Registered Members Login:
   
Forgotten Your Details? Click Here To Recover +
Welcome To The ShareCafe Community - Talk Shares And Take Stock With Smart Investors - New Here? Click To Register >

2 Pages (Click to Jump) V   1 2 >   
 
  
Reply to this topic

Europe, its place in our economy
nipper
post Posted: Sep 18 2018, 01:11 PM
  Quote Post


Posts: 5,724
Thanks: 2077


QUOTE
Belgium, Finland, Germany, Ireland, and the Netherlands (though not in France any longer, interestingly). This is evidence of a profound structural malaise.

The ECB has already pre-committed to holding its reference rate at minus 0.4pc until late 2019. By then the global economy will be acutely vulnerable since the sugar rush from Donald Trump's tax cuts and infrastructure spending will have faded.

The US is entering uncharted and perilous waters. The jury is out over whether it can - in extremis - follow the example of Japan and push the public debt ratio to stratospheric levels (245pc of GDP).

The difference is that the Japanese are the world's biggest savers and external creditors. The Americans must import capital to finance their twin deficits.
Ambrose Pritchard-Evans



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Sep 7 2015, 01:08 PM
  Quote Post


Posts: 5,724
Thanks: 2077


The Greek values that have led to its mendicant economy
QUOTE
Too many politicians and economists blame austerity – urged by Greece's creditors – for the collapse of the Greek economy. But the data show neither marked austerity by historical standards nor government cutbacks severe enough to explain the huge job losses. What the data do show are economic ills rooted in the values and beliefs of Greek society.

Greece's public sector is rife with clientelism (to gain votes) and cronyism (to gain favours) – far more so than in other parts of Europe. Maximum pensions for public employees relative to wages https://www.issa.int/country-details?countr...;filtered=false are nearly twice as high as in Spain; the government favours business elites with tax-free status; and some state employees draw their salaries without actually turning up for work.There are serious ills in the private sector, too – notably, the pervasive influence of vested interests and the country's business and political elites. Profits as a share of business income in Greece are a whopping 46 per cent, according to the latest economic data http://capitalism.columbia.edu/files/ccs/w...r_87_phelps.pdf. Italy came in second at 42 per cent, with France third, at 41 per cent. (Germany's share is 39 per cent; the United States', 35 per cent; and the United Kingdom's, 32 per cent.) Insiders receive subsidies and contracts, and outsiders find it hard to break in. Astoundingly, young Greek entrepreneurs reportedly fear to incorporate their firms in Greece, lest others use false documents to take away their companies. According to the World Bank http://www.doingbusiness.org/rankings, Greece is one of the hardest places in Europe to start a business. The result is that competition for market share is weak and there are few firms with new ideas.

This stunted system springs from Greece's corporatist values, which emphasise social protection, solidarity instead of competition, and discomfort with uncontrolled change. These values may well be beneficial for family life; but, even with the best of intentions, they are a recipe for a static economy and stultified careers.

Indeed, Greece's labour productivity http://www.oecd.org/std/productivity-stats...rs-22252126.htm (GDP per worker) is only 72 per cent of the level in the UK and Italy, and a mere 57.7 per cent of that in Germany. And surveys indicate that mean life satisfaction in Greece is far below that found in the wealthiest EU countries (the EU15). Contrary to claims by the Greek government, corporatism impoverishes the less advantaged. EU data on poverty rates in 2010 put Greece at 21.4 per cent – far higher than the mean EU15 rate of 16.7 per cent.

To be sure, Greece saw productivity gainshttp://www.worldbank.org/en/region/eca/pub...n/golden-growth after World War II – but mostly from increases in education and capital per worker, which can go only so far. Two important sources of broad prosperity are blocked by Greece's system. One is an abundance of entrepreneurs engaged in detecting and exploiting new economic opportunities. Without them, Greece does a poor job of adjusting to changing circumstances (an imperative emphasised by Friedrich Hayek). Greece's much-lauded shipowners, for example, were too slow to adapt to containerisation, and thus lost their market share.

The other source of broad prosperity is an abundance of business people engaged in conceiving and creating new products and processes – often termed "indigenous innovation". Here, Greece lacks the necessary dynamism: venture capital investment inflows are smaller, relative to GDP, in Greece than in any other EU country. So Greece's economy has scant ability to create sustained productivity growth and high human satisfaction.

Some economists believe that these structural considerations have nothing to do with Greece's current crisis. In fact, a structuralist perspective illuminates what went wrong – and why.

For several years, Greece drew on the EU's aptly named "structural funds" and on loans from German and French banks to finance a wide array of highly labor-intensive projects. Employment and incomes soared, and savings piled up. When that capital inflow stopped, asset prices in Greece fell, and so did demand for labor in the capital-goods sector. Moreover, with household wealth http://www.ecb.europa.eu/pub/pdf/scpsps/ecbsp2.en.pdf having far outstripped wage rates, the supply of labor diminished. Thus, Greece went from boom to outright slump.

The structuralist perspective also explains why recovery has been slow. With competition weak, entrepreneurs did not rush to hire the unemployed. When recovery began, political unrest last fall nipped confidence in the bud.

The truth is that Greece needs more than just debt restructuring or even debt relief. If young Greeks are to have a future in their own country, they and their elders need to develop the attitudes and institutions that constitute an inclusive modern economy – which means shedding their corporatist values.

Europe, for its part, must think beyond the necessary reforms of Greece's pension system, tax regime, and collective-bargaining arrangements. While Greece has reached the heights of corporatism, Italy and France are not far behind – and not far behind them is Germany. All of Europe, not just Greece, must rethink its economic philosophy.

Edmund S. Phelps, the 2006 Nobel laureate in economics, is Director of the Center on Capitalism and Society at Columbia University and author of Mass Flourishing.

I am sure this will cause offense to many (he certainly ain't your 'local Keynesian'); the peculiar circumstances of being in the Eurozone are a further distortion/ amplification of problems. Greece is just an extreme example of the pretty pickle a lot of countries are in, as the challenge of too much DEBT is across the board.



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: Alethia  
 
nipper
post Posted: Mar 10 2015, 09:07 AM
  Quote Post


Posts: 5,724
Thanks: 2077


EU urges Greece to 'stop wasting time' on reform

well, there's a headline with a dollop of ambiguity



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: triage  early birds  
 
nipper
post Posted: Sep 10 2014, 08:27 AM
  Quote Post


Posts: 5,724
Thanks: 2077


In Reply To: nipper's post @ Aug 4 2014, 04:29 PM

http://www.fidelity.com.au/insights-centre...ical-weak-spot/

This is the last couple of sentences from the above article…

Investors and others will need to form their own judgments if polls show Le Pen is heading towards the presidency (France) – in July she took the lead in the first-round polls for this election; in September she beat Hollande in a second-round matchup, according to one polls.] Just beware that if Le Pen should win, she has pledged that on her first day in office that she will take steps to rid France of the euro and that she is willing to let "financial Armageddon" rip if other eurozone countries won't agree to a joint breakup. "What are other countries going to do (to stop me)," she taunts. "Send in tanks?"



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: Barra  
 
nipper
post Posted: Aug 4 2014, 04:29 PM
  Quote Post


Posts: 5,724
Thanks: 2077


In Reply To: arty's post @ Aug 4 2014, 04:20 PM

good point, arty - JP is a well-known bull

(& just as long as not too many drivers are in those trucks when they go over that cliff)



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
arty
post Posted: Aug 4 2014, 04:20 PM
  Quote Post


Posts: 13,078
Thanks: 3381


In Reply To: nipper's post @ Aug 4 2014, 02:24 PM

Agree in part ... but ...
If the truck sales had fallen off a cliff for 3 years running, there simply comes a time when continuing with the old ones becomes counter-productive, and you simply have to replace the oldest bombs. I don't know how big an impact that kind of scenario has on the overall figures, but the thought is enough to make me cautious and not join the cheer squad too soon.
Have a look at the DAX over recent weeks ...



--------------------
I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 


nipper
post Posted: Aug 4 2014, 02:24 PM
  Quote Post


Posts: 5,724
Thanks: 2077


QUOTE
Ultimately, ..it is all about confidence and investors are confident that the global recovery is on track and that the world's major central banks will be cautious in their removal of the accommodative stance in monetary policy.

Recent economic data suggests this optimism is warranted. Take for example an economic indicator from Europe, namely commercial vehicle sales, which have risen 9.1% over the past year.

When companies are confident about the future they buy a new truck, when they are not, they don't! Such sales fell off a cliff in the dark days of the euro crisis from 2010-2012.

Jonathan Pain




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: mullokintyre  
 
Mungo
post Posted: May 9 2012, 04:23 PM
  Quote Post


Posts: 925
Thanks: 182


In Reply To: flower's post @ May 9 2012, 04:18 PM

I look into my crystal Ball and I see the shit hitting the fan late 2015 - 2016. Whilst painful it will one of the best things that could ever happen from a finance educational point of view.


Said 'Thanks' for this post: flower  
 
flower
post Posted: May 9 2012, 04:18 PM
  Quote Post


Posts: 12,991
Thanks: 1105


In Reply To: alonso's post @ May 9 2012, 03:54 PM

QUOTE
The uncertainty generated by Hollande's election and the political turmoil in Greece, where election gains by hard-left and extreme-right parties stripped the ruling coalition of its majority, have riled international markets



One of the matters of great concern has to be that quite suddenly the reactions of Mr Average in France and Greece to austerity (read reality) have ignited wild political swings that hold massive implications.

We see in a matter of hours all sorts of questions being posed eg who remains in what currency etc etc, what many fear is that attention will now swing to have closer look at Japan and the US---with the same outcomes as on the Continent, one wonders is the final day of reckoning about to dawn--will EVERYBODY be forced into repaying debt--and what might that entail---OR will those still holding debt laden assets have just one more chance to go liquid (sell) via a QE3 type liquidty push initiated by the US to ensure Obama's election?



--------------------
Combining Fundamental comments with Fundamental charts.
 
alonso
post Posted: May 9 2012, 03:54 PM
  Quote Post


Posts: 2,588
Thanks: 97


With division in the ranks will the eurocrats be able to stop Greece plunging us all into a nightmare?

AAP: PRESSURE is building on president-elect Francois Hollande to stand by France's austerity vows, with Germany's Angela Merkel saying Europe is counting on them to resolve the bloc's debt crisis. Mr Hollande's first foreign trip as president will be to Berlin next week.

Dr Merkel, in a letter to him that was released by her office, noted that he was assuming power in the European Union's second-largest economy "at a time full of challenges".

"It is up to us to take the necessary decisions for the European Union and the eurozone, to prepare our societies for the future and protect and advance prosperity in a sustainable way," she wrote.

But she also made clear she had no plans to renegotiate the fiscal pact setting tough budgetary rules for EU states that she spearheaded, despite Mr Hollande's call to rework it to do more to foster growth.

Start of sidebar. Skip to end of sidebar.

End of sidebar. Return to start of sidebar.

Yesterday, Japan joined those raising concerns about his plans, as Finance Minister Jun Azumi warned Mr Hollande to keep France's fiscal discipline in place.

"We want (France) to do what has been decided so far," Mr Azumi told a regular news conference, according to Dow Jones Newswires.

"I don't know whether Mr Hollande will immediately act on what he has said in heated debates during the election campaign," he said.

"But realistically, I think it is impossible (for European nations) to give up on fiscal-rebuilding efforts."

And a German member of the European Central Bank's board also warned France to honour its fiscal commitments.

"I expect France to implement the fiscal pact unchanged," Joerg Asmussen told the German daily Handelsblatt in an interview published today.

"In addition, I expect the new government to respect the promise to reduce the public deficit next year below the three per cent (of GDP) mark."

Mr Hollande promised cheering supporters on Sunday that he would reopen talks to ensure the EU fiscal pact focused on growth rather than simply imposing deficit-cutting austerity rules.

EU president Herman Van Rompuy announced yesterday that the bloc's leaders would meet on May 23 for an informal dinner ahead of an EU summit on June 28 and 29 that is expected to focus on growth.

Mr Hollande's transition chief Pierre Moscovici said the Socialist would not give up on his plan for "a European project that is more favourable to growth" and that France's partners would budge.

"We will find a compromise. And I am convinced that things are starting well," Moscovici told RTL radio.

The uncertainty generated by Hollande's election and the political turmoil in Greece, where election gains by hard-left and extreme-right parties stripped the ruling coalition of its majority, have riled international markets.





--------------------
"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith
 
 


2 Pages (Click to Jump) V   1 2 >

Back To Top Of Page
Reply to this topic


You agree through the use of ShareCafe, that you understand and accept the TERMS OF USE.


TERMS OF USE  -  CONTACT ADMIN  -  ADVERTISING