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Constable

€/$ At 1.42

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I heard a quote a few months ago that "the Euro above 1.40 tips Europe back into recession".

The Euro made a new 52 week high today.

The PIIGS are already crippled by massive interest repayments due to the high yields on their debt. The last thing they need is this.

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I heard a quote a few months ago that "the Euro above 1.40 tips Europe back into recession".

The Euro made a new 52 week high today.

The PIIGS are already crippled by massive interest repayments due to the high yields on their debt. The last thing they need is this.

Genuinely interested why this should be. If the mad Kenyan keeps printing and the African Americans and Jews who receive the money go out and buy BMWs, won't that be a boost for Europe?

Edited by mightytharg

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http://www.bloomberg.com/news/2011-03-08/roubini-says-oil-prices-at-140-may-result-in-double-dip-in-some-nations.html

Nouriel Roubini, the economist who predicted the global financial crisis, said an increase in oil prices to $140 a barrel will cause some advanced economies to slide back into recession.

Underlying how fragile the global economic recovery is, Roubini said the European Central Bank may be making a mistake by raising interest rates “too soon” when debt-ridden countries on the euro region’s periphery struggle to restore the competitiveness of exports.

I can't remember reading anything about the Euro at 1.40 tipping the area back into recession but I can remember reading that oil at around $140 would cause a recession and I seem to remember something specific to the Euro area that it would cause a banking crisis. I know it's posted on here somewhere, can't remember if I started the thread or not.

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I remember reading that $100 oil would push many western economies back into recession.

The figure appears very fluid, I read a report a few years back that said oil at I think $96 would trigger a recession.

I certainly wouldn't subscribe to their being a fixed price where X would happen.

As I can't find what I'm looking for I'm slightly doubting what I read, but I'm certain it was something along the lines that if oil hit $140 it would trigger not only a recession, but a recession that would undermine the European banking system.

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Genuinely interested why this should be. If the mad Kenyan keeps printing and the African Americans and Jews who receive the money go out and buy BMWs, won't that be a boost for Europe?

QE money doesn't go to 'Main Street', it goes directly to the big financial institutions where it used to prop up their balances sheets, allowing for time to free up capital to go chasing commodity related investments, thus pushing up prices of everything, whilst the Afro American, the Jew, and the everday whiteman can go and eat cake.

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http://www.wharton.universia.net/index.cfm?fa=viewfeature&id=2032&language=english

West Texas oil futures, the reference price for petroleum in the United States, reached US$105.17 a barrel on March 4, the highest price since September 2008. In September 2010, the price was only $73.

“Oil prices above $100 a barrel are bad news for the economic recovery of the member-nations of the OECD (Organization for Economic Cooperation and Development), as the IEA has already said,” notes Mariano Marzo Carpio, professor of energy resources in the geology department of the University of Barcelona. “High fuel prices mean more inflation and lower purchasing power for consumers.” He adds: “All of that will be combated by raising interest rates, which will mean more expensive money for companies, which may suffer by being able to invest less -- and the higher cost of money will have a [negative] impact on consumer loans. We find ourselves in a situation where there are prospects for higher inflation and lower economic growth, the worst possible situation that economies can face.”

Here's the $100 a barrel mentioned.

I know the original OP asked about the Euro at 1.40, I was just wondering whether they'd misheard the report I'm trying to find to no avail which talked about oil (I think!!!) at $140 a barrel which would trigger a major European banking crisis because of the deep recession oil at this price would trigger.

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I'm pretty sure the quote was re EUR/USD at 1.40.

Certainly oil at $140 would cause big problems, but that wouldn't be contained to the eurozone.

Oil at +100 (weak) dollars can't be doing many favours to the US economy atm.

IMHO at some point in 2011 things are gonna get really bad as the markets realise that reflation/devaluation is not the magic bullet they hoped it was.

Edited by Constable

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http://www.businessinsider.com/how-serious-is-the-oil-price-threat-to-the-us-recovery-2011-1

As David Rosenberg noted in yesterday’s strategy note this will more than erase the recently passed tax cut:

“Oil prices have broken above $90/bbl and we seem to recall that when this happened in 2007, an unexpected recession followed four months later. Yesterday’s USA Today ran with an article quoting some energy experts predicting that gasoline prices, already north of $3 a gallon, may yet test $4 a gallon before long. Now that would pretty well take care of that payroll tax cut … and then some. Looking at the near record net speculative long positions on the New York Mercantile Exchange as far as light sweet crude is concerned, it is abundantly clear that this runup in oil prices is not merely related to physical demand. Remember that it was this investment-related action in 2008 that ultimately caused the price to head into reverse as the physical demand growth went into reverse (as an aside, speculative longs in copper have also reached five year highs).”

I'll leave the oil stuff here. However I would be interested in a link to the Euro at 1.40 story.

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The US $ is universally unpopular at present due to a number of factors that would, in a non-contrarian market, be pushing it up:

1. US growth forecast at 3.1% compared with Germnay at 2.6% and the UK at 1.5% (UK £ isw soaring vs the $)

2. Sovereign debt issues still alive in the EU

3. ME wars and turmoil on the EU doorstep

4. US unemployment just starting to show signs of improvement

US would like to see the Euro back at 1.60 as this would give added momentum to their exports. Geithner's "strong dollar policy" is still engaged which indicates that the US are content with the way things are and the possibility that the Euro could hit 1.50 before summer.

Right now sterling is the most powerful currency as Fitch have reiterated our triple A rating and our gilts are a sell out. Low growth, high uemployment and declining exports are all plusses for sterling (in the contrarian climate) with declining hgouse prices the isicing on sterling's cake.

Going forward the EU will have to deal with an ever increasing Euro while the situation in the PIIGS contnues to prsent more bail out (QE) opportunities. Sterling is unassailable unless we get a HPC meltdown which is happening on the ground but not in the VI stats.

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The US $ is universally unpopular at present due to a number of factors that would, in a non-contrarian market, be pushing it up:

1. US growth forecast at 3.1% compared with Germnay at 2.6% and the UK at 1.5% (UK £ isw soaring vs the $)

2. Sovereign debt issues still alive in the EU

3. ME wars and turmoil on the EU doorstep

4. US unemployment just starting to show signs of improvement

US would like to see the Euro back at 1.60 as this would give added momentum to their exports. Geithner's "strong dollar policy" is still engaged which indicates that the US are content with the way things are and the possibility that the Euro could hit 1.50 before summer.

Right now sterling is the most powerful currency as Fitch have reiterated our triple A rating and our gilts are a sell out. Low growth, high uemployment and declining exports are all plusses for sterling (in the contrarian climate) with declining hgouse prices the isicing on sterling's cake.

Going forward the EU will have to deal with an ever increasing Euro while the situation in the PIIGS contnues to prsent more bail out (QE) opportunities. Sterling is unassailable unless we get a HPC meltdown which is happening on the ground but not in the VI stats.

The ECB don't want the Euro any higher, and that's what counts.

68523712.jpg

Edited by Constable

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February Home Sales Plummet As Housing Market May Have Further To Fall

Home Sales

First Posted: 03/21/11 12:22 PM Updated: 03/21/11 03:32 PM

Inspiring

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Typical

Scary

Outrageous

Amazing

Innovative

Infuriating

Read More: Economic Recovery, Existing Home Sales, Home Prices, Home Sales, Housing Market, National Association Of Realtors, Business News

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Sales of previously owned U.S. homes fell sharply in February, after several months of increases, according to a report released Monday, in an another blow to a sagging housing market that may have further to fall.

Existing home sales dropped 9.6 percent from January to February to an annual rate of 4.88 million units, according to the National Association of Realtors, an industry group. Compared with the same period last year, sales fell 2.8 percent. Home prices fell to their lowest in nearly nine years.

Although economists expected a decline from January's annual rate of 5.36 million units sold -- economists polled by Reuters expected February sales to fall 4.0 percent -- the steepness of the drop came as a surprise. The last several months of housing market data from NAR showed glimmers of recovery, but many analysts now feel that the downward trend is clearly reasserting itself.

"Expectations had looked for a decline, but a much more modest decline than what we saw," said Miller Tabak economist Dan Greenhaus. "I think what we're seeing is a complete and total reversal of any strength we saw as a result of the first time homebuyers credit."

In a March 15th statement, the Federal Reserve acknowledged that while the "economic recovery is on a firmer footing," the housing market "continues to be depressed."

Home prices have fallen 31 percent since peaking in 2006, according to the Case-Shiller 20-city index released in February. (For the past several months, Case-Shiller has indicated that home values are dwindling in nearly every American market.) Last year, nearly 2.9 million homes received foreclosure notices -- a 2 percent increase from 2009 -- according to data collected by RealtyTrac, an online foreclosure market. More than a quarter of all U.S. home sales last year were of foreclosed properties.

"This decline basically wiped out about half of the gains in home sales that were made in the previous 3 months," said Celia Chen, an economist at Moody's Analytics. But, Chen went on, if you look at the broader trends, there are some encouraging signs. "The pace of sales over three months is over 5 million," Chen said. "So that's better than the pace that occurred in the second half of last year."

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For Greenhaus, the report suggests that not only is a double-dip in the housing market at hand, but that there never really was a bounce to begin with.

"What the report does do is reinforce the housing weakness story," Greenhaus said. "With each new housing report, we're getting further corroboration that there really is no strength whatsoever in the housing market."

The one bright spot Greenhaus sees in the report is the absolute number of homes available for sale, which peaked in July of 2008 and has been steadily moving lower.

"At the end of the day the weakness in the housing market is at its core a supply and demand problem. We are working through that inventory, and that's a good thing," Greenhaus said.

At Moody's Analytics, economists remain optimistic about a recovery, despite the harsh February drop.

"Yes there are many risks out there," Chen said. "But our baseline outlook is that sales will pick up this year. And what's driving that outlook is our expectation that job growth is going to continue picking up as well. And jobs are of course very important for driving demand for homes."

According to the Bureau of Labor Statistics, In February the unemployment rate hovered near 9 percent with 13.7 million Americans officially out of work.

"I think there is sort of a general thougtht that the housing market is turning: it's gonna turn, it's gonna turn, it's gonna turn," Greenhaus said. "And with each passing month that turns out not to be the case. The insistence that the housing market is just about to turn has led to more incorrect than correct forecasts."

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Genuinely interested why this should be. If the mad Kenyan keeps printing and the African Americans and Jews who receive the money go out and buy BMWs, won't that be a boost for Europe?

Hopefully you didn't mean for your post to sound as racist and vile as it appears to be when read in isolation.

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Hopefully you didn't mean for your post to sound as racist and vile as it appears to be when read in isolation.

Alas, I think he probably did. :(

No one can be that thoughtless/careless when writing that sort of stuff.......

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The US $ is universally unpopular at present due to a number of factors that would, in a non-contrarian market, be pushing it up:

...

Right now sterling is the most powerful currency as Fitch have reiterated our triple A rating and our gilts are a sell out. Low growth, high uemployment and declining exports are all plusses for sterling (in the contrarian climate) with declining hgouse prices the isicing on sterling's cake.

US printing, UK not printing, makes sense that £ preferred to $ doesn't it?

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€/$ At 1.42 is much more of a problem for the export powerhouses of the Eurozone (Germany, Netherlands, etc) not really for the PIGS. For the PIGS it's rather beneficial since it keeps inflation low (especially energy inflation).

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€/$ At 1.42 is much more of a problem for the export powerhouses of the Eurozone (Germany, Netherlands, etc) not really for the PIGS. For the PIGS it's rather beneficial since it keeps inflation low (especially energy inflation).

But how are the PIIGS ever going to recover if they can't devalue like they have done historically?

Germany can remain competitive with the Euro at 1.40+ because of their efficiency and productivity - it's only a matter of time before the PIIGS begin to squeal IMO.

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Hopefully you didn't mean for your post to sound as racist and vile as it appears to be when read in isolation.

I think accusations of racism are often used to try and stop people discussing important issues. Obama campaigned on a platform of helping the Jews and Minorities, so it's not surprising he kept his promises. A few were surprised by the scale though, trillions of dollars squandered.

The racists are the people who voted him in.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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