Is the end nigh for the Euro? [vol. 3]

[RYH64E]

Esseesse said:

RYH64E said:

jsf said:

Not so long ago? Its over 8 years since the £ was worth over $2. The average since 2008 is around 1.50

Against the Euro, the £ is currently at the average its been since 2009, it was at 1.04 at the start of 2009, far less than the current 1.16

As soon as trump was voted in, the Euro started to slide and the £ started to climb, its not good news for the EU and could be good news for the UK after 8 years of Obama who has been far more pro-EU than Trump will be.

It wasn't Trump that caused GBP to strengthen, it was the judges decision that Parliament has to have a say over Brexit. The markets are desperate for any sign that Brexit might be delayed, cancelled, or watered down.

Do we have to link to the 2015 IMF forecasts that stated that the pound was overvalued by around the amount it dropped following the referendum again?

And I guess it's just coincidence that the correction happened as the referendum results started coming in, and that GBP strengthens on any news that suggests Brexit might be delayed or softened?

[V8RX7]

Andy Zarse said:

Yes the markets despair of Brexit and that's why the FTSE100 hit record highs in the following months...

Oh wait etc.

Wasn't that because the FTSE100 are basically international companies and their stock got a whole lot cheaper when the pound plummeted.

[Escapegoat]

Austrians could dent the hopes of those looking to make the EU bigger/deeper: http://www.bbc.co.uk/news/world-europe-38075644

[Andy Zarse]

Italy and her banks again.

https://notayesmanseconomics.wordpress.com/2016/11...

I occasionally post articles by idependent economist Shaun Richards, but I have to say this one took my breath away:

"Dino de Longhi, owner of a water treatment company, says he went to Veneto Banca in 2010 for a €200,000 home loan. The bank offered €260,000 at 5 per cent on the basis that €60,000 was used to buy bank shares. But Veneto Banca has failed — at least in the eyes of its thousands of shareholders like Mr de Bortoli, who have seen the value of their shares plunge from €40.75 in 2014 to 10 cents…………At Banca Popolare di Vicenza, the share price crashed from €62.50 in 2014 to 10 cents."

Can you imagine what the FCA would say if it happened here? The directors would be locked up for years!

[Gargamel]

Andy Zarse said:

Italy and her banks again.

https://notayesmanseconomics.wordpress.com/2016/11...

I occasionally post articles by idependent economist Shaun Richards, but I have to say this one took my breath away:

"Dino de Longhi, owner of a water treatment company, says he went to Veneto Banca in 2010 for a €200,000 home loan. The bank offered €260,000 at 5 per cent on the basis that €60,000 was used to buy bank shares. But Veneto Banca has failed — at least in the eyes of its thousands of shareholders like Mr de Bortoli, who have seen the value of their shares plunge from €40.75 in 2014 to 10 cents…………At Banca Popolare di Vicenza, the share price crashed from €62.50 in 2014 to 10 cents."

Can you imagine what the FCA would say if it happened here? The directors would be locked up for years!

Perhaps Mr De Longhi could be persuaded its a long term investment ?

Puts PPI in the Rymans League of Banking Scandals..

[Digga]

Gargamel said:

Andy Zarse said:

Italy and her banks again.

https://notayesmanseconomics.wordpress.com/2016/11...

I occasionally post articles by idependent economist Shaun Richards, but I have to say this one took my breath away:

"Dino de Longhi, owner of a water treatment company, says he went to Veneto Banca in 2010 for a €200,000 home loan. The bank offered €260,000 at 5 per cent on the basis that €60,000 was used to buy bank shares. But Veneto Banca has failed — at least in the eyes of its thousands of shareholders like Mr de Bortoli, who have seen the value of their shares plunge from €40.75 in 2014 to 10 cents…………At Banca Popolare di Vicenza, the share price crashed from €62.50 in 2014 to 10 cents."

Can you imagine what the FCA would say if it happened here? The directors would be locked up for years!

Perhaps Mr De Longhi could be persuaded its a long term investment ?

Puts PPI in the Rymans League of Banking Scandals..

I'm literally staggered by this. I honestly had no idea of this practice.

I now wonder, of all the NPLs, how many are NPL principally or solely because of the bank share 'investment' part they were coerced into?

[FN2TypeR]

Is that even legal?

[Digga]

FN2TypeR said:

Is that even legal?

Not here, but then this is Italy we're talking about.

You have to also now consider, as the article discusses, that if bank's share capital was being (artificially and temporarily) propped up like this, it is very likely we'll now see many bank's share prices tanking.

[anonymous-user]

Gargamel said:

Andy Zarse said:

Italy and her banks again.

https://notayesmanseconomics.wordpress.com/2016/11...

I occasionally post articles by idependent economist Shaun Richards, but I have to say this one took my breath away:

"Dino de Longhi, owner of a water treatment company, says he went to Veneto Banca in 2010 for a €200,000 home loan. The bank offered €260,000 at 5 per cent on the basis that €60,000 was used to buy bank shares. But Veneto Banca has failed — at least in the eyes of its thousands of shareholders like Mr de Bortoli, who have seen the value of their shares plunge from €40.75 in 2014 to 10 cents…………At Banca Popolare di Vicenza, the share price crashed from €62.50 in 2014 to 10 cents."

Can you imagine what the FCA would say if it happened here? The directors would be locked up for years!

Perhaps Mr De Longhi could be persuaded its a long term investment ?

Puts PPI in the Rymans League of Banking Scandals..

It's certainly a long term investment; he's never going to sell those shares!!

[anonymous-user]

RYH64E said:

jsf said:

Not so long ago? Its over 8 years since the £ was worth over $2. The average since 2008 is around 1.50

Against the Euro, the £ is currently at the average its been since 2009, it was at 1.04 at the start of 2009, far less than the current 1.16

As soon as trump was voted in, the Euro started to slide and the £ started to climb, its not good news for the EU and could be good news for the UK after 8 years of Obama who has been far more pro-EU than Trump will be.

It wasn't Trump that caused GBP to strengthen, it was the judges decision that Parliament has to have a say over Brexit. The markets are desperate for any sign that Brexit might be delayed, cancelled, or watered down.

You really should check your facts. It hardly moved on the court ruling. It moved quicker after the US Election and has moved more in the past week or so than the first part of the month in any case.

[anonymous-user]

REALIST123 said:

RYH64E said:

jsf said:

Not so long ago? Its over 8 years since the £ was worth over $2. The average since 2008 is around 1.50

Against the Euro, the £ is currently at the average its been since 2009, it was at 1.04 at the start of 2009, far less than the current 1.16

As soon as trump was voted in, the Euro started to slide and the £ started to climb, its not good news for the EU and could be good news for the UK after 8 years of Obama who has been far more pro-EU than Trump will be.

It wasn't Trump that caused GBP to strengthen, it was the judges decision that Parliament has to have a say over Brexit. The markets are desperate for any sign that Brexit might be delayed, cancelled, or watered down.

You really should check your facts. It hardly moved on the court ruling. It moved quicker after the US Election and has moved more in the past week or so than the first part of the month in any case.

I posted this in another thread yesterday.

£ is now 8% higher against the Euro than it was early October. It was at a low of 1.0943 on October 11th, its now at 1.1798

The £ dropped 8% against the US$ over the two weeks bridging the referendum.

Since Trumps election the Euro has lost 5% against the US$.
Since Trumps election the Japanese Yen has lost 8% against the US$.
Since Trumps election the Australian $ has lost 5.5% against the US$.
Since Trumps election the UK £ has gained 1% against the US$.

[anonymous-user]

[Luther Blisset]

Digga said:

Not here, but then this is Italy we're talking about.

You have to also now consider, as the article discusses, that if bank's share capital was being (artificially and temporarily) propped up like this, it is very likely we'll now see many bank's share prices tanking.

IIRC RBS did something similar.
I don't think they were ever punished for that (except by karma).

[Likes Fast Cars]

Digga said:

I'm literally staggered by this. I honestly had no idea of this practice.

I now wonder, of all the NPLs, how many are NPL principally or solely because of the bank share 'investment' part they were coerced into?

Complete scam. As for collateral, I'd bet they were conveniently over-valuing the shares. Bloody disgrace! Of course sooner or later it caught up with them.

Almost makes the Nigerian scams look honest by comparison.

[Likes Fast Cars]

FN2TypeR said:

Is that even legal?

I think it's against the EU rules for listed companies isn't it?

At the least I would say it reeks of extremely poor governance.

[Digga]

Likes Fast Cars said:

FN2TypeR said:

Is that even legal?

I think it's against the EU rules for listed companies isn't it?

At the least I would say it reeks of extremely poor governance.

It's a desperate, stop-gap measure and now, in any case, it seems bondholders, shareholders and savers are getting haircuts in an attempt to save these institutions.

https://notayesmanseconomics.wordpress.com/

Am I right in thinking that French banks had a lot of exposure to Italian banks a while back?

[Likes Fast Cars]

Digga said:

It's a desperate, stop-gap measure and now, in any case, it seems bondholders, shareholders and savers are getting haircuts in an attempt to save these institutions.

https://notayesmanseconomics.wordpress.com/

Am I right in thinking that French banks had a lot of exposure to Italian banks a while back?

Yes there was quite a bit, probably still is. There are also quite large ops of French banks in Italy such as SocGen, BNPP, and a few others, so if problems continue to manifest in Italy there will be some impact on the larger French players.

[Digga]

Likes Fast Cars said:

Digga said:

It's a desperate, stop-gap measure and now, in any case, it seems bondholders, shareholders and savers are getting haircuts in an attempt to save these institutions.

https://notayesmanseconomics.wordpress.com/

Am I right in thinking that French banks had a lot of exposure to Italian banks a while back?

Yes there was quite a bit, probably still is. There are also quite large ops of French banks in Italy such as SocGen, BNPP, and a few others, so if problems continue to manifest in Italy there will be some impact on the larger French players.

And that, in a succinct little nutshell is going to be the biggest issue the EU and Euro have ever faced, surely?

[Murph7355]

Digga said:

And that, in a succinct little nutshell is going to be the biggest issue the EU and Euro have ever faced, surely?

There are so many big issues comparing one against the other is difficult I suspect. And many are intertwined.

Greece? Spain? Deutsche Bank? Upcoming referenda and general elections?

[Enricogto]

Digga said:

And that, in a succinct little nutshell is going to be the biggest issue the EU and Euro have ever faced, surely?

Can we, again, put things into perspective?

Veneto Banca has a balance sheet size of about 30bn € (about 80% of the Yorkshire Building society, for comparison) and has therefore hardly any systemic impact on the Italian banking sector.

What the article reports poorly, is that the practice perpetrated by the bank (and common in other EU countries but only with mutualistic banks) is slightly different. The bank won't lend you more money than needed provided you buy shares. What it will do, (and it's common practice also for RE mortgages), is to allow for better contractual conditions to the bank's shareholders (again, valid only for mutualistic-type banks). Mr De Longhi won't have been forced to buy 60k of shares (if it has, then that's unfair market practice and it will be reviewed accordingly). He will have been asked to subscribe a token amount of shares (often less than 1000 €) in order to achieve a better loan rate.