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Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    Instead of whinging about it all, why don't you try and make a go of it yourself?!

    As for your later post about the price of oil - so what? - it's a commodity that's in high demand - take a reality check - get up and make it in your life, instead of thinking life's just one big problem!

    Your intellectual laziness is very apparent. You clearly didn't realise the amount of effort I put into my long post on the previous page.

    Do you want martial law and neo-feudalism in this country? How about a war with China and Russia? Neither do I.

    Edited by PersianPaladin
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    As harve has touched on, re inflation and interest rates, its a hell of complicated set up to understand correctly (nobody does imho), the news always presents it very clean, simplistically and wrong.

    Go Greek strikes Go.... It's not often I support strikes, but in this I do. They are absolutely right that Greece does not need more lending. It can't afford what it owes full stop, they still need t

    Afraid not, old bean; China has been a Communist People's Republic since, when, 1947? Just because it's a Tory government that's doing all the kow-towing makes not a jot of difference...But I bet that

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    Posted
  • Location: Stoke Gifford, Bristol
  • Location: Stoke Gifford, Bristol

    Your intellectual laziness is very apparent. You clearly didn't realise the amount of effort I put into my long post on the previous page.

    Do you want martial law and neo-feudalism in this country? How about a war with China and Russia? Neither do I.

    Don't do intellectuals - they're my pet hate - always trying to lecture the working class - most of 'em tend to read The Guardian and plant themselves into the public sector, as 'professors' or lecturers or something similar.

    I prefer to make money and live well - v enjoyable.

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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    Don't do intellectuals - they're my pet hate - always trying to lecture the working class - most of 'em tend to read The Guardian and plant themselves into the public sector, as 'professors' or lecturers or something similar.

    I prefer to make money and live well - v enjoyable.

    Well, I guess "serious discussion" isn't for you then.

    And no, don't condescend the working-class as being past this sort of understanding.

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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    This made me cry. One of the rare examples of a music company giving attention to permaculture co-operatives and grassroots community projects.

    All cities need to start doing this now; as the alternative would be to give powers to centralised agriculture which is more dependent on fossil-fuels and could well be controlled by government-corporations.

    An uplifting and positive video for 2011.

    Edited by PersianPaladin
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    Posted
  • Location: Bramley, Hampshire, 70m asl
  • Location: Bramley, Hampshire, 70m asl

    http://www.ft.com/cms/s/0/d2b3d95e-19c3-11e0-b921-00144feab49a.html?ftcamp=rss#axzz1AIWsoxjZ

    A new year but the same old problems for the euro zone!!

    Portugal seem almost certain to be bailed out in the near future.

    I can see the German, and to a lesser extent the French getting more and more fed up ...if, as is likely, Spain go the same way....

    Could France and Germany bail out of the euro altogether??

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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    10 year portugese bond yields have hit 7.12% today.

    7% is pretty much the state bankruptcy level, so looking odds on that Portugal will be next at the EU trough. Spanish banks share prices are at or close to 52 week lows - am certain where Portugal goes Spain will follow - however Spain will be a lot more painful for everyone.

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    Posted
  • Location: Rochester, Kent
  • Location: Rochester, Kent

    10 year portugese bond yields have hit 7.12% today.

    7% is pretty much the state bankruptcy level, so looking odds on that Portugal will be next at the EU trough. Spanish banks share prices are at or close to 52 week lows - am certain where Portugal goes Spain will follow - however Spain will be a lot more painful for everyone.

    This, I think, will propagate to the UK by the summer when banks are once again forced to fend for themselves in the global market without UK government help. Also, known as the big elephant in the room. Could we see a run on the likes of Santander? Possibly, but unlikely, since the Germans most likely will bail them out just in time.

    After Portugal, then Spain - which, let's face it are more or less foregone conclusions, I suspect Italy, Belgium, and then, shock/horror, France. When French gilts rise sky high, then that's the end of the EUR. After all, no-one likes the French, particularly their economic model.

    Knock on effects for this are clearly SME related since high commodity prices, which are set to continue throughout the year (since demand from the EU is small in proportion to India/China/Brazil, for instance) will cripple cash-flow as firms try to restock, and any SME with interests overseas from their home nation will suffer as organisation against USD manipulation grows with China (secretly) and Brazil (openly) start to impose crippling trade tariffs on USD sourced and priced goods. Restocking firms will be hit again since traditional high inventory businesses are forced to go back-to-back with big orders, thus nullifying any advantage from only shipping inwards during low commodity pricing.

    In the round 2011 does not look good in my view. On the balance of risks, it seems very wise that the UK is attempting to pay it's deficit down at breakneck speed. At least we'll have a good interest rate when we need it later.

    Edited by VillagePlank
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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    In the round 2011 does not look good in my view. On the balance of risks, it seems very wise that the UK is attempting to pay it's deficit down at breakneck speed. At least we'll have a good interest rate when we need it later.

    Agree 2011 doesn't look great from a number of angles.

    It's fairly obviously where the stress points are, picking which one breaks first is a bit harder. I also think that 2011 has the greatest potential for some black swan event (Iran, Korea, China hyperinflation, or something as yet unknown) than we have had for a few years.

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    Posted
  • Location: Dorset
  • Location: Dorset

    Portugal hits new yield heights, I agree with VP that this is only a matter of time (probably weeks), Spain is a bit more 50-50 though.

    A rescue attempt could work with Spain and stop the rot, assuming sufficent pressure was put on the remaining Euro states to reduce structural deficits and assuming Germany was prepared to try and curb export growth.

    Further afield we have Brazil bleating about how exchange rate flucuations are unfair, a view I have zero sympathy for. These countries benefited greatly from the over heated western economies and so cannot expect to maintain growth of 7 or 8%.

    Equally if they have sound finances, strong growth and good export growth then they can also expect their currencies to appreciate against countries have have borrowed too much and are struggling with growth, they should fully understand that this is exactly how the markets work to correct inbalances.

    For the world the biggest problem is associated with Pakistan and Isreal IMO and not government debt or any Euro issues.

    I think the general agreement is that a significant Isreal war this year stands ar 60% or so. Particularly given that Hamas now has lazer guided anti-tank missles capable of destroying Israels best tanks. They also have new rockets with a 300 mile accurate range thanks to Iran. Couple with this you have close communication(closer than ever) between Hamas, Hizbullah and Iran, with Hizbullah having somewhere between 30-60000 missles capable of hitting Isreal compared to the 5000 in the last war(which they didn't lose) and only 100 or so truely capable missiles.

    There is considerable talk that a quick 6 month war with Isreal which the US wouldn't get involved in might help the anti-isreal cause considerably in the medium term.

    Anyhow back to world economics, the country who's software carries most of the worlds payments is.....Yep Isreal, an Israel incapable of supporting this would be dire to the global economy as would the extra cost incured by the US if this were to happen.

    Pakistan is another kettle of fish and would probably hit the emerging stock markets.

    Definately a dangerous year where the biggest shocks to global growth are the shocks yet to start materialising.

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    Posted
  • Location: 4 miles north of Durham City
  • Location: 4 miles north of Durham City

    Portugal hits new yield heights, I agree with VP that this is only a matter of time (probably weeks), Spain is a bit more 50-50 though.

    A rescue attempt could work with Spain and stop the rot, assuming sufficent pressure was put on the remaining Euro states to reduce structural deficits and assuming Germany was prepared to try and curb export growth.

    Further afield we have Brazil bleating about how exchange rate flucuations are unfair, a view I have zero sympathy for. These countries benefited greatly from the over heated western economies and so cannot expect to maintain growth of 7 or 8%.

    Equally if they have sound finances, strong growth and good export growth then they can also expect their currencies to appreciate against countries have have borrowed too much and are struggling with growth, they should fully understand that this is exactly how the markets work to correct inbalances.

    For the world the biggest problem is associated with Pakistan and Isreal IMO and not government debt or any Euro issues.

    I think the general agreement is that a significant Isreal war this year stands ar 60% or so. Particularly given that Hamas now has lazer guided anti-tank missles capable of destroying Israels best tanks. They also have new rockets with a 300 mile accurate range thanks to Iran. Couple with this you have close communication(closer than ever) between Hamas, Hizbullah and Iran, with Hizbullah having somewhere between 30-60000 missles capable of hitting Isreal compared to the 5000 in the last war(which they didn't lose) and only 100 or so truely capable missiles.

    There is considerable talk that a quick 6 month war with Isreal which the US wouldn't get involved in might help the anti-isreal cause considerably in the medium term.

    Anyhow back to world economics, the country who's software carries most of the worlds payments is.....Yep Isreal, an Israel incapable of supporting this would be dire to the global economy as would the extra cost incured by the US if this were to happen.

    Pakistan is another kettle of fish and would probably hit the emerging stock markets.

    Definately a dangerous year where the biggest shocks to global growth are the shocks yet to start materialising.

    Hamas doesn't have that sort of weaponry. Israel has them surrounded and encased. Hizbullah is what you need to be actually referring to.

    Edited by PersianPaladin
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    Posted
  • Location: Leeds/Bradford border, 185 metres above sea level, around 600 feet
  • Location: Leeds/Bradford border, 185 metres above sea level, around 600 feet

    http://www.ft.com/cms/s/0/d2b3d95e-19c3-11e0-b921-00144feab49a.html?ftcamp=rss#axzz1AIWsoxjZ

    A new year but the same old problems for the euro zone!!

    Portugal seem almost certain to be bailed out in the near future.

    I can see the German, and to a lesser extent the French getting more and more fed up ...if, as is likely, Spain go the same way....

    Could France and Germany bail out of the euro altogether??

    In terms of Europe, i think that Belgium and Italy are the immediate problems other than Greece. Other countries which i would keep an eyeball on are Spain, Portugal and the Netherlands.

    Spain i think will survive, with Portugal being 50/50, however i can see Belgium, Italy and the Netherlands requiring bailouts.

    With just short of 200% national debt and a massive fiscal defecit, does anybody think Japan could go under?

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    Posted
  • Location: Rochester, Kent
  • Location: Rochester, Kent

    With just short of 200% national debt and a massive fiscal defecit, does anybody think Japan could go under?

    Curiously, Japan has pledged to purchase $100bn of EUR bonds ... of course, this is likely to be the S&P AAA+ stuff, and not specific government debt, but it does make an ECB bailout rather than a IMF bailout more likely. There's also a sniff that the ECB already knew this, since some of the high bond-yield states saw the rates drop yesterday, and the presumption in the markets is that the ECB are trying to manipulate markets to hold EUR value. Naughty.

    I think Japan will continue to stagnate since debt vs exports is pretty stationary at least during 2011; and if they buys these bonds, they are looking at a multi-decade strategy to kick start growth.

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    Posted
  • Location: Bramley, Hampshire, 70m asl
  • Location: Bramley, Hampshire, 70m asl

    I think Japan will continue to stagnate since debt vs exports is pretty stationary at least during 2011; and if they buys these bonds, they are looking at a multi-decade strategy to kick start growth.

    Isn't it a bit optimistic to talk about kick starting growth in Japan? They've been looking to revive growth since the 1990s!

    Isn't one of their biggest problem the rapidly aging population..... not to mention a massive debt, deflation......etc

    The Eurozone crisis seems, from my layman observer perspective, to be gaining a head of steam again with virtually every country under threat from the usual suspects like Portugal to rudderless Belgium. Is there a real threat to countries like Belgium? Are Germany expected to bail out the whole of Europe?

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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    In terms of Europe, i think that Belgium and Italy are the immediate problems other than Greece. Other countries which i would keep an eyeball on are Spain, Portugal and the Netherlands.

    Spain i think will survive, with Portugal being 50/50, however i can see Belgium, Italy and the Netherlands requiring bailouts.

    With just short of 200% national debt and a massive fiscal defecit, does anybody think Japan could go under?

    If the Netherlands need a bailout before Spain, I will eat my hat.

    Japan is an example of what the US and UK benefit from - being that debt is OK when the quality of the creditor nations is good. Personally, I don't see much difference between an unsustainable deficit in Japan or the US and an unsustainable deficit for Greece or Argentina.

    Edited by Stu_London
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    Posted
  • Location: Dorset
  • Location: Dorset

    While we are talking about the euro zone countries(and I am currently listening to a forecast about it at work).

    I think it helps to understand the relative sizes of the countries, below are the 2010 GDP values(or best estimates) for a selection of countries in Bn.

     Germany 3,306

     France 2,555

     United Kingdom 2,258

     Italy 2,036

     Spain 1,375

     Belgium 461

     Sweden 444

     Greece 305

    Ireland 204

    Portugal 244

    I think this shows that it's relatively easy for the likes of Germany and France to support the much smaller countries like Ireland and Greece and Portugal, Spain is another matter but still possible(just).

    I also think it shows why these smaller countries are at risk as their debts are just unservicable when based around it's GDP, if you assume say a 40% tas rate you can see that Greece, Ireland etc just cannot possibly pay the level of debt back.

    When it comes to Japan and the US with the same criteria, they can still service and pay back their debt, it might be uncomfortable but it's possible. Hence why I don't think they are in the same boat.

    Edited by Iceberg
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    Posted
  • Location: Rochester, Kent
  • Location: Rochester, Kent

    Isn't it a bit optimistic to talk about kick starting growth in Japan? They've been looking to revive growth since the 1990s!

    Isn't one of their biggest problem the rapidly aging population..... not to mention a massive debt, deflation......etc

    Yup, agree; which is why it has to be multi-decade.

    The Eurozone crisis seems, from my layman observer perspective, to be gaining a head of steam again with virtually every country under threat from the usual suspects like Portugal to rudderless Belgium. Is there a real threat to countries like Belgium? Are Germany expected to bail out the whole of Europe?

    Insurance against default is either at record levels, or is near record levels (normally packaged up in things like credit-default swaps) When insurers cease to insure against countries defaulting, those countries then can't sell the bonds, which means they can't raise money - and it's defo off to the IMF, then.

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    Posted
  • Location: Dorset
  • Location: Dorset

    Heres something I've been asking myself for awhile.

    Why is 7% seen as the default rate now for western European nations....?

    The UK has experienced rates as high as 12% on 10 yr notes in the last 20 years.

    Now anything above 4% is seen as risky.?

    This is particularly strange in view of the inflation rate.

    If we take this further one of the reasons for default as VP points out above are the high rates of CDS(or insurance/hedging against defaulting).

    Again CDS rates of 500 base points (5%) would be seen as utterly crippling, however again 10 years ago alot of government debt was brought without CDS or anykind of insurance as it simply didn't exist as a high volume product. If you could do without 10 years ago, you can do without it now.

    What's changed in the last 10 years which has caused countries to have to offer such low rates or even investors to accept such low yields.? Is it purely inflation expectations is it debt levels(neither of which seem greatly different to me than in 1990. Is it simply supply and demand i.e the total borrowing of countries far exceeds that of 1990, more borrowing/supply, with stable demand(lower demand in times of liquidity crunches) might well lead to lower prices.

    Whatever the reason I see very little to suggest that 7% as a seen default rate is right, it might be right for some indervidual countries, but for the UK it's probably more like 10% and Germany maybe 15%, US probably 8%.

    For Greece IMO it was 5%, Ireland probably 7-8%, Spain 6.5% and portugal 8%.

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    Posted
  • Location: Tunbridge Wells, Kent
  • Location: Tunbridge Wells, Kent

    We are definately in a low yield era, which has come about via the low IR, low inflation economics of the late 90s, early 00s.

    The problem was, we weren't really in a low inflation era. We imported a lot of deflation from the far east and the way inflation was calculated was changed to manipulate it downwards (i.e the exclusion of assets).

    Fast tightening yields equalled rapid asset price appreciation which led to rapid credit expansion to keep up with demand. The rest, as they say, is history.

    During the 1980s interest rates were almost always above 10% in the battle against inflation. Yields on equities were up around 7-8%, property investment would sometimes get you 15%-20% if you were prepared to scratch around in the mud for your return.

    Because of the money that has been allowed to pour into assets in the last decade, yields are now very tight and there are imbalances in certain areas. For exaple commercial property will return 6%-8%, whereas residential (where there are more costs and hassle) is stuck at 5%

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    Posted
  • Location: Dorset
  • Location: Dorset

    Maybe not VP, the bonds will sell there is no doubt about that, it's more who the buyer is.....Is their any real interest or will it only be the ECB with other friendly governments.

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    Posted
  • Location: Rochester, Kent
  • Location: Rochester, Kent

    Maybe not VP, the bonds will sell there is no doubt about that, it's more who the buyer is.....Is their any real interest or will it only be the ECB with other friendly governments.

    It's the contagion that's the problem, I reckon.

    Of course, and as you say, if the price is right they will sell; not so sure the ECB is willing to do this, unless the ECB stuff gets sold to China/Japan very soon - but this is only a move to preserve export markets, not out of friendliness, I think.

    If the price is high, then Spain are going to go, followed closely by Belgium. Strangely, I think that Italy might just make it since they've borrowed most of their debt from their own people so are not entrenched to the will of the market.

    What is almost certain in my view is that money is going to going from North Europe to South Europe, and, that, as austerity continues to bite, the people of North Europe will eventually get sick of subsidising retirement ages of 50, with 6 hour working days, and that will be the political impetus to break the EU.

    I know I am pretty much an economic bear (rather than a bull) but even taking that into account the future still doesn't look rosy to me.

    Edited by VillagePlank
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    Posted
  • Location: Dorset
  • Location: Dorset

    Well the yields in the end where lower than they have been for a week or so, not that this has much bearing IMO.

    Considerable rumours this weekend that the European Union(replace with Germany) are insisting that debt write offs need to be considered, with a 40% writedown of Greek debt, 20% or Irish and portugal's and if spain goes a 10-15% slice.

    Talk like this will scare the willies off the debt traders, even assuming a short term 6 month bond.

    I think the above is exactly what needs doing, but the effects on the other bond markets for US, Japan etc will be severe as investors finally realise that developed western world governments can default and that there is a real risk, so we would probably be looking an a jump of at least 200-300 basis points across the global on average.

    The other aside is BP and Russia. It seems that the greed of BP has no bounds and it's prepared to do business with the Russian Mafia in order to make a bit of money, This is totally unacceptable IMO and based on this I wouldn't buy BP shares even if I thought they would increase by 100% this year.

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