SERVING THE QUANTITATIVE FINANCE COMMUNITY

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farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: farmerOkay I have a new theory. The US is doomed. And that is the underlying economic trend driving this euro. That was my theory, of course, after they passed Obamacare. But I was eventually fooled by the statistics, like many. So the US is actually the money-lacking continent, with the stimulus drying up or something.QuoteInitial claims for unemployment benefits shot up by 25,000 to 471,000 last week. Economists had expected claims to drop to 440,000.Meanwhile, the Philadelphia Fed reported its gauge of regional manufacturing activity dropped to 21.4 in April, slightly more than expected, from 20.2 in March. And leading indicators fell 0.1 percent in April, the first decline in a year.

sunra
Posts: 16
Joined: October 31st, 2009, 4:11 am

### Why is this Greece situation bad for the Euro?

bro. eur 0.80. and thats being generous, hasnt even hit the fan over there yet

farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: sunrabro. eur 0.80. and thats being generous, hasnt even hit the fan over there yetMy last four trades in it have been long profit, short loss, short profit, short profit. So I am not allergic to the short side, but my beliefs are generally unchanged. What island are you going to buy when your puts pay off?

TheNaif
Posts: 76
Joined: November 11th, 2005, 2:28 pm

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: farmerQuoteOriginally posted by: sunrabro. eur 0.80. and thats being generous, hasnt even hit the fan over there yetMy last four trades in it have been long profit, short loss, short profit, short profit. So I am not allergic to the short side, but my beliefs are generally unchanged. What island are you going to buy when your puts pay off?---------------------------------------------------------------------------------------------------------------------------------------------------------------------Farmer I think you are out of your mind being long euros... I have been living in France, Germany, UK, Italy and the US and there is no way I would be short USA/long Europe.Interesting read: http://online.wsj.com/article/SB1000142 ... w"Economic growth in Europe has been slowing down since the 1960s, thanks to the increasingly damaging economic and social system which started dominating Europe at that time. The European "soziale Marktwirtschaft" is an unproductive variant of a welfare state, of state paternalism, of "leisure" society, of high taxes and low motivation to work. The existence of the euro has not reversed that trend. According to the European Central Bank, the average annual rate of growth in the euro-zone countries was 3.4% in the 1970s, 2.4% in the 1980s, 2.2% in the 1990s and only 1.1% from 2001 to 2009 (the decade of the euro). A similar slowdown has not occurred anywhere else in the world (speaking about "normal" countries, e.g. countries without wars or revolutions)."In fact I find Europe sickening, very static with no entrepreneurship. The bright young europeans usually flee to London/USA

farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: TheNaifIn fact I find Europe sickening, very static with no entrepreneurship. The bright young europeans usually flee to London/USAI am not betting they will have the next Microsoft. I bet long the euro. I have had such a ridiculous run of luck in this euro, on both the short and long side, I may actually post the run out of scientific interest when it ends. Meaning on the first day/week I don't sell the high and buy the low.

farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: farmerI have had such a ridiculous run of luck in this euro, on both the short and long side, I may actually post the run out of scientific interest when it ends.I am not shirking, my run continues.

farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

Obviously some people with more money than me decided to move on from betting against the euro in the last two days. I am curious if we can observe any changed ideas, or at least the latest ideas, of the euro doomsters in this thread. Are you still predicting doom with as much confidence, to the same extent, in the same timeframe?Thank you for explaining your ideas to me.

frenchX
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

I think that the Euro reached its lowest bound for this year. Now it is rising with the unemployment info in the US. When the austerity plans would be effective in Europe I guess it would rise a bit again. 1.5$is obviouly too high but I think that 1.3$ or 1.35$is a good goal. in the worst scenario I expect 1.2$ (kind of support for the darkest day). Pessimists in Wall Street said 1.15$or even 1$ at the end of the year but I sincerely don't think so. At the moment EURUSD is at 1.2556 $. Hazardeur Posts: 6 Joined: August 26th, 2007, 1:43 pm ### Why is this Greece situation bad for the Euro? QuoteOriginally posted by: frenchXI think that the Euro reached its lowest bound for this year. Now it is rising with the unemployment info in the US. When the austerity plans would be effective in Europe I guess it would rise a bit again. 1.5$ is obviouly too high but I think that 1.3$or 1.35$ is a good goal. in the worst scenario I expect 1.2$(kind of support for the darkest day). Pessimists in Wall Street said 1.15$ or even 1$at the end of the year but I sincerely don't think so. At the moment EURUSD is at 1.2556$ .And how is French bank BNP Paribas reacting to the latest surge in EUR/USD - after predicting parity and even 0.95 ? "Nous sommes desolee"...? :=)

farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: HazardeurAnd how is French bank BNP Paribas reacting to the latest surge in EUR/USD - after predicting parity and even 0.95 ? "Nous sommes desolee"...? :=)It could still get to .95, forever is a long time. And I am sure when the euro goes up or down for whatever reasons, banks, speculators, and other interested parties will again play that Trichet like a violin.

frenchX
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

QuoteOriginally posted by: HazardeurQuoteOriginally posted by: frenchXI think that the Euro reached its lowest bound for this year. Now it is rising with the unemployment info in the US. When the austerity plans would be effective in Europe I guess it would rise a bit again. 1.5$is obviouly too high but I think that 1.3$ or 1.35$is a good goal. in the worst scenario I expect 1.2$ (kind of support for the darkest day). Pessimists in Wall Street said 1.15$or even 1$ at the end of the year but I sincerely don't think so. At the moment EURUSD is at 1.2556 $.And how is French bank BNP Paribas reacting to the latest surge in EUR/USD - after predicting parity and even 0.95 ? "Nous sommes desolee"...? :=)As the americans who said that Germans would return in Deutsch mark Hazardeur Posts: 6 Joined: August 26th, 2007, 1:43 pm ### Why is this Greece situation bad for the Euro? QuoteOriginally posted by: frenchXQuoteOriginally posted by: HazardeurQuoteOriginally posted by: frenchXI think that the Euro reached its lowest bound for this year. Now it is rising with the unemployment info in the US. When the austerity plans would be effective in Europe I guess it would rise a bit again. 1.5$ is obviouly too high but I think that 1.3$or 1.35$ is a good goal. in the worst scenario I expect 1.2$(kind of support for the darkest day). Pessimists in Wall Street said 1.15$ or even 1$at the end of the year but I sincerely don't think so. At the moment EURUSD is at 1.2556$ .And how is French bank BNP Paribas reacting to the latest surge in EUR/USD - after predicting parity and even 0.95 ? "Nous sommes desolee"...? :=)As the americans who said that Germans would return in Deutsch mark Good, old Deutsche Mark. I still recall the 1000 DM notes. Helmut Kohl - Ph.D. in history - did not have any clue about basic economic policies. Conversion ratio of 1:2 for worthless German Demcoratic Republic afte the fall of the German Wall was his idea. BuBa president Karl Otto Pöhl suffered a heart attack, when hearing about this political nonsense. The productivity differences between both parts of Germany revealed the naivity of Kohl. Large monetary transfers have been necessary and several 100 bn Deutsche Marks later in infrastructure projects ( telecommunication, transportation and contstruction ) have been necessary to improve the capacity of competition of the "new" Eastern states. Reminds me what an effort is necessary to improve the competitive edge of the PIGS countries - not to mention Eastern Europe...

farmer
Topic Author
Posts: 13477
Joined: December 16th, 2002, 7:09 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: HazardeurGood, old Deutsche Mark. I still recall the 1000 DM notes. Helmut Kohl - Ph.D. in history - did not have any clue about basic economic policies. Conversion ratio of 1:2 for worthless German Demcoratic Republic afte the fall of the German Wall was his idea. BuBa president Karl Otto Pöhl suffered a heart attack, when hearing about this political nonsense. The productivity differences between both parts of Germany revealed the naivity of Kohl. Large monetary transfers have been necessary and several 100 bn Deutsche Marks later in infrastructure projects ( telecommunication, transportation and contstruction ) have been necessary to improve the capacity of competition of the "new" Eastern states. Reminds me what an effort is necessary to improve the competitive edge of the PIGS countries - not to mention Eastern Europe...This collective cost makes more sense to me than 99% of what governments spend the public's money on.

Martinghoul
Posts: 3256
Joined: July 18th, 2006, 5:49 am

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: HazardeurGood, old Deutsche Mark. I still recall the 1000 DM notes. Helmut Kohl - Ph.D. in history - did not have any clue about basic economic policies. Conversion ratio of 1:2 for worthless German Demcoratic Republic afte the fall of the German Wall was his idea. BuBa president Karl Otto Pöhl suffered a heart attack, when hearing about this political nonsense. The productivity differences between both parts of Germany revealed the naivity of Kohl. Large monetary transfers have been necessary and several 100 bn Deutsche Marks later in infrastructure projects ( telecommunication, transportation and contstruction ) have been necessary to improve the capacity of competition of the "new" Eastern states. Reminds me what an effort is necessary to improve the competitive edge of the PIGS countries - not to mention Eastern Europe...I really don't see what is specifically so wrong about what Kohl did. The re-unification of Germany was a political goal and it enjoyed, as I understand it, universal support both sides of the divide. I don't think that it comes as a surprise to anyone that you have to pay, if you want to achieve political goals. Moreover, transfer payments within political unions are not unusual. Just look at the US, where these transfers have been part of the political and economic landscape for a VERY long time. As you note yourself, this may be what's needed for proper EuroZone integration. That makes a lot of sense, if you take into account the fact that the EuroZone is a political construct, rather than an economic one. Either way, I don't see anything so horribly wrong with the idea.
Last edited by Martinghoul on July 4th, 2010, 10:00 pm, edited 1 time in total.

Hazardeur
Posts: 6
Joined: August 26th, 2007, 1:43 pm

### Why is this Greece situation bad for the Euro?

QuoteOriginally posted by: MartinghoulQuoteOriginally posted by: HazardeurGood, old Deutsche Mark. I still recall the 1000 DM notes. Helmut Kohl - Ph.D. in history - did not have any clue about basic economic policies. Conversion ratio of 1:2 for worthless German Demcoratic Republic afte the fall of the German Wall was his idea. BuBa president Karl Otto Pöhl suffered a heart attack, when hearing about this political nonsense. The productivity differences between both parts of Germany revealed the naivity of Kohl. Large monetary transfers have been necessary and several 100 bn Deutsche Marks later in infrastructure projects ( telecommunication, transportation and contstruction ) have been necessary to improve the capacity of competition of the "new" Eastern states. Reminds me what an effort is necessary to improve the competitive edge of the PIGS countries - not to mention Eastern Europe...I really don't see what is specifically so wrong about what Kohl did. The re-unification of Germany was a political goal and it enjoyed, as I understand it, universal support both sides of the divide. I don't think that it comes as a surprise to anyone that you have to pay, if you want to achieve political goals. Moreover, transfer payments within political unions are not unusual. Just look at the US, where these transfers have been part of the political and economic landscape for a VERY long time. As you note yourself, this may be what's needed for proper EuroZone integration. That makes a lot of sense, if you take into account the fact that the EuroZone is a political construct, rather than an economic one. Either way, I don't see anything so horribly wrong with the idea.I was not critisizing the idea of transfer payments. That´s just fine and as a political goal certainly of advantage. I just critisized Dr. Kohl´s toolkit, i.e conversion ratio.