ECB EFFECT ON THE MARKETS

odd1

hi all


http://online.wsj.com/news/articles/SB10001424052702304431104579549401081860542?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304431104579549401081860542.html


With Draghi's comments yesterday, what do you think the ECB will do in june and what effect will it have on the markets?

how will you position yourself with your views?

lucky john

Because of Draghi's quantitative teasing over the last 2 years the markets are only half expecting action in june. There's a little bounce from yesterday's statment but it's mostly a wait and see stance. If inflation comes in even .01% above .07% for May then more doubts will be raised. Same with euro v dollar. Anything less than 1.38c will raise questions.

If he really wanted to weaken the euro and boost the economy, he actually has put himself it a great position to do that. The market will be expecting minimum action as is his way. If he was to shock the market by cutting rates to 0, charging banks to deposit with the ecb and announce a sizable and immediate bond buying programme he just might archive his goals. A bit of Friedman economics. Will he do that? Well he's loaded the gun....

odd1

Yes john those three options are widely flaunted by the media, another tool he has in his box is to devalue the euro. Now that would be a shock!

lucky john

I doubt that type of nuclear option is in his bag of tricks. It would certainly devalue the euro, to 0 I imagine. He'd have to block all financial transfer of funds to stop every cent of capital fleeing Europe. Not to mention the exit of fdi from here...

odd1

lucky john wrote: »

I doubt that type of nuclear option is in his bag of tricks. It would certainly devalue the euro, to 0 I imagine. He'd have to block all financial transfer of funds to stop every cent of capital fleeing Europe. Not to mention the exit of fdi from here...

However low the probability it is still a possibility. Two years ago he said "what ever it takes to save the Euro" and has so far resisted QE.

So to follow up on your last point, if you think all this this money would flow out of europe where would it go? and what position would you take if did occur?

so far we have six possibilities
1) Overnight rate cut
2) Interest rate cut
3) some form of QE
4) Two or more of the above
5) ECB does nothing
6) Devalue the Euro

any more?

I,m not economically savvy, but i do know the top five would take years to filter through and even then might not work.

euroboom13

Higher interest rates attract capitol/show confidence /hints at an impending growth period.

Low interest rates is a false economy.it is doing nothing ,helping nothing ,only encouraging complacency to tax and indirect tax increases.

Don't be fooled by talk of a long term period of low rates.

odd1

so far we have seven possibilities
1) Overnight rate cut
2) Interest rate cut
3) some form of QE
4) Two or more of the above
5) ECB does nothing
6) Devalue the Euro
7) Raise interest rate

odd1

euroboom13 wrote: »

Higher interest rates attract capitol/show confidence /hints at an impending growth period.

Low interest rates is a false economy.it is doing nothing ,helping nothing ,only encouraging complacency to tax and indirect tax increases.

Don't be fooled by talk of a long term period of low rates.

My own view would be that a rate cut at this stage would have little or no impact on its own.

euroboom13

odd1 wrote: »

My own view would be that a rate cut at this stage would have little or no impact on its own.

My honest opinion is we are going to have another game changer like 2007 but this time it will by followed by high inflation and high interest rates as the corrective measure! And I can't see any other possibilities!!

lucky john

Reducing rates from .25% to 0 will have very little effect unless you had a big mortage and a tracker. The majority of banks won't even pass it on especially with stress tests pending. However with the US looking at increasing rates this time next year it may cause some cash deposits to move and weaken the euro a bit. It would take 2 years at least to see cash generated by increased exports filtering into the economy.

Charging banks to deposit overnight and encouraging them to lend instead will be a slow burner too. People and businesses are paying down debt and not borrowing. They feel poorer and just don't have much spare cash to pay for extra borrowing.

For qe to make a difference it would need to be meaningful amounts. At this moment banks would just hoard the cash to repair/strengthen their balance sheets. However, if there was enough cash flooding the system then, as in the US and UK asset prices start to increase making everyone feel richer and more likely to borrow and spend. Government feels richer as well allowing for capital projects to be funded, creating jobs and thus generating economic activity. As other countries are going in the opposite direction now, the euro will start to loose value boosting exports and activity further ignighting the economy.

All this activitie creates demand in the economy and inevitably inflation rises. And that's the holy grail. High inflation makes all our depts more manageable but not only our debt but government debt as well. That's without doubt the only way the first world can possibly pay down its massive debt and that's where the US, UK and Japan are heading. Dragi has resisted so far because he knows this course of action is a deal with the devil. Creating inflation is one thing, putting it back in the box is another. No one actually knows how. Greenspan, who started this ball rolling never gave an answer when questioned on controlling inflation without destroying the economy all over again.

So what's the best way to make money in a world of high inflation because 2 maybe 3 years from know that's where we will be.

euroboom13

Buy assets.

odd1

Effects of QE on the S&P


http://www.zerohedge.com/news/2013-05-06/sp-and-without-qe

odd1

lucky john wrote: »

Reducing rates from .25% to 0 will have very little effect unless you had a big mortage and a tracker. The majority of banks won't even pass it on especially with stress tests pending. However with the US looking at increasing rates this time next year it may cause some cash deposits to move and weaken the euro a bit. It would take 2 years at least to see cash generated by increased exports filtering into the economy.

Charging banks to deposit overnight and encouraging them to lend instead will be a slow burner too. People and businesses are paying down debt and not borrowing. They feel poorer and just don't have much spare cash to pay for extra borrowing.

For qe to make a difference it would need to be meaningful amounts. At this moment banks would just hoard the cash to repair/strengthen their balance sheets. However, if there was enough cash flooding the system then, as in the US and UK asset prices start to increase making everyone feel richer and more likely to borrow and spend. Government feels richer as well allowing for capital projects to be funded, creating jobs and thus generating economic activity. As other countries are going in the opposite direction now, the euro will start to loose value boosting exports and activity further ignighting the economy.

All this activitie creates demand in the economy and inevitably inflation rises. And that's the holy grail. High inflation makes all our depts more manageable but not only our debt but government debt as well. That's without doubt the only way the first world can possibly pay down its massive debt and that's where the US, UK and Japan are heading. Dragi has resisted so far because he knows this course of action is a deal with the devil. Creating inflation is one thing, putting it back in the box is another. No one actually knows how. Greenspan, who started this ball rolling never gave an answer when questioned on controlling inflation without destroying the economy all over again.

So what's the best way to make money in a world of high inflation because 2 maybe 3 years from know that's where we will be.

http://research.nordeamarkets.com/en/2013/12/04/euro-area-viewpoint-qa-on-negative-ecb-deposit-rate/

Just to back up some of your points, thanks for a bit of direction.

Thursdays euro data will be worth watching

lucky john

euroboom13 wrote: »

Buy assets.

Well cash is going to be a loss maker with the slightest spike in inflation. So in theory any assets at all would be better.

Leaving Putin and the consequences of his future actions out of this, is there a particular asset that does have the edge. Property maybe, especially here. The hedge funds seem to think so.

I think shares could be a little more unsure because of the ending of US qe. The s and p is very close to breaking records for both highs and valuations. Q1 results were mixed and that includes a dumbing down of expectations because of weather. If Q2 are as mixed it will cause jitters. How much QE would Europe need to sustain a US bull? Its unlikely there will be enough so if the US market turns then its most likely it will drag all markets down regardless of Draghi.

The winners in this sinario should be European banks and dare I say it BoI. Banks are out of favour at the moment and off highs. Stress tests should sort out the good from the bad and they will be the big beneficiaries of cash for bonds. They will be loaded with cheap money to lend and profit from and over the last while they have broken the link between EU rates and the margin they lend at. 3% profit is now the average BoI NIM on new loans. So with property prices rising with inflation and new money in the system, a euro pull back increasing export competitiveness, more jobs, ect, BOI are surely in a good place.

So that my bet. Property and banks. Hmmmm where have I seen that combination before? The wheel turns....

euroboom13

lucky john wrote: »

Well cash is going to be a loss maker with the slightest spike in inflation. So in theory any assets at all would be better.

Leaving Putin and the consequences of his future actions out of this, is there a particular asset that does have the edge. Property maybe, especially here. The hedge funds seem to think so.

I think shares could be a little more unsure because of the ending of US qe. The s and p is very close to breaking records for both highs and valuations. Q1 results were mixed and that includes a dumbing down of expectations because of weather. If Q2 are as mixed it will cause jitters. How much QE would Europe need to sustain a US bull? Its unlikely there will be enough so if the US market turns then its most likely it will drag all markets down regardless of Draghi.

The winners in this sinario should be European banks and dare I say it BoI. Banks are out of favour at the moment and off highs. Stress tests should sort out the good from the bad and they will be the big beneficiaries of cash for bonds. They will be loaded with cheap money to lend and profit from and over the last while they have broken the link between EU rates and the margin they lend at. 3% profit is now the average BoI NIM on new loans. So with property prices rising with inflation and new money in the system, a euro pull back increasing export competitiveness, more jobs, ect, BOI are surely in a good place.

So that my bet. Property and banks. Hmmmm where have I seen that combination before? The wheel turns....

Agree 100% on European banks but for slightly different reasons.

Property still has a long way to go yet, especially property over 300k.Average wages have dropped, so average house prices not only have to reflect this but drop relevant to pre-boom highs. Interest rate rises are severely going to effect repayments and with expendable income nearly completely eroded ,with indirect taxes, who knows what will happen.

I for one would not be betting on interest rates hikes having any positive effect on leveraged property assets and since average property prices are a reflection of average mortgages holders, cash will still remain supreme in this area for a while.

My tip is stay in employment based equity, for the next 5years at least.(the property gamblers will have left the building at that stage.the whole country is betting on property still, but its not for me, yet!

odd1

what scenario is that?
you have run through a few of them, just not sure which one you think Dragi will do.

Or do you like property and banks as a long term position regardless of what Dragi does/does not do?

away for a few days will chat then.

lucky john

odd1 wrote: »

what scenario is that?
you have run through a few of them, just not sure which one you think Dragi will do.

Or do you like property and banks as a long term position regardless of what Dragi does/does not do?

away for a few days will chat then.

I think inflation figures for May will be .06...08% so Draghi will cut rates to 0.

I don't think he will charge banks to deposit with ecb.

He won't devalued the euro, not directly anyway.

QE is the hard one. I think hinting is no use anymore and he will announce some form of bond buying.

Not as much as is needed but enough to pull back the euro. 1.40 or so is just not acceptable against the dollar. 1.20 must surely be a target if the eu economy is ever going to compete. Draghi has MIT connections with both King and Greenspan but too date has shown no interest in following their path (too many german and nordic considerations maybe) so I can't see him announcing a major programme of qe.

Enjoy the break.

euroboom13

I would love to know what goods/services they measure their inflation off because where I am standing,all I have seen is nothing but "a general rise in prices"??

So if I am right and inflation is already here, the only reason I can see why we have low rates (considering no ones getting loans), is to allow the smooth introduction of new taxes, throughout the eurozone.

The next step is to introduce capitol again and control expendable income by new taxes and interest rates.

People generally believe that this recession is effecting everyone else more than themselves and they are right but only while interest rates are low!!

To prepare for any future in the Eurozone is to hedge against interest rates, everything else is secondary.
Good luck!

jank

lucky john wrote: »

I think inflation figures for May will be .06...08% so Draghi will cut rates to 0.

I don't think he will charge banks to deposit with ecb.

He won't devalued the euro, not directly anyway.

QE is the hard one. I think hinting is no use anymore and he will announce some form of bond buying.

Not as much as is needed but enough to pull back the euro. 1.40 or so is just not acceptable against the dollar. 1.20 must surely be a target if the eu economy is ever going to compete. Draghi has MIT connections with both King and Greenspan but too date has shown no interest in following their path (too many german and nordic considerations maybe) so I can't see him announcing a major programme of qe.

Enjoy the break.

This may be a stupid question but how can the ECB devalue the euro directly or indirectly if not by interest rate cuts, charging banks holding deposits or via QE?
Is there another way?

lucky john

jank wrote: »

This may be a stupid question but how can the ECB devalue the euro directly or indirectly if not by interest rate cuts, charging banks holding deposits or via QE?
Is there another way?

http://www.currencysolutions.co.uk/currency/why-do-governments-devalue-their-currency-rates

It would be a kind of nuclear option and go down like a lead balloon elsewhere but the ecb can devalue the euro if they could get its members to agree to it. Its an option every central bank has but its a sign of weakness rather than strength when it happens. Both ireland and the uk have done it in the not to distance past.

The other way, question is interesting because in theory the euro should have fallen dramatically in the last few years. The talk was of it disappearing all together. However, the US beat it to the punch every time by lowering rates and flooding it economy with freshly printed money. Even a central bank that offered 1% interest was better than 0 especially when US banks were getting it for nothing. So as the US printed by the billion the money ended up in Europe propping up the euro. (The more money in a currency the stronger it gets).

There is a view that if Draghi sits on his hands long enough the dollar will gain as interest rates in the US rise and QE ends. So its actually he possible to devalue by 0 measures. The problem for the ecb is that the economy could be destroyed by deflation by then so some kind of action is needed soon.

euroboom13

lucky john wrote: »

http://www.currencysolutions.co.uk/currency/why-do-governments-devalue-their-currency-rates

It would be a kind of nuclear option and go down like a lead balloon elsewhere but the ecb can devalue the euro if they could get its members to agree to it. Its an option every central bank has but its a sign of weakness rather than strength when it happens. Both ireland and the uk have done it in the not to distance past.

The other way, question is interesting because in theory the euro should have fallen dramatically in the last few years. The talk was of it disappearing all together. However, the US beat it to the punch every time by lowering rates and flooding it economy with freshly printed money. Even a central bank that offered 1% interest was better than 0 especially when US banks were getting it for nothing. So as the US printed by the billion the money ended up in Europe propping up the euro. (The more money in a currency the stronger it gets).

There is a view that if Draghi sits on his hands long enough the dollar will gain as interest rates in the US rise and QE ends. So its actually he possible to devalue by 0 measures. The problem for the ecb is that the economy could be destroyed by deflation by then so some kind of action is needed soon.

The currencies that devalue last, win . France in the 30`s was booming with currency tourists(france was last to devalue,ecb seem to be imitating ).

lucky john

euroboom13 wrote: »

The currencies that devalue last, win . France in the 30`s was booming with currency tourists(france was last to devalue,ecb seem to be imitating ).

Interesting. Did they physically devalue or did the introduce measures? Is Draghi into world economic history I wounder or just slow to act.

euroboom13

lucky john wrote: »

Interesting. Did they physically devalue or did the introduce measures? Is Draghi into world economic history I wounder or just slow to act.

Roosevelt(part of the new deal) ordered that all gold should be sold back to the state at a fixed price and when most was returned(some wealthy families in the know held out), they increased its value against the dollar overnight. Britain and Germany followed but France reneged for months and then agreed. American elite were living in the south of France on American incomes, like kings.

Read "lords of finance"! how four men controlled the world`s finance.

euroboom13

http://www.amazon.co.uk/Lords-Finance-Great-Depression-Bankers/dp/009949308X/ref=sr_1_1?s=books&ie=UTF8&qid=1399907824&sr=1-1&keywords=lords+of+finance

euroboom13

euroboom13 wrote: »

Roosevelt(part of the new deal) ordered that all gold should be sold back to the state at a fixed price and when most was returned(some wealthy families in the know held out), they increased its value against the dollar overnight. Britain and Germany followed but France reneged for months and then agreed. American elite were living in the south of France on American incomes, like kings.

Read "lords of finance"! how four men controlled the world`s finance.

Have just read what I wrote and spotted my inaccuracy, the Americans where living like kings in the south of France before America devalued the dollar against gold.

odd1

jank wrote: »

This may be a stupid question but how can the ECB devalue the euro directly or indirectly if not by interest rate cuts, charging banks holding deposits or via QE?
Is there another way?

Not a stupid question at all, one I imagine has been asked a lot behind closed doors.

Jeopardy was a tv show where they gave you the answer and you had to guess the question.

All we can do is guess the questions they are asking and try and figure out the answer.

odd1

http://www.bloomberg.com/news/2014-05-24/draghi-s-mountain-retreat-contemplates-new-ecb-horizon.html


Should be an interesting week ahead in the european markets, as the big guns will start to take positions and hedge bets on what Dragi may hint at in the next few days.

lucky john

odd1 wrote: »

http://www.bloomberg.com/news/2014-05-24/draghi-s-mountain-retreat-contemplates-new-ecb-horizon.html


Should be an interesting week ahead in the european markets, as the big guns will start to take positions and hedge bets on what Dragi may hint at in the next few days.

I think serious qe is enviable now as a result of the elections this weekend. The European economy needs to grow or the euro sceptics will gain the upper hand and uncertainty will reign. The clock is ticking for the middle ground to produce growth so july if not june.

If the markets analysis the politics of the elections they will see this and price it in fairly quickly.

odd1

So what happens if the ECB bring in QE? Indices go up? Value of EUR down? Money goes to emerging markets with better interest rates?

If the interest rate stays the same at 0.25%, does US, UK and Japanese money keep coming in, keeping EUR fx rate high?

It does not make sense to me, to cut interest rate and QE or am I missing something

euroboom13

rates need to rise

investors will then spend rather than sit on the fence.

ecb need to create a confident market place, not a life support economy

be prepared for rate hikes (hopefully this june meeting)cash wont stay top dog for much longer!

odd1

^^ While raising rates would boost investment not sure how it would effect inflation if its still decreasing.

With the wake up call to all parties across europe in the elections, all those in power will do anything to hold on to it. So massive pressure is on to sort this mess out once and for all. Big changes are coming....

odd1

euroboom13 wrote: »

I would love to know what goods/services they measure their inflation off because where I am standing,all I have seen is nothing but "a general rise in prices"??

http://www.rateinflation.com/inflation-information/calculate-inflation

It does explain how they measure inflation, and some links on the right.
If i find the actual goods/services, I'll post the link.


EDIT http://sdw.ecb.europa.eu/reports.do?node=1000003107

I did a bit of digging and from what I can gather each country in the eurozone has their own inflation rate which are then all added together and an average for the eurozone is then given. The basket of goods/services is quiet extensive, here's an old one from the uk that I found.

http://www.theguardian.com/news/datablog/2012/mar/13/inflation-basket-goods-2012-full-list

lucky john

odd1 wrote: »

euroboom13 wrote: »

I would love to know what goods/services they measure their inflation off because where I am standing,all I have seen is nothing but "a general rise in prices"??


http://www.rateinflation.com/inflation-information/calculate-inflation

It does explain how they measure inflation, and some links on the right.
If i find the actual goods/services, I'll post the link.

The inflationary pains we all feel are government related ones eg, vat 21% to 23% , carbon taxes, general taxes ect. The actual productive economy has not raised prices in years because supply has outstriped demand and consumers, because of government mostly, have a much reduced disposable income. The result is stagnation or worse deflation. A spiraling circle of lower prices attempting to attract careful customers.

Because government must balance their books (no borrowing over 3% of gdp or something like that) there is no way to return cash to house holds through lower taxes. That leaves limited options. So lower interest rates and return a €100 a month on average to borrowers (if banks pass it on which is now in their interest to do) is one way.
But pump Europe full of cheap money, thus devaluing the euro, giving business a competitive edgy globally, creating more jobs and boosting disposable income is the big option.

Europe has 5 years to fix this because at the next parliament elections the number of hard left and hard right mep's could outnumbered the centre making the whole thing unworkable. That's why I think 0 rate's plus qe is a cert. Possible future inflation is not near as scary as the establishment loosing control of power.


The eu have to fix this problem urgently

odd1

Europe has 5 years to fix this because at the next parliament elections the number of hard left and hard right mep's could outnumbered the centre making the whole thing unworkable. That's why I think 0 rate's plus qe is a cert. Possible future inflation is not near as scary as the establishment loosing control of power.

The eu have to fix this problem urgently

True, but it is political issue and the brief of the ECB is (supposedly) independent of politics.
I think unless inflation is so low that the ECB has to act, it will resist QE until it see's what reforms the politicians come up with.
could be wrong, often am but thats my view at that moment.

lucky john

odd1 wrote: »

lucky john wrote: »

True, but it is political issue and the brief of the ECB is (supposedly) independent of politics.
I think unless inflation is so low that the ECB has to act, it will resist QE until it see's what reforms the politicians come up with.
could be wrong, often am but thats my view at that moment.

I wounder how long the euro would last if the euro sceptics take control? Not much use for a ECB if there's no euro so be in no doubt political issues matter.

odd1

Any word from Draghi today? not long home haven't seen anything yet.

lucky john

Na. All about the surge of the sceptics, especially in France.

odd1

France not a happy camper at the moment, the Germans will have to grant a few concessions

hullaballoo

When someone has clearly messed up quoting someone else, can we please stop quoting those posts. It's a nightmare to read.

odd1

Ok my bad. I fixed what I could. Any other mistakes is my fault.

euroboom13

call me paranoid but unlike the rational explanations of low interest rates ,I see it more like this.
I disagree with the eu inflation figures .....heres how I see it:

health insurance /car insurance/house insurance well up; petrol/diesel/electricity/gas well up; general none luxury food up;all taxes up: cinema well up:.......

.down car prices/house prices down/wages down/interest rates down

What the eu are doing is slowly increasing taxes and indirect taxes,as people wont protest until cash in cash out changes.

We are being played for fools and when interest rates normalize ,it will be too late to complain, the new system, which is geared to control expendable income, will be in set in stone.

I am well aware on how inflation/deflation is measured, just I disagree.

Anyone can see we need to attract capitol and this is impossible, with low rates and 0 inflation.(and before u say it,i know we are being told low rates fix deflation, rubbish ,how?when nobody/sme are getting loans!)

We have just witness a political coo , on how to change a tax system without protest, and everyone should congratulate each other on our blind stupidity. I just cant get my head around how nobody can see it ,and that everybody thinks low(deflation fighting)interest rates are here to stay, rubbish rubbish rubbish

question 1
How when it is near impossible to get credit is low interest rates fixing deflation???.

question 2
Why ,when all our expenditure is going up, do we hear ""deflation risk"" and not pull are hair out??

question 3
Why do people feel they cant question publicly quoted statistics without being accused of being ignorant.

just a theory ,yours euroboom

househero

euroboom13 wrote: »

What the eu are doing is slowly increasing taxes and indirect taxes

question 1
How when it is near impossible to get credit is low interest rates fixing deflation???.

question 2
Why ,when all our expenditure is going up, do we hear ""deflation risk"" and not pull are hair out??

question 3
Why do people feel they cant question publicly quoted statistics without being accused of being ignorant.

Your not paranoid. Your saying it as you see it. There's nothing wrong with that.

Q1.
Credit isn't that hard to get, compared to when they were throwing it at you it may be tougher. Low rates are NOT fixing deflation, increasing rates would increase deflation without fundamental economic growth (which is non existent)

Q2.
Relatively speaking commodity prices are around 8% lower than where they *should be. If we didn't have a recession and stagnation.

Q3.
You absolutely can. The figures you should be considering over stated are...

The stock market - 5 to 15% too high due to fed stimulus.

Unemployment figures - WAY higher than stated, no longer looking/in training, underemployed and working for Free under gov programs (exploiting desperate people).

House prices - nothing short of state sanctioned and media driven propagander. Our gov watch the UK gov start a new bubble and they want a piece (increased tax revenue) the media drives it, idiots watch the 'news' and read papers. Pay more for houses. The most vulnerable and easily led (old people) ho off to buy more cars and live their lives as pre 09 because the newspaper told them to.


The EU is facing the same problem Japan did 30 years ago.

Austerity failed (The IMF write a paper on how they fecked up Ireland's recovery) the imposter austerity removed 30 to 40% more from our GDP than if we had 'done nothing'

Now the general EU wide consensus is, its best to 'do nothing'

euroboom13

Househero ...I agree 100% with your view on the property market.i also think that if stamp duty was lowered on residential (investment) property a lot of stretched landlords would take the opportunity to sale, which would create a buyer friendly market(unlike the starved market bubble now).when rates normalize ,house`s will be less affordable.

I still think a statement of confidence of growth, that rate hikes would bring, is all that the eu needs to do to start inflation. Who would ever invest in an economy that is preaching about its deflation problem!

I also think there will be some sort of devaluation alliance with usa/Britain and eu, in the near future. qe only works if all nations participate ,other wise you just get currency tourisim.

I don't believe in doing nothing,by doing nothing ,you are waiting for something to force your hand.

euroboom13

sorry ,when i said gov need to reduce stamp duty to free up houses ,i meant capitol gains tax.Alot of elderly landlords sick of all the new taxes and would sell and re-invest if they had a reduction on their 30% tax on every euro profit!An investor whom retired with some property in 1990 to 2000 would still have good profit,but wont put them on the market with this rate(cost plus to goverment when sales increase ).And reinvestment would help somewhere even in bank deposites.
gla

househero

odd1 wrote: »

This day next week the charts are going to be looking a lot different.
Ok when I asked the question in post number 1, I wasn't really asking for the answer. It was the most likely question I thought would be asked by hedge fund mangers, investment institutions or anyone with enough money to move the markets( theyt? big guns from here on out)
Now there is no way to compete with the big guns so might as well follow them. So we are the mini guns with seven possibilities so far, there are more but Time is ticking so if no-one adds any more by tomorrow night I will draw a line under number eight called surprise.

So if anyone wants a rant and rave or are afraid to ask, throw it out there, I don't have the answers but hey some might throw you an answer back.

So from Saturday time to look at what effect each possibility Will have on the four major asset classes.
Lucky John, Euroboom thanks for your input so far.

Go go mini guns:D

Did that make any sense

stevedublin

euroboom13 wrote: »

I also think there will be some sort of devaluation alliance with usa/Britain and eu, in the near future....

When do you think this would happen?

euroboom13

stevedublin wrote: »

When do you think this would happen?


Change is something that is never predictable but always happens.(wont be to long)

odd1

we have eight possibilities
1) Overnight rate cut
2) Interest rate cut
3) some form of QE
4) Two or more of the above
5) ECB does nothing
6) Devalue the Euro
7) Raise interest rate
8) surprise (anything outside the 7 listed)

A) What effect would each possibility have across the four major asset classes?
stocks/indices
forex
commodities
bonds

If you are unable or unprepared to answer the above question do you think its wise to be investing/trading?

Good luck with whatever position you decide to take.

euroboom13

my only interested is in stocks because I think it has the biggest potential(indices to slow). commodities are over sold in my opinion/bond market not volatile enough for me, spread betting is only for fun!

Great time for investing unless you believe in further economic collapse in europe.
Good luck

odd1

dax
eur/aud nzd
gold
bund

news at ten. let the games begin.

odd1

stevedublin wrote: »

When do you think this would happen?

Might get a mention at G7 meeting tomorrow.