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 Post subject: Christmas comes early
PostPosted: Mon Nov 28, 2011 4:31 pm 
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What more can one say? They really are stuffed.

Commenting on the failure of German to sell its quota of euro bonds, The Hill blog observes: "This is all so painful to watch, mostly because it is a true indictment of the final breakup of the eurozone, but when it breaks up what are the implications for Europe, world trade and the good ol' USA? All we know is that the short-term impact of a breakup will not be good".

View full article here

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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 5:13 pm 

Joined: Wed Dec 08, 2010 2:22 pm
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Well, the Beeb is going with the rise in the stock markets on the back of the Dec 9 meeting and the string-puller, Wolfgang Schaeuble, is busy, busy, busy.

They are still of the opinion that they can and will contain it.

Irrespective, of course, as to how it affects Europeon tax payers. Or maybe they just don't give a shit.


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 5:23 pm 
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There is already pain, especially among the young & the very old...any move away from the current status quo, I thinkk it is generally agreed, will increase that pain in the short term.
The longer term is one of Rummy's 'known unknowns'.
If the Euro & the EU are to omplode then let it be done quickly so that we can the sooner pick up the pieces.
"Go with god, but for god's sake go!"

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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 5:39 pm 

Joined: Sun Aug 29, 2010 8:50 pm
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But still the exchange rates do not reflect this. The pound is at 1.1625 today against the Euro and 1.5542 against the dollar. The dollar has strengthened against the Euro and the pound of late, but there is no collapse.


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 5:56 pm 
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Robertm wrote:
But still the exchange rates do not reflect this. The pound is at 1.1625 today against the Euro and 1.5542 against the dollar. The dollar has strengthened against the Euro and the pound of late, but there is no collapse.


The markets have their own rules and tempo ... how much of the trading will be computer driven?

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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 6:01 pm 

Joined: Wed Mar 14, 2007 11:26 am
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AE-P's piece is covering the speculation that the US might step in. A real possibility, or the latest of speculations that are generated every few days to fend off the-end-is-here from crystallising in peoples' minds ?


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 6:10 pm 
Quote:
But still the exchange rates do not reflect this. The pound is at 1.1625 today against the Euro and 1.5542 against the dollar. The dollar has strengthened against the Euro and the pound of late, but there is no collapse.
The dollar and sterling are both weak, the latter having devalued by about a quarter since 2008. It's the poor health of those two currencies that convinces people that the euro is strong. It's not, it's merely being compared to other weak currencies.

If you compare the euro against a solid currency, such as the Swiss franc, you get a truer picture of the zero's health and trajectory: http://www.xe.com/currencycharts/?from= ... HF&view=5Y


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 6:32 pm 

Joined: Thu Apr 27, 2006 4:51 pm
Posts: 163
Re the US stepping in.
Maybe yes,maybe no.

1) US Fed chairman Bernake has never met a bank he didn't want to bail out.
2) The Obama Administration is stuffed full of academic types who have much in common w/the EU "leadership",and would be more than willing to help anything that would aid in creating their One World beliefs.
3) It might actually work,for a while,which is as long as most politicians think.

4) Inflation is really starting to kick in in the US. There is zero popular support for bailing out other people when the US is in bad economic shape.
4A) There's a simulation the San Francisco Fed has made available letting one act as the fed Chairman. Everyone who has run it who uses Quantitative Easing ends up w/horrendous inflation in Yr 3. The US is in yr 2 of QE and the real inflation rate is very close to the rate in the computer sim.
5) Think the Germans are unhappy about bailing out fellow Europeans? Wait til Americans struggling in the recoveryless Recession hear they're going to have to go further in debt so Greeks can retire at 60 and Spanish banks don't lose money on bad real estate loans.
6) Obama can kiss his re-election good-bye w/a Euro bail-out and he wants another term too much to do so.
After all,this is the Administration that thought "leading from behind" was a grand idea.


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 7:48 pm 

Joined: Thu Sep 22, 2005 11:55 pm
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Location: USA
I read an interesting comment somewhere this weekend (possibly here). It raised the question...
If the Euro collapses how long would it take, and how much would it cost, to revert to DMs, Drachmas, etc.?

Between physical limitations in printing and minting and the need to change Lord knows how many computer programs, banking machines, etc. it seems that it would take a long time and cost a whole lot. Who would buy into this and what would "the people" think?

I can't help but feel that this is the next global catastrophe after WWII.

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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 9:02 pm 

Joined: Wed Dec 08, 2010 4:25 pm
Posts: 1032
Jeremy Warner is continuing the gloom over at the DT.This is especially remarkable as he has long been a fan of the eurozone and the European project in general.He had written some rather positive pieces as recently as this summer.

Now he is like a man possessed with a new conviction,prophesising the destruction of the modern day temple that makes Ezekiel seem tame.

Quote:
. For those who prefer more scary assessments, here's the OECD's "worst case scenario", by which it means a disorderly breakup of the eurozone.

If everything came to a head, with governments and banking systems under extreme pressure in some or all of the vulnerable countries, the political fall-out would be dramatic and pressures for euro area exit could be intense. The establishment and likely large exchange rate changes of the new national currencies could imply large losses for debt and asset holders, including banks that could become insolvent. Such turbulence in Europe, with the massive wealth destruction, bankruptcies and a collapse in confidence in European integration and cooperation, would most likely result in a deep depression in both the exiting and remaining euro area countries as well as in the world economy.

In the OECD's opinion, there is only a small probability of this occurring. Actually, I would have thought this is fast becoming the most likely scenario, since there is zero evidence of Continental policymakers grasping the true enormity of the danger they are in.


http://blogs.telegraph.co.uk/finance/je ... ro-crisis/

Who needs Ambrose amymore?


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 10:08 pm 
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This has been the only outcome for months if not years.

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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 10:53 pm 

Joined: Wed Dec 08, 2010 4:25 pm
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Talking of Ambrose, he is giving the story of a US led bailout some legs today.It just might be mad enough to work...well for a few more years till the eurozone spends all that money and is left penniless yet again.We are really about to find out what being between a hard rock and a hard place is like.

http://www.telegraph.co.uk/finance/comm ... aster.html

Though Ambrose thinks there might be an alternative,....if only Germany would leave the eurozone...but of course that would mean admitting that the project is finished.Merkel has to decide to make a dash to escape armeggedon or go down with the ship.....tick tock.

edit....apologies to Richard did not see the above link in your post :oops:


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 11:07 pm 
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RAENORTH wrote:
Robertm wrote:
But still the exchange rates do not reflect this. The pound is at 1.1625 today against the Euro and 1.5542 against the dollar. The dollar has strengthened against the Euro and the pound of late, but there is no collapse.


The markets have their own rules and tempo ... how much of the trading will be computer driven?



I watched a DVD film last night called Margin Call, loosely based on Lehman's, and it showed that it's all computer generated with alogarithms (don't know if spelled right) it seems a lot of this guesswork is done by physicists that are employed. For someone who really understand how the numbers work it's a good film. It certainly amazed me when one of the traders turned out to be a rocket scientist.


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 11:14 pm 

Joined: Wed Dec 08, 2010 4:25 pm
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rosie wrote:
RAENORTH wrote:
Robertm wrote:
But still the exchange rates do not reflect this. The pound is at 1.1625 today against the Euro and 1.5542 against the dollar. The dollar has strengthened against the Euro and the pound of late, but there is no collapse.


The markets have their own rules and tempo ... how much of the trading will be computer driven?



I watched a DVD film last night called Margin Call, loosely based on Lehman's, and it showed that it's all computer generated with alogarithms (don't know if spelled right) it seems a lot of this guesswork is done by physicists that are employed. For someone who really understand how the numbers work it's a good film. It certainly amazed me when one of the traders turned out to be a rocket scientist.


Physisists and mathmeticians are the requirement now,.."quants" as they are called.The sheer number of trades is beyond the human mind....some trades changing over in milliseconds.The proposed transaction tax was aimed at these frequent trades...apparently they can cause volatility if left unchecked.

Bit like autopilot on a plane,it will do a better job than a human....but in an emergency it doesnt really care if the plane crashes.It has no "skin" in the game PDT_Armataz_02_11


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 Post subject: Re: Christmas comes early
PostPosted: Mon Nov 28, 2011 11:20 pm 
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Rosie,

I'm not familiar with the film but those fellows are called 'quants' (quantitative analysyts), mostly hired for their mathematical abilities - hence the attraction of these positions to physicists and others with those skills.

Here's a wiki link: http://en.wikipedia.org/wiki/Quantitative_analyst


Whoops! I see Vincent beat me to it.

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