No bud you got it backwards. The stock market is positively correlated with the euro. They move inverse to the USD, the DX. Don't believe pull up the ES, 6E, and the DX and watch themselves yourselves. Why do you think the stock market is getting pounded...................? It because of the EU debacle and the DX getting stronger. As that happens stocks take a dump.
I agree. Brits and Americans especially seem to have a politically-motivated blind spot about the Euro. That's why so many of them were shorting it back in the early 2000s, and being on the wrong side of convergence plays (e.g. short Irish or Italian bonds, long bunds) in the late 90s, and why they got hosed on both plays. How embarrassing to take an opposite position to a central bank recommendation, and then actually lose money. It would be stupid for any fringe country to leave the Euro during a mini-crisis. If Greece think it's hard/expensive to borrow money now, imagine what it would be like if they tried to issue bonds in drachmas. A deflationary adjustment in prices is much more likely, similar to what happened under the gold standard (which lasted a lot longer than the Euro has), similar to what happens when a US state has a depression whilst the rest of the country is doing ok. If necessary then they can do a partial default, but seeing as their debt to GDP is about half of Japan (which pays 1.5% interest rates) I don't think it's necessary yet. The EU has a single currency, and free movement of capital and labour now. There are no major handicaps to keeping a single currency and letting economic adjustments happen through the normal price mechanisms.
Wrong. UK is 17th for healthcare in Europe, behind Czech Republic, Cyprus and Estonia. It's only 4 places above Greece. The UK ranks 24th for child wellbeing. The UK has the highest violent crime rate in the EU. UK life expectancy is lower than Greece. The UK is below Greece in several infrastructure measurements such as renewable energy or road congestion. So, not only is Greece far from "decades away" of coming close to the UK, in many important measures (crime, life expectancy, environmental, child welfare) it is actually *inferior*. This despite being a richer country per capita. In other words, the UK is governed in some ways worse than Greece - they have more resources and achieve similar or worse results in many important areas.
If sterling falls 30%, isn't that the same for a bond investor as if Greece restructure their debt to knock 30% off the face value?
Both areas have 99%+ chance of recovery. Long-term GDP in market economies almost always goes up - even countries ravaged by war like Germany, Japan etc. The fundamental principle of economics is that markets adjust to conditions - if there is too much capital in tourism and construction, prices will fall, capital will flee, wages will decline, then capital will go to the cheaper wages, land, factories etc and start new businesses with better prospects, thus returning to growth. This will continue until the next asset price bubble, which will be at a much higher level of GDP and wealth.
If you take out gun crime murders (due to widespread US handgun ownership), the UK is more violent than even the USA. You are more likely to be robbed, mugged, raped etc in London than New York - by criminals who are generally not armed with guns due to the insanely strict firearms laws here (kill a man with your fists or rape a woman and you can be out in 2-3 years. Carry a replica handgun with no ammo and you get 5 years minimum). The worst ghettos in Europe are far safer than your average high street in the UK on a Saturday night.
Okay, right, my mistake. US stocks did well and so did the euro in 2009. Both the euro and US stocks fell in January 2009. Thus positive correlation. Bettles
"The Frankfurter Allgemeine summed up German feelings when it asked why taxpayers should bail out a country that thinks it an outrage to raise the retirement age to 63. "Should Germans have to work in the future until 69 instead of 67 so that Greeks can enjoy early retirement?" http://www.telegraph.co.uk/finance/...any-growls-as-Greece-balks-at-immolation.html :eek:
All political propaganda. Watch out if Club Med insolvency threatens the viability of their own banking system. They will write cheques faster than the eye can see, because they can't make the same mistakes as they made during the great depression now can they?