Global Macro Trading Journal

Quote from Butterball:

After tax net income does not equal unit labor costs. Unit labor costs are the ratio of total labor costs divided by real quantum of output.

The Germans managed to drop their unit labor costs by some 10% over the last 10 years while the PIGS ran then up 10-20%. I am sure they have taken some steps in the right direction and are in the 2nd inning of becoming more competitive but there's still a long way to go. Unfortunately for the PIGS they were dumb enough to sign themselves to the slavery chains of the EUR zone. The Peseta, Lira and Drachma would take care of the competitiveness problem. Just like the Pound does for the Brits.

Krugman - like him or not - wrote a piece recently comparing the UK and Italy's challenges with productivity in light of one tied to the EUR it can't print and one having a flexible exchange rate:

'Britain has achieved a 15 percent relative deflation via depreciation; it would take incredibly painful deflation for Italy to achieve the same.'

http://krugman.blogs.nytimes.com/2011/10/05/italy-and-the-uk/
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I understand but are there any statistics that prove this advantage for the British has actually gained them anything besides not coming under pressure from the financial markets?

Has export risen? Has unemployment dropped?

Mind you Spain never had more tourists visiting then this summer so even when fundamentals would seem to improve for them to result in more fiscal health is another question isnt it.
 
These things take time to play out. You won't see an instant effect on UK exports or job growth, just like Spain or Italy won't go down the drain overnight. This is a very slow process that will take years to complete as jobs will be maintained or created in more productive countries (Northern Europe) and destroyed in the least productive countries (PIGS).

If you look at 10y yields on Italian debt and UK GILTs you see the market is pretty certain with how it will play out.

For a good historic example look at the early 90s when Pound Sterling crashed and was forced out of the ERM. The numbers are out there.
 
Does anyone if EFSF debt can be bought in the OTC markets or if its traded somewhere?I see people quoting the spreads and yields there almost daily which makes it seem that they are looking at trades rather than auctions
 
Quote from Daal:
Does anyone if EFSF debt can be bought in the OTC markets or if its traded somewhere?I see people quoting the spreads and yields there almost daily which makes it seem that they are looking at trades rather than auctions
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It's traded in the secondary mkt like all the other EUR sov debt...
 
Quote from Martinghoul:

It's traded in the secondary mkt like all the other EUR sov debt...
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Any idea where I can get charts, quotes of that without a Blg terminal?
 
Quote from ralph00:

My man ...

http://www.telegraph.co.uk/finance/...-Putsch-rolls-on-as-two-democracies-fall.html

We are not that far from use of EU judicial coercion, and then EU police power, and ultimately EU "border troops" - for those old enough to remember Soviet methods of fraternal assistance.

Indeed. It's just starting to get ugly out there, but hey, the stock market rallied so all is well.:mad:
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Shouldnt he rather be writing about all Republican candidates wanting to attack Iran rather then crying over the loss of the likes of Berlusconi who would have been in jail 10 years ago if he didnt wrote the laws to keep him out himself and owned all the TV channels to keep the propaganda machine going?
 
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