Thursday, April 15, 2010

Wow!

Morgan Stanley fears German exit from EMU

The Greek debt crisis is setting off a chain of events that may prompt German withdrawal from the eurozone, with grim implications for investors caught off-guard.

Posted by devo @ 10:49 PM (4293 views)
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9 thoughts on “Wow!

  • Political wildcards such as this complicate investment decisions. How on earth is a business operating across Europe supposed to plan for an event as momentous as German withdrawal from EMU? I found the comment by ‘Jon Livesey’ at 6:30pm quite relevant.

    “I think the main danger here is one we have seen throughout history, which is that the necessity for a change is staring everyone in the face, but the political embarrassment is such that no-one can quite bring themselves to make the necessary change. In the end, the change is forced upon them with a lot of accompanying chaos … If the Germans must eventually leave the Euro, they would be well advised to do it early and in an orderly manner, not in the midst of a World market melt-down.”

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  • Another article about Morgan Stanley today, “Morgan Stanley property fund faces record loss”:

    http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/7591216/Morgan-Stanley-property-fund-faces-record-loss.html

    A lot of the losses seem to involve German commercial properties. I cannot help wondering if there is some link between the massive loss Morgan Stanley have announced and their doom mongering about Germany but it’s not obvious to me what the motive might be.

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  • My response to today’s 6.49AM post was meant as “It won’t happen but it could work” idea:-

    “Maybe Germany should leave the euro @1New D Mark = 1 euro. Then the Mark could rise, and the euro could fall, to their apprpropriate levels.”

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  • more and more of you are coming to the realisation that the global economy as it stands is FUBAR

    with this in mind, consider the following…

    i) TPTB are aware of this and are engineering the outcome

    or

    ii) TPTB have lost control of the situation

    either conclusion is staggering in its implications

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  • fallingbuzzard says:

    Were they ever in control?

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  • I don’t think the Germans are losing control, I think they’re getting out. This is a great excuse for them to leave. A good tactical retreat!

    With their own currency re-established, resourceful Germany will recover quickly whilst the others will be in turmoil. After all the Euro social experiment can always be attempted again but with stricter entry requirements.

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  • Following on from the John Livesy comment quoted by @1 , there was another that continues the theme and sums up the scale of the problems we are in .

    – that the UK stands at a crossroads and can either take the Irish approach of imposing austerity measures itself or the Greek approach of having them posed upon it by the IMF .

    This idea that Mandelson seams to be propagating that the IMF is a white knight who wants to save us is false . It’s more like a doorstep lender trying to extract payment in kind from your wife .

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  • It’s an interesting notion, but one has to consider the events that might provoke such a move..

    It doesn’t seem very likely that this would happen in a calm, sober and planned manner. That would only happen if it became an election issue, and I think it’s some time before Germany next goes to the polls.

    However, if the rest of the eurozone wanted to bail out Greece, but the German constitutional court said Nein! – then that could provide the excuse to discuss such an option, which might then gather momentum.

    But would France sit idly by? Being lumped in with the euro losers would not rest well, and France is not a country that does anything that is not in its own interest..

    It might be a French bullet that finally puts the euro out of its misery…

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