Sorry for the lack of posts, but, hopefully, frequency will increase as TMM pack away their beach towels and knotted hankies for another year. But for now we would just like to say that if the rest of peripheral Europe are taking the crisis anywhere near as seriously as Greece is, then the whole place is f%"ked. We have just found local prices in Greece exceed high-end London supermarkets with even olives and olive oil more expensive. Greek super yachts happily ply the waters and the bars are still full of locals paying positively Alpine prices for food and beverages in establishments where the plumbing is still Third World. At current prices, they shouldn’t be surprised if tourists start to choose Antibes or the Maldives over Poros. But as far as the bars, restaurants and supermarkets are concerned its either "what crisis" or they are taking the "rip 'em while you can" policy. The number of bleak concrete quay wastelands with big blue signs proclaiming EU funding from unification/friendship funds is depressing and you can understand German concerns as to when the subsidies will stop.. if ever. (A good article in the FT on how German / Peripheral imbalances are not diminishing through the normal routes.)
All this adds weight to the feeling that September's seasonality sell offs are this year going to return to the Euro zone, just when all eyes are pinned on the US.
But for now we leave you with a postcard we were asked to pop in the post to Germany.
All this adds weight to the feeling that September's seasonality sell offs are this year going to return to the Euro zone, just when all eyes are pinned on the US.
But for now we leave you with a postcard we were asked to pop in the post to Germany.
10 comments
Click here for commentsI know September is a seasonally a weak month but
ReplyAAII has US investor sentiment at 20.7% bulls (lowest since March 2009 lows), and
only 17% of hedge fund managers are bullish the S&P 500. August has been the lowest volume month since 1999.
These are not numbers you want to see if you are bearish stocks ... watch out for a squeeze :)
Normally a natural skeptic, I've been wanting to get long beta recently (which urge itself likely is a bearish omen). So far I've resisted, mainly on the thesis that my best entry point will be some time shortly after the markets get a good look at what the US sends to Congress this fall. But the more little data points like this I see, and naturally the lower indexes sink, the itchier I get to edge in now.
ReplyYou don't think your sample is actually representative of anything other than itself, do you? Munchau's article is pure August bollocks, btw - unless, of course, they're getting beer for 8 cents a can and milk for 20 a litre in Frankfurt.
ReplyLB is tempted to fade the August swoon, as almost everybody seems to be so focussed on an ever-growing flock of Black Swans that they might be caught out of position by any improving economic data in the US.
ReplyLB would not be shocked to see many investors yards offside, if indeed there is a September surprise. Now that all the Treasury bears have closed down their macro funds, just exactly who is left to buy those tasty morsels?
This is the kind of stuff that makes me think we are due for a surprise. Where was this tool last summer when I was buying Treasuries and preaching the Japan story to anyone who would listen (and many who refused to)? Now that these f*ckwits are all talking about it, you know that we have seen a short-term top !!
ReplyAnother Tool Comes Late to the Bond Party?
Treasuries are becoming very interesting to the retail investor... not usually a bullish indicator.
Nic and LB I am actually with you on this one for bounce on a "bad news nearly all priced in" move and I do think that equities are the place to see the biggest upside , there is little room left elsewhere unless you think deflation is really coming in which case cash 'n ' mattresses a la Japan is the answer. They are also the beneficiaries of most of the QE money at the moment. So lets get ready for an equity rally. BUT, despite Charles's vehement disagreement I am still waiting for a European re-shock that will be create that dip to buy on.
ReplyAs for my sample. I am very happy that it represents itself even if it is just itself. Even if the random selection of supermarkets, tavernas and bars I frequented were some statistical fluke in all charging astronomical prices , I am still happy to say that micro sample is living in cloud cuckoo land if they think that local earnings are going to support those costs. Something is going to give. Whether its Greek or German elections that are going to refocus the mind I don't know. I bow to your local knowledge re Spain, but I was personally bowled over at the pricing in Greece. It is also extraordinary how many non millionaires ( officially there are only a handful in Greece according to tax returns ahhhmm) can afford to run all those super-yachts out there.
Austerity my arse... they robbed Public Peter to pay Private Paul and are now claiming poverty towards their creditors... Impound the Yachts!!!
But back to the bounce. IF it comes then you have to expect an accompanying rates move and that could be explosive for USDJPY. Especially if the BoJ have learnt their lesson and chase a rising market rather than try to catch a falling one as SNB LLC has tried and failed to do.
PP
Poor Blythe "
Replyno one is going to get screwed" Masters.
JPM closing commodities prop trading unit.
Polemic,
ReplyAgreed. Much more efficient for BoJ to wait and try to catch the wave and then pursue the fleeing Yen longs by buying USDJPY and hence stabbing them in the back while they retreat. A more efficient use of knives than catching the falling variety...
The more I hear stories like yours, the more I'm convinced that there's a conspiracy to screw Brits (yes?) at any point that they interface with the 'continent'. Although I hear that holiday apartments can be had around Torremolinos for half what they were two years ago, I'm sure that you can't get that price there. It works in the other direction, too.
ReplyI recently got a call from Tely reporter who wanted to do a story on why olive oil prices had increased 20% up there. I was flabbergasted. A producer price chart for that stuff is the most comatose thing you'll ever see - and at two decade lows.
Your eurozone dip will come courtesy of our idiot president. This guaranteed. He believes that the fact that he moved in the wake of last spring's festivities will hold him in good stead forever. I generally think that the importance of bond spreads can be exaggerated, but the fact that Spain/Bund is back at 200's doorstep leads me to believe your moment will come sooner than later.
Didn't mean to come across as vehement. But Naked Capitalism carried the FT bit yesterday. Read the comments. It ain't just me.
Thanks Charles, I thought my paranoia was confined to the workplace but now I realise all Europeans are out to get me. theer must be something in what you say. If Gary Larson's deer Hal's "bummer of a birth mark" was a target on its chest then mine must be "British Mug" in 12 eurolanguages across my forehead. Sometimes feels that way.
ReplyYour example of olive oil prices flat at producer level but rising at retailer level is very interesting abd reaffirms that there is still room to take the piss in raising prices. No deflation there then. I still have yet to see any high street prices display any form of deflation. And it looksliek the discount store of teh East is even starting to raise prices. Companies are still keeping margins.
re your vehemence .. yes I m sure you are right ,, but I came home spitting tacks over various issues in Greece and that and other recent articles are napalm to my ire..
Thanks for your reassurances re Zap. In Zap we trust to muck it up.