Eurozone debt crisis

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CaerMyrddin
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I take the liberal view that any intervention (and this one is unfair IMO) on economy will cause distortion and not the social view of it, although I do considerer myself a social liberal and that is also a concern.

http://en.wikipedia.org/wiki/Social_liberalism

This is a controversial issue (if governmentes should interveen), but in fact you can account how much you will pay for these measures.
hgodden
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If one bank is allowed to fail though then it would have huge knock on effects for that country (and others).... people and businesses who have money in that bank and others who lend to any bank that goes under could find themselves in huge amounts of trouble. Whatever political ideals you have, it would just cause a catastrophe!
Iron
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Indeed.

And if Ireland itself defaults on its debts, that could have ramifications far beyond its border.

It might make the other so-called PIGS wonder why they're bothering with austerity measures. The institutions which lent Ireland money could be in deep trouble, with possible ramifications for the wider banking sector. And Britain may suddenly find itself with a new influx of migrants...

Jeff
hgodden wrote:If one bank is allowed to fail though then it would have huge knock on effects for that country (and others).... people and businesses who have money in that bank and others who lend to any bank that goes under could find themselves in huge amounts of trouble. Whatever political ideals you have, it would just cause a catastrophe!
Iron
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Indeed.

It brings to mind the World War I analogy of lions lead by donkeys...
oddstrader wrote:how the decisions of so few cause pain to so many :!:
Iron
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According to the BBC's business editor Robert Peston:

'A couple of fairly substantial economies, Ireland and Portugal, are teetering on the brink of collapse'.

From http://www.bbc.co.uk/blogs/thereporters ... risis.html

Jeff
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CaerMyrddin
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If one bank is allowed to fail though then it would have huge knock on effects for that country (and others).... people and businesses who have money in that bank and others who lend to any bank that goes under could find themselves in huge amounts of trouble. Whatever political ideals you have, it would just cause a catastrophe!
I understand what was told then and I understand it is a fair pont.

Well, I'm just not sure about it and much could be made to limit the effects of doing something different. There are funds that insure the cash you deposited and the governments could create temporary credit lines to keep things running smoothly.

Now, let's face it if you lended money to a bank that is in trouble, the minimum you have to do is securize that asset. And it's a private bussiness between privates ;)

Well, it wasn't the option made and one can only make wild guesses, but you can see clearly that what was done was to sweep the huge debts that some banks had and they were transferred to public debt. Let's face it: the money was missing somewhere and what was made was to move this massive whole.

As someone once said, there is only microeconomy and bad economy :lol:

It's really hard to say what's for the best...

'A couple of fairly substantial economies, Ireland and Portugal, are teetering on the brink of collapse'.
Not so substantial, but in my opinion if the EU economy lifts, we should be ok. A chance to buy debt from these countries? ;)
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Euler
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Ireland to get bail out

http://www.bbc.co.uk/news/business-11782356

Next country to come under pressure is probably portugal.

The thing that amazes me about this crisis is that everybody knew property was in a bubble but still people were happy to lend against highly inflated bricks rather than invest in the real economy. It was always going to end in tears. Central banks don't count asset inflation in their inflation figures but there is obviously a case for doing so or at least taking steps to counter obvious bubbles.
Last edited by Euler on Thu Nov 18, 2010 10:09 am, edited 1 time in total.
Iron
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Indeed.

And I fear that Britain may yet go through what Ireland is experiencing.

I'd say that Britain's housing market is at 'fear' in this model of a bubble, whereas Ireland's is at 'despair':

http://trendfollowing.com/images/casey.gif

Jeff
Euler wrote:
The thing that amazes me about this crisis is that everybody new property was in a bubble but still people were happy to lend against highly inflated bricks rather than invest in the real economy.
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Euler
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I was appointed a fair while ago to help manage the Irish arm of a company and I remember seeing people who had property in Dublin. They bought ages ago then suddenly saw prices skyrocket beyond belief. The secretary of the firm left after she cashed in €1m of property that she bought for a pittance a decade earlier.

I kept an eye on the market and saw net yields turn negative. At that point it was screaming major problems from every angle but people just continued to chase up the prices. It was doomed for disaster. It was like the late 80's in the UK only more extreme.
Last edited by Euler on Thu Nov 18, 2010 11:11 am, edited 1 time in total.
Iron
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I was thinking recently what the common factor is in all types of market, whether we're talking about Forex or the 3:30 at Wolverhampton.

I think it is this: bubbles form and bubbles burst.

It's like humans fail to learn from history, and keep making the same mistakes...

Jeff
Euler wrote:I was appointed a fair while ago to help manage the Irish arm of a company and I remember seeing people who had property in Dublin. They bough ages ago then suddenly saw prices skyrocket beyond belief. The secretary of the firm left after see cashed in €1m of property that she bought for a pittance a decade earlier.

I kept an eye on the market and saw net yields turn negative. At that point it was screaming major problems from every angle but people just continued to chase up the prices. It was doomed for disaster. It was like the late 80's in the UK only more extreme.
PeterLe
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Joined: Wed Apr 15, 2009 3:19 pm

I saw exactly the same.
I spent a fair amount of time in Dublin in recent years. One of my accounts was a large Irish bank and I seem to recall one of my colleagues who lived in Dublin say that his house had gone up by about 300% in a matter of years!
Even he said at the time that it was a time bomb waiting to go off.

There were massive investments and a lot of UK Tech companies based part of their operations in Dublin to soak up the graduate market (not so readily available around the M4 corridor). The enterprise park at Dublin was booming not so long ago.

Like we see on a daily basis in the markets we concentrate on; I guess it is just a market correction at the end of the day?
andyfuller
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Pat Rabbitte gives Pat Carey a piece of his mind on RTE Prime Time:

http://www.youtube.com/watch?v=zqx4E5tq ... e=youtu.be
Iron
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Dominique Strauss-Kahn urges leaders to cede more sovereignty to EU: http://www.telegraph.co.uk/finance/fina ... to-EU.html

"Don't be afraid. Come into my web," said the spider to the fly...

Jeff
Bet Angel
Bet Angel
Bet Angel
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Iron
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Good to see that our tabloids aren't the only ones in the world capable of careful and considered analysis... :)

Jeff
Bet Angel wrote:Tabliod response to the bailout.

http://www.vexnews.com/news/11669/usele ... n-have-it/

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