So, now is not the time to be in shares ?

 

We'll all be speaking German after all

 

Fractional reserve banking always ends up swamping everyone in debt, then the currency fails.

 

Demand for US Dollar increases and it gets stronger against the Euro as the euro zone debt contagion spreads...

 

If Italy goes down the pan, does that mean I'll be able to pick up a Brand new 458 Italia for the price of a Mondeo?

 

Yes, but a new Mondeo will cost £168,000 due to inflation and interest!

 

Damn.

 

Post of the year so far!!

 

Pay off the mortgage instead?

TX.

 

So should I book my Jamaca holiday now or in sept about a week before i wanna go?

 

At the minute I'm working abroad and get paid in Euros but transfer my wage into Sterling to cover mortgage payments and for savings. What is this situation going to mean for me?

Basically is the exchange rate going to get better or worse for me?

Kev

 

Markets down 2.5% already this morning !

 

If Italy goes to the wall it may well mean the end of the Euro. The big plus from that would be that it would be impossible to federate the Eu countries and with a bit of luck the whole egregious scheme may all turn to dust.

Les

 

Probably worse short term as the Euro weakens against the pound.

 

But if the Euro weakens I will get more sterling when exchanged, or have I got that the wrong way around?

 

You could be right being wrong

 

Yup, wrong way round. If the Euro weakens it means you'll be buying less Sterling for the same amount of Euro.

 

Damn it!!!

 

If the smart money is already in cash, then there is no real money left to sell. With no selling power the markets often drift higher. Volume hasn't been big considering the volatility we have seen, surprising since we know fear to be a stronger emotion in comparison to greed. This reaffirms that more than likely the smart money is already in cash and the low volume often triggers volatile thin trading. If everyone is bearish, you'd be surprised how rewarding being a patient bull can be. One bit of good news triggers a bit of risk appetite and then as all the bears stops get triggered waves of new buying emerge....

June, the risk off trade saw equities down for 3weeks, good news and all this damage pared within a week. Usually we sell off frantic and then grind higher, here the converse.....

 

Could it be that this is so big and intangible that everyone has just locked down and are doing nothing - like the bank we talked about.

He was in massive amounts of cash months ago. It a cash and hold strategy.

You are right though - there is no black Monday...


...yet!!!!

 

I'm pretty certain the big institutions are largely cash allocated, from speaking to brokers there's not a lot of business being done out there at present.

There doesn't need to be a black Monday, the markets are very efficient in pricing risk. The consequence of these European dominos falling is global. China will realise their economic output and reserves is futile if there is no one to do business with, market rumour today was that they started buying euro debt. The US will not allow the efforts of asset purchasing and maxing out the Feds credit card to be in vain. Default will eventually occur, but the global economy is not robust to tackle this burden quite yet.....

 

When will it ever be robust enough for a default though? It's surely just like anything that people generally just don't want to happen?

 

Italian debt is almost 25% of the eurozone debt total. Remarkable.

 

So they should be able to adsorb a default soon then?

Or is it a case of everyone getting to used to the idea of 'bail outs' and so nobody wants to blink?

 

It is this sort of fear that is pushing me back to property. I don't trust anything else right now. I did not expect this.

 

But Spain is still small compared to Italy, it is also less intertwined to northern Europe economies.

 

I am not sure property is immune. Ownership means you have an asset that is depreciating in real terms. Rental is risky.

A friend of mine has 73 rental properties. If he does not get rent on 3 of those he is loss making. And in this climate collecting 90-95% of your rents is a challenge!!!

And if you only have 3 or 4 properties the risk of occupancy or default is a lot higher!!!!

 

Definitely not immune, just seems the least of evils to me now. I mean primary property. I am not rich enough to have a string of rentals without leverage and have a nice owner occupied too. The situation with 73 rentals for which you need 70 occupied is far more scary than my risk averse stomach would tolerate.

 

looks like financial suicide to me -- if mortgage rates go up I would make an offer to the lease/finance company on his Aston