m22au's journal

I happen to be in spain italy greece croatia, etc just before gfc. I am surprised pigs are italy greece spain. People seem to live there sustainably. Not so in croatia slovenia czech where i would expect the crisis based on what i saw.
 
Quote from macroman:

I happen to be in spain italy greece croatia, etc just before gfc. I am surprised pigs are italy greece spain. People seem to live there sustainably. Not so in croatia slovenia czech where i would expect the crisis based on what i saw.
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Greece, Spain, Italy are all obviously well-developed countries, and without checking the figures, I am guessing that the GDP per capita in those countries is higher than Croatia and Slovenia.

However if and when Greece, Spain and Italy implement significant austerity measures, and/or default/restructure their govt debt, then its reasonable to assume that the living standards of people in those countries, as measured by GDP per capita, will decline. We can see the start of this with recent happenings in Greece.

Taking this one step further, the US is also a "rich" country. However, if and when it has a govt bond crisis, then the living standard of Americans will decline.
 
On the topic of "the watched pot never boils":

Italy's 10-year yield is getting very close to 5.00% again.

According to Bloomberg:
http://www.bloomberg.com/apps/quote?ticker=GBTPGR10:IND
it is +0.085% to 4.996%

and the Spanish 10-year:
http://www.bloomberg.com/apps/quote?ticker=GSPG10YR:IND
is also +0.084% to 5.482%

however I notice that Italy is much closer to its 52-week high yield than Spain. This is because Spain's 10-year bond's price rose (yield fell) by more than Italy's 10-year last week.

edited to add:
just came across the following Bloomberg article:
http://www.bloomberg.com/news/2011-...mino-to-fall-commentary-by-simon-johnson.html
 
Although the jobs report on Friday was ugly, it's noticeable that US stocks, including the financials closed near the high of the day. Given the huge advance seen since 27 June, it would have been reasonable to expect US financials to finish the week closer to the low of the day.

On the other hand, Irish (see AIB example above), Greek, Spanish and Italian financials have performed far worse than their US counterparts.

So I've started a thread about Spanish financial stocks:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=223329
 
Quote from m22au:

I posted a few sentences in Daal's journal about the underlying bid to the stockmarket in the face of the horrible jobs number on Friday.

http://www.elitetrader.com/vb/showthread.php?s=&postid=3232673#post3232673
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Although those sentences may be proven to be incorrect if things in Italy continue to deteriorate. News out on the weekend about an emergency meeting for European officials to discuss Italy, and also Zero Hedge is reporting about a shorting ban of some sort.

EUR/USD has support at 1.4205 and noticeably could not rally for most of last week, despite the rally in US equities. Also the GBP/USD rose on Friday after the jobs report, but the EUR/USD quickly gave back a lot of its post-jobs report gains.

Looking at the CME web site, ES down 8 points to 1333.75, support at Friday's low and then 1326ish which is Wednesday's low.
 
Interesting again that despite the selling in the main indices that stocks with "generous" valuations like LNKD went up on Monday.

Also momentum continued in VHC and JVA, despite the overall poor tone for equities.

*****

In Euro-land:

Article from Calculated Risk about Eurogroup statement

http://www.calculatedriskblog.com/2011/07/statement-by-eurogroup.html

Link to original statement (PDF)

http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/123601.pdf

Comment from Calculated Risk:

"It sounds like they will expand the EFSF to buy back bonds of Greece, Ireland and Portugal. That might buy some time, but there is no mention of Italy - and if Italy goes, the EU has lost containment."
 
 
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