NZSX50 - Good News!

[BlackPeter]

Black P
I dont altogether agree with you.
Many European Countries Are finding it hard to pay back debt now.
Greece !!!. Spain, Belgium, Italy etc.....
France is the interesting one.
If interest rates have to rise then they struggle more.
As i say .25 basic point rise wont hert too much , but more ?
We might have to agree to disagree old son
cheers BB
Rates are all based on the US$.

Hi BB, not sure I understand. Why do you think that a US interest hike would require European countries to pay higher interest? They only would if they hold their debts in US$ - but the lions share of European debts is obviously hold in Euro?

[Billy Boy]

Hi BB, not sure I understand. Why do you think that a US interest hike would require European countries to pay higher interest? They only would if they hold their debts in US$ - but the lions share of European debts is obviously hold in Euro?

No not altogether
Hedging etc is based to the US$
Asian countries also hold a large amount of European Debt
Germany will have to hold out coz they have done a lot of vender lending since GFC and will want
their money back soon.
It would appear that most Euro Countries are trying to distance them selves from Greece coz
if Greece defaults, then Who knows. Greece owes 2.5 times GDP.
Argentina is still suffering the effects of their default.
Deflation in the Euro Zone must be turned surely. Will this latest massive QE kick start the
Euro zone economy ..... I doubt it.
The only way out as I see it (other than default) is huge forgiveness of debt across the board.
No point in Germany lifting their output (as you suggest) if the buyers are broke.
So back to the original Q. What will cause this Bull Market to turn...
A. When the Fed start lifting interest rates, And they will. IMO.
cheers BB

[Billy Boy]

Sorry.....
Greece owes repayments that equate to 2.5 times GDP.
Don't ya hate it when ya start pushing 80 yrs

[Bjauck]

...No point in Germany lifting their output (as you suggest) if the buyers are broke....

As I see it the Euro has meant that those countries like Greece with traditionally weak currencies have had a stronger currency by virtue (mainly) of being linked to German monetary (& indeed fiscal) prudence. It has meant that Greece (& Spain etc) have found that German manufactures are more affordable so German industry has benefited, as their Mediterranean customers were able to afford German produce bought in part by lower interest Euro borrowings, undertaken by fiscally imprudent governments.


Germany (& other Northern EU) benefited from these indebted Southerners so now they need to cut them slack, and then either cut them loose or introduce greater fiscal union.

[Billy Boy]

As I see it the Euro has meant that those countries like Greece with traditionally weak currencies have had a stronger currency by virtue (mainly) of being linked to German monetary (& indeed fiscal) prudence. It has meant that Greece (& Spain etc) have found that German manufactures are more affordable so German industry has benefited, as their Mediterranean customers were able to afford German produce bought in part by lower interest Euro borrowings, undertaken by fiscally imprudent governments.


Germany (& other Northern EU) benefited from these indebted Southerners so now they need to cut them slack, and then either cut them loose or introduce greater fiscal union.

""t has meant that Greece (& Spain etc) have found that German manufactures are more affordable so German industry has benefited "...
Yep, bought about buy cheap money and Vender Lending. But now all thats gotta stop as the five year debt is falling due mid 2015. And the private lenders want their dosh , hence part of the story with the big ECB QE, so the heavely in debtors can "kick the can again"
Its all gotta stop. Greece .... we will see ??
To me things are worse than the present picture would suggest. Don't scare the horses
.
Thinking ahead on how the payback might happen.
1. Inflation over a long period ( but the Euro Zone is in deflation)
2. Debt forgiveness .... May beeeeee
3. Large sell off of assets (the rich lenders would love that)
4. large scale Civil unrest causing political turmoil ( They have got a little of that now !)
5. Minor wars !!!! (and we got a bit of that)
Readers might remember , The new monetary system being set up to run in opposition to the IMF.
China, Brazil, India, Russia, Korea, (South Africa , I think)
We have'nt heard much about that of late.
Oh well.... I will probably be out of the market(s) by June.
BB

[gv1]

why june mate

[Bjauck]

I agree. Insisting on payback and austerity can backfire. Just think of Versailles and Germany itself post 1919! Lessons too for NZ as our society becomes more unequal - discontent and possible social problems.

[Billy Boy]

why june mate

Coz thats when a lotta bond money and hedging becomes due.
Brown stuff could get sprayed.
Also a lot of cycles indicate June, although I'm not a great believer in that stuff.
.
We can speculate all day but the bottom line is :-
Something has gotta happen sometime.
And it wont be pretty.
BB

[Billy Boy]

I agree. Insisting on payback and austerity can backfire. Just think of Versailles and Germany itself post 1919! Lessons too for NZ as our society becomes more unequal - discontent and possible social problems.

.
Your onto it mate....
BB

[Bjauck]

Coz thats when a lotta bond money and hedging becomes due.
Brown stuff could get sprayed.
Also a lot of cycles indicate June, although I'm not a great believer in that stuff.
.
We can speculate all day but the bottom line is :-
Something has gotta happen sometime.
And it wont be pretty.
BB

When I was in London...the mantra was "sell in May and go away!"