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  1. #1
    Volatire Volatire is offline
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    EURGBP and Celtic Tiger II

    Ireland is a hedge fund leveraged on EURGBP.

    At 69½ pence, the euro has fallen against sterling to a level last in September 2007. This is significant, because Northern Rock collapsed in September 2007, signalling the beginning of the banking and sovereign debt crises. At one point, the euro almost reached parity with sterling. The reversal shows that the UK has dealt with these problems, while the EZ still struggles to do so.

    There are several reasons for the strength of sterling against the euro

    • strong UK GDP performance vs EZ
    • failure of the EZ to deal with the Greek crisis
    • ECB QE program is ongoing, when BOE's has ceased
    • prospect of higher interest rates in the UK


    Pound soars to eight-year high as Carney talks up rate rises - Telegraph




    As seen from the chart, Ireland's GDP growth has matched the UK's and Germany's in recent years. However, Ireland is uniquely placed in the EZ to benefit from weaker EURGBP.

    Volatire would like to make some predictions:

    • Irish growth will be by far the strongest in the EZ in coming years
    • Irish growth will exceed UK growth
    • This growth will happen without excessive buildup of credit
    • Since this looks more like the 1990's than the 2000's, pundits will begin to talk about Celtic Tiger II.


    Two further remarks of a political nature:

    • none of this has anything to do with government policy, as the Irish government has no control whatsoever over EURGBP.
    • whoever wins the next general election stands to reap a large dividend
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  2. #2
    Analyzer Analyzer is offline
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    I have a different theory.

    Ireland is a hedge fund alright. A real estate hedge fund effectively, nursing bankrupt failed unreformed, unaccountable banks. And that is ultimately hedged on something else.

    The East region is fully leveraged on the Nasdaq. Dublin and Kildare in particular.




    Munster/S Leinster (the food exporting region) might be leveraged on GBP/EUR exchange rates.

    NI, plus Donegal are definitely influenced by GBP/EUR exchange rates.
    Last edited by Analyzer; 18th July 2015 at 10:48 AM.
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  3. #3
    Mad as Fish Mad as Fish is offline

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    Oh goody, does this mean we will see some sign of a recovery out here in the west? None has appeared so far.
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  4. #4
    wombat wombat is offline
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    Quote Originally Posted by Volatire View Post
    [*]none of this has anything to do with government policy,
    Whatever you think of the banking inquiry, its fairly obvious that govt policy had a large part in growing the bubble, events in Greece have shown the effects of govt policies there but because the economy here has started to recover, govt policy is irrelevant?
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  5. #5
    silverharp silverharp is offline
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    The only problem Voltaire is Irish debt , what if the Irish gov. has to borrow at 5% or 7%? The current bubble is bond prices they go south rates go up and Irish governments are happy to tax everyone to hell to keep the foreign banks in the green
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  6. #6
    Clanrickard Clanrickard is offline
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    Quote Originally Posted by Analyzer View Post
    I have a different theory.

    Ireland is a hedge fund alright. A real estate hedge fund effectively, nursing bankrupt failed unreformed, unaccountable banks. And that is ultimately hedged on something else.

    The East region is fully leveraged on the Nasdaq. Dublin and Kildare in particular.




    Munster/S Leinster (the food exporting region) might be leveraged on GBP/EUR exchange rates.

    NI, plus Donegal are definitely influenced by GBP/EUR exchange rates.
    You understand the meaning of Hedge Fund right?
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  7. #7
    Clanrickard Clanrickard is offline
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    Quote Originally Posted by Analyzer View Post
    I have a different theory.

    Ireland is a hedge fund alright. A real estate hedge fund effectively, nursing bankrupt failed unreformed, unaccountable banks. And that is ultimately hedged on something else.

    The East region is fully leveraged on the Nasdaq. Dublin and Kildare in particular.




    Munster/S Leinster (the food exporting region) might be leveraged on GBP/EUR exchange rates.

    NI, plus Donegal are definitely influenced by GBP/EUR exchange rates.
    You understand the meaning of Hedge Fund right?
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  8. #8
    Nudavongs Nudavongs is offline
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    Quote Originally Posted by silverharp View Post
    The only problem Voltaire is Irish debt , what if the Irish gov. has to borrow at 5% or 7%? The current bubble is bond prices they go south rates go up and Irish governments are happy to tax everyone to hell to keep the foreign banks in the green
    There are some big fish (IT, FR, ES) out there in the eurozone pool who need bond prices to stay right where they are so they can keep their economies ticking over. The Germans will be horrified but the ECB will be intervening and QEing for some time to come to keep the eurozone ship afloat.
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  9. #9
    Analyzer Analyzer is offline
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    Quote Originally Posted by silverharp View Post
    The only problem Voltaire is Irish debt , what if the Irish gov. has to borrow at 5% or 7%? The current bubble is bond prices they go south rates go up and Irish governments are happy to tax everyone to hell to keep the foreign banks in the green
    Exactly. Ireland's debts are still out of control. The Irish institutional state is as wasteful, and as unaccountable as ever. The quango state complex is completely beyond reform, and is unwilling to accept any compromise for the sake of the rest of the society.

    As shown by the SiteServ, it is corporatist, in outlook. Current state policy is effectively about leveraging, Ponzi scheme economics, asset valuations.

    The state is heading for the point beyond symbiosis. The parasite has been too big for the underlying host, since Ahern appointed Cowen as MoF. Nothing has been fixed since then.

    I predict that Britain will grow their economy, but Ireland will head into a Greek style debt crisis as a result of waste from the Brussels Bloc. In other words allies of the same political parties that caused the mess in Greece, will cause a massive disaster here.
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  10. #10
    Nudavongs Nudavongs is offline
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    Quote Originally Posted by Clanrickard View Post
    You understand the meaning of Hedge Fund right?
    It's something dodgy involving money.

    It might go wrong in the future. If it does, people will lose money.

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