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Europe is falling apart---close to bringing the whole world down.

Discussion in 'BBS Hangout: Debate & Discussion' started by Northside Storm, Nov 9, 2011.

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  1. Northside Storm

    Northside Storm Member

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    A Greece exit and/or a full default might mean an ECB technical insolvency...the capital base being wiped out in terms of asset-capital ratio requirements...how that would be resolved would be anyone's guess.

    Spain downgrade was so drastic...Santander down three notches? How will this not cause a run on the banks?

    US TIPS are selling at record negative yields.

    I mean, I thought things were going to get ugly, but this is f**king fast.
     
    #61 Northside Storm, May 18, 2012
  2. Northside Storm

    Northside Storm Member

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    ATW, the implosion of Europe was delayed by LTRO action by the ECB, not solved.

    So we can thank the ECB for six extra months, I suppose, not that it was used to come close to any sensible solution.
     
    #62 Northside Storm, May 18, 2012
  3. AroundTheWorld

    AroundTheWorld Member

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    Is the world going to end on Dec. 21, 2012, Northside Storm?
     
    #63 AroundTheWorld, May 18, 2012
  4. Northside Storm

    Northside Storm Member

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    Depends on how the Greece default plays out. If it's messy and involves multiple knock-off effects, a double-dip depression is probable.

    So if your definition of the world is material things, and the ability to live comfortably in a modern, capitalistic economy, then I say yes.

    If things unroll as they have been, the capitalism we have seen for the last 20-30 years of unregulated financial directional betting and uncontrolled speculation will end. It will have to in some way. Whether it's a gradual reformism as Keynesian theory was in the 1930s or a more messy process...is hard to tell.
     
    #64 Northside Storm, May 18, 2012
  5. Northside Storm

    Northside Storm Member

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    Incidentally, ATW, are you invested in the DAX? You would have already seen, on average, a 8.42% drop in your value in the last three months---an annualized loss of 30%.

    maybe that's why you're so angry lately.
     
    #65 Northside Storm, May 18, 2012
  6. AroundTheWorld

    AroundTheWorld Member

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    I am neither angry nor invested in the DAX.
     
    #66 AroundTheWorld, May 18, 2012
  7. Northside Storm

    Northside Storm Member

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    well, I'll take your word on the second.
     
    #67 Northside Storm, May 18, 2012
  8. Invisible Fan

    Invisible Fan Member

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    This has been serious since 09 in my book. PIIGS has been notched to fail even before that. I wonder what happened to the Eastern European "subprime crisis", maybe they're not as bad in relative importance.

    Seems like the EU and the ECB have been closing their eyes and playing dumb until they have to face the music of some painful decisions. It's becoming more and more painful by the month, and now Germany's feeling it? Wow, don't know how many shoes there are left for dropping.
     
    #68 Invisible Fan, May 18, 2012
  9. Johndoe804

    Johndoe804 Member

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    OP: Looks like the world is still up and going.
     
    #69 Johndoe804, May 18, 2012
  10. Major

    Major Member

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    Depends how you define fallen apart. European stock markets are in collapse and most European countries are on the verge of entering recession again, borrowing costs are skyrocketing, Greece is revolting and no longer has a functional government, banks and governments are universally being downgraded, there have been partial runs on banks in both Greece and Spain this week, European leaders are in panic over the potential collapse of the Euro, US interest rates are at all-time record lows as people look for a safe haven for their money, etc.

    I'd say Europe is still in the process of falling apart. It's certainly in a more precarious position than it was 6 months ago.

    The whole world hasn't been brought down yet, thanks to efforts to delay the collapse through LTRO and other temporary funding solutions. But as was noted earlier, none of that has actually addressed any of the underlying issues.
     
    #70 Major, May 18, 2012
  11. Northside Storm

    Northside Storm Member

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    Do you have anything invested in the Dow? In the last five days it has gone down 3.52%. That's an annualized loss of 92%.

    Yeah, up and going it is.
     
    #71 Northside Storm, May 18, 2012
  12. bigtexxx

    bigtexxx Member

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    Sorry, but this post is simply amateurish.
     
    #72 bigtexxx, May 18, 2012
  13. Northside Storm

    Northside Storm Member

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    Yes, because I brought a simple example, and not the fact that American ten-year TIPS are selling at record NEGATIVE yields?

    huh.

    Or that the ECB is pegged at about 200 billion Euros in exposure to Greece, and is the one of the most leveraged banks in the world?

    Care to contribute some insight then, professional?
     
    #73 Northside Storm, May 18, 2012
  14. AroundTheWorld

    AroundTheWorld Member

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    Facepalm. And this guy calls himself an economist.
     
    #74 AroundTheWorld, May 18, 2012
  15. Northside Storm

    Northside Storm Member

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    Suppose the Annualized Gain was R (where R=0.123 means a 12.3% annualized gain), then:

    (1+R) is the Gain Factor over one year
    (1+R)2 would be the Gain Factor over two years
    (1+R)0.75 would be the Gain Factor over 0.75 years (that's 9 months)
    (1+R)78/12 would be the Gain Factor over 78/12 = 6.5 years (namely 78 months!)

    If we know that Gain Factor = 1.620 over 78 months then:

    (1+R)78/12 = 1.620 so 1+R = 1.62012/78 so R = 1.62012/78 - 1 = 1.077 - 1 = 0.077 or 7.7%
     
    #75 Northside Storm, May 18, 2012
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  16. AroundTheWorld

    AroundTheWorld Member

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    LOL @ student Northside Fart.
     
    #76 AroundTheWorld, May 18, 2012
  17. Northside Storm

    Northside Storm Member

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    Hey ATW, as a MBA, it might be useful for you to learn that tidbit.

    Unless you're working in sales & marketing, I suppose.
     
    #77 Northside Storm, May 18, 2012
  18. AroundTheWorld

    AroundTheWorld Member

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    Northside Fart, you are trying so hard...it's hilarious.

    Kind of like a clown stabbing himself to death.
     
    #78 AroundTheWorld, May 18, 2012
  19. Northside Storm

    Northside Storm Member

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    Uh...

    Wait, you don't know how to calculate annualized returns?

    ...i'm not even being like satirical anymore, how in the f**k could you have earned a MBA?
     
    #79 Northside Storm, May 18, 2012
  20. Northside Storm

    Northside Storm Member

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    Definition of 'Annualize'
    1. To convert a rate of any length into a rate that reflects the rate on an annual (yearly) basis. This is most often done on rates of less than one year, and usually does not take into account the effects of compounding. The annualized rate is not a guarantee but only an estimate, and its accuracy depends on the variance of the rate. This rate is also known as "annualized return" and is similar to "run rate".

    Read more: http://www.investopedia.com/terms/a/annualize.asp#ixzz1vGwoM0iJ

    [(1+R/N)^365] - 1

    Where N is the number of days.
    And R is the rate that you wish to compare.

    You're welcome, ATW.
     
    #80 Northside Storm, May 18, 2012
    Last edited: May 18, 2012
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