Re: Re: Three Little Bears
On Mon, 4 Dec 2000, Rob Schaap wrote: I thought they were being pretty tight on interest rates? Duizenberg'd have to be scared of that droopy euro of his, wouldn't he? Not too much room for manouvre there, I'd've thought. Well, core EU inflation is around 2.5%, growth is at 3.5%, and short rates are 4.75% -- darn low compared to the 1980s or most of the 1990s, and much more comparable to the 1970s, when the EC was doing pretty well. The ECB's latest report warns that EU governments are backing off on austerity and that fresh spending is on the way, a good sign for Europe. So you're with the likes of Thurow? He reckons you can take hundreds of billions out of the stock markets without hurting the economy. But better than 20% of households are into those markets up to their necks - and not a few of 'em on margin call, too. With consumer debt the way it is, it wouldn't take much to start a credit crunch from there. Yep, this would feed into pension funds and retirement portfolios, accentuating any downturn. But US debt is leveraged on low-cost EU and Japanese capital, which would likely become even cheaper to facilitate the post-crash cleanup. Maybe I'm giving the global bourgies too much credit, but I still think the market mayhem will be confined to the US and that a long upwave, powered by accelerated accumulation in SE Asia and Eastern Europe, is on the way. We're about to find out, aren't we! -- Dennis
Re: Re: Three Little Bears
Share prices in Taiwan and South Korea are way down also. In Taiwan this may be more a matter of politics. In South Korea it includes such elements as the Washington-approved bustup of the Daewoo chaebol, with its auto firm now shut down, part of the general global retrenchment in the auto industry. Barkley Rosser -Original Message- From: Rob Schaap [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Sunday, December 03, 2000 9:12 AM Subject: [PEN-L:5410] Re: Three Little Bears G'day Dennis, Consumer sentiment has dipped a bit, but has stayed high in the EU; The September stat for France was spectacularly low (haven't got one for October). And low prices in Europe, given a low Euro, indicate low pricing power, don't they? And why'd that be? and the tigers plus China are continuing to do well. Some parts of the chip biz are slowing, but it's a relative, not yet absolute, decline. Well, you wouldn't think the Tigers were doing at all well to look at their sharemarkets and currencies. The Philippines is in the toilet, but the rest of 'em have their governments very worried just now. I can't get to the web from here (not in less than the half-hour it takes for each graphics page to unfurl, anyway), but there's a lot of talk about this at the moment, Dennis. The US is overdue for a recession, of course, but interest rates and fiscal policy in the EU and East Asia remain decidedly stimulative; I thought they were being pretty tight on interest rates? Duizenberg'd have to be scared of that droopy euro of his, wouldn't he? Not too much room for manouvre there, I'd've thought. Fed could cut rates in a hurry to contain a Bubble blow-out. Only as long as foreigners (responsible for more than eight per cent of Wall St values - at a rate of $1.5 billion per day) keep feeding the greenback. If they find cause to go elsewhere, well, then Greenspan'd have a dollar to protect, wouldn't he? And that kinda limits the rate-cut option. I still think we're headed for a long upwave, punctuated by centibillion-euro bailouts and a delightfully vicious bear market in US equities. So you're with the likes of Thurow? He reckons you can take hundreds of billions out of the stock markets without hurting the economy. But better than 20% of households are into those markets up to their necks - and not a few of 'em on margin call, too. With consumer debt the way it is, it wouldn't take much to start a credit crunch from there. On the other hand, it *would* be nice to see Strasbourg-approved NATO peacekeepers occupying America's polling booths, to supervise a program of massive electoral reconstruction. Be lovely. So are my reservations as unlikely a scenario as that? Cheers, Rob.
Three Little Bears
On Sun, 3 Dec 2000, Rob Schaap wrote: - a serious slump in consumer sentiment in Europe; - a serious slump in corporate pricing power in Europe; - the Asian Tiger economy recovery is stalling; Consumer sentiment has dipped a bit, but has stayed high in the EU; order books look pretty good and profits are quite healthy (the low euro has meant surplus-profits for exporters, too). Also, Japan is growing, albeit slowly, and the tigers plus China are continuing to do well. Some parts of the chip biz are slowing, but it's a relative, not yet absolute, decline. The US is overdue for a recession, of course, but interest rates and fiscal policy in the EU and East Asia remain decidedly stimulative; the Fed could cut rates in a hurry to contain a Bubble blow-out. I still think we're headed for a long upwave, punctuated by centibillion-euro bailouts and a delightfully vicious bear market in US equities. On the other hand, it *would* be nice to see Strasbourg-approved NATO peacekeepers occupying America's polling booths, to supervise a program of massive electoral reconstruction. -- Dennis
Re: Three Little Bears
G'day Dennis, Consumer sentiment has dipped a bit, but has stayed high in the EU; The September stat for France was spectacularly low (haven't got one for October). And low prices in Europe, given a low Euro, indicate low pricing power, don't they? And why'd that be? and the tigers plus China are continuing to do well. Some parts of the chip biz are slowing, but it's a relative, not yet absolute, decline. Well, you wouldn't think the Tigers were doing at all well to look at their sharemarkets and currencies. The Philippines is in the toilet, but the rest of 'em have their governments very worried just now. I can't get to the web from here (not in less than the half-hour it takes for each graphics page to unfurl, anyway), but there's a lot of talk about this at the moment, Dennis. The US is overdue for a recession, of course, but interest rates and fiscal policy in the EU and East Asia remain decidedly stimulative; I thought they were being pretty tight on interest rates? Duizenberg'd have to be scared of that droopy euro of his, wouldn't he? Not too much room for manouvre there, I'd've thought. Fed could cut rates in a hurry to contain a Bubble blow-out. Only as long as foreigners (responsible for more than eight per cent of Wall St values - at a rate of $1.5 billion per day) keep feeding the greenback. If they find cause to go elsewhere, well, then Greenspan'd have a dollar to protect, wouldn't he? And that kinda limits the rate-cut option. I still think we're headed for a long upwave, punctuated by centibillion-euro bailouts and a delightfully vicious bear market in US equities. So you're with the likes of Thurow? He reckons you can take hundreds of billions out of the stock markets without hurting the economy. But better than 20% of households are into those markets up to their necks - and not a few of 'em on margin call, too. With consumer debt the way it is, it wouldn't take much to start a credit crunch from there. On the other hand, it *would* be nice to see Strasbourg-approved NATO peacekeepers occupying America's polling booths, to supervise a program of massive electoral reconstruction. Be lovely. So are my reservations as unlikely a scenario as that? Cheers, Rob.
