit me.
Firstly, China thinks it can dictate equity prices, and they're learning the facts of life the hard way.
Secondly, the trail leads back to our old friend QE and how it interfered with the proper functioning of markets. Let us not forget that QE was initially only supposed to be a "temporary tactic" to get us over the credit crunch but - wrongly in my view - became a permanent strategy and has led to addiction. From 9th March 2009 – the day QE was introduced - the FTSE 100 went up 100.5% (from 3542 to 7103). The S&P 500 went up 214% (676.7 to 2129). So it's not surprising we are seeing some profit taking now, just before interest rates rise (and that's another story!).
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
fblm said:
Snoggledog said:
Tallinn
You lucky bd. She wants to go to New York but I think it'd be dreadful at that time of year, packed to bursting point - it doesn't appeal!
Andy Zarse said:
Agree pretty much on all points. This is not the start of a sudden massive sell-off. I think a lot of what we are seeing goes back to two things:
Firstly, China thinks it can dictate equity prices, and they're learning the facts of life the hard way.
Secondly, the trail leads back to our old friend QE and how it interfered with the proper functioning of markets. Let us not forget that QE was initially only supposed to be a "temporary tactic" to get us over the credit crunch but - wrongly in my view - became a permanent strategy and has led to addiction. From 9th March 2009 – the day QE was introduced - the FTSE 100 went up 100.5% (from 3542 to 7103). The S&P 500 went up 214% (676.7 to 2129). So it's not surprising we are seeing some profit taking now, just before interest rates rise (and that's another story!).
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
I posted very similar numbers on the QE stuff a couple of pages back, but I think the interest rate thing has been as or more significant. You would expect equity prices to rise when interest rates fall and vice versa. In fact almost every cut in rates was met with a jump in share prices. It is a normal check and balance. Though it will now be somewhat ironic if the market correction now delays the first rises in interest rates for a while. Firstly, China thinks it can dictate equity prices, and they're learning the facts of life the hard way.
Secondly, the trail leads back to our old friend QE and how it interfered with the proper functioning of markets. Let us not forget that QE was initially only supposed to be a "temporary tactic" to get us over the credit crunch but - wrongly in my view - became a permanent strategy and has led to addiction. From 9th March 2009 – the day QE was introduced - the FTSE 100 went up 100.5% (from 3542 to 7103). The S&P 500 went up 214% (676.7 to 2129). So it's not surprising we are seeing some profit taking now, just before interest rates rise (and that's another story!).
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
Secondly I posted yesterday on the Greek stock market losing 5% of value. Ok so the UK has retreated from 6400 to 5900 yesterday and will recover to 6000 or so or may be higher in a week, and that was bad. But the Greek market has been falling for a while now. 12 months ago it was 1200 pts, yesterday it was 566. That is a very significant reallocation of capital going on right there with real consequences for suture pensions, investments etc.
The Euro as a currency is safe enough for now, I don't see any substantive threat in the near term, but the Greek people have no where to turn to, no recovery and a bankrupt/failed state to live with. I honestly don't know what might happen in the elections
Gargamel said:
Andy Zarse said:
Agree pretty much on all points. This is not the start of a sudden massive sell-off. I think a lot of what we are seeing goes back to two things:
Firstly, China thinks it can dictate equity prices, and they're learning the facts of life the hard way.
Secondly, the trail leads back to our old friend QE and how it interfered with the proper functioning of markets. Let us not forget that QE was initially only supposed to be a "temporary tactic" to get us over the credit crunch but - wrongly in my view - became a permanent strategy and has led to addiction. From 9th March 2009 – the day QE was introduced - the FTSE 100 went up 100.5% (from 3542 to 7103). The S&P 500 went up 214% (676.7 to 2129). So it's not surprising we are seeing some profit taking now, just before interest rates rise (and that's another story!).
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
I posted very similar numbers on the QE stuff a couple of pages back, but I think the interest rate thing has been as or more significant. You would expect equity prices to rise when interest rates fall and vice versa. In fact almost every cut in rates was met with a jump in share prices. It is a normal check and balance. Though it will now be somewhat ironic if the market correction now delays the first rises in interest rates for a while. Firstly, China thinks it can dictate equity prices, and they're learning the facts of life the hard way.
Secondly, the trail leads back to our old friend QE and how it interfered with the proper functioning of markets. Let us not forget that QE was initially only supposed to be a "temporary tactic" to get us over the credit crunch but - wrongly in my view - became a permanent strategy and has led to addiction. From 9th March 2009 – the day QE was introduced - the FTSE 100 went up 100.5% (from 3542 to 7103). The S&P 500 went up 214% (676.7 to 2129). So it's not surprising we are seeing some profit taking now, just before interest rates rise (and that's another story!).
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
Secondly I posted yesterday on the Greek stock market losing 5% of value. Ok so the UK has retreated from 6400 to 5900 yesterday and will recover to 6000 or so or may be higher in a week, and that was bad. But the Greek market has been falling for a while now. 12 months ago it was 1200 pts, yesterday it was 566. That is a very significant reallocation of capital going on right there with real consequences for suture pensions, investments etc.
The Euro as a currency is safe enough for now, I don't see any substantive threat in the near term, but the Greek people have no where to turn to, no recovery and a bankrupt/failed state to live with. I honestly don't know what might happen in the elections
AstonZagato said:
I think the key to tapering or reversing QE will be the stock market (absent other forces such as a resurgence in inflation at the CPI level). Central banks will use their stock market as the "canary in the mineshaft" and only taper as much as it will allow.
Yes, I can see the QE daftness may resume, here and in the US. I'm less convinced another shot in the arm for asset prices is a good thing.Edited by Digga on Tuesday 25th August 13:59
Digga said:
AstonZagato said:
I think the key to tapering or reversing QE will be the stock market (absent other forces such as a resurgence in inflation at the CPI level). Central banks will use their stock market as the "canary in the mineshaft" and only taper as much as it will allow.
Yes, I can see the QE daftness may resume, here and in the US. I'm less convinced another shot in the arm for asset prices is a good thing.Mermaid said:
Digga said:
AstonZagato said:
I think the key to tapering or reversing QE will be the stock market (absent other forces such as a resurgence in inflation at the CPI level). Central banks will use their stock market as the "canary in the mineshaft" and only taper as much as it will allow.
Yes, I can see the QE daftness may resume, here and in the US. I'm less convinced another shot in the arm for asset prices is a good thing.(And thanks for correcting my spelling.)
Digga said:
Agreed.
(And thanks for correcting my spelling.)
(And thanks for correcting my spelling.)
When stocks were going up super fast (& ahead of earnings), the Fed did not step in (though Greenspan tried to).
If stocks drop, it should stand aside but it has not in recent years. I think the Fed is likely to this time for it creates a stocks & a bond bubble.
Andy Zarse said:
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
Some of which? Its perhaps one of the biggest ironys of the ongoing european train wreck, that the Euro has become the funding currency of choice leading to it responding positively to bad news, even when that bad news emanates from Europe! Crazy marketfblm said:
Some of which? Its perhaps one of the biggest ironys of the ongoing european train wreck, that the Euro has become the funding currency of choice leading to it responding positively to bad news, even when that bad news emanates from Europe! Crazy market
Wife of a friend on FB is an economics journo somewhere (I'm not even going to name a country on here!) in Europe and was wondering how gold, normally the 'safe haven' was not doing better. I've mischievously advised her classic cars are the new gold. 
fblm said:
Andy Zarse said:
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
Some of which? Its perhaps one of the biggest ironys of the ongoing european train wreck, that the Euro has become the funding currency of choice leading to it responding positively to bad news, even when that bad news emanates from Europe! Crazy marketRYH64E said:
fblm said:
Andy Zarse said:
As to the Euro, yes it has (happily for some of us) been strengthening, some of which I suspect is carry trade.
Some of which? Its perhaps one of the biggest ironys of the ongoing european train wreck, that the Euro has become the funding currency of choice leading to it responding positively to bad news, even when that bad news emanates from Europe! Crazy marketEdited by anonymous-user on Tuesday 25th August 17:15
Axionknight said:
fblm said:
Snoggledog said:
Tallinn
You lucky bd. She wants to go to New York but I think it'd be dreadful at that time of year, packed to bursting point - it doesn't appeal!
If you want an astonishing curry then try a place called Chakra in Tallinn.
If you're after Christmas markets than Bratislava is very good but very busy at times.
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