end of the European Union...

[Crypto Crude]

Im hearing some pretty scary things about the EU and the debt problems going on...
anyone got any views?

Seems like the theme for this year is EU related...
hope we hold ok,
lots of standout stocks to buy...
:cool:
.^sc

[Skol]

Yes, it won't happen.

Human beings get themselves in some fixes all right but they have an uncanny habit of getting themselves out of them. The Euro is making an orderly retreat against the USD and it won't be easy in the Eurozone but they'll muddle through it one way or another.

I think the USD will approach 1:1 with the Euro, good place to go for a vacation instead of being ripped off all the time in Europe.

[Pumice]

Its unlikely IMO.
Although I see some European banks (UniBank) are puting in warnings in thier disclosure statements specifically abut the risk of the reintroduction of national currencies in one or more countries, but only in dire circumstances would there be an abandonment of the EUR.

Agree with Skol the EUR is likely to get hit and the USD strenghen. (NFP result was very good this morning, US unemployment was expected to be 8.7% but came in at 8.5%)

[fungus pudding]

Yes, it won't happen.

Human beings get themselves in some fixes all right but they have an uncanny habit of getting themselves out of them. The Euro is making an orderly retreat against the USD and it won't be easy in the Eurozone but they'll muddle through it one way or another.

I think the USD will approach 1:1 with the Euro, good place to go for a vacation instead of being ripped off all the time in Europe.


Yeah, cos in Europe they only have holidays. Gotta go to U.S. for vacations. :D :t_up: :D

[gazprom1]

Im hearing some pretty scary things about the EU and the debt problems going on...
anyone got any views?

Seems like the theme for this year is EU related...
hope we hold ok,
lots of standout stocks to buy...
:cool:
.^sc

Hey SC,

Seasons Greetings. My view, for what it is worth, is that the EU will remain in some form or another. There may be some adjustment in the members or not but I am with Skol in believing they will muddle through somehow. Germany has remained strong and appears committed. If we have some more positive economic numbers out of the US this will assist the EU in recovering. There is no doubt that they have a mountain of debt and issues to deal with - too many member states lack the will to reduce spending.

Asia, and China more particularly, is what I am focussed on given most of my equity investments are in Aussie. If China can navigate its way through inflation/ spending and still poduce reasonable growth figures we could be looking at an ok year. Chinas economic numbers are coming off a much higher base that even 3 years ago. Cautious optimism is where I sit right now.

My glass is half full.:)

[shasta]

Im hearing some pretty scary things about the EU and the debt problems going on...
anyone got any views?

Seems like the theme for this year is EU related...
hope we hold ok,
lots of standout stocks to buy...
:cool:
.^sc

The UK, Germany & France were against this from the start, so if it fell over it would screw, Greece, Italy, Ireland, Spain & Portugal.

The Germans would prefer the **** to hit the fan, & for other countries to sort there own affairs

I'd be more worried about China's growth slowing down, Japan's rebuild & where the US is heading than Europe.

[macduffy]

Germany is the key here. The EU has been good for German industry and I expect that they will fight to keep the core of the stonger countries intact, even if a few weaker ones need to be "let go". I don't really think that will happen but that the EU will manage to muddle through another year of crises.

But who knows?

[HIDDENGEM]

Seasosn greetings to all.

Lot of players wanted to dump US dollar in the recent past. In my opinion it was a wrong decision. US dollar can go up further. In the next wave both NZD and AUD can come down.

Alas, the solution to the euro crisis isn’t simple and it isn’t imminent.

The euro crisis can be worsen before a solution is put in place, but, there will be a solution, maybe within five months. Definitely we can keep some hope

I strongly believe in some point both POUND AND EURO can go up together with their stock markets.

I think it is better to keep crisis proof assets as well in our portfolio. People will always will drink, eat, travel, take medicine and will wear cloths

Despite recessions and different crisis some currencies and sectors can outperform others.

[stanace]

Seasosn greetings to all.

Lot of players wanted to dump US dollar in the recent past. In my opinion it was a wrong decision. US dollar can go up further. In the next wave both NZD and AUD can come down.

Alas, the solution to the euro crisis isn’t simple and it isn’t imminent.

The euro crisis can be worsen before a solution is put in place, but, there will be a solution, maybe within five months. Definitely we can keep some hope

I strongly believe in some point both POUND AND EURO can go up together with their stock markets.

I think it is better to keep crisis proof assets as well in our portfolio. People will always will drink, eat, travel, take medicine and will wear cloths

Despite recessions and different crisis some currencies and sectors can outperform others.

And will always have to live somewhere.

[Hoop]

Im hearing some pretty scary things about the EU and the debt problems going on...
anyone got any views?

Seems like the theme for this year is EU related...
hope we hold ok,
lots of standout stocks to buy...
:cool:
.^sc

Yes I have a view after having a cautious eye on Europe for a while now and it's different to the media version. It's long and sorry it will create reader fatigue.

SIZE matters when it comes to a country in dire straits.

Some other ducks to line up to make a perfect anarchy storm are:-
Recession
Government and Public service overindebtiness..Cut back of non money making vital system control areas.
Weakened Governments due to their people's very negative views to severe austerity plans.
A financial crisis coming at the height of a business cycle...people perceive big businesses creaming it at their expense, suffering and hardship

Economic Size a major factor with other trading nations
European union's economic size is 20% bigger than 1st placed USA followed in 2nd place by China (less than 1/2 the size of USA) closely followed by Japan Germany and France (20% the size of USA) are in 4th and 5th place. UK and Italy are similar size in 7th and 8th and in 12th place is Spain (similar size to Australia and 2/3rds the size of the UK) http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29

Notice no mention of Greece that's because it is a small economic power...and I have no doubts from my research...it will leave the EU maybe not now but within 5 years..why?... its got a laid back welfare culture and this lifestyle is entrenched for the last hundred or so years and is at odds with the work efficient countries such as Germany Netherlands etc ....the Greeks will not take kindly to any austerity demands from the likes of Germany.


My problem child is Spain a large economic power which has seen a successful Anarchy in some peoples lifetime.

Anarchy raises fear in the general masses of anti-system ultra left wing nutters taking control usually by Military force.. they enforce closed (protective) country economics (anti-globialisation) Nationilise large global organisations, so to lower the risk of global power retaliation threat and stop the flow of money out of the country. Nationalising the Key essential companies such as communications, power water,Policing, Data processing companies, money tranfer companies, banks, etc....yep those Ultility companies that some here have posted as investor (shareholders) safe havens. For the record ..Ultilities are laggers and the are perceived as safe haven until the panic sets in then they fall worse than other sectors , this happens when a higher porportion of middle class citizens can't pay their bills and the country's systemic control breaks down (hard to take a third of the country's population to court for unpaid bills ...eh??).

Anarchy usually gets triggered around the 25% unemployment rate. and some signs are: the hatred towards those with good jobs on high salaries, the usual antiness against landlords in any property area but mostly the slum area ...... and the well to do high society group....the focus of riots towards destruction of property mostly in the central business districts, Public Buildings Government Offices the affluent unprotected suburbs, the slum areas,....Hmmmm did I see a poster infer property as a safe haven

Anarchy bad? ..It is to the rich, big businesses, people employed by big global businesses and to the rich and powerful high society folk..
Anarchy OK... with the unemployed the poor and the lower economic suffering society.
Basically it depends on how wealthy the population is a whole...therefore Anarchy signs appear during tough times such as Depressions.
Anarchy appeals to those think big business or Unpopular Goverments (with tough austery plans) are sucking the life out of the ordinary folk....and the creation of community group owned and driven smaller businesses becomes very appealing.

Nah..this won't happen

Unfortunately it will at some in time...remember "History repeats"... The French and Russian Revolution being the most famous anarchy events.
The most interesting and surprising rare successful Anarchy event was the Spanish Civil War in 1936 led by Franco and lasted into the 1960's.

So I personally have been watching the hot spot areas France Spain and those fringe countries (ex Russia) Greece where Archacy still has recent History and remembered by some older folk.
There is a lot of anti-globalisation feeling (an anarchy sign) because it is seen as upsetting some of these counties that still have strong traditional cultures. Distributed Wealth holds Anarcacy at bay...a large wealth and income gap and mass unemploment plants the ananarcy seeds.
This is a link to a Google chart showing the unemployment rate of the EU countries http://www.google.co.nz/publicdata/explore?ds=z8o7pt6rd5uqa6_&met_y=unemployment_rate&idim=country:gr&fdim_y=seasonality:sa&dl=en&hl=en&q=unemployment+rate+in+greece#ctype=l&strail=false&bcs=d&nselm=h&met_y=unemployment_rate&fdim_y=seasonality:sa&scale_y=lin&ind_y=false&rdim=country&idim=country:gr:es:fr:de:it:nl:uk:ie&ifdim=country&hl=en&dl=en note:... Spains high unemployment rate this is my worry...OK Greece ditto and the outer fringe (ex communist blocs) all together combined is another worry.

Have a play with this interactive chart and tick some other countries such as the high (ex eastern bloc and the low stable countries such as Norway Austeria etc

My Conclusions:

In my View EU Austery measures in these type Countries could be adding petrol to the EU crisis fire. EU powers of be have to tread very carefully..and take time to think alternative strategies...the downside is they have run out of time and there are no alternative strategies left bar printing heaps of Euros and inflicting heavy damage to the Golden Geese (Germany, Scandanavia Switzland Austria)...they have run out of road to kick this can down.

I think this EU crisis is very complex and changing one variable will create another crisis...a bit like a Hydra a mythological Sea monster... you cut off its head only to see two grow back in its place ...rather ironic..I Greek myth???

Food for thought.....London burning 2011 many of the identified 1500 rioters were middle class citizens with good well to do jobs.
............................Wall St Sit-ins around the world surprisingly resistant and popular by many.

[drillfix]

Great to see you back Hoop.

And yep thats one heck of a monster post, but Love it, keep them coming.

Also, great interactive unemployment chart, I wonder how often that gets updated or is it current all the time.

Back to the post, some excellent points indeed and that sure is public sentiment and as much as these politicians or economists say there are plans, they are only fabricating and planning on finding out how can they get people to pay for it.

Ahh well, IMO the real time of a known crisis is when you then see Lynch Mobs controlling the Anarchy with Action.

Something at times in some countries I would say it would be very warranted, IMO :ohmy: but that's just me.

Good to see ya back, now how about your take on the ASX thread? LOL

[tricha]

Im hearing some pretty scary things about the EU and the debt problems going on...
anyone got any views?

Seems like the theme for this year is EU related...
hope we hold ok,
lots of standout stocks to buy...
:cool:
.^sc

You must have read this article Shrewdy, yes we are on the edge, hence why I have sold some of my loved stocks. If it happens, Mr Market will take no prisioners.

Soros: Euro Crisis More Serious than the Crash of 2008By editor (http://wallstreetpit.com/author/editor) Jan 6, 2012, 6:07 AM Author's Website

A collapse of the euro — currently the greatest threat to global economic health — and break-up (http://wallstreetpit.com/23337-is-the-breakup-of-the-euro-and-the-eu-imminent) of the European Union would have catastrophic consequences for the global financial system because of inter-connectedness, Business Line (http://www.thehindubusinessline.com/industry-and-economy/article2777983.ece?homepage=true&ref=wl_home) newspaper cited billionaire investor George Soros as saying.
“Today, the euro is potentially endangering the political cohesion of the European Union….Certain inadequacies in designing the [currency] have led to the euro-zone crisis that looms large over world economies” Soros said at an interactive session in the south Indian city of Hyderabad.
“If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system.”
The euro-zone crisis is “more serious and more threatening than the crash of 2008″, the Economic Times reported, quoting Soros.
Soros said that some European countries have to adopt more austerity measures to narrow imbalances between “creditor and the debtor countries”.
Paris-based OECD warned several weeks ago that the collapse of the EU currency could send the world’s advanced economies into a severe recession, dragging EMs with them into the mire.

[Lizard]

. ... BTW rumour has it that the ECB is buying stakes in helicopter related companies ... ;)

This has me intrigued, along with Halebop's recent post (http://www.sharetrader.co.nz/showthread.php?6971-All-Ords-Index&p=364577&viewfull=1#post364577) on another thread.

Without intending slur to the importance of either yourself or HB in these things, I am genuinely curious as to where you both get your rumours? I have searched every corner of the net that I can think of without coming up with anything other than the seemingly ubiquitous American belief that the Eurozone will break up (in one way or other).... so, sans sarcasm, where do Aucklanders get better rumours???

[POSSUM THE CAT]

lIZARD My opinion is they make there own rumors to suit there needs

[Financially dependant]

The other way to look at it...... is there is no other solution...

[Halebop]

This has me intrigued, along with Halebop's recent post (http://www.sharetrader.co.nz/showthread.php?6971-All-Ords-Index&p=364577&viewfull=1#post364577) on another thread.

Without intending slur to the importance of either yourself or HB in these things, I am genuinely curious as to where you both get your rumours? I have searched every corner of the net that I can think of without coming up with anything other than the seemingly ubiquitous American belief that the Eurozone will break up (in one way or other).... so, sans sarcasm, where do Aucklanders get better rumours???

A short piece on CNBC, I think on the 3rd, maybe the 4th of January. They referred to it as rumour, hence so did I.


lIZARD My opinion is they make there own rumors to suit there needs

You got me their PtC. Rather than expressing an opinion I was trying to simultaneously move the US Market, the ASX and European debt markets via a single post on Sharetrader. Now that I'm nicked, my days of international financial crime are clearly over. Lesson learnt.

[upside_umop]

I'm not sure it will be the end of the EU, as the EU is more than just the "Euro." Remember, NZ has suffered as a consequence of the "EU" in 1973 when Britain essentially joined a prior form of it and it chopped the price and volume of our exports essentially overnight. Given it's been around in some form or another for quite a while, I think the EU will continue, and they will still be protectionist to try to act like a large economy (and why not??!!)

However, like most others, I don't think the EU will survive as it is today. Members will leave/be forced to leave as it just doesn't offer the flexibility for countries in economic distress to rebalance (think Ireland). Further, Germany/Netherlands reap the rewards when other countries are in trouble through a "weighted" exchange rate, but don't seem to want to help out or seem very reluctant to (when in fact it is their duty to...the other countries are suffering as a consequence of their success...)

The only way it could work is if each member state had exactly the same political & economic laws. Sure, they currently have targets, for example inflation and deficits but the factors which influence these can be different such as taxes and retirement age (which I cannot understand why they're allowed to be different!) These differences in the political and economic environment creates economic distortions and ultimately crises.

My two cents. Interesting topic.

[janner]

Lizard ..

Helicopter Ben !!!.. Repeating itself in Europe..

Well that was what I took out of Belg's post.

[elZorro]

Here's the inside info from "Chris", a shareholder/principal in a hedge fund advisory business. The Germans (and the French) are very interested in keeping the Euro going, as it provides their exporters with a weak exchange rate.

Other comparative data.

http://www.dismal.com/dismal/article_free.asp?cid=227374&src=dismal-freelunch-&tid=1160F6A7-4619-4273-BD5D-E7519DED10C0

[upside_umop]

Exactly Ez, the exchange rates for trade surplus members are artificially lower than what they should be and hence they obliged to help the other members. It's a 'weighted' exchange rate which benefits some and is the detriment to others in terms of exporting.

However, there is a flipside to this....an incentive to consume (basically anti-export). But we all know where thats got a few members.

[janner]

Of course the Euro will survive..

Only for those countries willing to take orders from Berlin ..

And only for those countries acceptable to Berlin..

There will be many weeping Grandmothers through out Europe. That it has come to this..

Thank God... " Perfidious Albion " .. Saw through it..

[corran]

interesting thread...

My 2c is that the Euro is unlikely to exist in it's current form in a couple of years time. There are just too many economic, political and, IMO most important, cultural differences between the euro countries.

Getting the debt levels and deficits under control would be a massive ask if we were talking about a couple of closely aligned countries, but to try and get out of this mess with 17 very diverse countries using the same currency is very unlikely IMHO.

[Lizard]

Thanks for that Belg/Halebop.

Have tended to agree with your take on things Belg, except that recently it appears that they are prepared to push things so hard that they will risk disorderly default. Suspect M&S will try to turn sentiment going into his weeks bond auctions so as to ensure an "encouraging" result. Not many encouraging signs though - read this one from the BBC News (http://www.bbc.co.uk/news/business-16470494) today:


Germany sells six-month bonds at negative yields

Investors are flocking to havens to store their cash, amid continuing worries about the eurozone debt crisis.

Germany sold 3.9bn euros (£3.2bn) of six-month bonds at an average yield of -0.0122%, the first auction with a negative yield.

That means investors are effectively willing to pay Germany for the privilege of lending to it.

Meanwhile the European Central Bank revealed a new record for the amount of cash lodged with it overnight by banks.

Overnight deposits hit 464bn euros.

Traders said they could hit half a trillion euros by next week.

High deposits can indicate banks prefer the safety of the central bank for their funds to the higher rates they could get by lending to each other.

And the ECB said on Monday that it more than doubled its weekly purchases of eurozone bonds.

The ECB said it bought 1.1bn euros in bonds last week, up from 462m euros in the previous week, as part of a programme to drive down the borrowing costs of some eurozone members.

As usual, the ECB did not specify which government bonds it had bought.

At the German debt auction, Bundesbank data showed that it drew bids for 1.8 times the amount on offer, compared with 3.8 times at the previous auction in December.

The bond auction took place ahead of a eurozone crisis meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy.

[POSSUM THE CAT]

LIZARD I was not picking on you I was picking on the originators of the rumors. I appreciate you saying they were rumors.

[Lego_Man]

Here's the inside info from "Chris", a shareholder/principal in a hedge fund advisory business. The Germans (and the French) are very interested in keeping the Euro going, as it provides their exporters with a weak exchange rate.

Other comparative data.

http://www.dismal.com/dismal/article_free.asp?cid=227374&src=dismal-freelunch-&tid=1160F6A7-4619-4273-BD5D-E7519DED10C0

Germany is competitive enough without needing cheap exchange rates, due to their extremely efficient labour force and high-tech economy. Yes there are vested interests in some industries there but dont mistake that for a blanket attitude. How about what the advantages would be of being the best on the block and a de-facto reserve currency? A central European area based on Germany, Austria, and Benelux, and some of the Scandinavian countries would be very powerful economically.

And the reason for the French wanting the Euro is not to give them a weaker exchange rate - the Franc would be toilet paper next to the Mark if they both floated. The Euro does give them some semblance of economic control of Germany though and masks their own economic uncompetitiveness, they forced Germany to adopt it as the price of allowing them to reunify in 1991.