My first week for some time of non-blogging, and a very interesting week its been. The Irish/European Crisis seems to have come to a head (for now), and the markets saw some very strong corrective activity, which has certainly helped to de-froth them, particularly in the wake of the QE2 announcement.
In line with my earlier comment from this week, where I announced I will be slightly stepping back from daily blogging, I still intend to occasionally update my page, including a weekly blog at least. I hope to get some analytical stuff out on Monday. For now however I would like to post (or refer) to a couple of articles from other contributors.
The first posting is by NAB economist, and ex-colleague of mine Nick Parsons. Nick is a brilliant economist who has great understanding of markets from both an economist's angle, and having worked closely with traders for many years, a trader's angle. His commentaries and writing style are wonderfully perceptive, witty, and slightly acerbic, all at the same time. Here is his commentary for today (19th Nov):
As millions of freckle-faced, tousle-haired Irish kids set off for school this morning, they’d be well advised to pay attention in their German lessons. It might not be a bad idea to stay awake during Economics too, and they might even find basic Mathematics comes in pretty handy. Their parents’ generation, unfortunately, spent too much time in Politics and Creative Writing classes whilst making the elementary mistake of studying History but failing to learn from it. We have the laughable but tragic situation today of hearing Irish political leaders insist on what is non-negotiable as if somehow they will ultimately have any say in the matter. To be sure, it’s the only bargaining tool they have and they might as well use it, but threatening to bring about the collapse of a European project which has been more than 60 years in the making will cut no ice in Brussels or Berlin. Dressing up a sovereign bailout as a mere accounting issue, a technical plan to provide a loan to the banking system, should fool no-one. Crucially, it’s unlikely to impress the European Central Bank, which is finding its mandate to ensure price stability increasingly undermined by a new requirement to become the lender of first resort to a bankrupt system. The Frankfurt-based ECB is likely to be headed next year by a German central banker. This will be the minimum price for German acceptance of a commitment to underwrite the EFSF for what could become perpetuity. The German economy is booming and a German-led ECB in Germany will increasingly set interest rates for the good of Germany. So it’s not just the Irish who should concentrate in school today. The rest of Europe, like it or not, is likely to find out soon that real power lies with creditors, not debtors.
In line with my earlier comment from this week, where I announced I will be slightly stepping back from daily blogging, I still intend to occasionally update my page, including a weekly blog at least. I hope to get some analytical stuff out on Monday. For now however I would like to post (or refer) to a couple of articles from other contributors.
The first posting is by NAB economist, and ex-colleague of mine Nick Parsons. Nick is a brilliant economist who has great understanding of markets from both an economist's angle, and having worked closely with traders for many years, a trader's angle. His commentaries and writing style are wonderfully perceptive, witty, and slightly acerbic, all at the same time. Here is his commentary for today (19th Nov):
As millions of freckle-faced, tousle-haired Irish kids set off for school this morning, they’d be well advised to pay attention in their German lessons. It might not be a bad idea to stay awake during Economics too, and they might even find basic Mathematics comes in pretty handy. Their parents’ generation, unfortunately, spent too much time in Politics and Creative Writing classes whilst making the elementary mistake of studying History but failing to learn from it. We have the laughable but tragic situation today of hearing Irish political leaders insist on what is non-negotiable as if somehow they will ultimately have any say in the matter. To be sure, it’s the only bargaining tool they have and they might as well use it, but threatening to bring about the collapse of a European project which has been more than 60 years in the making will cut no ice in Brussels or Berlin. Dressing up a sovereign bailout as a mere accounting issue, a technical plan to provide a loan to the banking system, should fool no-one. Crucially, it’s unlikely to impress the European Central Bank, which is finding its mandate to ensure price stability increasingly undermined by a new requirement to become the lender of first resort to a bankrupt system. The Frankfurt-based ECB is likely to be headed next year by a German central banker. This will be the minimum price for German acceptance of a commitment to underwrite the EFSF for what could become perpetuity. The German economy is booming and a German-led ECB in Germany will increasingly set interest rates for the good of Germany. So it’s not just the Irish who should concentrate in school today. The rest of Europe, like it or not, is likely to find out soon that real power lies with creditors, not debtors.
The second article of the day is from the 'Daily Telegraph' newspaper. The Telegraph is the most widely read of what are known as the Broadsheet newspapers here in the UK: These include -'The Times', 'The Financial Times', 'The Guardian', and 'The Independent'. The article is entitled 'Margaret Thatcher knew the single currency would devastate Europe'. and can be viewed by hitting the highlighted link. I have always considered Margaret Thatcher as the greatest British Prime Minister during my lifetime - by a country mile. However she and many of her followers have often been maligned in the British press, yet she was one of that rare breed that had the courage of her convictions and did what she thought was right for the country, not what was popular, or right according to the opinion polls and columnists.
I think if you read the piece fully you may appreciate our lucky escape here in the UK, and although Margaret Thatcher fell from power in the early 90s, I think her influence and opposition at the time to joining the Euro built up enough of a head of steam to ensure that it never materialised in the ensuing years. In fact looking now at what is happening a short hop across the Irish sea from us, I can't helping thinking that joining the Euro may have achieved for Germany over the UK what 2 World Wars failed to achieve.
At that point I will bid you all a great weekend.
.png)
.png)
No comments:
Post a Comment