Postage Stamp Chat Board & Stamp Bulletin Board Forum
 

I agree about that, but it is only a small economy and I suspect many of the smaller European economies are beneath the radar right now. Everyone is focusing on Greece and Italy and Spain, in the main.

Also, the principal European problem right now (well, teh one getting all teh attention anyway) is sovereign debt. The private banks will come much more into focus as there is an unwinding of the sovereign debt issue. That is to say, the private banks will be forced to write off loans to countries like Greece at the same time as their minimum capital ratios are being increased. They will need to raise both capital to balance the 'losses' on the written down loans and increase their overall capital base as well.

The issue is going to, where do the banks get the extra capital they will need? Loans, even from governments, won't increase the capital base. They will need to issue more share capital into a very hesitant market.

During the GFC all the major Australian banks increased their capital base. They had to issue shares at a substantial discount, even though they were extremely secure and still very profitable. In Europe many banks are neither, or so it seems from afar.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Here is a GREAT article, much too long to copy here, but of immense interest to the serious contributors to this thread:

http://tinyurl.com/6emrp2v

Primary focus, gold fraud and accounting irregularities in TBTF banks.

[quote="doug2222usa"]Here is a GREAT article, much too long to copy here, but of immense interest to the serious contributors to this thread:

http://tinyurl.com/6emrp2v

Primary focus, gold fraud and accounting irregularities in TBTF banks.[/quote ]



Whoops. Not sure what I did wrong whilst typing , below is a statement quoting previous above?


Probably not far off the mark , scary but true , I have previously stated your Gold or other that you buy to survive may be OK if you are 70 years old , if you are younger and you want your family to survive then that patch of good growing land with permanent water will be unbeatable , but you must be willing again to learn the old time skills , and get your hands dirty .

Go back to Human history for your long term survival strategy , Monetary wealth is a falsehood , the only food left will not be swapped for your gold at the very time you need it most.

NO ONE, especially the soft urban city dweller, is anywhere near capable of growing sufficient food for a family, regardless of how much land they have. Even bartering won't help. This is a fantasy of the back-to-the-land movement.

The short list of absolute necessities includes tools, equipment, FUEL, access to repairs and maintenance, supplemental labor, and security. Never happen.

That's why family farms are specialized, and why corporate mega-farms now dominate.

========

An aside, did you know that cattle rustling has increased exponentially in the past 2 years? The animals are butchered on the owner's land, and only the saleable meat hauled away, leaving the carcass for the rancher (or the coyotes) to find.

Peter. I'm suprised how anyone across the world can have confidence in share investments these days. EU and US and some Asian markets always seem to be on the wait for a politicial decision to instruct them in the height they are to jump!

Doug. You are covering a lot of ground in the above post and I'm not sure I understand what you are saying? You appear to be saying that in the event of a breakdown in the social order, exsistence as a society is impossible?

dukeprince. If monetary wealth is a falsehood, it is still a reality and until Peters markets stabilise, or dougs anarchy prevails. It might be better to go along with it.

Huanga.

Share market investments are the best mainstream investment for the longer term. You just have to ignore short term volatility or, even better, use it to your advantage. There are plenty of companies that are seriously undervalued, based on their underlying profitability and strength. The Australian banks are classic examples of this, as are the large miners.

This will be the case on most markets around the world. I only focus on Australia, so I wouldn't buy foreign shares.

Buy the right shares, which means doing the research, and you have a liquid asset. For example, in Australia I can sell my shares (through my online broker), at the highest price someone is prepared to buy that stock at, and in 3 days (the settlement period) I will have the money in my account.

If I hold physical gold then I have a more problematic sale process, I have to shop around and find the best buy price (governed by more than just the gold price, e.g. holdings the buyer already has). I may or may not get the equivalent of 'market' price.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

My "above post" refers to Dukeprince's idea that a young family can escape to the country and live off the land:

"...if you are younger and you want your family to survive then that patch of good growing land with permanent water will be unbeatable , but you must be willing again to learn the old time skills, and get your hands dirty."

As I said before, pure fantasy for the urban dweller.

==============
The long article I linked to, is not my own writing, of course. It's a guy who tells it like it is, and it's not a pretty picture. But the article's worth reading.

I have no big problem with investing in stocks, at least right now. It depends on how much money you're making. If you can squeeze out 20% per year, then full speed ahead. Gold and silver have been manipulated (Congress now acknowledges this) to such an extent that the near-term outlook is totally unpredictable, but in the endgame, that's where I want to be.

Besides, I'm almost 67 now, with a LOT of medical problems, and no family -- it doesn't matter much what I do, I don't have to look out for anyone else, and it doesn't matter if I take unwise risks. No one will suffer but me. Many of you have several generations of family to help, support, or defend. That would change my outlook in a hurry.

All along, my GOAL has been to wake YOU up, and to see different points of view (not just my own), and we are getting there, post by post.

You are lucky to live in a country with as many blessings as Australia.

Agreed , lucky to be in Australia.

Only problem is most countries have layers of wealth over the population , the bottom layer in Australia is doing it tough just as elsewhere in the world.

The bottom layer sees not the mineral wealth we have , they just read or hear about it in the press.

All points of view have legitimacy in this forum , that is the beauty of Freedom of Speech and Democracy , but the ugliness of Democracy and the Manipulation available was shown in Dougs Link.

Actually, even the 'bottom layer' in Australia is better off now than at almost any time in our history. I saw an analysis of costs, as a percentage of income at specific levels, recently. Can't put my finger on it now, but the synopsis was that (as a percentage of disposable income and often in absolute terms) prices for most necessities are lower now than 10 years ago.

We may think we are worse off, but we really are not.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Yes probably correct if you leave todays 2011 Rent and Mortgage payments out of it , they have risen so hard and so fast , they are the Killer to low income families, these payments usually halve or perhaps worse the take home pay.

Anyone who has their own home paid for will indeed not experience any money shortage , even if on the pension , the pension is then for rates and utilities and food only , an easy task if you dont Drink, Smoke or Gamble.

Mortgage repayments are higher for more recent buyers, because of the higher price they would have paid. However, if you had a home even 3 years ago then the interest rate is much lower and the repayments also lower.

I had a mortgage in 1991, during Keating's 'recession we had to have'! I was paying interest rates of around 18%.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Well, I hate to say "I told you so!", but..... The AUD is down nearly 4c and the EURO is unloved. Seems the deal wasn't really much more than window dressing, once it was examined. Add to that the bombshell that Greece may hold a referendum to decide if the plan is to go though.

Let's see, the question is (in essence) "Do you agree to a massive cut in government spending, a rise in taxes and some other nasties?"

Unless the Greek Government has suddenly become the world's best sellers of fact and the Greek polis suddenly decides that they should not only pay existing taxes but also new and higher one's, well...doomed to fail I would have thought.

Of course the alternative is even more unpalatable. Default, with no possibility of borrowing as a result. A 9% deficit suddenly cannot be funded and spending has to be even more heavily slashed, jobs have to go and benefits dry up. Going back to their own currency and just printing money won't help, the pathway to hyper inflation and even more total collapse.

I am sure many will be saying that a referendum is democracy in action and that it is best for the electorate to decide their own fate. Unfortunately, it isn't just Greece at risk here. The funds set aside for bank recapitalisation (to cover the 50% haircut they are to take on Greek sovereign debt), only agreed last week, would be totally inadequate in the circumstance of a Greek default occasioned by a No vote in the referendum (assuming it ends up being held).

Further, until the referendum is held then expect turmoil. The Greek government needs that bailout money to stay afloat. They won't get it until the deal is ratified and implemented.

Add to that the fact that the Greek Government now only controls 152 of 300 seats in Parliament (they need 151 to get the referendum proposal agreed) and the likelihood (to me, from afar admittedly) of a collapse of the government (they have to survive a confidence vote on Friday). Well, Europe is not in for a very happy time.

The USD is going to continue to appreciate as funds once again flow into the safe haven of US Treasuries.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Yes, the euphoria did not last long. I would add, this is NOT the time to buy gold, in my opinion, as another round of market-related margin calls could force selling, force the price down where nobody thought it could go.

At least in the short- to medium-term.

Doug, I agree. Gold is not in my portfolio right now and won't be for the foreseeable future.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Europe and the rest of us used to grow and make most things that were for sale in their countries.

Around 20 years ago we all decided that why make it when I can get it for less than my manufacturing cost from Asia , just add a mark up and on sell it , easy , a fortune to be made by no other work than to unload the pallet from the container.

Well , did you really expect that attitude to result in wealth for the country , or would it possibly make wealth for Asia or did that never cross your mind.

Australia have only escaped at this point in time by digging up every thing and anything to sell to guess who, to then perpetuate the afformentioned imported goods Worldwide.

And now we all expect it to magically come good , not only come good but at the same time pay the last 20 years debts that we have all piled up, hold on to your hat for the wild ride , no strategy will help , only restarting the manufacturing and increasing farming will get us back to where we once were.

Remember the story of the Mission boat landed on shore with a bible , that was what they owned , the local people owned all around them and its ability to feed and clothe them.
Ten years later the Mission owned all around them and the people owned the Bible.

I did forget to add in the last post , Our Politicians.

Politicians of real ability are seldom elected by the masses anymore .

We are all now so sophisticated and have seen so many wonderful Actors play roles that were truly inspiring we now all seek that in our elected Candidates.

How they look on Camera and how they Speak on Camera is all it takes to get elected , good Speech Writers will gladly do the rest at a fee , and we all think wow thats what they believe in that speech , can you not see the Emporer has no clothes.

Men of Substance are quickly removed by the big Money Players , they have to be , or they will make the leaders look bad, and those leaders have already cost Big Dollars to put in place.

Democracy in todays world is too highly manipulated by the unseen , worse than it ever was , manipulators you dont squash when they are minor grow into the unsquashable.

.........'I am sure many will be saying that a referendum is democracy in action and that it is best for the electorate to decide their own fate. Unfortunately, it isn't just Greece at risk here. The funds set aside for bank recapitalisation (to cover the 50% haircut they are to take on Greek sovereign debt), only agreed last week, would be totally inadequate in the circumstance of a Greek default occasioned by a No vote in the referendum (assuming it ends up being held).

I understand what your are saying Peter and I understand the consequencies of a Greek referendum. However, what other course do they have? It is being made very plain through the media that EU politicians are not concerned with what their peoples want. They are more concerned with their own wants and the wants of their bankers!

A referendum now may be the pressue valve needed. To do nothing and follow the course that the EU and financial experts want will likely lead to some form of armed conflict. Greece, dispite giving the world the word democracy. Has never been the most stable of Countries. A conflict there could soon spread much more than the word.

Now it is easy to say the media should not be believed, but the media is believed because there is no other source that has a measure of credibility. No matter how small that measure of credibility actually is.

I think Europe has now past its point of no return and is now in the first stage of its own destruction. To what extent that destruction will reach. Who knows?

Huanga.

Huanga, it has nothing to do with the wants of "politicians and their bankers"! It has everything to do with trying to save the EURO and, more directly, stop the spread of the contagion.

The bankers are not going to happy either way. If the bailout proceeds they lose 50% of the value of their holdings in Greek sovereign debt. If the bailout fails then they will lose 100% (or close to it) as Greece has no way of paying it's bills without the bailout.

There are occasions when a government has to do what is right, regardless of public opinion. That is what we elect governments to do. So, the "other course" the Greek government has is to abide by the agreements they have made. This is one case where the medicine is better than the disease, even though the medicine is extremely unpalatable!

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Peter. As I said, I understand the consequencies for Greece and for Europe of a referendum. However I doubt there is enough medicine in the world now to halt the spread of this particular disease. Who or what caused it is now irrevelant. Too many have seen through the media that they are a growing majority being made to face the future with diminishing wealth.

Huanga.

Another Friday, another bout of unbridled optimism on overnight markets. Seems that Greece will not have a referendum after all. Hooray! The world is saved! Sell US Treasuries and buy shares and Australian Dollars and gold and everything else in the 'risky' basket!

Of course, overnight tonight there will be a confidence vote in the Greek Government. If it fails (Papandreou needs all his party members to support him, only has a majority of 2)and the government falls, then the optimism will be even shorter lived than last weeks bout.

I still think the underlying bailout has too many unanswered questions and assumes that Europe will raise the money needed. The Chinese are not keen, at the moment anyway.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Half the world is waiting to hear if the political elite has reached agreement on their futures. These highly paid masters are debating who amoung the millions they govern will have some form of employment in the coming years. Will their Euro saving be worth anything.

Instead what do they hear?

They hear that a French politician of an uninteresting faith, has told an American politician of uncertain faith, that an Isreali politician of a jewish faith, is a liar!! I wonder what was said in that closed world of theirs that gave a hint?

Or perhaps they are truely unaware that many of the millions that await the outcome of their talks, regard them all as damm liars!!

Huanga.

Peter, do you think the European Union is a failure ... or did they just let in too many weak links?

My chance to vent, here. I think the EU was doomed from the word "GO" because it could not accommodate two dozen different cultures and languages. The European countries have little in common other than they are primarily welfare states. In addition, there was no mechanism for the stronger members to exert influence over the profligate states, and when things began to unwind, the incentive was strong to merely cover up the problems behind the scenes.

Having lived a little over a year in Europe, I would not want to see the continent stirred and shaken, homogenized, and forced into a common mold of laws, behaviors, and customs.

The best course, in my opinion, would have been a concerted effort to cut bureaucratic red tape in every aspect of life and commerce. Unfortunately, that makes socialist governments more vulnerable, so little was done in that regard; the "Union" was a top-down approach, not a bottom-up. Great Britain was smart to remove itself as far as possible from this mares-nest.

I agree they created a universal currency for Europe without taking into account the past debts and social costs of individual nations. If they kept thier individual currencies and instead implemented other changes that allowed free trade and a transient labour force would have isolated these non performing nations.

However it has nothing to do with European socialistic methods. We are either here for one or another or its a dog eat dog approach. With the rise of the protests both here and the states we are starting to see the populaces disapproval of the dog eat dog approach. Which has been cause by global free trade and not fair trade. Fewer are profiting from proper traditional corperate socialistic and nationalistic approachs of, "we are here to defend the nation, the weak and spread the wealth around". There are way too many monopolies, oligopilies, and include now how "WALL STREET" rewards companies that farm jobs overseas for increased profit.

It is not just about the pay to the worker but every single night we hear on the news about global warming and environmental protection. We are driving our own manufaturing base out of our own countries to meet our "WALL STREET" and environmental commitments to nations that 1. Have no labour laws. 2. Have no environmental laws. 3. Have no human rights.

Instead of improving technology or carbon foot print in our country lets get it made in China its cheaper and it won't effect us.

Right now its a fluffy bunny vs dog, bring back tarrifs and restrict trade to countries that can not meet our own commitments to labour practices and the environment. Then there would be no EU issues.

The EU is probably a good idea, not sure about the EURO though. The EU includes the UK, for example, which did not adopt the EURO.

In my view a single currency where fiscal policy is not centralised is a disaster in waiting. In Australia and the USA we have Central Banks that set monetary policy (Interest rates), just as teh European Central Bank does in Europe. However, in Australia and the USA there is a single place that monetary policy is set (by a central government). In Europe, monetary policy is set by each country individually.

Yes, they are supposed to meet certain criteria and follow the rules. Didn't work in Greece, where the then government just lied about their finances. I worry about how many other smaller EURO Zone countries are in trouble but just don't want to tell anybody.

To be fair, Greece and Ireland and many of the smaller economies could fail and the world would not come to an end. Germany and France would be forced to bail them out to support the EURO. But confidence in the EURO is being eroded and interest rates actually paid are going up. It is a vicious cycle that is going to cause significant (if not insoluble) problems.

Italy is an example of that right now. I think it's debt situation is poor, but would be manageable...absent any other problems in the zone. Perception and confidence are all important to a currency. I wouldn't buy EURO assets under any circumstances right now and I am not alone in that view, it seems to me.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Maddog, a welfare state only works if you have enough people paying enough taxes to support those that receive the welfare. You also need to ensure that only those that need that welfare get it. Social welfare payments in Australia consume a significant proportion of the Federal budget. Other than for the last 3 years however, Australia has run strong budget surpluses since the late 1990s. TYhat has meant we can afford to support those that need support.

Look at Greece, though. It seems the majority of the population is reliant on government largess to some extent. Those that are earning an income seem reluctant to pay taxes. The result is huge budget deficits that, eventually, bring teh whole thing crashing down. Of course, those used to the handouts get very upset when they disappear (an inevitable consequence of economic restructuring) and they riot.

I prefer the system in Australia where those that need support get it and everybody on welfare is encouraged (by carrot and stick) to get themselves off it, if they are capable of working. It also helps to have a low unemployment rate!

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

BTW. I notice that the interest rate Italy has to pay on long term (10 year) debt is now over 7.5%, a record. Not looking good and Italy is going to have to cut spending savagely and probably, at the same time, increase taxes.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I would simply point out that all the European countries are democracies. In a democracy we elect politicians to manage the economy, amongst other things. Politicians the world over are also, in my opinion, poorly paid for the level of responsibility we entrust them with.

So, the politicians in Europe are doing precisely what they were elected to do, what the electorate requires them to do. If the people don't like the result, they will simply kick them out at the next election. Then it will be the turn of some other underpaid, overworked politicians to find a solution more palatable to the electorate. Their solution will probably not be any more palatable. People who are living beyond their means, eventually have to stop doing it.

The longer it takes to get back to some sort of balance the worse it will be for the entire population.

As to the reporting of a private conversation, like Wikileaks it helps no-one and adds no value to society. Prurient interest value only and better left unreported.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Probably not. Things are complicated by looming elections, especially in the US.

I am an optimist on Italy, to the extent that an economy of that size has the capacity to make changes that will make a difference, without totally destroying the economy in the process. In that, Italy is not another Greece.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

by John Rubino, at http://www.24hgold.com

"...European banks are sitting on heaps of exotic mortgage products and other risky assets that predate the financial crisis, adding to pressure on lenders that also are holding large quantities of euro-zone government debt.

Four years after instruments like "collateralized debt obligations" and "leveraged loans" became dirty words because of the massive losses they inflicted on holders, European banks still own tens of billions of euros of such assets. They also have sizable portfolios of U.S. commercial real-estate loans and subprime mortgages that could remain under pressure until the global economy recovers.

While the assets largely originated in the U.S. financial system, top American banks have moved faster than their European counterparts to rid themselves of the majority of such detritus.

Sixteen top European banks are holding a total of about €386 billion ($532 billion) of potentially suspect credit-market and real-estate assets, according to a recent report by Credit Suisse analysts. That's more than the €339 billion of Greek, Irish, Italian, Portuguese and Spanish government debt that those same banks were holding at the end of last year, according to European "stress test" data..."

Doug, I may be wrong here but it was my understanding that the European banks had been required to write down the value of those toxic assets (mark to market, resulting in big paper losses, just as occurred in the US) back in 2008 and 2009. As a result, the banks passed their stress tests (which occurred before the depth of the sovereign debt crisis became understood, hence expectation of need to recapitalise as a result of writing off around 50% of Greek sovereign debt).

I don't know enough about the detail for European Banks, but similar accusations have been floating around about Australian banks (even to the extent of suggesting one of our biggest got a massive loan from the US Federal Reserve!). All bogus accusations, but still they circulate.

I just wonder how much of what is said about the large European banks is also wide of the mark.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Don't know.

They might have written them down 30% when they should have done 85%. Bet we'll know by Christmas.

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Different subject:

Not exactly a loan, more of an accommodation:

In December 2007, the FOMC announced that it had authorized dollar liquidity swap lines with the European Central Bank and the Swiss National Bank to provide liquidity in U.S. dollars to overseas markets, and subsequently authorized dollar liquidity swap lines with additional central banks. The FOMC authorized the arrangements between the Federal Reserve and each of the following central banks: the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Canada, Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Korea, the Banco de Mexico, the Reserve Bank of New Zealand, Norges Bank, the Monetary Authority of Singapore, Sveriges Riksbank, and the Swiss National Bank. Those arrangements terminated on February 1, 2010. [more]

Source: http://www.federalreserve.gov/monetarypolicy/bst_liquidityswaps.htm

Doug, perfectly understandable standby facilities in the event of a need for US Dollars. At the time, nobody wanted anything but US Treasuries or US Dollars. At the end of December 2007, the AUD was worth US$0.8793. At the end of December 2008 the AUD was worth US$0.6918, over 27% less. It got as low as US$0.64 during 2008.

As I understand it, there were actually no swaps done between the Fed and the RBA in the end. Although the exchange rate collapsed commodities continued to sell and there was a massive inflow of USD as a result. Continues to this day, something like a net US$40b annually from China due to a massive trade surplus with them.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

My point was, this exercise might have been publicized (and misunderstood) as a loan.

No, the misinformation doing the rounds is about the private banks, not the RBA.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

'Politicians the world over are also, in my opinion, poorly paid for the level of responsibility we entrust them with.'

Amazing! You must be high on their polling list.

Huanga.

Pay peanuts and get monkeys. We elect people to keep our standard of living and look after us, essentially. What is more important to us than that? I earn more than any standard member of an Australian parliament. Whilst I would say I am worth every penny I get, my job doesn't compare with what an MP should be doing.

However, Australian parliaments are stuffed full of rent seekers, union hacks and so forth. If we paid a decent salary we might just attract a higher quality of candidate.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

It must be Friday. Unbridled enthusiasm on the Australian market today, although the AUD is going nowhere, so risk is not quite back in fashion. It will be interesting to see how Europe and the US treat Friday.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

AUD is actually still high against other countries, though. Euro is also not moving much one way or the other (I suppose for every Greece there is a Germany so it averages out.)

"I suppose for every Greece there is a Germany so it averages out."

This assumes for every victim drowning there's a lifeguard ready to jump in -- not the case, as we will all find out in the near term.

I predict we will see two Euro banks declared insolvent before the end of the month, with predictable consequences. Greece and Italy are both optimistic, thanks to a "new man" who will "solve" the problem when there's no way to solve it.

Some lifeguards can carry two people of course.

Europe ( or at least London ) is so far treating Friday with it's usual approach - crass stupidity. At 12.30 the FTSE was up 25 points with Lloyds bank and RBS ( our 2 weakest banks by a distance ) up 3.6%.FFS!!!!!!

I really don't know why we actually take any notice of these idiots who make Runyon's characters look like Economists

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When a man comes to me for advice, I find out the kind of advice he wants, and I give it to him

The problem, right now, is that any piece of news can generate ridiculous swings up and down.

Whilst I do subscribe to the view that the market is (reasonably) rational, that is when looked at over the medium to long term. right now is a time to just sit back and look for opportunities.

For example, if there is a banking crisis in Europe (and I am not convinced any bank of any decent size is going to fail in the near future) then Australian banks will be sold down, simply because they are banks.

They have next to no exposure to European sovereign debt and are highly profitable. They will be sold down anyway, potentially opening a window of opportunity to buy them more cheaply than would otherwise be the case.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The report I heard about the French Credit Rating is that one of the ratings agencies 'accidentally' advised some of their clients of a removal of the AAA credit rating from France. Some accident! It is going to cost the ratings agencies big time, I suspect!

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Peter. It may not cost them anything. By the time court action is taken the report might prove to be accurate, just a little ahead of time?

huanga.

This is a brief excerpt from Bloomberg:

"Standard & Poor's roiled global equity, bond, currency and commodity markets when it sent and then corrected an erroneous message to subscribers suggesting France's top credit rating had been downgraded.

The benchmark Stoxx Europe 600 Index extended its decline to 1.5 percent to 234.11 and French 10-year bond yields surged as much as 28 basis points to 3.48 percent, the highest level since July, after the mistaken announcement. The euro pared gains and U.S. equities briefly dropped. Commodities erased gains before resuming increases after S&P affirmed France's AAA rating in a later statement..." [more]