Europe

[ghariton]

Unfortunate timing for Mr. Black.

George

[Shakespeare]

Not for the first time....

[ghariton]

Anyone paying attention to Hungary?

Hungary’s unofficial ambassador to the IMF,Tamás Fellegi, is reportedly facing a “terrible atmosphere” after his arrival in Washington on an exploratory mission whose objective is to open up communication about a new financial lifeline for the country. Frankly, given the recent record of relations between the two institutions involved it isn’t hard to understand why. Leaving aside the long list of recent grievances, it was Hungary who decided to walk away from the IMF in the first place, suggesting it could manage quite well on its own, thank you very much, so the Washington based lender is now hardly likely to welcome the country back as some sort of long lost prodigal son.

To make matters worse, the country has now opened up a second front by generating a serious dispute with the EU Commission, and other European institutions like the ECB, so it is only to be expected that the Fund will not reach any sort of agreement with the Hungarian government, until after the path has been cleared at the Brussel’s level. Indeed such is the degree of dishumour of Europe’s leaders with the present government, that it is still not clear whether the price for any form of aid might not be Orban’s own head, and the installation of a more technocratic caretaker government. There are, after all, recent precedents for such a development in Greece and Hungary, and indeed the former Hungarian prime minister Ferenc Gyurcsány was effectively forced out by Brussels in March 2009.

Contagion, anyone?

George

[AltaRed]

I have been watching but I do not see this as a case of contagion. To me, the government is so 'rogue' and 'suicidal' in its approach, that it will be seen as a 'black swan' and deserving of failure. In a conversation I had with a friend about a week ago, I thought Hungary would be a perfect example to let fall into the abyss thereby giving a wakeup to Greece of what their fate could be. It may be what the Eurozone really needs.

[zinfit]

Europe has been building a hugh debt house for decades. In typical leftist thinking they believed government could control the situation and the market could be ignored. They will soon find out who will control this situation. When the market starts correcting there will be a lot of pain and misery. They chose this coarse of action and they deserve the fruits of their foolishness.

[julianteakle]

In my opinion Europe lose control on Euro situation. Soon Euro will collapses and the dollar will be in the lead position again. People should Post removed by ModeratorZ their money in dollars nowadays but much more better in gold.

[AltaRed]

In my opinion Europe lose control on Euro situation. Soon Euro will collapses and the dollar will be in the lead position again. People should save their money in dollars nowadays but much more better in gold.

That looks like a US site not relevant to Canadians. Also looks a bit spammy/solicitous and off-topic to me as well.

[ModeratorZ]

Thanks for the sharp eye, AltaRed. The spammer is being warned.

[adrian2]

For future reference:

Yields on Germany’s benchmark 10-year Bund, viewed as the euro zone’s safest debt, hit a record low of 1.628 per cent. The previous record was established in November 2011, at the height of the debt crisis before the ECB injected around €1-trillion of cheap three-year funds into the banking system.

[...]

Spanish 10-year yields rose 16 basis points at 6.15 per cent, five-year yields topped 5 per cent, while two-year yields spiked to 3.70 per cent, all 2012 highs.

Six per cent is psychologically important for markets as the pace at which yields rise has accelerated on previous occasions when that level was broken. Beyond 7 per cent, Greece, Portugal and Ireland struggled to raise cash in the market and were forced to seek financial aid.

Underlining investor fears, the cost of insuring Spanish debt against default hit a record high of $520,000 a year to buy $10-million of protection.

Contagion fears pushed Italian 10-year yields about 12 bps higher on the day at 5.66 per cent.

[Taggart]

Worried about Europe; should I pull out of the market?

[kcowan]

Stating the obvious but nice to hear so eloquently restated.

[like_to_retire]

Worried about Europe; should I pull out of the market?

The article appears to be more centered around not jumping to cash with every crisis that comes along (good advice), rather than anything specific to do with Europe.

Myself, I sold all my US stock in 2008, and did the same for Europe in 2009 and put the money to work in Canada. Have had nothing but Canadian securities ever since. One of my better moves.

ltr

[Taggart]

Myself, I sold all my US stock in 2008, and did the same for Europe in 2009 and put the money to work in Canada. Have had nothing but Canadian securities ever since. One of my better moves.

ltr

Has Canada’s luck run out?

"For all the talk about our country’s strong banks and coveted natural resources, investors might be surprised to learn that Canada has lately had one of the worst-performing stock markets. At press time, the S&P/TSX Composite Index had fallen 13% over the last 12 months, while U.S. stocks had gained 4%. So far in 2012, even Europe is kicking sand in our faces."

[AltaRed]

"For all the talk about our country’s strong banks and coveted natural resources, investors might be surprised to learn that Canada has lately had one of the worst-performing stock markets. At press time, the S&P/TSX Composite Index had fallen 13% over the last 12 months, while U.S. stocks had gained 4%. So far in 2012, even Europe is kicking sand in our faces."

Which is why one should be diversified across sectors and geographic regions, and stick with the plan. I find it amusing when one "writes off" a region based on a few years of performance.

[Taggart]

"For all the talk about our country’s strong banks and coveted natural resources, investors might be surprised to learn that Canada has lately had one of the worst-performing stock markets. At press time, the S&P/TSX Composite Index had fallen 13% over the last 12 months, while U.S. stocks had gained 4%. So far in 2012, even Europe is kicking sand in our faces."

Which is why one should be diversified across sectors and geographic regions, and stick with the plan. I find it amusing when one "writes off" a region based on a few years of performance.

I don't think the author is writing off a region. He's basically saying don't be totally home biased and stay diversified across world regions. Since I personally can't predict the immediate or distant future, I just stick with my targeted allocation.

[like_to_retire]

Which is why one should be diversified across sectors and geographic regions, and stick with the plan. I find it amusing when one "writes off" a region based on a few years of performance.

hehe, yeah I suppose you could be right. It's the prevailing wisdom anyway.

When I dumped my USA investments in 2008, I had done a ten year analysis and found I hadn't made a cent. I pontificated on the next ten years and decided that given the huge debt in the USA, I wasn't likely to do much better. Since I was now retired and an income investor, investments in dividend producing stocks in Canada, where I understand the market much better, and where I receive a large bonus in the form of the dividend tax credit, that I predicted I would do much better. The same held true for European investments.

So far, I'm way ahead. I'll put myself down as a contrarian, or maybe just dumb.

ltr

[AltaRed]

So far, I'm way ahead. I'll put myself down as a contrarian, or maybe just dumb.

Maybe just lucky for the window of investing time you have been in. I, too, didn't make anything off US stocks in the last decade. That is no reason to shed them as I predict (but have no idea) they will outperform in the decade we are in. My Cdn and US portions of my equity portfolio are about equally weighted.

[adrian2]

So far, I'm way ahead. I'll put myself down as a contrarian, or maybe just dumb.

Maybe just lucky for the window of investing time you have been in.

+1

[scomac]

When I dumped my USA investments in 2008, I had done a ten year analysis and found I hadn't made a cent. I pontificated on the next ten years and decided that given the huge debt in the USA, I wasn't likely to do much better. Since I was now retired and an income investor, investments in dividend producing stocks in Canada, where I understand the market much better, and where I receive a large bonus in the form of the dividend tax credit, that I predicted I would do much better. The same held true for European investments.

So far, I'm way ahead. I'll put myself down as a contrarian, or maybe just dumb.

ltr

Are you sure about being way ahead? My US stocks have outperformed my Canadian stocks quite handily in the past 18 months. I wouldn't put that up to astute stock picking either as my US stocks have underperformed the S&P 500 while my Canadian stocks have outperformed the TSX Comp.

[Taggart]

Since I was now retired and an income investor, investments in dividend producing stocks in Canada, where I understand the market much better, and where I receive a large bonus in the form of the dividend tax credit, that I predicted I would do much better.

ltr

I'll agree with you on the above point ltr. Personally I find it impossible to look at anything else in the taxable portfolio but Canadian dividend growth stocks. All due to the Canadian dividend tax credit versus treating foreign dividends as income. Our foreign equities (including Europe) are in the RRSP's.

[like_to_retire]

Are you sure about being way ahead?

Yep, after tax, since all my equities (which are only ~ 15% of my portfolio) are in my non-registered account. I have no room in my RRSP, since it's full of bonds and GIC's.

In a non-registered account, foreign investments have to really outperform Canadian equities to win after tax. With the debt burden in the US and the mess in Europe, I'm fairly confident I'm on the right track.

ltr

[Wallace]

Nigel Farage is a favourite of mine too. Just search for his name in you tube videos to see dozens of fascinating and provocative speeches given in the European Parliament since he was elected in (was it?) 2007. Everything he has predicted has come to pass, so his opinions can't just be dismissed, although the unelected brass of the European Union would dearly like to do so.

Here he is giving a history lesson and advice to the youth movement in Greece. March 2012.



PS - "likes" outnumber "dislikes" for this video on you tube by 346 to 6.

[zinfit]

The most recent EU summit has just turned the hour glass. I wonder how many summits have been held over the European debt crisis?











/

[ghariton]

The most recent EU summit has just turned the hour glass. I wonder how many summits have been held over the European debt crisis?/

I don't understand what just happened. There will be no Eurobonds, and no increase in the funds available for bailouts. So how does that help Italy and Spain?

And yet the markets went up sharply on Friday. Time to go short?

George

[Nemo2]

Eurozone jobless total hits record high

Clap for the Wolfman?