EU Wed

  • Posted: 25 October 2011 04:11 PM

    Does anybody know when we will have information on the results of Weds. EU Summit?
    I can’t seem to find any info concerning a timed press announcement or anything like that.

         
  • Posted: 25 October 2011 04:47 PM #1

    I believe the European Council summit starts in the evening, CET. It’s hard to imagine there being a quick consensus; I don’t expect anything substantial before 23-24 o’clock CET. Also note that the ECOFIN (Finance ministers) meeting has been cancelled, due to an ‘agenda-mistake’; make of that what you will. During the day, the 17 Euro-ministers might get together too, possibly resulting in some news.

    Interesting times…

         
  • Posted: 25 October 2011 06:16 PM #2

    Based on today’s action, I think that investors are expecting a let down.

         
  • Posted: 25 October 2011 07:19 PM #3

    Austerity has proved a big fail. Whatever they agree on will only mean a temporary plus for the market; eventually someone will pull the bathtub plug…

         
  • Posted: 25 October 2011 10:37 PM #4

    All the planets are aligning for some type of correction:
    The EU situation
    Dow at 11,700
    Dow been rising last 5 or so trading days except for today
    VIX and VIXN movement in the last 3 trading days

    On a side note Greece is the big question.  No doubt they will default.  The question is when Europe will finally pull the plug?  Its getting pretty tense in EU right now for this very reason IMHO as Merkel and Sarkozy know this is inevitable but don’t want to put the facts to their voters.  Basically Greece has no where near the output to meet the loan payments and/or maybe more important they need to keep borrowing money just to keep the country running.  I don’t think there is a precedence for this.  The U.S. market may just have a short reaction and be over it once it sinks in the GDP of Greece is less than Conneticut.  On the other hand it may be the excuse Wall St is waiting for to have the mother of all sell offs.  Just my .02. Frank

         
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    Posted: 25 October 2011 11:46 PM #5

    Greece defaulting in some form and the Euro needs a major restructuring or something like that IS NO SECRET TO ANYONE.

    And with all the WAVES OF FEAR? we’ve been struggling through since last year, I think the markets are getting well-innoculated against a relatively soft landing.  There’s some heads in the sand but most people can pretty reliably predict what’s coming.  And despite the millions of debt contagion scenarios, all economic indicators are still pointing to said indicators having to take a huge turn for the worse before those fears are justified.

    I’m not seeing a mega-panic, -15% day in the markets yet, though I will be going “short” on the market in various ways soon most likely.

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  • Posted: 26 October 2011 09:12 AM #6

    Mav - 26 October 2011 02:46 AM

    Greece defaulting in some form and the Euro needs a major restructuring or something like that IS NO SECRET TO ANYONE.

    And with all the WAVES OF FEAR? we’ve been struggling through since last year, I think the markets are getting well-innoculated against a relatively soft landing.  There’s some heads in the sand but most people can pretty reliably predict what’s coming.  And despite the millions of debt contagion scenarios, all economic indicators are still pointing to said indicators having to take a huge turn for the worse before those fears are justified.

    I’m not seeing a mega-panic, -15% day in the markets yet, though I will be going “short” on the market in various ways soon most likely.

    No understand on the Greek issue.  However the EU meeting and ramblings from EU leaders is creating an expectation that Greece will be supported.  There was an excellent article BTW by Alan Greenspan on how the Euro can’t survive as long as Northern European countries subsidize the Southern countries; i.e. that in it’s current form the demise of the Euro is inevitable.  He makes some good points.
    As a side note; another factor pointing to a near term correction, the P/E of the S&P is currently at 20.  It’s average is in the 15s.
    Frank

         
  • Posted: 26 October 2011 10:48 AM #7

    fas550 - 26 October 2011 12:12 PM
    Mav - 26 October 2011 02:46 AM

    Greece defaulting in some form and the Euro needs a major restructuring or something like that IS NO SECRET TO ANYONE.

    And with all the WAVES OF FEAR? we’ve been struggling through since last year, I think the markets are getting well-innoculated against a relatively soft landing.  There’s some heads in the sand but most people can pretty reliably predict what’s coming.  And despite the millions of debt contagion scenarios, all economic indicators are still pointing to said indicators having to take a huge turn for the worse before those fears are justified.

    I’m not seeing a mega-panic, -15% day in the markets yet, though I will be going “short” on the market in various ways soon most likely.

    No understand on the Greek issue.  However the EU meeting and ramblings from EU leaders is creating an expectation that Greece will be supported.  There was an excellent article BTW by Alan Greenspan on how the Euro can’t survive as long as Northern European countries subsidize the Southern countries; i.e. that in it’s current form the demise of the Euro is inevitable.  He makes some good points.
    As a side note; another factor pointing to a near term correction, the P/E of the S&P is currently at 20.  It’s average is in the 15s.
    Frank

    Paul Krugman wrote an op-ed on Monday that is as clear-eyed a view on the economic problems facing the Euro and Europe as anything I have read in the last 6 months. I recommend it highly.

    http://www.nytimes.com/2011/10/24/opinion/the-hole-in-europes-bucket.html?_r=1&ref=paulkrugman

    Alan

         
  • Posted: 26 October 2011 12:30 PM #8

    Hannibal - 26 October 2011 01:48 PM

    Paul Krugman wrote an op-ed on Monday that is as clear-eyed a view on the economic problems facing the Euro and Europe as anything I have read in the last 6 months. I recommend it highly.

    http://www.nytimes.com/2011/10/24/opinion/the-hole-in-europes-bucket.html?_r=1&ref=paulkrugman

    Alan

    +1

         
  • Posted: 27 October 2011 07:45 AM #9

    Willrob and Hannibal,

    you don’t read enough or should urgently change your sources.

    I’m among those that read Paul Krugman with pleasure because he actually makes many good points. But his view on the Euro and European integration is not among them.

    The mentioned op-ed has one main message: to announce, yet another time, that the Euro is doomed and that he, Prof Krugman, has been right in saying it and repeating it throughout years.

    He has been wrong up till now, and repeating it is nothing but wishful thinking.

         
  • Posted: 27 October 2011 01:25 PM #10

    hlas - 27 October 2011 10:45 AM

    Willrob and Hannibal,

    you don’t read enough or should urgently change your sources.

    I’m among those that read Paul Krugman with pleasure because he actually makes many good points. But his view on the Euro and European integration is not among them.

    The mentioned op-ed has one main message: to announce, yet another time, that the Euro is doomed and that he, Prof Krugman, has been right in saying it and repeating it throughout years.

    He has been wrong up till now, and repeating it is nothing but wishful thinking.

    hlas:

    I suspect that Willrob and I read as much and as widely as you.

    Regarding the above-referenced Krugman article, I could not find one sentence or phrase in the article that mentioned any earlier opinion of Krugman’s. The article was succinctly to the point without any reference to an “I told you so”.  But, yes, those of us who follow—among other economists—his writings are aware that he has written about structural weaknesses in the Euro regime (and rightly so) for years.

    I might suggest some further reading for you regarding the Euro crisis (which it definitively is experiencing) in the interests of widening your own sources:

    Steven Erlanger in IHT/NYT:
    http://www.nytimes.com/2011/10/20/world/europe/euro-meant-to-unite-europe-seems-to-be-dividing-it.html?ref=stevenerlanger

    Sir John Major:
    http://www.ft.com/intl/cms/s/0/8e9e4bde-ffc1-11e0-8441-00144feabdc0.html#axzz1bzvyWuya

    And you might read some of the many Euro-related articles by Martin Wolf, Chief Economics Commentator of the Financial Times, which touch on the same Euro concerns.

    Alan

         
  • Posted: 27 October 2011 02:25 PM #11

    Thanks Hannibal I’m sure you are right that we all read enormous number of different authors and that we are well informed and possibly also educated and experienced to have a good understanding of what is going on. Thanks for the links you provide.

    The persons you refer to explicitly are among those I would think we all read. When mentioning Steven Erlanger (New York Times’s Paris correspondent)  and Martin Wolf (Financial Times), you are surely pointing at two of the best commentators available.  Concerning John Major, the former Prime Minster that some 20 years ago proposed a “hard ECU”  to be managed by the European Monetary Fund, instead of a common currency, the Euro, I noticed his declaration of confidence in the Euro made to the Daily Telegraph the other day. However, I’m sure you will agree, they are all three eminent figures of Anglo Saxon visions of what happens in Europe. That is maybe where the bias is to be found that also Krugman represents.

         
  • Posted: 28 October 2011 07:25 AM #12

    Back to Krugman, when he is good and convincing:

    http://www.nytimes.c…t-taken.html?hp

         
  • Posted: 28 October 2011 07:11 PM #13

    hlas - 28 October 2011 10:25 AM

    Back to Krugman, when he is good and convincing:

    http://www.nytimes.c…t-taken.html?hp

    hlas,
    Couldn’t open your link. Is this the Krugman article you are pointing to?

    http://www.nytimes.com/2011/10/28/opinion/krugman-the-path-not-taken.html?_r=1&partner=rssnyt&emc=rss

    Alan

         
  • Posted: 28 October 2011 07:40 PM #14

    Yes Hannibal, that’s it !

         
  • Posted: 29 October 2011 10:43 AM #15

    hlas - 27 October 2011 05:25 PM

    Thanks Hannibal I’m sure you are right that we all read enormous number of different authors and that we are well informed and possibly also educated and experienced to have a good understanding of what is going on. Thanks for the links you provide.

    The persons you refer to explicitly are among those I would think we all read. When mentioning Steven Erlanger (New York Times’s Paris correspondent)  and Martin Wolf (Financial Times), you are surely pointing at two of the best commentators available.  Concerning John Major, the former Prime Minster that some 20 years ago proposed a “hard ECU”  to be managed by the European Monetary Fund, instead of a common currency, the Euro, I noticed his declaration of confidence in the Euro made to the Daily Telegraph the other day. However, I’m sure you will agree, they are all three eminent figures of Anglo Saxon visions of what happens in Europe. That is maybe where the bias is to be found that also Krugman represents.

    hlas,
    The European bond markets have been agreeing with Krugman et al for months (recent example: Italian bond spreads since Thursday’s Eurozone “solution”) and these markets are pretty much agnostic vis a vis ideology. I don’t see any Anglo Saxon bias there, so I’d be reluctant to ascribe such a bias to Krugman either.

    My sense is that the central flaws in the Euro structure are predominantly a matter of finance and economics. These financial minefields were, of course, allowed to reside in the Euro structure because of limits on what Euro proponents thought was politically possible at the time.

    Alan