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(06-09-2011, 11:37 AM)Behappyalways Wrote: Many European banks could go under if they had to accept a "haircut" at current market valuations on their entire sovereign debt holdings instead of the 21-per-cent writedown that has been proposed on Greece's sovereign debt, warned Mr Ackermann.
"It's stating the obvious that many European banks would not survive having to revalue sovereign debt held on the banking book at market levels," he said.
http://www.todayonline.com/Business/EDC1...kest-banks
Is this a crisis about to unravel or is this an opportunity? Well that's a million dollar question for each individual to decide....The above article is a good re-read, the Deutsche Bank chief executive is stating that many European banks would not survive having to revalue sovereign debt held on the banking book at market levels. Should it be booked at market value or a higher value than market which no one would buy?
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(07-09-2011, 11:33 PM)Behappyalways Wrote: (06-09-2011, 11:37 AM)Behappyalways Wrote: Many European banks could go under if they had to accept a "haircut" at current market valuations on their entire sovereign debt holdings instead of the 21-per-cent writedown that has been proposed on Greece's sovereign debt, warned Mr Ackermann.
"It's stating the obvious that many European banks would not survive having to revalue sovereign debt held on the banking book at market levels," he said.
http://www.todayonline.com/Business/EDC1...kest-banks
Is this a crisis about to unravel or is this an opportunity? Well that's a million dollar question for each individual to decide....The above article is a good re-read, the Deutsche Bank chief executive is stating that many European banks would not survive having to revalue sovereign debt held on the banking book at market levels. Should it be booked at market value or a higher value than market which no one would buy?
Mark to market......does it sound like the subprime crisis?......the CDOs...
(PS: How do those in 'strategic reserve' find jobs if jobless rate is 16.6%? Would the govt survive the next election? The next govt or present govt, would they continue the reform?)
They will be put on 60% of their previous salary. Those who do not find another public-sector job within 12 months will be fired.
From The Economist
Greece
Pen pushers out
The government v civil servants
Sep 10th 2011 | ATHENS | from the print edition
GREECE is being dragged kicking and screaming into confronting one of its biggest obstacles to reform: an almost unsackable civil service. Civil servants’ working week has already been increased from 37.5 to 40 hours, a way of reducing overtime payments. A unified salary scale is about to be introduced, smoothing out differences between ministries and slashing allowances. (It was supposed to have been brought in 13 months ago.) And, at last, jobs are going.
Under pressure from the European Union, the IMF and the European Central Bank, Evangelos Venizelos, the finance minister, agreed to arrange, by September 14th, mergers and closures of 150 state organisations and to transfer thousands of workers to a so-called “strategic reserve”. They will be put on 60% of their previous salary. Those who do not find another public-sector job within 12 months will be fired.
It is an embarrassing climb-down for George Papandreou, the prime minister. He has tried to avoid dismissals of public-sector workers, who form a power base for his Panhellenic Socialist Movement. Worried party officials say the political cost of his decision will be high. The jobless rate hit a record 16.6% in May.
But the government has run out of wiggle-room. Greece needs the next €8 billion slice of its current €110 billion bail-out to pay off debt and cover October salaries and pensions. Without civil-service cuts, the second bail-out, worth €109 billion and agreed in July, could fall apart. It already looks shaky.
Greece has agreed to cut 150,000 public-sector jobs by 2014. Many will go as part of a big promised privatisation programme. A rush for the exit is also likely. Thousands of civil servants in their 40s and 50s have asked about early retirement, say union officials. This may only increase long-term liabilities but Mr Venizelos, desperate to please creditors now, is expected to oblige.
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The strategy of European leaders so far has been less about finding a way to keep the country from debt restructuring, and more about delaying the inevitable until Greece had some tiny semblance of fiscal order in place, and until other wobbly peripheral eurozone economies had a chance to shore up their defenses and recapitalize their overexposed banks. The best possible outcome? A managed, contained Greek default in 2013.
http://www.minyanville.com/businessmarke...1/id/36883
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Look like Euro will disband sooner or later and
Greek will default her loan.
Reset and start from zero position, maybe the best way out.
So look likely a crash is unavoidable...hehe, opinion only.
Bro behappy is in bear mode...like what he had posted in 2007, hinting and posting all the bear news...
This time round crisis will definitely couple with with hyperinflation....
when inflation kick-in , property asset will not crash, cos paper money is useless...
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17-09-2011, 09:20 PM
(This post was last modified: 17-09-2011, 09:23 PM by Behappyalways.)
My guess is that this Euro crisis will be very much like the one we have in 2008 except that the world economies are much weaker than before. When it hits, demand for commodities will fall as in 2008, and price of commodities may plunge, inflation will fall and demand for property might dry up. Which is why Redas is sounding the alert....I agreed with their assessment that if supply continues to be oncoming while demand for housing dries up....a lot of people/property developers might have problem. Many PRs and half-leg citizens might choose to go back to their home country where they are born, further exacerbating the property demand and rental market.
This should be a re-run of 2008 although food prices might stay high because they are volatile to weather but other commondities like oil, iron and etc.....i doubt so.
The US and European govt trying to delay the crisis so they will try to use whatever means and not to forget US Presidential Election coming so we might have a small bull.....maybe....time to use the opportunity to get out.
When the crisis hits full scale, we will be back to the scenario where Ho Bee was trading at 30 cents(I doubt 30cents...maybe 50cents...who knows) and it will be a golden opportunity for those who are cash rich....a few bags in the making within a few years when stock prices move up again.
(Ps: HeeHee you never go analyse this video http://video.cnbc.com/gallery/?video=1640401359 Cash is a resource....Gives you opportunity to buy)
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i realli cant believe this 'coming crisis' will be any worse than the 2008's.
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18-09-2011, 12:03 AM
(This post was last modified: 18-09-2011, 12:37 AM by koh_52.)
(17-09-2011, 09:20 PM)Behappyalways Wrote: When it hits, demand for commodities will fall as in 2008, and price of commodities may plunge, inflation will fall and demand for property might dry up. Which is why Redas is sounding the alert....I agreed with their assessment that if supply continues to be oncoming while demand for housing dries up....a lot of people/property developers might have problem.
I have differ view...no way inflation will fall.
Ppty is co-related with interest rate. The rich borrow money to become richer...why?
Current mortgage rate only 1% for my investment property, Inflation 5.4%, that mean i gain 4.4%...on the contrary if you park your money in bank FD only pay 1% and inflation 5.4%, mean you loss 4.4% in actual fact.
Next question, why people buy gold and silver...likewise ppty is a good hedge against inflation. Oh sorry stock also can hedge inflation,if you are a stock guru....but not for me.
Helicopter Ben already said interest rate will stay low for the next 2 years, mean till 2013...
No-one know yet will QE3 kick in after long delay..what next? sure come out something, could be twist to a long term loan strategy..i dunno but dun rule out.
Okay, next why I said property will not immediate crash and might stay flat for awhile...Here some figures to share with and there are facts:
1. From up-coming new projects data, over 50,000 new condos will be completed in 2013 and 2014. However, demand for condos is aro 9,000 units. Last year's Highest Record in History is 15,000+.
2. KBW is going to increase supply of New HDB flats in year 2011 to 25,000 but only can be completed in 3 yrs times.
3. HDB will build another 25,000 HDB flats for rental...but be completed in next 3 yrs
Infact, you will be surprise current Rental rate across the board increased by 3%-5%...well prices maintained flat...latest Bishan new condo CapitaLand is selling at $1,450 PSF, and still got buyers.
But now is not the right time to buy property...that my personl view.
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18-09-2011, 08:27 AM
(This post was last modified: 18-09-2011, 08:29 AM by pianist.)
to start with, countries in the euro zone originally were individual nations with their own respective currencies, it was an 'advancement' then to merge into euro currency. if this crisis is anything but to disintegrate euro zone, it probably means returning to the original state of circumstances. Major euro countries like Germany, Switzerland, Sweden, Norway and even London will still do well. So on this note, I am not so fearful this time round compared to the 2008's, yet ironically when the fear factor is not there, I thus won't be seeing great abundant opportunity across the board like that shown in the 2008's.
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