Is the end nigh for the Euro? [vol. 2]
Discussion
Mermaid said:
Haggleburyfinius said:
In fairness, this is one of, if not the most impressive thread on PH.
Well done Steffan 
Your own contributions have been most observant and stimulated discussion as have the comments of DJRC, HundredthIdiot and many others on here.
I do believe my prediction will prove correct.
The timescale depends on EU largesse lasting. Difficult to estimate in the extreme!??
The army of Ph.D.'s carrying weapon-grade laptops, fully loaded with the latest econometric software can flatten any known cyclical deficit with a 99% probability. Right? At least I am sure the merely elected representatives are convinced of their well dressed cohort's capabilities on the battlefield.
Irish said:
Steffan said:
The timescale depends on EU largesse lasting. Difficult to estimate in the extreme!??
This Autumn. Again thanks to Steffan and all the contibutors for keeping this thread going.The euro was due to collapse about 3 years ago, but a combination of the FED, EU, ECB and the complicit governments have managed to successfully grow the debt and recession to the current point.
If the ECB pulls this off and enslaves the whole of europe it will truly be a magnificent achievement for them, unparalleled in history - bigger even that the FED's overturning of the US constitution.
Globs said:
Irish said:
Steffan said:
The timescale depends on EU largesse lasting. Difficult to estimate in the extreme!??
This Autumn. Again thanks to Steffan and all the contibutors for keeping this thread going.The euro was due to collapse about 3 years ago, but a combination of the FED, EU, ECB and the complicit governments have managed to successfully grow the debt and recession to the current point.
If the ECB pulls this off and enslaves the whole of europe it will truly be a magnificent achievement for them, unparalleled in history - bigger even that the FED's overturning of the US constitution.
Irish said:
Steffan said:
The timescale depends on EU largesse lasting. Difficult to estimate in the extreme!??
This Autumn. Again thanks to Steffan and all the contibutors for keeping this thread going.Mr Bliar and Co undoubtedly copied the world leaders in the USA and reaped huge rewards. Problem is now everybody in every political party is doing it more and more and in consequence the whole media circus descends upon a particular topic, gives blanket coverage, and then moves on to the next story.
Media hype is event driven. Hence a gaggle of journalists fawns about each event that transfixes the media channels in a burst of coverage and then disappears moving on to the next big story.
The junkets and grandstanding at Davos and every EU meeting are classic examples of this modern phenomena. The politicians have achieved nothing, their only concern is huge personal aggrandisment and exposure at other peoples cost. Following the example of Mr Bliar.
Gesture politics is becoming the norm in our society. Making decisions and facing problems is a lost art for modern politicians. What they seek is personal wealth and personal security. They no longer even pretend to be concerned about the poor taxpayer.
But economic reality will force the politicians to face their incompetence in the end. The question is how long will this take?
My estimate is that there cannot be much more window dressing in Europe. The reelections of Merkel and Sarkozy are upon them. The clarity of the imminence of Greek collapse is surely forcing the end? Portugal and Spain cannot continue for long teetering on the edge of being unable to find sustainable bond rates. Italy is steadily nosediving into recession and cannot recover.
The ECB and EU can continue to throw away billions of Euros in a fire blanket coverage of lending by QE as they will short term. Longer term the reality that these 'loans' were in fact gifts will wreak a terrible consequence in the money markets as the extent and depth of the losses becomes apparent.
IMO this whole rumbling mess will collapse on itself shortly. But that is just my opinion. What I do think is certain is that the current 'strategy' in the EU of lending (giving!!) more and more money to increasingly insolvent sovereign states can only end in compete financial disaster.
A Barron's article
Germany's role in concluding Greece's long-winded debt restructuring attracts some unfavorable headlines, but overshadows an important fact: Its equities are among the best performers in Europe.
Europe's stocks have bounced up in the first few weeks of 2012: The Stoxx Europe 600 index is up 8.2% since Jan. 1, closing Friday at 264.60 points, a high for the year. But Frankfurt's benchmark DAX index has raced ahead, soaring 14.7% in the same period, and erasing almost all of its 2011 losses.
FOR INVESTORS, THERE'S A DISTINCTION between the strong, export-driven economy of Germany and those of the rest of Europe. "Germany really stands apart," says Audrey Kaplan, a portfolio manager at Federated Investors' InterContinental Fund in New York, who adds that the country's stocks are "underowned and underloved." German stocks trade at an attractive price/earnings multiple of 9.8 times, compared with 12.4 times for the U.S. market and 11 times for the MSCI World Index excluding the U.S.
Gross-domestic-product growth in Germany, Europe's largest single economy, is expected to slow from 3% in 2011 to about 0.6% this year—a contraction, but not a recession. The unemployment rate, at a 20-year low, will continue to fuel domestic consumption, and strong demand for exports will help keep the economy ticking. Weakness in the euro's value against other major currencies adds impetus by making goods produced by Germany's industrial machine—as well as in other parts of the euro zone—more competitive in overseas markets.
Despite criticism of their handling of the European crisis, German leaders have done a good job steering the country through the turmoil. "I can definitely see that they are on the right path in terms of promoting growth, and lead by example with austerity measures," says Kaplan.
The top 10 holdings of Federated Investors' InterContinental Fund include chemicals company BASF (ticker: BAS.Germany), car maker Daimler (DAI.Germany), insurer Allianz Holding (ALV.Germany) and reinsurer Munich Re (MUV2.Germany). Federated doesn't disclose target prices, but apart from any share-price gains, the stocks offer generous dividend yields: 3.6% for BASF, 4.2% for Daimler, 5.1% for Allianz and 5.9% for Munich Re.
Kaplan says her positive views on Germany are in contrast to those of other fund managers. "Most of my peers don't want to buy anything in Europe at all," she says.
Germany is keen to limit fiscal transfers as part of Greece's debt restructuring, and wants the southern European nation to implement tougher austerity to meet budget targets. Predictions of a resolution to negotiations on private-sector involvement have been wide of the mark. The latest indications are that private-sector holders of Greek government bonds now could take a haircut of 70% on their principal, more than the 50% previously agreed to. But even that could leave Greece short of its goal of debt at 120% of gross domestic product by 2020.
Germany doesn't want the European Central Bank to make concessions as part of the Greek debt restructuring, in part because the institution might be reluctant to buy bonds in the secondary market in the future.
Long-running discussions over Greece became a little more difficult last week, after Germany suggested that the European Union supervise Greece's budget, a proposition that provoked anger in Athens and found no support—publicly, at least—among other European nations. While Germany's fiscal management has its admirers, no country in the euro zone is ready to surrender economic sovereignty. Not yet, anyway.
"Clearly, the tensions are getting bigger, and the Greeks are questioning the policies that are being imposed on them," says Dario Perkins, director of global economics at Lombard Street Research in London, who thinks that Greece will leave the common currency eventually.
The Greek negotiations have broad implications and may set a precedent for other countries struggling with their debts. Portugal saw the yield on its 10-year bond rise sharply, before easing to roughly 14%, amid fears it could require another bailout or a Greek-style restructuring. The ECB's quantitative easing in December has transformed Europe's fortunes, but the euro zone's troubles are far from over.
Germany's role in concluding Greece's long-winded debt restructuring attracts some unfavorable headlines, but overshadows an important fact: Its equities are among the best performers in Europe.
Europe's stocks have bounced up in the first few weeks of 2012: The Stoxx Europe 600 index is up 8.2% since Jan. 1, closing Friday at 264.60 points, a high for the year. But Frankfurt's benchmark DAX index has raced ahead, soaring 14.7% in the same period, and erasing almost all of its 2011 losses.
FOR INVESTORS, THERE'S A DISTINCTION between the strong, export-driven economy of Germany and those of the rest of Europe. "Germany really stands apart," says Audrey Kaplan, a portfolio manager at Federated Investors' InterContinental Fund in New York, who adds that the country's stocks are "underowned and underloved." German stocks trade at an attractive price/earnings multiple of 9.8 times, compared with 12.4 times for the U.S. market and 11 times for the MSCI World Index excluding the U.S.
Gross-domestic-product growth in Germany, Europe's largest single economy, is expected to slow from 3% in 2011 to about 0.6% this year—a contraction, but not a recession. The unemployment rate, at a 20-year low, will continue to fuel domestic consumption, and strong demand for exports will help keep the economy ticking. Weakness in the euro's value against other major currencies adds impetus by making goods produced by Germany's industrial machine—as well as in other parts of the euro zone—more competitive in overseas markets.
Despite criticism of their handling of the European crisis, German leaders have done a good job steering the country through the turmoil. "I can definitely see that they are on the right path in terms of promoting growth, and lead by example with austerity measures," says Kaplan.
The top 10 holdings of Federated Investors' InterContinental Fund include chemicals company BASF (ticker: BAS.Germany), car maker Daimler (DAI.Germany), insurer Allianz Holding (ALV.Germany) and reinsurer Munich Re (MUV2.Germany). Federated doesn't disclose target prices, but apart from any share-price gains, the stocks offer generous dividend yields: 3.6% for BASF, 4.2% for Daimler, 5.1% for Allianz and 5.9% for Munich Re.
Kaplan says her positive views on Germany are in contrast to those of other fund managers. "Most of my peers don't want to buy anything in Europe at all," she says.
Germany is keen to limit fiscal transfers as part of Greece's debt restructuring, and wants the southern European nation to implement tougher austerity to meet budget targets. Predictions of a resolution to negotiations on private-sector involvement have been wide of the mark. The latest indications are that private-sector holders of Greek government bonds now could take a haircut of 70% on their principal, more than the 50% previously agreed to. But even that could leave Greece short of its goal of debt at 120% of gross domestic product by 2020.
Germany doesn't want the European Central Bank to make concessions as part of the Greek debt restructuring, in part because the institution might be reluctant to buy bonds in the secondary market in the future.
Long-running discussions over Greece became a little more difficult last week, after Germany suggested that the European Union supervise Greece's budget, a proposition that provoked anger in Athens and found no support—publicly, at least—among other European nations. While Germany's fiscal management has its admirers, no country in the euro zone is ready to surrender economic sovereignty. Not yet, anyway.
"Clearly, the tensions are getting bigger, and the Greeks are questioning the policies that are being imposed on them," says Dario Perkins, director of global economics at Lombard Street Research in London, who thinks that Greece will leave the common currency eventually.
The Greek negotiations have broad implications and may set a precedent for other countries struggling with their debts. Portugal saw the yield on its 10-year bond rise sharply, before easing to roughly 14%, amid fears it could require another bailout or a Greek-style restructuring. The ECB's quantitative easing in December has transformed Europe's fortunes, but the euro zone's troubles are far from over.
Mermaid said:
Europe's stocks have bounced up in the first few weeks of 2012: The Stoxx Europe 600 index is up 8.2% since Jan. 1, closing Friday at 264.60 points, a high for the year. But Frankfurt's benchmark DAX index has raced ahead, soaring 14.7% in the same period, and erasing almost all of its 2011 losses.
Now that's what we like to see! FTSE 100 up a handy 15% in less than 3 months and generally looking a lot more sensible. Mind you, with inflation stubborn IMO at around 5% you don't want to be left clutching fixed interest for too long.Ozzie Osmond said:
Now that's what we like to see! FTSE 100 up a handy 15% in less than 3 months and generally looking a lot more sensible. Mind you, with inflation stubborn IMO at around 5% you don't want to be left clutching fixed interest for too long.
Depends very much on what happens in Syria/Iran in the next few weeks. But yes I agree Bonds can turn around, and turn very fast.We are in a quite time in the Euro future currently. Calm before the storm.
But it will not last.
Too many unsupportable insolvent Sovereign states and a growing realisation that this cannot go on as it is.
Will it be the collapse of Greece?
Will it be the loss` of Oil to Greece and Italy?
Will the Bond rates sink Portugal or Spain?
Will it be all of them together?
Wait and see must be the Mantra.
But it will not last.
Too many unsupportable insolvent Sovereign states and a growing realisation that this cannot go on as it is.
Will it be the collapse of Greece?
Will it be the loss` of Oil to Greece and Italy?
Will the Bond rates sink Portugal or Spain?
Will it be all of them together?
Wait and see must be the Mantra.
It has enjoyed a good run.So it looks probable Greece may finaly default ultimately no one wanting to agree to draconian austerity measures for the public sector workers lasting in many cases util their career end (aprox 45yrs old in Greece!!).
It will be a similar scenario for the other indebted nations,we have however another large helping of QE (£50bn),my question is how actually does this filter through to stop the double dip,and as it is always held on to by the banks and NOT lent how does inflation come into play as a concern?
G
(does this mean we now owe £1tn + £50bn?)
It will be a similar scenario for the other indebted nations,we have however another large helping of QE (£50bn),my question is how actually does this filter through to stop the double dip,and as it is always held on to by the banks and NOT lent how does inflation come into play as a concern?
G
(does this mean we now owe £1tn + £50bn?)
No good news out of Europe. Financial markets are all up on the last 12 months.
No Financiers and Fund Managers do live in the real world, honestly
Seriously, even if they think it will all sort itself out, in the interim the results from companies have been distinctly underwhelming the economic data from Europe also pretty poor.
So how do these analysts and traders who are complicit on setting prices actually feel that this market is anywhere near as valuable as the share prices are indicating.
I do hope the volumes are small because WHEN the defaults start happening the value of equities is going to fall through the floor.
No Financiers and Fund Managers do live in the real world, honestly
Seriously, even if they think it will all sort itself out, in the interim the results from companies have been distinctly underwhelming the economic data from Europe also pretty poor.
So how do these analysts and traders who are complicit on setting prices actually feel that this market is anywhere near as valuable as the share prices are indicating.
I do hope the volumes are small because WHEN the defaults start happening the value of equities is going to fall through the floor.
I don't see what negotiations are about. Just send a list of demands, one way or another they will balance their budget regardless of if they agree to measures or not.
Greece has been bankrupt or in serious difficulty many times over the last 200 years:
1825, 1826 and 1830 – Borrowed from London, then a raft of countries.
1843 Austerity to return funds borrowed but wasn’t done until 1847 when we sent a war ship as our collection agency.
1854 to 1857 they supported the Russian in the Crimean war, the British and French occupied Piraeus and only withdrew on the promise debt would be repaid.
1879 to 1890 they borrowed lots off France, in 1893 they failed to repay.
1897 the Greeks are beaten by Ottomans at war. The Greeks where told to repay debt owed.
1916 they borrowed again for military but that stopped in 1922 and again they were unable to repay.
1928 to 1931 Greece borrow again and goes bankrupt in 1932.
After WW2 the U.S. gave substantial aid but from the 60’s to the mid 70’s U.S. private capital replaces government aid.
In turn private capital dwindled and was replaced with EU money from 1974 and of course by 2011 Greece was again ready to go bankrupt.
The miracle perhaps is that people are still willing to lend to Greece at any cost.
Greece has been bankrupt or in serious difficulty many times over the last 200 years:
1825, 1826 and 1830 – Borrowed from London, then a raft of countries.
1843 Austerity to return funds borrowed but wasn’t done until 1847 when we sent a war ship as our collection agency.
1854 to 1857 they supported the Russian in the Crimean war, the British and French occupied Piraeus and only withdrew on the promise debt would be repaid.
1879 to 1890 they borrowed lots off France, in 1893 they failed to repay.
1897 the Greeks are beaten by Ottomans at war. The Greeks where told to repay debt owed.
1916 they borrowed again for military but that stopped in 1922 and again they were unable to repay.
1928 to 1931 Greece borrow again and goes bankrupt in 1932.
After WW2 the U.S. gave substantial aid but from the 60’s to the mid 70’s U.S. private capital replaces government aid.
In turn private capital dwindled and was replaced with EU money from 1974 and of course by 2011 Greece was again ready to go bankrupt.
The miracle perhaps is that people are still willing to lend to Greece at any cost.
QE is the BoE buying (electronic money) loan notes from the banks etc giving said 'banks' liquidity. They should add this to the M2 money supply (fractional reserves) and cause supply demand (CPI inflation) and growth but they buy stuff like US Treasuries instead (asset inflation).
It is not sovereign debt.
It is not sovereign debt.
speedy_thrills said:
I don't see what negotiations are about. Just send a list of demands, one way or another they will balance their budget regardless of if they agree to measures or not.
Greece has been bankrupt or in serious difficulty many times over the last 200 years:
1825, 1826 and 1830 – Borrowed from London, then a raft of countries.
1843 Austerity to return funds borrowed but wasn’t done until 1847 when we sent a war ship as our collection agency.
1854 to 1857 they supported the Russian in the Crimean war, the British and French occupied Piraeus and only withdrew on the promise debt would be repaid.
1879 to 1890 they borrowed lots off France, in 1893 they failed to repay.
1897 the Greeks are beaten by Ottomans at war. The Greeks where told to repay debt owed.
1916 they borrowed again for military but that stopped in 1922 and again they were unable to repay.
1928 to 1931 Greece borrow again and goes bankrupt in 1932.
After WW2 the U.S. gave substantial aid but from the 60’s to the mid 70’s U.S. private capital replaces government aid.
In turn private capital dwindled and was replaced with EU money from 1974 and of course by 2011 Greece was again ready to go bankrupt.
The miracle perhaps is that people are still willing to lend to Greece at any cost.
^This. Greece has been bankrupt or in serious difficulty many times over the last 200 years:
1825, 1826 and 1830 – Borrowed from London, then a raft of countries.
1843 Austerity to return funds borrowed but wasn’t done until 1847 when we sent a war ship as our collection agency.
1854 to 1857 they supported the Russian in the Crimean war, the British and French occupied Piraeus and only withdrew on the promise debt would be repaid.
1879 to 1890 they borrowed lots off France, in 1893 they failed to repay.
1897 the Greeks are beaten by Ottomans at war. The Greeks where told to repay debt owed.
1916 they borrowed again for military but that stopped in 1922 and again they were unable to repay.
1928 to 1931 Greece borrow again and goes bankrupt in 1932.
After WW2 the U.S. gave substantial aid but from the 60’s to the mid 70’s U.S. private capital replaces government aid.
In turn private capital dwindled and was replaced with EU money from 1974 and of course by 2011 Greece was again ready to go bankrupt.
The miracle perhaps is that people are still willing to lend to Greece at any cost.
IIRC they have been in default for something ridiculous like 75% of their country's indepenence.
1point7bar said:
QE is the BoE buying (electronic money) loan notes from the banks etc giving said 'banks' liquidity. They should add this to the M2 money supply (fractional reserves) and cause supply demand (CPI inflation) and growth but they buy stuff like US Treasuries instead (asset inflation).
It is not sovereign debt.
OK so how exactly does said QE actually (instead of idealy)bolster the economy,IMO the bankers are playing hardball for this first sector,I am just looking for ANY eveidence of Bank dervied aid for buisness and individuals from this source.It is not sovereign debt.
Call me cynical but the children are IMO running the sweetshop.
Digga said:
This.
IIRC they have been in default for something ridiculous like 75% of their country's indepenence.
Beggars the question why is the cumalative economic know how of PH superior to that of the ENTIRE EU?IIRC they have been in default for something ridiculous like 75% of their country's indepenence.
Would anyone lend them money or go into buisness with such a country?
Sadly this isnt just retoric this has had a tragic cost for the Greek people chasing a dream that sadly passed long ago will now cost the whole nation and others dear!
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