kinellll Italian 10 year note @ 7.41

[MajorDutch]

yield @ 7.41 once above 7.3 none of the other PIIGS recovered, is it now a death spiral for Italy???

 

[Martinghoul]

Yes.

 

[MajorDutch]

Yes.

so what u reckon will be the ultimate outcome? do you reckon super bailout followed by rampant inflation OR chop eurozone down to German, France & Benelux and cut the others adrift. I am thinking the former and inflation and gold will go off the scale. We then raise interest rates in the UK to counter and then the housing market here get's body slammed. what u sayin?

 

[scose-no-doubt]

I don't see UK housing (lower end) taking too much of a beating. I live in a university town and many of the houses here are under-priced on a basic discounted yield basis and I hear it's a similar story throughout much of the country. High end seems to take care of itself anyway as footballer salary types seem to keep buying no matter what. London high end has held up extremely well and all this ex-dictator money is flying about like nobody's business. Personally, I'm expecting the gap between lower and mid priced properties to tighten to a level where those who aren't over-leveraged can trade up relatively painlessly.

That being said I've been hearing about cross-generational 50 year mortgages at work lol.


@ MG - Do yo think that a lower EC ejection from the monetary union would require currency pegs? Isn't it likely that anyone who is ejected is gonna have inflation issues... and the yield/financing problem isn't going to disappear either is it?

 

[MajorDutch]

I don't see UK housing (lower end) taking too much of a beating. I live in a university town and many of the houses here are under-priced on a basic discounted yield basis and I hear it's a similar story throughout much of the country. High end seems to take care of itself anyway as footballer salary types seem to keep buying no matter what. London high end has held up extremely well and all this ex-dictator money is flying about like nobody's business. Personally, I'm expecting the gap between lower and mid priced properties to tighten to a level where those who aren't over-leveraged can trade up relatively painlessly.

That being said I've been hearing about cross-generational 50 year mortgages at work lol.

London is a separate property market from the rest of the UK. Outside London I can see prices reverting to 3.5 x average salary, I think the wheels will come off. I own 2 properties so no vested interest.

 

[scose-no-doubt]

Outside London I can see prices reverting to 3.5 x average salary, I think the wheels will come off.

Based on the 2011 average salary figures, my discounted rental pricing agrees. I'm calling those lower end prices though. I'm thinking the mids are stamp level - 350 or so.
I think that's where we'll see the most adjustment - if people are over leveraged.

I was at a meeting with a guy from the BOE the other day and he was saying he expects the spread between the base rate and mortgage rates to tighten to within historical norms (of 1.5ish if memory serves) before the banks can even consider raising.

Not sure about that though but I can see how it's in their interests to keep people in their homes rather than repossessing during times of -ve equity.

 

[Martinghoul]

so what u reckon will be the ultimate outcome? do you reckon super bailout followed by rampant inflation OR chop eurozone down to German, France & Benelux and cut the others adrift. I am thinking the former and inflation and gold will go off the scale. We then raise interest rates in the UK to counter and then the housing market here get's body slammed. what u sayin?

Tough question... Don't see inflation, but it's gonna be pretty tough going and the world's gonna feel like sh1t for a while. That's sort of my best case.

 

[ordinaryguy76]

so what u reckon will be the ultimate outcome? do you reckon super bailout followed by rampant inflation OR chop eurozone down to German, France & Benelux and cut the others adrift. I am thinking the former and inflation and gold will go off the scale. We then raise interest rates in the UK to counter and then the housing market here get's body slammed. what u sayin?

There will be war !!!!

 

[Martinghoul]

@ MG - Do yo think that a lower EC ejection from the monetary union would require currency pegs? Isn't it likely that anyone who is ejected is gonna have inflation issues... and the yield/financing problem isn't going to disappear either is it?

I dunno... We're talking about a calamity, so pegs might be needed, but who knows. The yield/financing problem disappears if you have your own ccy that you can freely devalue.

 

[new_trader]

The problems disappear with magic money printing...spoken like a true mainstream economist

 

[Martinghoul]

The problems disappear with magic money printing...spoken like a true mainstream economist

Pls feel free to explain where I am incorrect. Do try to avoid slogans, videos and quotes from various "important" and famous people and rolling your eyes. It would be nice if you could offer specific example, given how I can cite a whole multitude of them.

 

[neil]

Pls feel free to explain where I am incorrect. Do try to avoid slogans, videos and quotes from various "important" and famous people and rolling your eyes. It would be nice if you could offer specific example, given how I can cite a whole multitude of them.

This should be interesting :whistling

 

[YouAreNotFree]

There's no point in arguing anymore with those who call for inflation. Just hope if it gets to that point, they undergo much financial suffering because of it.

You deserve everything you get.

Morality doesn't exist to these people.

 

[scose-no-doubt]

I dunno... We're talking about a calamity, so pegs might be needed, but who knows. The yield/financing problem disappears if you have your own ccy that you can freely devalue.

I don't understand... who the hell buy into free-fall devaluation? Surely, temporary is only an interim solution as it will affect future external financing requirements?

 

[MajorDutch]

can someone please tell me how to short Banco Popolare. IG index say the stock cannot be borrowed and therefore cannot short it. Anyone got a way around this? It's just shown a bearish outside bar at an all time low. kinelll.

 

[new_trader]

There's no point in arguing anymore with those who call for inflation. Just hope if it gets to that point, they undergo much financial suffering because of it.

You deserve everything you get.

Morality doesn't exist to these people.

+100

 

[cristiano]

This should be interesting :whistling

I'll have a monkey on MG winning

 

[scose-no-doubt]

I'll have a monkey on MG winning

Against what? I've yet to hear a coherent counter-argument! I only see off-hand dismissing of anything that's not gold standard -esque.

Pity really as I'd like to hear an equally well informed (as MG is) opinion from the other side. Would make a really good thread.

Almost as good as MG's legendary show a trade thread. Now that was epic...

 

[new_trader]

Where is MG's legendary show a trade thread? I would like to see what an inflationist does with their own money and why...unless of course it was just short term stuff based on pretty coloured lines and shapes...

 

[new_trader]

I get it, others get it, but for some the arguments are just not coherent enough...

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