Financial Crisis

[mccw]

All those unemployed yet the minimum wage prevents any adjustment to price of labour and so massive benefits bill keeps rising and so must taxes, so the death circle keeps feeding itself.

[BuffaloRescue]

"depositors are increasingly coming to the realization that deposits in

their local bank are not 'safe' places to put their spare cash, but are

in fact loans to extremely leveraged businesses."

what's new about that?

Its totally new knowledge for most people. They think the bank is literally holding their money. Most don't believe it when I try explaining the way money is created through debt / banks aren't lending out existing funds but "creating" new money many times greater than what they have. They think get this quizzical perplexed look like "no; surely not; he must be mistaken" then blank not to think about it too much and carry on life in the matrix

Its a shame that "Home Economics" in school is about baking cakes, not about learning about money/finance etc.

[manarak]

All those unemployed yet the minimum wage prevents any adjustment to price of labour and so massive benefits bill keeps rising and so must taxes, so the death circle keeps feeding itself.

exactly! not only minimum wage, but also the fact that getting rid of employees is difficult in some countries, so companies tend to not hire.

[midas]

an interesting article by President Ronald Reagan’s budget director from 1981 to 1985

State-Wrecked: The Corruption of Capitalism in America

“ The Dow Jones and Standard & Poor’s 500 indexes reached record highs on Thursday, having completely erased the losses since the stock market’s last peak, in 2007. But instead of cheering, we should be very afraid. “

https://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?pagewanted=all&_r=0

[lannarebirth]

^{Oh my!}

^{http://www.businessinsider.com/british-financial-industry-leak-reveals-the-identities-of-the-rich-who-hide-money-overseas-2013-4}

^{Say, wasn't Thaksin's "Ample Rich" scam a BVI company?}

[mccw]

http://bbc.co.uk/news/business-22023291

Appart from the big numbers. At the end a cursory mention that now they will be buying etfs and property funds.

[mccw]

http://bbc.co.uk/news/business-22024606

What happens when the engine stalls?

[Naam]

http://bbc.co.uk/news/business-22024606

What happens when the engine stalls?

then fuel is saved.

[mccw]

So optimistic

Cyprus denied until the last moments. How about Slovenia?

http://bbc.co.uk/news/world-europe-22025555

It does sound like they have a lot of state assets to sell though.

[churchill]

INTERACTIVE: STASH YOUR CASH

http://www.icij.org/offshore/interactive-stash-your-cash

[churchill]

Baht up as BOJ policy seen spurring more inflows to Thailand

'SINGAPORE/BANGKOK, April 5 (Reuters) - The Thai baht rose on Friday, helped by demand from offshore funds as the country's assets are expected to be popular targets for investors borrowing cheap yen following the Bank of Japan's surprisingly bold monetary policy easing.

The baht rose 0.3 percent to 29.29 per dollar as of 0653 GMT. The Thai currency hit 30.096 to the yen, its strongest since May 2008.

"USD/THB is Asia's lone one-way depreciation bet," said Tim Condon, head of Asian economic research at ING in a note early Friday. "We reiterate our bullishness on all THB-denominated assets, starting with real estate, equities, the THB and fixed income."

continued ....http://www.reuters.com/article/2013/04/05/markets-thailand-forex-stocks-idUSL3N0CS0KY20130405

Edited April 5, 2013 by churchill

[Naam]

INTERACTIVE: STASH YOUR CASH

http://www.icij.org/offshore/interactive-stash-your-cash

not listing two taxhavens with clear jurisdictions, namely Hong Kong and Singapore is an utterly ignorant piece of journalism.

[lannarebirth]

http://qz.com/71533/a-new-bipartisan-bill-would-end-basel-iii-and-hike-bank-capital-requirements-to-10/#

[manarak]

I have all reasons to believe that France is very close to an economic collapse, which will also have severe repercussions on Spain, Portugal and Italy, as well as Germany.

The crisis France is running into might be unrecoverable under its current economic system, i.e. I believe it is very likely that France's borrow rates will hike up and put France into unrecoverable credit crunch.

The key indicator for this is industrial production.

I want to profit from these events if they happen.

Of course I will not hold EUR and linked currencies (I expect the Swiss to kill their healthy currency to maintain acceptable rates for their exporting industries).

But beyond this, what can I do to make money if I'm right?

[Naam]

I have all reasons to believe that France is very close to an economic collapse, which will also have severe repercussions on Spain, Portugal and Italy, as well as Germany.

The crisis France is running into might be unrecoverable under its current economic system, i.e. I believe it is very likely that France's borrow rates will hike up and put France into unrecoverable credit crunch.

The key indicator for this is industrial production.

I want to profit from these events if they happen.

Of course I will not hold EUR and linked currencies (I expect the Swiss to kill their healthy currency to maintain acceptable rates for their exporting industries).

But beyond this, what can I do to make money if I'm right?

shorting *.JP¥ was very profitable until this very moment. now i wonder whether USDJP¥ will go beyond 100.

[cheeryble]

I would firstly wonder.....given that you don't know how to take advantage of a European bear, a fairly simple thing....whether I had the wherewithal to say my call was more sage than all the others which have formed prices into what they are today for say EWQ or IEV which you might short. You have a particular reason to think educated assumptions are not built into France's....or their neighgbours'......share prices?

Be aware you would be short the dividend which for EWQ is a hefty 4.4%.

[Naam]

wouldn't it be easier to go for a derivative that shorts the CAC instead of shorting e.g. EWQ?

for what it's worth... my opinion on France differs from Manarak's opinion.

[manarak]

I would firstly wonder.....given that you don't know how to take advantage of a European bear, a fairly simple thing....whether I had the wherewithal to say my call was more sage than all the others which have formed prices into what they are today for say EWQ or IEV which you might short. You have a particular reason to think educated assumptions are not built into France's....or their neighgbours'......share prices? Be aware you would be short the dividend which for EWQ is a hefty 4.4%.

Firstly, the CAC or other France-oriented indexes might not behave in the expected way, or might take time to do so. The reason is most of the big companies in indexes are very internationalized, making much of their profits abroad, and since the currency remains the EUR, their share prices might stay the same or even rise in the short term.

Second, I am looking for safer ways to make money than shorting, because this is a position I have always been uncomfortable with when the time horizon is uncertain.

The chain of events I expect is the following:

1- very very bad French figures: industrial production, unemployment, lower tax returns, trade deficit, etc. and rapidly deteriorating further (within 3 to 12 months)

2- interest rate hike for French government bonds (within 6 to 18 months)

3- leter effects on the EU neighbors and the EUR (within 2 to 3 years)

My estimate is that French Bonds will first be bought by the central bank while exterior lenders will just stop lending to France.

I want to profit from #2: interest rate hike.

Maybe I will short when the time has come, but for the moment, it is too early.

Naam, in what sense does your opinion differ from mine?

Edited April 9, 2013 by manarak

[Naam]

Naam, in what sense does your opinion differ from mine?

i differ from you extremely negative view on France and your forecasts for which you did not give reasons. it's not that i'm plainly contradicting you, it's just because you did not mention any reasons which justify your opinion.

[manarak]

Naam, in what sense does your opinion differ from mine?

i differ from you extremely negative view on France and your forecasts for which you did not give reasons. it's not that i'm plainly contradicting you, it's just because you did not mention any reasons which justify your opinion.

ok, here you go:

- the INSEE monthy business climate survey has historically been highly correlated with French GDP. The index currently stands at 85 points, which correlates with an annulaized GDP contraction of 1% (linear regression model).

- France's industrial production stats are deteriorating, as I already pointed out in earlier posts. One of France's particularities is that government spending accounts for 57% of GDP, which means the contraction of industrial production (currently about -1,5%, -2%) is borne by the private sector alone, meaning it contracts by 3%, 4%.... maybe more!

- French unemployment is about to explode

- French consumption spending is already negative, and more unemployment is coming...

- The gap between business climate indexes (IFO and INSEE) in Germany in France has been widening from 5 points in 2005 to 15 to 20 points in 2012 but were still correlated, and now it appears that the curves take different directions!

the consequences of all the above are devastating

in the last 25 years, the private sector never outgrew the public sector.

the gross operating surplus of companies steadily fell in the last 25 years, from about 27% of GDP to 22% today.

less consumption = less VAT income

GDP contraction = less company tax income

less industrial production = less jobs

less jobs = more unemployment

more unemployment = more social spending, less taxes, less spending, less VAT

and some links to illustrate:

http://www.tradingeconomics.com/france/industrial-production

http://www.tradingeconomics.com/france/government-debt-to-gdp

http://www.tradingeconomics.com/france/business-confidence

http://www.tradingeconomics.com/france/retail-sales

http://www.tradingeconomics.com/france/current-account-to-gdp

http://www.tradingeconomics.com/france/labour-costs

http://www.tradingeconomics.com/france/unemployment-rate

[cheeryble]

So Manarak....

What specifically makes you think all available data is not built into the price?

ps: Was only throwing out EWQ IEV etc no recommendation I personally wouldn't dream of it, and how often has the seemingly darkest hour been the moment the stockmarket is a step ahead and starts taking off? And it certainly is a dark hour the Bourse is one of the few not to recover from 2009.

Edited April 9, 2013 by cheeryble

[manarak]

So Manarak....

What specifically makes you think all available data is not built into the price?

ps: Was only throwing out EWQ IEV etc no recommendation I personally wouldn't dream of it, and how often has the seemingly darkest hour been the moment the stockmarket is a step ahead and starts taking off?

simple: it hasn't happened yet and the French politicians are pretending it won't happen, plus the indicators I mentioned are just one the verge of turning really bad, which also hasn't happened yet.

If the market was able to price everything into current prices, it would be impossible to make a profit by anticipating events.

I don't believe in the efficient markets theory, and even in its lesser form it only applies to past events while future events are always considered having a probability of less than 1.

In other words, if it was priced in, everybody would be talking about the "inevitable" internationally as well as in France.

Edited April 9, 2013 by manarak

[cheeryble]

I don't believe in the efficient markets theory,

Whilst not casting doubts on your abilities I must point out that although you may not believe markets are efficient, if you take a position you are considering your own abilities (plus the resources you draw on) to make judgements acuter than the thousands or tens of thousands of others out there around the world who form the price.

They say that if you don't know who the patsy is in a game of cards then.....you're the patsy.

Extending this to the markets:

Do you have some special source of arcane information or faster supercomputers?

Or you think other analysts cannot see or know what you see and know?

Or is it that others cannot see the simple facts staring them in the face?

You may be smarter and more able.....but why? What's your advantage?

ps: I ask this politely and with all good intent and for the sake of France and all of us hope you lose your bet

Edited April 9, 2013 by cheeryble

[churchill]

Seems a lot more French in the last few weeks looking to buy land / property in Samui .....

Who could blame them or any other Europeans wanting to diversify cash after Cyprus ...

[manarak]

You may be smarter and more able.....but why? What's your advantage?

Give the same information to many people, and it will get interpreted in different ways with different results.

Regarding your question about wether others don't know the same things, the answer is yes, but I organize the information in a different way.

I have a twice exceptional mind (light Asperger's syndrome with high IQ), which gives me a special ability to see big pictures and how things are interconnected more easily than others.

I studied financial markets and products and have worked for over ten years in the front office departments of banks and brokers, including positions as trader and risk manager.

I'm not right all the time, but I haven't made a loss since the Swiss central bank suprised me on the wrong foot when it decided to peg to the Euro.

I haven't traded since october last year. I missed the (predictible) moves of AUD against CHF twice, in december/jan 2012 and in the past month :-( I wanted to buy AUD against CHF at 0.94 CHF, but both times I let it slip...

Edited April 9, 2013 by manarak

[PCA]

You may be smarter and more able.....but why? What's your advantage?

Give the same information to many people, and it will get interpreted in different ways with different results.

Regarding your question about wether others don't know the same things, the answer is yes, but I organize the information in a different way.

I have a twice exceptional mind (light Asperger's syndrome with high IQ), which gives me a special ability to see big pictures and how things are interconnected more easily than others.

I studied financial markets and products and have worked for over ten years in the front office departments of banks and brokers, including positions as trader and risk manager.

I'm not right all the time, but I haven't made a loss since the Swiss central bank suprised me on the wrong foot when it decided to peg to the Euro.

I haven't traded since october last year. I missed the (predictible) moves of AUD against CHF twice, in december/jan 2012 and in the past month :-( I wanted to buy AUD against CHF at 0.94 CHF, but both times I let it slip...

you just gave me the first chuckle of the day

[manarak]

You may be smarter and more able.....but why? What's your advantage?

Give the same information to many people, and it will get interpreted in different ways with different results.

Regarding your question about wether others don't know the same things, the answer is yes, but I organize the information in a different way.

I have a twice exceptional mind (light Asperger's syndrome with high IQ), which gives me a special ability to see big pictures and how things are interconnected more easily than others.

I studied financial markets and products and have worked for over ten years in the front office departments of banks and brokers, including positions as trader and risk manager.

I'm not right all the time, but I haven't made a loss since the Swiss central bank suprised me on the wrong foot when it decided to peg to the Euro.

I haven't traded since october last year. I missed the (predictible) moves of AUD against CHF twice, in december/jan 2012 and in the past month :-( I wanted to buy AUD against CHF at 0.94 CHF, but both times I let it slip...

you just gave me the first chuckle of the day

English is not my native language, you may have noticed! LOL

[churchill]

Thai baht: gone too far?

http://blogs.ft.com/beyond-brics/2013/04/09/thai-baht-gone-too-far/#axzz2PxWjOUMT

[Naam]

for the sake of France and all of us...

a good one Cheeryble! should France go down the drain those of us who have served and are invested anywhere will remember the command "helmets off... kneel down for prayer!"

[churchill]

for the sake of France and all of us...

a good one Cheeryble! should France go down the drain those of us who have served and are invested anywhere will remember the command "helmets off... kneel down for prayer!"

Agreed France will forever survive , but likes its unions and the Euro , neither help ... tant pis

and Hollande ca va pas

Will there ever be a reformer in France like Margaret T ....I cannot see it ... jamais

and If they were not tied to the Euro peut-etre

But Germany rules ..Alors