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Randall : The euro as we know it is dead
Message
From
28/05/2010 12:46:08
 
 
To
28/05/2010 02:40:21
General information
Forum:
Finances
Category:
Other
Miscellaneous
Thread ID:
01465506
Message ID:
01466414
Views:
36
>There are no free markets. You are given an impression that you are taking part in a fair trade when investing in SE, but that is not the case. It used to be the case long time ago before they invented all those derivatives, structured fund vehicles, 'instruments' , high frequency trading etc.
>Today you are betting your money aginst the BOTs very mach alike to those machines in Las Vegas. There was recently the case when stock plunged 1000 points in a single day which in turn automatically drained money frrom many small investors (so called 'suckers') who had opted for certain value protection mechanisam (can't remember exact name).

The term your looking for is stop-loss and quite frankly those who employ it should know the risks or not use it. Those who got stopped out earned their losses. I've said it before, if you do not know what you're doing then stay out of the stock market and for god's sake do not use techniques for which you do not understand the risks. For those of us who do understand what we're doing, the "flash-crash" provided an outstanding buying opportunity.

>Now if trade was indeed free they would be indeed just 'loosers', however SE is controlled by people who sometime call themselves 'market makers' (this is how both Blankfein and Bernie Maddof called themselves) and their financial BOTs. Nowdays they are capable of pushing stocks up or down almost as they pleased.

There is definitely some truth to this, however, it's not quite as you make it seem. The major institutions are the ones who control the way stocks move as they have the resources to purchase or sell enough to move the ticker. However, they are very slow to act and as such there is plenty of opportunity for nimble small investors to trade around them. In addition, long term investors can predict and piggy back on their methods and make long term gains through growth and dividends. Including Madoff as an example is just silly. He can call himself whatever he wants, he never made a trade. The best he could do was go on tv and make claims. Even Buffett cannot move the market much simply by going on tv, the institutions look at his actual trades. Madoff's influence, like his trades, were all made up. ;)

>'Volatility' is when they make big money, so they naturally shake the markets all the time.

Actually the really big guys hate volatility. Just ask CalPERS.
CalPERS was told Monday to expect lower investment returns over the next 10 years, a development that could put more pressure on taxpayers and workers to increase contributions to the pension fund.
...
Consultants said returns are expected to fall as markets become increasingly volatile.

http://www.sacbee.com/2010/05/18/2757679/calpers-warned-about-lower-investment.html

The amounts of money they deal with are too vast to make nimble trades. As such they prefer slow growth and dividends to produce nice neat returns. Hedge funds and trading desks are different and not nearly as influential as the stock holdings of major institutional investors.

>Not only that market is cheated, but they openly call small investors, our pension funds, municipality funds and nowdays entire states 'suckers'.

Quite frankly a large number of people in the market are "suckers" who have no freaking clue what they're doing. During the 90s, any company having a name that sounded tech-like was bought to the point of absurdity. That was done by small-investors, 401ks and mutual fund managers responding to the public demand. That had to collapse. Some Enron and Worldcom employees had their entire retirement funds in their company's stock. That's concentration of investment to the point of lunacy. Many people simply threw their retirement at whatever mutual fund their company offered which had the highest 5 year return. Never bothering to read the very clear language "past performance does not predict future results" which is printed on every single legitimate fund sheet out there. In the 2000s the same happened again with ETFs and real estate.

>It is all fraud, it is very widely spread and it is sad. SE parasites outgrew the tree that they are feeding/growing uppon and that is a serious problem.

??

>And nobody have solution for it because 'regulation is bad' . {g}

Strawman! Oppressive, risk-punishing, investment-killing regulation is bad. Competition-inducing, risk-rewarding regulation is good and necessary.

>Back to euro;
>Euro economy is very strong, Euro currency was also very strong up to only few months ago.

It was fake and pumped up, just like the rest of the western world. The debts of the Euro-zone are not new, they've been known for years, however, they were not seen as a high risk while the western economies were roaring. After all growth is the way out of debt. Once we contracted the spotlight shone on reality. Just like sub-prime, just like dot com, just like every other bubble economy.

>What happened is that in 2007 crush weakened dollar so bad, that global switchover from USD to EUR (+gold) bacame almost natural trend.
>Rrrriiiingggg!!

The effect is called "flight to safety", and there's nothing new or rigged about it.

>So now all of a sudden greek debts became global news (Greek debt - a news ?? {g}) with all bunch of speculation (smear campaign) of entire Europe falling apart blah blah etc. As I said, this is act of financial terrorisam with only difference that it is not buildings collapsing

All the sudden?

1 January 2001: Greece joins the euro
15 November 2004: Greece admits fudging euro entry
29 March 2005: Austerity measures
Spring 2006: Bouncing back?
4 October 2009: George Papandreou becomes Greece's prime minister
30 November 2009: Debt fears mount

http://www.guardian.co.uk/business/2010/may/05/greece-debt-crisis-timeline

The Greeks have been faking their numbers since the late 90s in order to gain entry into the Euro. They ramped up the fudging between 2000-2003 to hide the debt buildup in the run-up to the 2004 Olympics.

>but entire states. Media attack are the airplaines, while behind the scenes financial drillings are weakening euro support columns.
>Over there it was 'pancake effect', here it is already called 'domino effect'.
>Yeah, all clear, very natural, simple free market. {g}

There's a very real prospect of default of a Euro-zone country thus their debts demand higher return. Since there's a common currency between multiple countries, they are all affected. The lack of a strong central bank prevents a rapid coordinated response to the panic, further compounding the problem. Then there were the band-aid measures, followed by the emergency fund, which was tapped 10 days after it was created. The fact that Greece is not alone, but is one of 5 countries identified as high-debt ratio risks as far back as 1997 intensifies the problem. The markets have responded accordingly.

What's occurring today is not a sudden unexpected event. This is the predicted result of poor political decisions by a set of countries who were financially crowbarred together as a political creation by European leadership who desperately wanted an economic zone large enough to compete with the US and a future China. The desire to get "something" created overwhelmed sound financial advice about the necessary regulatory makeup of the zone. The result we're now experiencing was foreseen from before it's inception. That those warnings were not heeded is why the zone is in the hole it dug for itself.

Remember Milton's prediction from 1999?
http://www.american.com/archive/2010/february/maybe-milton-was-right-about-the-euro

>>Responses in-line. In addition I just posted Message# 1466268 for more information.
>>
>>>>In one respect, Mrs Merkel is right: "The euro is in danger… if the euro fails, then Europe fails." What she has not yet admitted publicly is that the main cause of the single currency's peril appears beyond her control and therefore her impetuous response to its crisis of confidence is doomed to fail.
>>>>...
>>>>Telegraph loyalists with long memories will be shocked by none of this. In 1996, Sir Martin Jacomb, then chairman of the Prudential, set out with great prescience in two pieces for The Sunday Telegraph why a European single currency, without full political integration, would end in disaster. His prognosis of the ailments that might afflict the eurozone's sickliest constituents reads as if it was penned to sum up today's turmoil.
>>>>
>>>>"A country which does not handle its public finances prudently will find its long-term borrowing costs adjusted accordingly," Sir Martin predicted. "Although theory says that default is unlikely, nevertheless, a country that spends too much public money, and allows its wage costs to become uncompetitive, will experience rising unemployment and falling economic activity. The social costs may become impossible to bear."
>>>>

>>>>
>>>>http://www.telegraph.co.uk/finance/comment/jeffrandall/7746806/Whatever-Germany-does-the-euro-as-we-know-it-is-dead.html
>>>
>>>
>>>Greece represents barely 2% of Euro economy and would never be able to bring euro down without 'little hellp from our friends'.
>>
>>Greece, by itself, cannot bring down the Euro, as I've previously stated they are the first domino. The Euro could likely survive a Greek default as well as Portugal and maybe Italy. It cannot survive more than one and it cannot survive if Spain fails.
>>
>>>What is happening to Euro lately is pure financial terrorisam. Merkel banning naked short selling is not enough, but I would say it is
>>>step in right direction in combating global financial gangsters. That ban should IMO become global.
>>
>>Then you do not believe in the free market. There is no difference between investing in a stock or bond to the downside as well as the upside. Without that you do not have the two sides to a trade. The knee-jerk ban of certain naked shorts is shortsighted, panicky and yet another blow to confidence in the political leadership in time of crisis.
>>
>>>Financial systems globally are in need for complete reform and TOUGH regulation. Next good thing would be (as she proposed) global tax on financial transactions. On EACH AND EVERY ONE!
>>
>>Which will further damage investors appetite for Euro markets and continue to tighten the pool of funds which are so desperately needed.
>>
>>>If you can sit at home and gamble on SE in pursue of easy money, then you should as well pay tax immediately on all your 'winnings'. If you loose, then other side should pay tax on their 'winning'. So weather you win, or sophisticated BOT softwares you are betting against, your country should receive some money for it.
>>
>>If you think of investing as gambling then you should not be investing. With gambling, you know the house odds depending on the strategy you use and the payout tables. There is no such set odds with investing. In addition, with gambling, you are playing against the house and the odds always favor the house. With the stock exchange there is no house to "play" against. One side buys the other sells, hence "exchange".
>>
>>>Stock exhanges were not invented to become global (rigged) casinoes but for enterprises to gain access to funds needed for expansion. Therefore they should be returned to their original function.
>>
>>Again, investing is not gambling and if you think of it that way you should not participate.
>>
>>>Otherwise, not only Euro but all global currencies (and economies) are in big jeopardy. It happened to you back in 2007, it is happening to EU nowdays. Unless we have more Merkel's , sonner or later we are all doomed.
>>
>>The Euro was a poor concept from the start. Launching a common currency across multiple countries with divergent priorities in regards to investment, public spending, debt and culture was a bad idea, however, it could work if there was consistent central leadership. Since that clearly does not exist, there is no way for the Euro countries to speak as one in regards to their currency. In addition, all member states are subject to divergent political winds within their own governments. The downfall was inevitable without dramatic change to the structure of the common currency countries.
>>
>>>After couple of rounds of global inflation spirales, none of us will enjoy secure retirement (unless you have rental income). People will
>>>have to go back in rural areas in order to be able to produce daily food, or live poorly in the cities. Hence making 75k-100k all your life and then eventually getting todays 400$ worth of pension to live on. (It might be called 3,000$ / month but it will be still just 400 today's dollars or euros).
>>>
>>>This is where current situation is leading us.
>>
>>The Euro-zone has designed it's own downfall and has no one else to blame but themselves. Now the question is, can they pull themselves out? I personally think yes. It will be tough. It will require strong leadership and a huge shift away from the growth-crippling belief in Euro-socialism as a viable long term economic position, but yes, I think that Europe has withstood many hard times in the past and has made the tough choices to push through.
Wine is sunlight, held together by water - Galileo Galilei
Un jour sans vin est comme un jour sans soleil - Louis Pasteur
Water separates the people of the world; wine unites them - anonymous
Wine is the most civilized thing in the world - Ernest Hemingway
Wine makes daily living easier, less hurried, with fewer tensions and more tolerance - Benjamin Franklin
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