What Happens If, Europe ?

[FCP Bob 1,312]

literally every day this week has set a new euro-era record for yields in one country or another. this really cannot continue. they are going to have to do something soon, and I don't think the markets will react well if it is anything short of, "we're reforming our central bank, and we're going to issue debt collectively," aka every bit of ammo they have left.I'm gonna be taking a hard look at stocks if they get crushed again today.

There's a chance that the politicians and people in charge of the ECB are too stubborn to do what's needed. If they don't like you say use every possible tool everything is going to blow up real good.

[mrdannyg 274]

literally every day this week has set a new euro-era record for yields in one country or another. this really cannot continue. they are going to have to do something soon, and I don't think the markets will react well if it is anything short of, "we're reforming our central bank, and we're going to issue debt collectively," aka every bit of ammo they have left.I'm gonna be taking a hard look at stocks if they get crushed again today.

Good idea. There might be downside, but come on. The most obvious and profitable stock pick every dentist has is Apple, which has a forward P/E below 10. There is some upside coming.Disclosure: I have 100% of my very very small portfolio in Apple.

[FCP Bob 1,312]

Europe Can’t Move Fast Enough to Halt Crisis

[Balloon guy 158]

Death of the Euro?

[FCP Bob 1,312]

Death of the Euro?

Yup, the Euro is probably beyond saving which it turns out was inevitible since a common currency like this without fiscal integration and a lender of last resort can't work.

[FCP Bob 1,312]

Good analysis of the situation in Europe from The Economisthttp://www.economist.com/node/21540259?fsr...ffallingmasonry

[SAM_Hard8 50]

Yup, the Euro is probably beyond saving which it turns out was inevitible since a common currency like this without fiscal integration and a lender of last resort can't work.

What happens with the US trade position, are we better off with the euro being gone, mixed bag or hard to say?

[FCP Bob 1,312]

What happens with the US trade position, are we better off with the euro being gone, mixed bag or hard to say?

The fall out if the Euro Zone breaks up is going to be really really bad for everybody.It isn't out of the question that a combination of the European problems, fiscal tightening in the US and a very possible hard landing for the property bubble in China could make 2012-13 worse than 2008 was in terms of a World Wide recession.

[Balloon guy 158]

The fall out if the Euro Zone breaks up is going to be really really bad for everybody.It isn't out of the question that a combination of the European problems, fiscal tightening in the US and a very possible hard landing for the property bubble in China could make 2012-13 worse than 2008 was in terms of a World Wide recession.

How can we blame Obama?Nevermind, he'll get the blame for being there,

[akoff 0]

How can we blame Obama?

we can blame him just like we can blame a person who spends 100% or more of their income and then wants a bailout to keep his house...fail.

[strategy 4]

seems like today's move is mildly inflationary and makes the european apocalypse slightly less likely. the markets are pleased, but the 6mo charts of stocks like BAC, MS, GS, et al give a sense of how far we have to go to be at pre-crisis levels.

[Balloon guy 158]

[FCP Bob 1,312]

seems like today's move is mildly inflationary and makes the european apocalypse slightly less likely. the markets are pleased, but the 6mo charts of stocks like BAC, MS, GS, et al give a sense of how far we have to go to be at pre-crisis levels.

Inflation is what Europe needs right now. What happened today is probably just another band aid but it should help in the short term to stem the panic a little bit.http://www.theglobeandmail.com/report-on-b...article2254698/

Central banks moved to ease the strain the European debt crisis is putting on the global financial system by lowering the rate they charge for emergency access to U.S. dollars. In a joint announcement Wednesday, the Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of England, the Bank of Canada and the Swiss National Bank said the move is necessary to “ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.” Starting next week, the central banks will drop the rate they charge to exchange U.S. dollars for other currencies by half a percentage point. The new charge for “swaps” will be half a percentage point above the U.S. dollar overnight index swap, or OIS. A swap is essentially a loan backed by collateral. The OIS market is where banks go to borrow dollars or other currencies on a short-term basis

[hblask 1]

Inflation is what Europe needs right now. What happened today is probably just another band aid but it should help in the short term to stem the panic a little bit.http://www.theglobeandmail.com/report-on-b...article2254698/

Inflation is probably the only thing that can save the US as well as Europe. This is what I was talking about in that response to that clear thinking economist a few days ago. Fiat currency is great if you want to encourage fiscal irresponsibility that keeps pushing off the day of reckoning, passing your problems on to the next generation. It's what the US is doing, it's what Europe is doing. But that bubble can only be inflated so long. Like the housing bubble, inflated by the same fiat currency, the "big government" bubble will come crashing down, and it will be way worse than the housing bubble, and way worse than the continuous corrections of a commodity based currency.These inflationary policies will hide the problems a few more years, maybe a decade, but each year that it is delayed makes the crash that much worse.

[akoff 0]

Inflation is probably the only thing that can save the US as well as Europe. This is what I was talking about in that response to that clear thinking economist a few days ago. Fiat currency is great if you want to encourage fiscal irresponsibility that keeps pushing off the day of reckoning, passing your problems on to the next generation. It's what the US is doing, it's what Europe is doing. But that bubble can only be inflated so long. Like the housing bubble, inflated by the same fiat currency, the "big government" bubble will come crashing down, and it will be way worse than the housing bubble, and way worse than the continuous corrections of a commodity based currency.These inflationary policies will hide the problems a few more years, maybe a decade, but each year that it is delayed makes the crash that much worse.

i never try to be an economic expert but this certainly seems logical, i would assume it will be dismissed by some smart guy with a pretty chart.

[FCP Bob 1,312]

Very very good article from the NY Times on why Germany and the German people fear inflation so much. It's a combination of their history and the fact that Germany has a very high savings rate. I learned a few things reading this article.http://www.nytimes.com/2011/12/02/world/eu...s&seid=auto

[hblask 1]

Very very good article from the NY Times on why Germany and the German people fear inflation so much. It's a combination of their history and the fact that Germany has a very high savings rate. I learned a few things reading this article.http://www.nytimes.com/2011/12/02/world/eu...s&seid=auto

Good article, and it shows the problem pretty well: printing money harms the responsible to bail out the irresponsible. I personally got caught up in the cheap money mania pre-bubble, and inflation would save my ass right now, in a big way. It's a horrible policy that would help me personally.

[FCP Bob 1,312]

Good article, and it shows the problem pretty well: printing money harms the responsible to bail out the irresponsible. I personally got caught up in the cheap money mania pre-bubble, and inflation would save my ass right now, in a big way. It's a horrible policy that would help me personally.

LOL, yes that's what a reasonable person who understands economics should take after reading that article.

[ahosang 0]

Good analysis of the situation in Europe from The Economisthttp://www.economist.com/node/21540259?fsr...ffallingmasonry

Yo Bob, you make very good posts in this thread(although the business of lender-of-last-resort is overdone). Your posts and links tend to focus on economic viewpoints etc. Here are a couple that focus on politics:More to Europe than the stats

Compounding this challenge, the European Union has incorporated societies on its periphery that never have accepted the principle that states must be transparent, a problem exacerbated by EU regulations. Southern and Central Europeans always have been less impressed by the state than Germans, for example. This is not simply about paying taxes but about a broader distrust of government, something deeply embedded in history......The level of indebtedness and the ownership of the debt of European banks and countries are as murky as who held asset-backed securities in the United States. Yet there is a precise plan designed to solve a problem that can't be quantified or allocated......

Italy isn't really worried??

Still, Monorchio adds, Italy has a kind of wealth that is hard to explain to hedge-fund managers in London. "Italian families own real estate worth €4.832 trillion, of which only 7 percent is burdened with mortgages," he explains. "Every family owns one, two or three houses -- and we're supposed to be part of the PIIGS?""With about 20 percent of this wealth," he adds, "we could pay the €950 billion by which we exceed the Maastricht criteria for government debt."

NATIONALISM is persistent!

But the financial crisis had its greatest impact in Europe, where it is triggering a generational shift. Since 1991, the idea of an integrated Europe has been a driving force of the global economy. As mentioned, it also has been presented as an implicit alternative to the United States as the global center of gravity.........This system was created in a world in which European politics had been declared in abeyance. Germany was occupied. The Americans provided security and inter-European fighting was not allowed. Now, the Americans are gone, the Germans are back and European international politics are bubbling up to the surface.

[FCP Bob 1,312]

All good points ahosang.Trying to force countries that are so different into one mold is proving to be pretty darn near impossible.

[ShakeZuma 585]

All good points ahosang.Trying to force countries that are so different into one mold is proving to be pretty darn near impossible.

would you say that could also possibly be true about states within a country?

[strategy 4]

would you say that could also possibly be true about states within a country?

threat of recession is much less serious than threat of guns and murder and whatnot

[ShakeZuma 585]

I THOUGHT I TOLD YOU TO GO OUTSIDE

[ahosang 0]

would you say that could also possibly be true about states within a country?

depends on the country, and existing cleavages(financial, ethnic/cultural, geographical). China is obvious(Xinjiang and Tibet), Russian Federation too, and so on. Several African countries too.Be careful though if you over-state the similarities because national consciousness and regional though.If you're thinking of the US, forget it. You guys aren't ready for splitting no matter what state you're from(this can change in the future of course). Language - note Quebec was francophone hence only realistic province to bid for secession in Canada - hence shared 'stories'.And the national consciousness is held together by the most pervasive television and popular culture(see Benedict Anderson's book Imagined Communities - again the power of national 'stories').

[ShakeZuma 585]

you lost me at cleavage.but really, I wasn't insinuating secession just the difficulties faced when trying to apply one size fits all governing to states of very different demographics much like henry always talks about. but that's the last I'll be discussing of it as I don't care to carry on a conversation since, again, I've already moved on to cleavage.