Posts by "dodger"

OK,the yuan has been allowed a bit of flexibility,it went up then down as did the dow because suddenly the american bluechips who either manufacture in china or distribute chinese goods presumed rising costs!Actually those costs are being seen increasing in rising wages after a contagion of labour unrest in the pearl river delta manufacturing heartland started reminding me of the english midlands in the seventies "everybody out!"for a 25% payrise,and most of them seem to have got it too,well great for them,but inflation is now surging in china which may have a lot to do with the new found desire for yuan flexibility.CHINA HAS PROBLEMS,inflation,labour unrest spreading,property bubbles in places that would put spain to shame,old "model" low end manufacturers either going bust or moving to vietnam"thats actually how they made money inthe first place!"Now the world apparently wants china to change its ecconomy,but look if south korea was apparently today denied "developed status "where does that put most of china or even the big cities??So why did I put this in euro forum,because the euro is a proxy of risk and right now the worlds reliance on china is a risk,and china is no longer looking like it did a few years back! That conduit road luxury development in hong kong who sold out"off plan" mostly to mainland chinese and 70% have cancelled ,is a big red shooting star on the hong kong property market and I would say the chinese ecconomy,well things did need to cool down!

New "buzz"used by Nassim "black swan"Taleb and then theme followed by Naoto Kan last night is we are about to enter an "age of austerity",or as George Soros more rightly called it act 2 of a depression.Rebound in euro is a reaction to an "oversold" in risk from last few weeks,however could break 1.2150 with a positive wall street run but doubt if there is the "cojones" to carry that through to the weekend.Think wait till later till US afternoon to short euro unless US retail sales are diabolical which could be a game changer.

Santander makes good profits from its Brazilian subsidary these days,which kind of balances out its european exposure.Spanish problem is the "cajas",which are small localised savings banks which were pretty loose with their lending in the boom years,particularly in the wild south where the property developers kept "tame"bank managers,along with the well publised "tame"alcudes or mayors many of whom are currently serving time.Spain is also very regional even to the level of small towns,where one can be in a boom and 20 miles away everbody is on the social.Without sounding like a "Franquista",also think people outside of spain have no idea how heavy the immigration into spain was in the boom years,that could turn into a real burning issue if things get bad,zapatero gets voted out and the"PP"who are very nationalistic conservatives get voted in.European ecconomic problems are already and will threaten to become more political problems as the budget cuts start to be bite,spain,portugal,and greece were all run by militery juntas until the late 1970s we must not forget.There is a lot of medium term political risk manifesting in southern europe that may "hopefully" be underestimated.

Be carefull of the swiss SNB,trying to repeat last weeks intervention,particularly after london close,that worked pretty well last week.

Brown is not holding out for nothing,there are still a lot of hard points of contention between libs and tories,clegg also has to clear any deals through his own party inner circle by their constitution.Personally hope not,but there could be a whole week of stalling,horse trading,and uncertainty for the pound yet to come??