Jan 20, 2015
sundaymorning The market started off well this morning, but oil is getting hammered and things went south across the board. The IMF cut growth forecast for 2015, despite their slashing of .5% on the global economy, the U.S. is still looking towards high growth for 2015-2016. I think this Thursday will be an important day for the EU, right now the U.S. is carrying the rest of the world..�
Jan 20, 2015
FluxCap Indeed, rough seas in the global macroeconomic environment are having a pronounced effect on us equities, including our favorite. I feel like I don't have a good read on things right now, but I suspect that we are in for prolonged period of semi-stagnation in US equities prices while oil is cheap, followed by a massive and irrationally exuberant rally when oil is allowed to appreciate again by the Saudis later in 2015. When that may come to pass is anyone's guess.
All the active trades I am seeing are in foreign currency exchanges (ForEx), where these global macroeconomic tides are sending currencies on massive swings against each other. JPY/USD was the story a few weeks ago, now traders are salivating looking at Eurozone pegs. Interesting times.
I could do with less deflation and more fiscal stimulus, personally.�
Jan 20, 2015
sundaymorning I agree. Data is all over the place right now but my gut feeling is that QE will help the EU tremendously, although it will arrive much later than the US's QE. The combined effect of Japan's & EU's QE can only help spur growth for the global economy and fight deflation. I also agree that inflation is the where we should be headed, just not in home prices, that area should deflate a little more.
IMO the recent development in the stock market tracking oil prices is a cautious play by large institutions and retail investors who are fearful of what this one data, in oil, might represent. For the average investor like myself, I am more optimistic of the future now than I was a few years back, mainly because the U.S. remains healthy and on track for higher growth for 2015-2016 as forcasted by the IMF.
I believe the Chinese GDP drop of 0.1% is overblown, and was expected. Due to China's growth in the standards of living, companies are naturally going to take manufacturing to other regions of the world such as India, Vietnam or Africa. Africa's GDP continues to grow at a very healthy pace as China has pumped a lot of money into that economy, and it's proving to be a great growth story for that battered continent. Samsung has recently announced a new multi-billion factory in Vietnam, a sign that China may not be the recipient of future manufacturing, which will undoubtedly benefit other nations in Asia.
I think foreign exchange currencies will be highly volatile during this time, there are so many things tide to foreign currencies I don't think I can ever stomach that kind of trade. Japan may need to lower the value of its Yen, like the Euro to the dollar of late to spur growth in their economy. With the U.S. Rolling ahead full speed, our currency should remain strong, just how much stronger than the Euro or Yen remains to be a discussion per QE has yet to show its effect on Japn and yet to start in the EU. Because of QE, I remain optimistic, it's worked for us under Obama, and should work for other countries, this should be good for fighting deflation, but only if home prices stably fall 2-3% per year as appose to a free fall. My next question is how much QE will Europe bring? My guesstimate is $500-$800 billion.�
Jan 22, 2015
MikeC So King Abdullah of Saudi Arabia died and oil futures are "surging": Oil Surges in New York After Saudi Arabia's King Abdullah Dies - Bloomberg
Good for TSLA tomorrow?�
Jan 22, 2015
FluxCap I bought oil calls (USO) and TSLA calls earlier this morning. Wow.�
Jan 25, 2015
sundaymorning With talks of Grexit hitting this forum, the Nekkei and shanghai appears to be doing fine as I type this. Based on what I've been reading, the exit is expected. Germany is prepared and EU is positioned differently than it was a couple years ago when Spain, Italy and Portugal looked weak.�
Jan 27, 2015
AlMc Big day ahead for us GDP, Fed meeting highlight busy week for economy - MarketWatch followed by Apple ER after market close. Alibaba tomorrow. Will be interesting.�
Jan 28, 2015
FluxCap It would appear that today, the market wants to punish the Fed viciously for not being aggressive enough with its language. The market wants QE-infinity and is attempting to bully the Fed into submission. Macro traders I follow think there is more carnage to come tomorrow. We shall see.�
Jan 30, 2015
sundaymorning The overall market took a beating today due to GDP data coming in at around 2.5% for full year 2014. After previous 5% GDP growth, the street was anticipating ridiculously similar numbers to end the year. Well, despite not repeating those absurd numbers, we are anticipating continual growth in GDP for 2015 to reach 3% and about 3.3% for 2016. At this rate, it is extremely difficult to interpret macro economic conditions as data continues to show mixed results.
We did, however, receive a bit of a boast from oil, which recovered about $3 or approx. 7% towards the end of the day. If these types of recovery continues for oil, it would be in line with what OPEC secretary general expected as we exit January and enter February. Usually after 4th Q, the economy slows down a bit, then picks up with more tail wind around March, which is most likely why OPEC expected oil prices to bottom out sometimes during January....
Consumer sentiment also continues to be strong, with many projecting that the U.S economy will continue to grow for the next 3-5 years...
In regards to Tesla's low volume, we are hovering around 3.5 million shares traded the past 10 days, which to me indicates that there is much support at the $200 level. I would be worried if the volume was higher than 5 million and we continue to go negative or flat. At this rate, I think we are forming a new base of stronger support at $200 since we've been here for awhile. Perception of Tesla in the media has recently changed from negative to positive as more reviews of the "D" hits the street. Despite, the negative macro data we received today, TESLA held up well, imagine if we receive something a bit more positive, I have a feeling the stock is ripe for an uptrend, especially with recent videos of the X. The street is usually a bit behind in terms of news flowing through this forum. Once the media gets a firm grip on more videos and pictures of X prototypes, investors will follow. If you are trying to time X, now would be a good time IMO. I can't see Tesla reporting guidance without including at least 5-7k X produced for the year...Just a guess here, good luck to everyone.�
Feb 6, 2015
Gerasimental http://www.reuters.com/article/2015/02/06/us-usa-economy-idUSKBN0LA02P20150206
257k jobs added, unemployment up to 5.7% due to labour market growing, along with substantial rise in wages.
Will the market react negatively to this because of the increased probability of ending ultra low IR? On the other hand, will consumer cyclicals react well to increasing purchasing power?�
Feb 6, 2015
Robert.Boston This gain is particularly impressive because there was a lot of talk about the number of jobs destroyed in the oil & gas sector by low oil prices. It seems pretty clear that low energy prices create more jobs than they destroy.�
Feb 15, 2015
sundaymorning Japan looks to be doing well. The Nekkei is at an 8 year high. GDP looking to stabilize.�
Feb 15, 2015
Auzie Nikkei is doing well because Yen is going down, due to Bank of Japan Quantitative Easing program. I doubt that the Japanese economy is out of the woods. There are problems with deflation.
Here are graphs of exchange Yen/USD and Nikkei over the same time period.
There is similar effect in Australia. ASX300 jumped up with falling AUD.
�
Feb 15, 2015
sundaymorning It will likely take a lot more to get Japan back to normal. But it's a bit soothing to my investment knowing their economy is slowly improving. The strong dollar may slow down certain sectors of the US economy, but it will be beneficial to other areas of the world. As long as the US continues to be strong, it'll buy time for other economies to recover and grow. With Japan and EU both infusing money, I remain bullish in the stock market, so long as the US remains the strong and China is steady.�
Feb 16, 2015
Auzie Economy is improving indeed. US economy has technically been out of recession for the last 6 years.
At 5.7%, US has one of the lowest unemployment rates in the OECD.
The Economist calls US "the star of the catwalk".
I hope that rates stay put for a while.
We may have a bull market for next few years at least, providing there are no wars or other catastrophes.�
Feb 18, 2015
sundaymorning As we were discussing about Japan the other day, their export jumped to a whopping 19% up from 11% expected... the Nekkei is at a 15 year high! Hopefully Europe can get out of its funk the next few months.�
Feb 19, 2015
Auzie We can expect similar jump in Euro exports. Euro dropped close to 30% against USD since May 2014. Currencies are likely to reach parity in 2015.
That is a double edge sword. Strengthened Japanese and European economy are the positive forces on a macroeconomic scene, but a strong dollar is weakening US economy.
All German and Japanese cars imported to US now compete with Tesla at 30% lower price point. The reverse also holds for Teslas exported to Europe and Japan.�
Feb 19, 2015
Robert.Boston I haven't looked at the Japanese pricing, but the German gro�en Drei (Audi, BMW, MB) weren't pricing their cars at parity last summer, with US prices appearing to result in lower gross margins than domestic sales. I would be surprised, therefore, to see them lower their sticker prices, but instead for them to pocket more margin. What we might see, though, are stable prices for the 2016 models and, potentially, more aggressive purchase incentives from the OEM.�
Feb 19, 2015
Auzie It is correct what you say. My statement was too loose. Prices adjustments lag considerably behind exchange rate moves and often never catch up. Many factors may play a role in price (non) adjustment.
However if the trend of the exchange rate continues, prices adjustment will follow and may catch up.�
Feb 24, 2015
sundaymorning Dow, Nasdaq and S&P at new highs. The Nekkei is at 15 year high, Greece has settled. Feds aren't raising rates, EU $1 trillion bailout along with Japan QE. Oil looking to stabilize with numerous refineries on strike. Looking bullish to me...�
Feb 24, 2015
sundaymorning Fresh in, China factory expands in February, first time in four months!
http://www.cnbc.com/id/102452885�
Feb 25, 2015
sundaymorning Oil is quietly up 3.5% and Brent is up 5.5% today after Saudis observe an uptick in demand and Chinese economy expands in February. This is online with earlier predictions that 1st Q is normally weak and 2nd Q grows steadily. This prediction is of course based on historicals and bars any interference of unpredictable circumstances... US oil inventories continues to rise, maybe bc of a strong dollar?�
Feb 25, 2015
Auzie Yellen: Rate rise unlikely
Janet Yellensemiannual report to Congress:
Report major points
Great job US Fed, in managing recovery. The US house seems to in order, all threats seem to be outside threats. Pesky foreign sluggish economies need to pull up their socks.�
Feb 26, 2015
sundaymorning
Apple rumor helped this morning but it appears we were unable to build on that momentum because oil was largely down, US jobless weekly rate up, and consumer sentiment down a bit. However, the US economy remains in positive territory.. we'll see what happens next week.�
Mar 2, 2015
Auzie Interesting predictions by Morgan Stanley CEO
Here is what James Gorman, MS CEO has to say on the future:
I agree with the first statement, not so sure about the second one.�
Mar 3, 2015
Robert.Boston With my Fed-watcher tinfoil hat on, I agree that a mid-summer rate increase is likely based on parsing what Dr. Yellin has been saying. With my energy economist hat, I also agree with the oil price prediction, based on how inventories and rig counts are declining.�
Mar 3, 2015
jhm Fuel Gauge Report from AAA
Gas prices are going back up.
The crude price, I believe is the barrel price of crude divided by 42 gallons per barrel. Notice that the national retail price is always about $1.00 to $1.30 above the crude price per barrel. This spread reflects the costs of refining, distributing and marketing gas plus taxes. Taken together this retail to crude spread represents the infrastructure cost of gasoline, about $1/gal, what consumers must pay for gasoline to be conveniently located where they need it. Drivers pay about $500 per year per car for this service. And it is additive to the cost of crude. So even if crude were just $0.01/gal, gasoline would still cost more than $1/gal, just to bring it to the retail market.
This is critical to understand for EV economics. Getting 3 to 4 miles per $0.12 kWh is comparable to $0.75 to $1.00 per gallon. Thus, even if crude oil were free, gasoline would still be more expensive than the electricity to power an EV.
Of course, there are also infrastructure costs for charging. We may spend $1000 for at home charging installation. But this is still far cheaper in the long run than paying $500 per year per car to refiners and gas stations just to cover the infrastructure of convenient gas.
So no matter how cheap oil gets, EVs are always cheaper to power.�
Mar 5, 2015
ev-enthusiast EZB purchase program starts next Monday, March 9th, ends September 2016
Mario Draghi:
The Europ�ische Zentralbank (EZB) is starting to buy government bonds on a large scale in order to avert the risk of deflation in the euro zone.
The EZB is buying government bonds and other securities each month valued at 60 billion euros until September 2016.�
Mar 5, 2015
Johan His first statement kind of invalidates the second one, doesn't it? "It's impossible to predict the future, and if you try you're a fool. Now let me predict the future..."�
Mar 5, 2015
yesla I think it was tool to infer that he did not take himself too seriously...�
Mar 6, 2015
FluxCap Looking like market tried to punish a good weekly jobless claims report to pressure Fed into not raising rates in the morning hours of this session. A rather weak attempt, and I suspect a bounce back up with force on Monday AM. Too many green shoots in this market with lots of cash looking for a home. Made a few bets accordingly.�
Mar 10, 2015
FluxCap Rough few days for the S&P, NASDAQ and TSLA. I'm convinced much of the recent downward pressure on TSLA is macro-related. We need a green market day soon, or macro bears are going to start salivating and talking "the big correction" again.
�
Mar 10, 2015
Lump At the beginning of 2014 I began lowering risks in my portfolio since I felt we were in the late innings of the USA bull market, later in the summer I turned bearish & sold many long held positions, I typically don't sit on cash very long but found my self with ~40% in cash with an itchy trigger finger, the only Microeconomic trade I found comfortable making was buying WisdomTree Europe Hedged Equity ETF (HEDJ) http://www.wisdomtree.com/etfs/fund-details.aspx?etfid=73
Currency trading & predictions are not my strong suit but HEDJ has performed well over the past 3-6 months & should continue in this environment.�
Mar 11, 2015
Auzie I am curious about the bearish macroeconomic signals that you see.�
Mar 11, 2015
Lump Hey Auzie, last night I decided to not participate in the investment threads for awhile...good luck.�
Mar 11, 2015
Auzie I will miss your input. I appreciate bearish input and seek it to balance and keep in check my current overly optimistic outlook.
My portfolio has a good chance to be decimated in a potential market downturn. That makes me a bit paranoid about looking for bearish signals.
We all participate in and contribute to shaping the underlying market sentiment. Not hearing different voices increases the risk of not sensing the change in market sentiment
Good luck to you as well, sitting on cash and in funds is not a bad place to be, it might turn out to be better than chasing sp waves:smile:�
Mar 11, 2015
kenliles Ditto. We need all the Bear balance we can get. I'm largely in cash right now due to an anticipated market correction. I think TSLA is a bit dangerous right now for the very reason it has, on its own, a good price point here. But with the market conditions I'm at very minimal levels in all stocks, especially high flyers like TSLA. Historically, when the Fed begins raising interest rates the market corrects 10+% (13/16 odds). On top of that the high dollar, more oil downside imo, and general world low growth, etc. It's just a very risky time for the markets imo, making it doubly frustrating to be under invested in TSLA at these prices...�
Mar 11, 2015
Auzie I have some hopes that Fed will refrain a bit longer with rate hikes. If they don't, strong(er) $ may become a drag on US economy and that is likely to flow into market correction. My dilemma is how big is that correction likely to be if it happens and at what point is it worthwhile to make moves. 10% correction is not so threatening.
Tesla is as dangerous as ever:smile: thrilling�
Mar 11, 2015
jhm Infrastructure cost of gasoline
While we're considering the possibility that oil could decline further, I'd like to share something on the infrastructural cost of gasoline. Acxording to the EIA (Factors Affecting Gasoline Prices - Energy Explained, Your Guide To Understanding Energy - Energy Information Administration) in 2013 the average retail price of gasoline in the US was $3.51/gallon. 68% of this was due to the price of crude oil which obviously varies with the oil market. However, refining, retailing and taxes accounted for 9%, 11% and 12% respectively, and these costs do not substantially vary with the price of oil. These are the infrastructural costs of gasoline that consumers pay for the convince of filling up at the gas station of their choice. This infrastructure cost is about $1.12/gal. So even if crude where were free and delivered to refineries at no cost, the retail price of gasoline would still be about $1.12/gal.
Given a price of electricity at $.12/kWh, average EV efficiency of 3.5 mile/kWh and average gas vehicle efficiency 22.5 mpg, EVs reach fuel cost parity with gasoline at about $0.77/gal.
Thus, EV parity gas prices are well below the infrastructural cost of gasoline. EVs will always be cheaper to power than gas vehicles no matter how low the price of oil may go.
As a handy little model for gas prices, it is convenient to remember that there are 42 gallons to the barrel. So roughly we get:
Gas ~ 1.12 + Crude/42
So even with oil as low as $10/bbl, gas will be about $1.36/gal.
So the average family is spending about $500 to $600 per year per vehicle just for the convenience of gasoline infrastructure. EV infrastructure is much lower, so in the long run EV infrastructure wins regardless the price of oil.�
Mar 11, 2015
kenliles True enough! Due to US economic strength and still positive yield curve, I think a market correction of 10-15% is a reasonable expectation. Given TSLA is already beaten down pretty good, I would expect it to match (rather than amplify it). If we get the correction while TSLA is down, I'm planning on something like a $180ish support level. I'll be holding my core position thru that and adding on the way down in measured increments. No doubt, none of this will take place!
Nice reminder post jhm. I've been trying convince associates of this fact for a long time now. Markets don't seem to get this. In addition, with Solar-Storage, the EV fuel infrastructure continues to get cheaper over time (including on a relative basis)-- Thx�
Mar 11, 2015
sundaymorning Lump, you and I have had our differences but I think your input can be valuable as long as you contribute by posting informative comprehensible information, as appose to the regular 2-3 sentences or punchlines... It is also critical when bulls are asking for you to expand your thoughts, that you follow up with an explanation. When reading each others' posts here, we sometimes misread the tone and take it the wrong way. I encourage you to change your mind...
Auzie, it is very difficult to time the market, sometimes you get it right and sometimes you get it wrong. Data oftentimes come in mixed, the only sure bet is to buy yourself enough time to ride the ups and downs. If you own options that are short term, I encourage you to wind them down, use the extra cash and buy further out in terms of leaps.
Not only is electric cheaper and more convenient, gasoline in California has not been that much cheaper than previous years. Despite the price of OIL dropping, gasoline for 91 OCTANE currently costs $3.70 in California, even though U.S crude only costs $48 per barrel. I hate to see what the price of gas would be like if OIL rises to 60-70$.
I have been putting much thought into the macro-economies lately and I must admit I am as puzzled as ever. The bearish and bullish signals are not as evident as one would assume. At first glance, the recent drop in TESLA stocks may be of concern, but if you look at the DOW, S&P, and Nasdaq, they are all at record highs (so there are plenty of buyers, additionally,Japan's Nekkei is also at record highs). I attribute these historical highs to the strong U.S economy, and of course, low interest rates.. the other factor that drives the stock market higher is real estate prices. Homes use to be cheap, so investors would flock to that arena for investments, but with current home prices also at all time highs, I don't see it as a feasible investment for the average speculator. Hence, they turn to other avenues, like stocks, gold, etc.
There has been some concern about Feds raising interest rates, which in turn may drive investors to the bond market. However, if Feds raise interest rates, it would indicate that the U.S economy is healthier than ever, which in turn would mean more buying power and higher value in the dollar, which then drives down gold prices. Where will gold investors put their money when gold prices are driven lower? There's the bond market, stock market, equities (a bit too risky IMO), real estate, savings or under the ole mattress, etc... Everyone of these markets will have its fair share of new investors driven by the higher dollar, lower gold value, lower oil/copper prices, etc. In the meantime, those flocking out of equities will soon be met with anxious buyer ready to buy low sell high... this in turn brings prices back to normal in due diligence. Let the current example of record Dows, S&P, NAZ be a clear reminder...
Now, if there is any indication of concern over FEDS, wouldn't the historical highs of the Dow, Naz, and S&P see some form of a contraction? Sure, however, we are seeing the exact opposite and those markets are expanding. Just how much longer? Who knows... the most common argument I've heard from bears is that the stock market has been on a tear, so it has to pull back. Just how many times have we pulled back during the past several years with the Russian Crisis, Fed Crisis, Europe Crisis, Greek Crisis, more Fed Crisis, Syria Crisis, Oil Crisis, Gold Crisis, Dollar Crisis and now FED crisis again? We've had our fair share of crisis each and every single year, reminding the market to pull itself back, only to break new highs. Why? Because we're making profits...
Not only are markets expanding, governments all over the world are easing rates (China, Japan, Europe, and as I type this South Korea, etc). Additionally, world markets are pumping hundreds of billions into Q/E, for example: Japan; while Europe has committed to one TRILLION $$$. More money = great for stocks. One other reason that supports low interest rates here in the U.S is because of Europe. If Europe remains unhealthy and in debt or weaker Euro, the U.S can't afford to raise it's interest rates because we are all exposed to Europe, our financial institutions has billions in credits tied to many European countries. Hence, if Europe is unhealthy, we need to lend a helping hand in keeping interest rates low. I do not see Europe as being healthy at this moment. If we raise interest rates soon, how will Europe repay its debt with its current Trillion $$ commitment to Q/E? Will more countries end up like Greece if we do? Hence, in order for us to raise rates, we must first see a steadier improvement in the U.S, and Europe must follow...with fears of exports being low I can't see the Feds screwing us (but hey, anything can happen) for this reason, I am predicting a delay.
On the flip side, if Europe's economy improves, then it would mean overall healthier macro-economies which justifies higher interest, just what we need for stocks to rise further.
China's GDP has recently declined, they are predicting 7% this year, down from about 7.5%, although this may seem as a negative, keep in mind that the U.S GDP is only about 2.5% so China's 7% is still pretty healthy, considering they are at a 300% growth rate compared to us. China recently reported export data, and it was a resounding beat btw. The U.S jobs market continues to be healthy, I do not see it turning 180% anytime soon. As I type this, the Nekkei has risen 240 points, Shanghai rises 44 points (1.35%) due to better than expected jobs report in Australia, which exports much of its materials to China...
Again, how does one interpret all these data? Should we pull our money and hang onto cash when the U.S continues to be healthy? Should we worry about Europe? There are too many factors and mixed signals, the picture is not clear enough to make an inform decision. Hence, we resort to our "gut" feeling, that maybe the continuous growth in the U.S economy will soon decline or will it not? How much longer can the U.S continue this amazing growth? In the meantime, the strong U.S engine is buying more time for the rest of the world to catch up. If the rising dollar is a concern for exports, it could also mean healthier imports, cheaper prices and more profits for other sectors of our economy. Higher imports, would then equate to more buying power going from the U.S towards other world economies, helping them on the road to recovery as they would need to produce more to meet U.S demand for cheaper goods. If the dollar falls in juxtaposition to the Euro, it would mean that Europe is recovering. We can also help Europe when we are traveling to their country and taking advantage of the favorable exchange rates, spending our dollars to help their local economies...
Oftentimes, when we get too clear of a picture of bad news or good news, it also means that it is too late because by then, everyone else will either be in or out.
So while all this is going on, Tesla continues to grow, the gigafactory continues to be built, Gen 3 gets a step closer to reality. Our storage solution and charging network footprint continues to increase.. where should my money be then? Bonds, equities, stocks, real estate, gold, oil, Europe, China? I don't see a better potential for a 5-10 bagger. Yes, I can lose a few points in the short term, but that's the price I will have to take. You gotta pay to play and if you are not playing, where will your money be?
Despite mixed signals from all over the place and my inability to dissect macro-economies. If there is an indication of a clear and precise picture it is the big pullback right here in our own back yard, yes I am talking about TESLA. Its pulled back pretty darn hard so far, and historically speaking, you should always buy low and sell high.... or you can play the wait and see game.�
Mar 12, 2015
ev-enthusiast Automotive industry in Germany booming, posting record profits:
- VW Group posts record profit of $17.9 Billion in 2014, raising annual production in China from current pace of 3.7 million vehicles to 5 million vehicles by 2019
- BMW posts record net profit of �5.82 Billion in 2014
- Audi 10% global sales growth in '14�
Mar 12, 2015
Auzie Great news. German auto industry is a considerable propellant towards macroeconomic improvement in Europe.
I think common currency in Euro zone works wonders for German exports (cars). Common currency eliminates competitive devaluation of currencies, facilitating uncompetitive demand generation outside of Germany.
Here is a link to a bit dated opinion piece that discusses Germany Euro advantage.
Highlights:
�
Mar 12, 2015
jhm Great point about regional price differences. The easy way to ballpark your local infrastructural cost of gasoline is to subtract crude/42 from your local price. So with crude at $48/bbl, oil only contributes about $1.14 to the price per gallon. Thus, gas at $3.70 leaves $2.56 as the infrastructure cost.
So with oil returning to $84/bbl, you could see gas at $4.56.
Wouldn't it be cool if you just send gasoline over the internet. No need to pay for shipping, no need to go to a gas station to fill up. Just download at home. If only there were some genius entrepreneur to come up with Internet gas, that could really cut out a lot of cost and inconvenience. If only there were an app for that.�
Mar 12, 2015
Auzie jhm, be the change you want to see :smile:
Maybe we are already there, internet undermines the need for transportation in so many ways and reduces the demand for gas. By facilitating people connections and businesses operations without any gas usage, perhaps in some devious way we can consider that internet is delivering gas where needed:wink:�
Mar 12, 2015
AudubonB Just the thought of that gives me gas.�
Mar 12, 2015
jhm If only there was a way to send energy over wires, you could just plug in...�
Mar 13, 2015
ev-enthusiast Sometimes the obvious is too difficult to see
I agree this is one big advantage of EVs during every day use.
Meanwhile US auto sales are picking up more speed: US auto sales could top forecasts
Sales have been up 6% in 2014 (best since 2006)
Sales have been up almost 14% in January.
Reasons for increasing sales among others:
- rising consumer confidence
- falling unemployment
- low gas prices (sorry, for gas guzzlers only)
�
Mar 13, 2015
jhm Sorry to be so coy. It's come as revelation to me that electricity has enormous infrastructural advantages over gasoline. Gasoline is expensive and risky to transport and must be sold at brick and mortar stores. By contrast electricity pretty much enjoys the advantages that online stores have over brick and mortar. It is so much cheaper to transmit power over the grid than to truck petroleum products from refinery to gas station. Think about that the next time you see a truck or train shipping petroleum.�
Mar 13, 2015
Robert.Boston Electricity has three other key advantages. First, it has many uses other than as a motor fuel, so the infrastructure costs (which are considerable) are spread among many sectors. Second, there are many ways to make it, so no coalition of countries can control its price. Third, the health & safety issues around producing and delivering electricity can be much lower than those for gasoline.�
Mar 13, 2015
ev-enthusiast Exactly.
Exactly.
Same goes for potential new H2 infrastructure!
And that's only one fact why some people know that FC is BS.
- - - Updated - - -
New Oil Market Report from IEA out. Forecasting oil demand growth for 2015 rising by 75 kb/d to 1.0 mb/d (report)�
Mar 13, 2015
ev-enthusiast Porsche just joined the party at their annual press conference today in Stuttgart, Germany:
- Porsche deliveries rose 17 percent to 189,849 cars in 2014 and surged 34 percent in February.�
Mar 13, 2015
FluxCap U.S. proposes to buy up to 5 mln barrels of oil for SPR
So now "Oil QE" is upon us folks. I'm not even sure we have room in the Strategic Petroleum Reserve for this much more oil, but I could be wrong.
I'm not sure what to make of this, other than my macro shocks spook-o-meter has gone up a tick or two for sure. Not a good week for my long positions.
Edit: Techmaven confirms we have room for about 100 million barrels in the 700million-barrel large SPR right now. Still, I find this move odd. Is this a price floor for oil? I think not until the Saudis turn off their taps. OPEC has said $200/barrel in 2015 but that sure seems a long way off right now.
At least TSLA has mostly decoupled from oil price fluctuations since late last year. Remains to be seen if the market decides to "directly re-correlate" or not. Obviously Tesla shares a modicum of indirect effects of shifting oil prices, as do most global companies.�
Mar 13, 2015
surfside i would add one more significant advantage of electricity: it can be generated by the sun (via solar panels), and given the sun washes the whole planet with power every day, there isn't a need for a distribution network like the grid to provide electricity to power to any given user, particularly when there is a cost effective way to store that energy (e.g. battery storage).
surfside�
Mar 13, 2015
dha This could just be...you know...strategic. As per your own article, 5 million barrels were unloaded from the reserve last March when oil was twice as expensive as today. Sell high buy low? Seems to me like a bullish signal for oil therefore perhaps bullish for TSLA.�
Mar 13, 2015
jhm Is 5 million barrels even material? It's about a half-day supply.�
Mar 13, 2015
sundaymorning The Russians are mighty quiet lately, perhaps the oil fiasco was a manufactured crisis? Why not just cut production during low demand months?�
Mar 14, 2015
jhm The question is, whose job is it to cut production? OPEC does not want to play swing producer and progressively lose market share. Additionally one can't just stop pumping a wrll one month and start back up a few months later. When you stop the flow in a well, it starts to settle and plug up. To start it up again, re-drilling may be required. So it is a costly proposition to shut down for awhile. The other positivity is to slow down on bringing new wells into production. These are multi-year projects based on lots of contracts and financial obligations. So again it is costly to halt a project midway. What we are left with is curtailing new projects that would not bring new capacity to market for several years. The recent decline in rig counts does very little to correct oversupply right now, but it could make for an inadequate supply in several years. This is why there is a risk of oil at $40 today could precipitate $200 oil in 2018. Not saying that will happen, but if rig counts fall to far it compromises future supply. This is not at all an easy game to play.
One of the huge benefits of bringing EVs into transportation is that it diversifies the energy mix that powers transport. This gives price stability to EV drivers, while drivers of gas vehicles are subject to extreme volatility in the oil market. So not only is it cheaper to power your car with electricity, it is less volatile as well.�
Mar 14, 2015
AudubonB Not only are the points of Jim's last paragraph - providing energy mix diversification and bestowing price stability - beneficial to EV drivers but, far more able to turn heads in Washington DC, they are consummations devoutly desired amongst those who espouse national security and for those who attempt to foster economic growth. Carefully cultivated, these arguments can - I'm not saying will, since there are profound cross-currents at play - attract elected officials and bureaucrats of various ilks across the political spectrum.
And....these points are by no means confined to the United States. They are worldwide truisms. Political-economic structures like PRC; quasi-totalitarian states like Russia can effect them more easily than the US can, which in itself is a factor that redounds to the security and growth cultivators.�
Mar 16, 2015
ev-enthusiast German DAX above 12.000 pts for the first time ever (live cam here).
�
Mar 16, 2015
jhm I agree. Electricity is heavily domestic energy and is becoming increasingly localized with solar and in some places wind. National security issues are less pressing when local energy is sufficient.�
Mar 17, 2015
ev-enthusiast ACEA says Passenger car registrations up +7.0% on average over first two months throughout Europe: press release
BTW Carlos Ghosn re-elected President of ACEA for 2015.
Could only be positive for EV future...�
Mar 17, 2015
FluxCap Fed-a-palooza March 2015 continues today as the market prepares to digest tomorrow's FOMC forecast and Chair press conference:
The FOMC release will be posted here at 2pm EST, and the market will likely move sharply immediately afterwards as the algos/HFT's digest the language and fight each other to move the indices up or down. I expect TSLA will be affected by this as well temporarily, up or down.�
Mar 18, 2015
Robert.Boston Good call; with the NASDAQ down to 4,908 after lunch, it leaps to over 5,000 after the announcement, the settling a bit to close up 0.92%. Still, Tesla outperformed the market today, rising over 3%.�
Mar 18, 2015
sundaymorning Yep. The Feds may have scared a lot of investors awhile back, but this recent movementonly indicates what I've been thinking as the likely scenario: FEDs cannot raise rates with Europe doing so poorly. We'll see how the market reacts overall tomorrow, but for now, every index is higher. We may be entering a new period of bullishness.�
Mar 22, 2015
sundaymorning Nekkei, Shanghai, FTSE at new highs, so are markets here in the US.�
Mar 26, 2015
FluxCap I found this data visualization interesting, some of you might too:
USA vs Russia vs Germany: Military, Economically, Oil Resources
�
Apr 2, 2015
FluxCap Interesting re: today's jobs data and oil:
"Of the 140,214 job cuts announced in the first quarter, 47,610 were directly attributed to falling oil prices."
2015 March Job Cut Report: 34% of Q1 Cuts Due To Oil Prices | Challenger, Gray Christmas, Inc.�
Apr 2, 2015
Wenche Thank you for holding us updated on the maco level�
Apr 3, 2015
sundaymorning It's going to be hard for the Feds to raise interest rates in June. Jobs creation down by 50% compared to estimates.�
Apr 3, 2015
FluxCap You are most welcome -- sorry I don't post as much as I used to on this but please do check the first post in this thread for daily news!
Yep, seems there is almost is no way June is the hike date, I think market has that at about a 5% chance right now. Honestly, given global currency manipulation by nearly every modern central bank on the planet and massive corporate leverage in the oil sector and others, I don't see how they can raise rates anytime in the near future without sending us into Depression. I think they know this but will not say it. I could of course be wrong.�
Apr 3, 2015
sundaymorning You're on point. To me, the first indication of a hike will come from how the European economy performs.�
Apr 3, 2015
AudubonB Keep your eyes on the UK elections. Campaign season just opened (they're SO lucky! Campaigning is allowed only for four weeks prior to an election!), and it is incredibly unapparent what its outcome will be: continued Conservative (aka Tory); Labor; or if a coalition will be needed for the first time in a queen's age. Err, coon's age. There are strong currents and countercurrents in England right now over that country's future in the EU, so it is an important election for all - US as well as the rest of Europe.�
Apr 7, 2015
Auzie Dollar rally slowdown
WSJ article, Dollar Sputters After Rally
Highlights:
Many investors are bullish on the dollar long term, but consider the biggest gains over.
Slight cooling of US economy, as evidenced by the weaker than expected job report, might delay rate hike to the end of 2015. The Labor Department reported 126,000 new jobs, against expectations of 248,000.
Brightening EU outlook puts downward pressure on the dollar.
A weaker dollar might contain downward pressure on oil prices.
The expected likelihood of a rate rise in September dropped to 28%, according to the futures market.
There are expectations of Dollar/Euro parity by the end of 2015.
The ECB boosted region growth forecast to 1.5%, from 1%.
Looks good to me.�
Apr 8, 2015
ev-enthusiast Alcoa reporting their numbers for Q1 2015 today after the closing bell.�
Apr 8, 2015
Robert.Boston I'm hoping for something dramatic there. I've bought some AA as a long-term investment in the transition from steel to aluminum in the car industry, but it's been underperforming ever since (which is the story of most of my non-TSLA direct investments).�
Apr 8, 2015
FluxCap Minutes from the latest FOMC policy meeting will be released at 2pm, and as always when this happens, the market may lurch significantly one way or another in short order if the bots pick up on any surprising wording.
Minutes will appear on the page here. And bots will digest them fast and trade based on pre-programmed word searches.
Could affect TSLA as we move towards the close, up or down.�
Apr 8, 2015
CALGARYARSENAL I think it will push TSLA upwards for a close above $210.00. Cheers.�
Apr 8, 2015
32no I would like to bring up exchange rates and their effect on Tesla's margin. By February 11 (the day of the quarterly report), European cars were already estimated to be delivered in Q2, so any further changes in NOK or EUR will not affect Q1 revenue or margin. However, Tesla warned that if the Dollar strengthened further after February 11, it would effect margins. I am not quite sure how. Is it because of purchasing battery cells from Panasonic?�
Apr 8, 2015
Auzie There is a discussion thread on the subject: FX impact potential/scenario
I think strong $ puts downward pressure on sp due to its impact on revenues from overseas, your table with comparative pricing shows at least 10% loss. There is some offset of this effect due to paying for the cells in Yen. Once GF is online my understanding is that the batteries will be paid in $ and Tesla might need to start hedging.�
Apr 9, 2015
ev-enthusiast Alcoa reported their numbers for Q1 2015:
�
Apr 13, 2015
Auzie China slowdown
China's GDP expanded 7% in the first quarter of 2015. China GDP growth in 2014 was 7.4%.
Such number would have been an outstanding achievement for many economies, but for China this is disappointing and represents the worst result since GFC.
The drop in GDP rise is attributed to a waning property sector. The Chinese government is acting to counteract but seems unable to reverse the slowdown. JP Morgan estimated that the property development contributed to 20% of GDP. Excessive developments led to oversupply and unsold properties, creating a drag on the economy.
There is a significant capital flight out of China. Beijing loosened the grip on exchange rates last year and the yuan has been sliding since then. China's huge trade surplus and cash reserves provide some protection against such outflows.
Major cities around the world are feeling the influx of Chinese capital as an upward force for their real estate prices.�
Apr 20, 2015
Auzie Yield curve, look into the future
A 3D View of The Yield Curve, by NYT
The yield curve shows how much it costs the federal gov to borrow money for a given amount of time. The price of money today, tomorrow and many years from now embeds a forecast for the future economy.
Key points
Now- the yield curve is flat, signalling the expectations of a mediocre growth ahead
The last time Fed started raising rates was in 2004 to 2006. Long term rates did not respond, raising questions about the ability of the Fed to guide the economy. Long term rates are low now as well.
Yields in Germany are negative. Bond buyers agree to lose money. Last month, 10 year yields in Germany were lower than in Japan.
With low rates in both Europe and Japan, the rates in the US are among the highest in the industrialised world.�
Apr 23, 2015
Auzie Australia to continue with easing bias
Most likely no one here but me really cares much about what happens downunder, but here it is anyway
Further rate cuts and lower AUD expected
Highlights
Australian economic engine is located in Western Australia. That engine is quite simple, some people might describe it as 'digging stuff out, putting it on boats and selling to China'. Some people call it mining.
Mining boom is over, iron ore and coal (stuff on boats) has shrinking demand and lower prices. That is not just a drag on our economy, that is something to complain about, as now we must learn to make a living doing some more complicated stuff, like building houses, tourism, retail and similar.
The Australian economy is growing at a pace of 2-2.5%. RBA already cut rates and plans further cuts ahead, to help the struggling economy. AUD is expected to slide further, perhaps down to 0.7 USD.�
Apr 23, 2015
sundaymorning Aussie keep it coming, most investors are in the short term thread for the latest news. I also think that most investors are likely oblivious to the macro conditions as it is one of the hardest piece of information to grasp.�
Apr 24, 2015
Larken I care about it and thanks for the update!�
Apr 24, 2015
Auzie sunday I guess people just follow what interests them. I think whoever can have an active trading account is more than capable of grasping anything.
I find it interesting how US really pulled out of GFC with money easing policies and now we are getting all these copy cats around the world. It took some years though for the truth to sink, what works and what does not work. In some places (countries) there is still some stubbornness and refusal to abandon not so effective policies, I will not name names
- - - Updated - - -
Hey Larken, I like your new location! Now there is more than one Auzie in this cul de sac, great!:biggrin:�
Apr 24, 2015
Larken Yeah, for now I'm here and just got the power back after 3 days off the grid... were you ok?�
Apr 24, 2015
atang I care and appreciate your invaluable input from my little viewpoint in Bensalem, Pennsylvania! I curse myself for not ever making it to your continent. That will change in the future!�
Apr 24, 2015
Auzie Larken may I suggest you buy one of these Tesla batteries , then you will never be off grid again.
Yea I was ok, we are all very good swimmers here, even my car knows how to swim, it did a few laps on my way to work
Thank you for your kindness atang
Indeed not visiting Australia can easily be considered a missed opportunity. I highly recommend a visit, we speak a similar language so it is easy to get around, exchange rates are going in a favourable direction for you and conveniently our summer is during Christmas holiday making us a perfect holiday destination.
Long flights are the only downside, all other experiences are likely to be in the upside category. My favourite upside is that the requirement for shoes and fancy clothes is truly minimal, what a relief that is.�
Apr 25, 2015
atang �
Apr 25, 2015
Auzie In Australia we receive in excess of 4 kWh per square metre per day of insolation, making Australia the continent with the highest potential for solar uptake. Solar uptake has been rapidly increasing. Still we are far behind countries like Germany. Germany has 10 w per capita solar, Australia has 2.6 w per capita. Solar installations are getting various government incentives here, and we have approximately 3400 megawatts of installed solar power. That contributes 1% of Australian electrical energy.:redface: We have a long long way to go
�
Apr 25, 2015
atang @Auzie, Thanks for that detailed response! 1%, very surprising?�
Apr 25, 2015
Auzie It could be a little bit more now, the graph is few years old, but still the contribution of solar is miniscule. It is a legacy issue. Once an industry sets its footprint, it becomes quite hard for that footprint to change and takes decades.
Solar potential is high, but the uptake is slow due to a high capital hurdle. As that hurdle diminishes, uptake will go up. The government is running a series of programs to help with the change.
Another likely reason for the slow uptake is that the energy sources issue is not high on homeowners agenda. This issue seems to be much higher in the commercial sector than in the private sector. Most businesses have sustainability plans and the energy supply is a critical issue in these plans. Businesses are pushing for the changes with the help of various government incentives.
Businesses also have another incentive for improved and interrupted energy supply. Premiums for business insurance are reduced with the reduced risk of business interruption due to the mitigated risks of energy supply interruption. We get frequent storms here, power supply drops out causing havoc with locals, see Larken's post upthread. This year there were at least several power supply interruptions at my place of work, costing a lot and causing havoc. Solar energy supply coupled with battery storage becomes a strategic project rather than just a fancy project, and capital hurdle can be higher for those.�
Apr 26, 2015
Auzie Any mention of a plan B is profoundly anti European
Bloomberg: Euro Ministers Alarmed as Bloc Shuts Down Plan B
European ministers seem to be in a double bind situation. They seem to expect the negotiations with Greece to fail. Hence they would like to have a plan B prepared.
Talking about and having plan B broadcasts to the world their lack of faith in Greece's ability to refinance and meet its obligations. It feeds right into self fulfilling prophecy scenario.
On Friday meeting of European Finance Ministers, when Greece was supposed to present its list of reform and failed to do so, there were some attacks on Greece finance minister Yanis Varoufakis for his failure to deliver.
Plan B was mentioned but the discussion on plan B was shut down by the European Economic Commissioner as counter-productive. Other ministers were unhappy with the attitude of the Greek side in negotiations and aired their concerns about not having plan B. Varoufakis called plan B profoundly anti-European.�
Apr 27, 2015
Theshadows Does anyone think the rioting in Baltimore unite will have an effect on the markets tomorrow.
I hope they get it under control tonight. I have Highschool friends that are now cops in that area, one is a Baltimore cop and the other is in DC, whom I'm sure is on some sort of standby.�
Apr 28, 2015
Gerasimental I think the underlying cause of the anger, rather than the symptom itself is much more worrying for long-term macroeconomic and social stability.
But did Fergusen et al have an impact on markets? In any case, I hope your friends stay safe and sound and can help to de-escalate the situation!�
Apr 28, 2015
AudubonB Notes From The Road:
Am about half-way through my semi-annual 3,800 mile peregrination. For the past two days have been passing through the heart of Canada's oil patch.
Edmonton AB, the heart of their o&g world, definitely is quieter than in the past several years, but still vibrant.
Ft. St. John BC, which has been at the epicenter of a 10-year exploration/development boom, still is bustling but has slowed down more than Edmonton.
Ft. Nelson BC (whence I write this), is not yet a ghost town but is as somnolent now as it was ten or so years ago at the start of the new discoveries.
Thus, as to be expected, the peripheries of the oil boom are the first and hardest hit when the sag comes; this diminution began well before last year's price declines but obviously have been exacerbated by same.
***None of this bears on the oil sands region - that's northern Alberta, well above Edmonton. My route never passes through there***
Funny thing is.....diesel still is spendy here Up North - and I'll really begin to feel the hits in the next thousand and so miles. A litle bit ameliorated by the significantly weakened C$/US$ exchange rates.
Cheers, all -�
Apr 28, 2015
Auzie I think your comment about anger is spot on Gerasimental. Imo society that fosters such amount of anger in its population segment without addressing the underlying causes places its sustainability at risk. Very sad.
I had to google peregrination, a day feels wasted without learning something new
Google says peregrination involves travels on foot, I wonder if you are speaking metaphorically or really walking around. We call such walks 'gone walkabout' on this hemisphere.
Stay safe in your peregrinations, thank you for updates on picturesque scenery along your route. Curious TMCers would more than welcome few picks from the road less travelled�
Apr 29, 2015
FluxCap Word heat-map for latest Fed statement:
They took out calendar references for timing of rate hike, so market sees this as essentially unchanged.�
Apr 29, 2015
austinEV Hah. I for one wish "unemployment rate" was bigger than "inflation". Maybe the concept was worded differently in different mentions.�
Apr 29, 2015
Robert.Boston The Fed has a legal mandate about inflation, not so much for employment.�
May 6, 2015
FluxCap An interesting read re: Yellen's comments today:
Behavioral Macro | The Federal Reserve, on Avalanche Patrol�
May 6, 2015
kenliles great post Flux�
May 6, 2015
FluxCap Thanks. Here's another indicator I'm intrigued by lately. It's far from scientific, but I find it interesting nonetheless:
Fear Greed Index - Investor Sentiment - CNNMoney�
May 8, 2015
AlMc So, what is the thought about the effect that the Conservative party win will have on the market and TSLA specifically? Sterling rising
Jobs report for US?�
May 8, 2015
Gerasimental I imagine next to no effect on TSLA. Rise in Sterling is probably due to de-risking of uncertainty over prolonged coalition negotiations and or even new elections more than anything else. Indices up because UK is so heavily banking-focused and a Conservative win is good for banks. Whether it's good for aggregate demand is unclear, but likely not. It doesn't bode well for investment in 21st century infrastructure though which might be bad for Tesla in the long run, but not for TSLA.
I'm too confused about the dynamics between economic performance and market fear of rate hikes in the US to really understand the effect of today's NFPs.
I actually hope this puts a damper on the QE-exuberance in equities as I'm worried about the blow when rates finally do rise, as we know that stocks like TSLA will be disproportionately hit by a sudden flight out of equities.�
May 8, 2015
Robert.Boston I've been watching this election keenly because my company has plans for renewable energy sales in the UK. Interestingly, in stark contrast to the U.S., the environment is not a party-line issue in Britain�there is broad support in all parties for reductions of CO2 and decreased reliance on fossil fuels. So I expect no policy changes on environmental issues coming out of this election.
The really good piece of news for Tesla is the sharp increase in the �/$, which should help GM on sales in the UK and/or allow Tesla not to take price increases there. The other macro piece I worry about from this election is the dominating win in Scotland by the SNP, which won 56 of 59 Scottish seats in Parliament. This sweep lays the groundwork for another referendum on Scottish independence, which I think would hurt both Scotland and the three other UK nations.
Jobs report was almost exactly in line with consensus forecasts, so I don't think we'll see much reaction on Wall St today to it.
- - - Updated - - -
Interesting POV. (What's "NFP"?)
I'm going to challenge your last statement a bit. Personally, I am more equity-heavy than I would like to be because bonds have such crappy yields and substantial risk of capital depreciation once rates start to rise. The money I would have in bonds is instead in dividend-bearing equities in companies I like, giving me income and upside. If bond yields rise, I will likely rebalance out of these conservative stock holdings towards bonds, but it won't change my holdings of growth/speculative stocks like TSLA. That's one man's POV; I'm not sure if it can be generalized.�
May 8, 2015
Gerasimental Nonfarm Payrolls, sorry.
Good point that risk-averse investors who just don't see the point in bonds right now are likely to be focused more on div-yielding, safe stocks rather than growth stocks. Nevertheless I think that money flowing out of stocks in general will have a strong knock-on effect on TSLA, which seems to have a beta of 2-3.
About the SNP: They had said during the campaign that they would not pursue a new referendum in this parliament if they ended up forming a coalition with Labour. I don't know if today's result will change that stance but their sweep of Scotland is more extreme than even they expected, so admittedly anything could happen here. Look out for very strong statements coming from Cameron about Scotland and the broader nature of the Union in the coming few days.�
May 17, 2015
AlMc This looks like a busy week ahead for 'macros'. hmmmmm..... May be a little rocky for the markets (TSLA) this week. Good week for short term options IF you can call it right. I bought a couple puts at the end of the trading Friday just in case.�
May 19, 2015
ev-enthusiast European Central Bank decided to adapt their pace of bond buying to the expected trading volume during the next months, buying more during May and June and less during July and August.
From the Financial Times (english): European Central Bank steps up pace of bond buying
Same information from german Handelsblatt: Draghi greift bei Staatsanleihen noch einmal zu
German DAX reacting positively, currently up about 2% (DAX live cam in Frankfurt).�
May 19, 2015
AlMc How are some of you 'macro people' with more experience than I interpreting the rise in housing starts and the feeble increases income as it would apply to TSLA? Seems to me the effect on the FED would be to hold off on allowing interest rates to rise, possibly even into 2016?�
May 19, 2015
Robert.Boston I agree; inflation remains below target in the U.S., income and GDP growth is tepid. I don't see any rate increase this summer.�
May 19, 2015
ev-enthusiast FOMC will release their latest minutes later today (link to Bloomberg Economic Calendar).
Reminder: Next Monday is Memorial Day, markets are closed.
Maybe there is only thin trading volume this week ahead of the holiday.�
May 20, 2015
FluxCap FOMC minutes are out. Here's what the market thinks:
�
May 20, 2015
Auzie IMF considering renminbi inclusion in Special Drawing Rights
In June, IMF is likely to decide to include the Chinese renminbi in its SDR
Special Drawing Rights is an international reserve asset, formed by the IMF.
Current SDR basket:
USD 41.9%
EU 37.4%
Pound Sterling (GBP) 11.3%
Yen 9.4%
People's Bank of China deserves some credit for the reform policies which seem to lead to renminbi improving its stature amongst the world currencies, both as an investable currency and as a storage currency.
My personal basket, if I was after safe currencies, would include USD, Yen and GBP. For the moment Euro seems to me a bit like a house of cards (currency only, not the underlying economy).�
May 24, 2015
Auzie Greek tragedy
Reuters: Greece will not make June IMF repayment as it does not have the money
June instalments are 1.6b euros. Greece does not have that money, nor the money to pay wages and pensions and other bills.
Some pics of destroyed factories in Greece
The responsibility for this disastrous out of control outcome is disputable and a matter of opinion.
It seems indisputable that the Greek people are far worse off now then before joining the Union, and the Union seems to be worse off for having to deal with the Greek problem. The leadership inability and lack of effectiveness are on display for the world to see, undermining the stability of the rest of the Union.
I think we are seeing one of those tragic cases of 'It must get worse (for Greece at leats) before it gets better'.
The question worth pondering is: What went wrong, how could it get so far and so out of control?�
May 25, 2015
Cobos I'm not so sure that the rest of the union is worse off because of the economic problems in southern Europe generally and Greece particularily. The German economy is very dependent on their expert industry. The fact that times are fairly good in Germany imply that their currency should be very strong. That again hurts their export industry. But the markets looks at all the member states of the Euro and due to problems in Greece f.inst. the Euro is a lot weaker than it would have been if it was the deutsche mark. The end result is Germany in spite of higher wages and higher costs can compete away industry in the southern states.
So at least as long as Greece doesn't default or cause a crash in the German banks Germany will profit from a weak Euro to prop up their export industries.
Cobos�
May 25, 2015
Auzie Cobos I agree with your post above describing how Germany benefits from weak Euro. Strong economies in Euro zone benefit from low currency that does not match their underlying economy.
The way that Union suffers from Greek crisis is the public display of their ineffectiveness to deal with it. Put it simply, because of Greek crisis and all events leading up to it, many people think less of such leaders and of the Union that they lead. These happenings undermine European Union to a degree, imo. Something must be wrong when the whole country is destroyed. Whether it was destroyed or was simply helped to destroy itself is now irrelevant. What kind of a Union breeds something like that inside itself? Can it happen again?
Times are good and this crisis may be too small to trigger spreading out to other countries. A cycle of good times bad times will predictably run its course, bad times will come again and I am just not sure how the Union will hold when that happens.�
May 27, 2015
ev-enthusiast Europe rallies after hints of tentative Greece deal (link).
Form CNBC:
Update:
Deal with Greece still in negociation.
Today there is a meeting of G7 finance ministers in Germany (city of Dresden) to prepare G7 summit that will take place in about two weeks.
Maybe we get some clarification after today's meeting.�
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