Stock Market Today : May 21 - 25 - Page 3

Quote:

Originally Posted by Mr.Mike 

"GREECE is a tiny country, less than 2% of Europe's GDP. Its got about the same GDP as the State of Nevada. Now Nevada's economy not doing well since the Housing Bust. But do we in USA worry about our whole nation's economy just because housing prices had a real bust in Nevada? Same thing in Europe is that Germany is growing and is 15X the GDP of little Greece, so stop worrying always about Greece. One way or another, the Greek Government will have to get in line and be rational."

 

Found this post

Really couldn't disagree more with the source of your post Mr.Mike. To really understand the issue takes a great deal of time.

For me to understand it I had to break it down into degestable chunks:

Why does this economically small country have such importance? (Relatively speaking economically Greece is not huge no offense Greece)

Debts are held by european banks and non payment (default would do significant damage)

Also does it pave the way for other nations to default such as Portugal, Ireland or Spain?

Debt forgiveness but stay in Euro ? Still financial damage unsure how viable this is.

So this debt is important and at this time I lean to an eventual Greek exit (HSM Grefuss - I concede - 6 months later !)

1) There is no majority Greek party at the moment, attempts to for a co-allition have failed so we wait further elections mid june.

2) Make no mistake 80% of greeks want the Euro currency

3) The majority do not want the harsh austerity they are suffering

4) It is a mess that we should all be watching unfold.

http://www.youtube.com/watch?v=cEbioTWE6Gg

I have posted this link before (last week) its an hour long by former UK MP Michael Portillo and it explains things rather well.

Don't under rate this issue, the debt to GDP is huge and unlike the USA and England the Greeks can't print money to pay debts as we can. Also GDP is shrinking as debts rise so this is  real mess

and causing division in Europe. G8 sumit states that Pres Obama wants (as do other EU national leaders) Greece to stay in the Eurozone. 

WELL I WANT TO BE AN ASTRONAUT BUT ITS JUST NOT GOING TO HAPPEN !!

In short some of the parties are pandering to the people with promises of less austerity this will not satisfy the EU. Meanwhile the parties that satisfy the EU are not getting the votes from the people as it means austerirty !  Its a bad situation austerity = suffering - povererty for some. No austerity = return to drachma - poverty and savings reduced by the conversion of euros to sinking drachma.

(This is why the bank run has not been publicised in Greece, anyone with a brain stem is taking Euros out as a  switch would happen overnight at a weekend - bang its done)

Hope this helps anyone that is wondering what the he*& is going on?

Quote:

Originally Posted by IchibomB 

Bob told me yesterday that he likes drags and not the car type. 

Bob and Gil likes drags (drag queens I bet)....hum....strange american habbits......

Quote:

Originally Posted by Mr.Mike 

"GREECE is a tiny country, less than 2% of Europe's GDP. Its got about the same GDP as the State of Nevada. Now Nevada's economy not doing well since the Housing Bust. But do we in USA worry about our whole nation's economy just because housing prices had a real bust in Nevada? Same thing in Europe is that Germany is growing and is 15X the GDP of little Greece, so stop worrying always about Greece. One way or another, the Greek Government will have to get in line and be rational."

 

Found this post

73.6% of all statistics are made up.

Maybe Greece is a decoy to take everyones attention from the real problems?

The Worlds Biggest Debtor Nations:

http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations

UK's Debts 'Biggest in the World'

http://www.bbc.co.uk/news/business-15820601

External Versus Domestic Debt in the Euro Crisis

http://www.voxeu.org/index.php?q=node/6550

I'm no economist and won't even pretend to be one. If someone has the time to explain why we're worrying about the size of Greece's public debt when the UK's total debt is at 451% of GDP, I'd appreciate it..

I understand that the size of public debt indicates the capability of a government to boost the country's economy and apparently external debt is considered to be offset by the amount that is owed to the country, but still, feels weird.

Quote:

Originally Posted by WTFMarketWTF 

Maybe Greece is a decoy to take everyones attention from the real problems?

 

The Worlds Biggest Debtor Nations:

http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations

 

UK's Debts 'Biggest in the World'

http://www.bbc.co.uk/news/business-15820601

 

External Versus Domestic Debt in the Euro Crisis

http://www.voxeu.org/index.php?q=node/6550

 

I'm no economist and won't even pretend to be one. If someone has the time to explain why we're worrying about the size of Greece's public debt when the UK's total debt is at 451% of GDP, I'd appreciate it..

I understand that the size of public debt indicates the capability of a government to boost the country's economy and apparently external debt is considered to be offset by the amount that is owed to the country, but still, feels weird.

its not really about the debt as it is the value of the euro.  the UK is not in the eurozone.

and Venom, shut up and go lose some money.

Looks like the first link is totally make up statistics to make Americans feel better that they are at the bottom of the rank... Hong Kong does not have high debt like 200+%...  Hong Kong government is actually famous on how they run huge profit most of the time.  

http://en.wikipedia.org/wiki/Economy_of_Hong_Kong  

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

Hong Kong gov't even just gave every single adult Hong Kong citizen around the world (anyone over 18 yrs old and you could be an immigrant who left HK for years because HK supports dual citizenship) to get $6000 HKD (around $770 USD).  No question asked, just as long as you can provide ID or birth certificate to show that you have legal HK citizenship.

Yes, that included my uncle who was born in HK back in 1948 and left HK back in 1975.  He still has his birth certificate so he got that $770 USD free money.  Current there are 7 mil people in HK, who knows how many had immigrated since 200+ yrs ago... remember the sons and daughters of Hong Kong citizens who left HK are also HK citizens as well.

http://www.ecns.cn/in-depth/2011/09-02/2128.shtml

That's why I don't fully trust most of the western media anymore... You will often find conflicting stats and facts and history among multiple sources if you start reading news from different parts of the world.

Quote:

Originally Posted by WTFMarketWTF 

Maybe Greece is a decoy to take everyones attention from the real problems?

 

The Worlds Biggest Debtor Nations:

http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations

 

UK's Debts 'Biggest in the World'

http://www.bbc.co.uk/news/business-15820601

 

External Versus Domestic Debt in the Euro Crisis

http://www.voxeu.org/index.php?q=node/6550

 

I'm no economist and won't even pretend to be one. If someone has the time to explain why we're worrying about the size of Greece's public debt when the UK's total debt is at 451% of GDP, I'd appreciate it..

I understand that the size of public debt indicates the capability of a government to boost the country's economy and apparently external debt is considered to be offset by the amount that is owed to the country, but still, feels weird.

Quote:

Originally Posted by Venom08 

Ugh, I just flew to Europe and hate it. Just comparing a US airport to one from France or Germany will tell you everything you need to know about the way these countries differ politically and mentally. Probably the biggest difference is the attitudes of the
people, they're all jack$$3$$. I'm now in Bulgaria, I immigrated to the states a long time ago at the age of six, and am so glad my parents did that.

Are you serious? You cant take a tree for the forest...

Of course there are highs and lows. But the same aplies where ever you go around the world. I can give you a similar example: first time I flew to NY, at JFK airport, when I saw the size of those lines and the time they took checking my passport, I thought I was again in Tangier airport, in Morrocos...but concluding, by that, I was in third world again theres a big difference!

I was in Sofia in late 2009, December for sure, to check one possible buy for my company, one abandonned bulgarian company.

I was in a great hotel, in the middle of Sofia, where there was several Xmas parties happening, with nice girls, nice cars, lots of booze, etc.

One night I went to hotel casino just for some fun...two heavy gunmen on the door, scary...there I met a bulgarian lady, early 30s, amazing face and dressing, playing roullete (?). She was spending 500 € per round....

A few drinks later, rounds for her, she whispered me, with her tongue twisting her voice..."no problem, didnt lost much money....one round is one monthly salary....I will solve it in the morning"....
 

I freezed hearing that...

why are you comparing Bulgaria to all of Europe though? 

when youre in Mexico do you bitch and complain about the poor economies of North America?

Yes. Yes I do. 

I think people are still in a selling mood for no reason whatsoever.

If we bounce I think it will be "a dead cat bounce' but what do I know??

Quote:

Originally Posted by Stevie_B 

If we bounce I think it will be "a dead cat bounce' but what do I know??

About as much as the next guy

Quote:

Originally Posted by Mr.Mike 

 

About as much as the next guy

+1 for Mr. Mike 

Hi guys--long time troll here, figured I would pony up and start an account finally.
 

I wanted to comment on the threat of European contagion, how real the issues with the debt markets are, and try to offer a few links to help re-frame the discussion.  Below is a link to CNBC's page that quotes sovereign CDS spreads.

http://www.cnbc.com/id/38451750

A CDS allows a buyer to pay an annual premium to the issuer of the CDS who then in return guarantees to pay the purchaser of the CDS in the event of a bond's default.  Right now CNBC is quoting the price of a U.S CDS as roughly 50 BPS (it currently is showing up as 44.5 on CNBC).  This means that I would have to pay the issuer of a CDS covering U.S sovereign debt 0.5% of the amount of bonds covered by the CDS per year to be gauranteed in the event of default.

At a CDS rate of 1,267 BPS someone looking to insure 5 year Portugal sovereign debt would have to pay 12.67% of the amount insured per year.  (If insuring 10,000,000 of debt you would be paying ~$1.3MM per year)

Some people look at this number and say that this implies that Portugal currently has a 13% chance of default on its sovereign debt in the next year.   I choose to look at this percent more like that of a bond/loan wherein default risk is only a fraction of the implied 13% risk rate, albeit in this case a significant portion. 

My point here was to stress the significance of watching these CDS rates right now and hopefully explain what they mean.  With that being said there are a couple caveats that I want to note.

• Greece triggered a technical default on many of the CDS contracts that were insuring greek debt earlier this year.  I don't understand if this is having an effect on new contracts being issued on Greece or if it would anyway mess up the pricing.  For this reason and the fact that I believe that Greek failure is priced in I choose to concentrate on other country's CDS pricing.
• Credit default swaps are traded mostly over the phone between IBs, insurance companies, and specialized funds.  It is a very imperfect market and the pricing that cnbc or bloomberg puts out there is best viewed as a directional to what is going on in the marketplace.  They are probably getting their information from trades that go through clearing houses/brokers, not traders working directly with each other.  Traders working directly with each other is typically where most of the volume is in imperfect markets.
• Unique circumstances since 2008 have created massive supply/demand imbalances in a lot of markets (specifically the U.S sovereign debt market).  I am under the opinion that CDS prices provide the most efficient gauge currently available of how healthy any particular economy is.

I know this is a long first post but I have seen a lot of speculation about the Eurozone on the boards in the past year and felt the need to point out that there is a market based way to measure current risk.  Let me know if y'all have any questions or if some of this doesn't make sense.  I had to take some painkillers for an injury and may have gotten to rambling a little bit.