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Old 07-15-2002, 11:49 AM
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Default Europeans screw themselves



I think we can be honest, and say Europeans liked Clinton more than they like Bush. The way Clinton did business, is the way they like to do business.


So, unfortunately for a lot of retirees, our own citizens had to bid against Eurpopean investors for durable assets. Moreover, the flood of European money stimulated entrepreneurs to build more companies to compete with existing companies.


But when it comes right down to it, those European investors bought from our entrepreneurs (and their employees at the highs. And now, they're selling to our retirement investors at the lows. And they're sending the signal to unform the extra companies that reduce earnings by competing with each other.


So, in short, now the Europeans are selling US stocks. And this is a great opportunity. And, moreover it's lucky, you don't even have to think about it, because most US investors will do the right thing, by continuing to prefer domestic stocks, without even having to think about it.


eLROY
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Old 07-15-2002, 07:46 PM
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Default Re: Europeans screw themselves



" think we can be honest, and say Europeans liked Clinton more than they like Bush. The way Clinton did business, is the way they like to do business."


could be but i think price has more to do with it.


"So, unfortunately for a lot of retirees, our own citizens had to bid against Eurpopean investors for durable assets. Moreover, the flood of European money stimulated entrepreneurs to build more companies to compete with existing companies."


yeah the current accounts deficit shows they made a lot of investment in US.


"But when it comes right down to it, those European investors bought from our entrepreneurs (and their employees at the highs. And now, they're selling to our retirement investors at the lows. And they're sending the signal to unform the extra companies that reduce earnings by competing with each other."


could be although i might argue that they were buying throught the nineties.


"So, in short, now the Europeans are selling US stocks. And this is a great opportunity."


could be.


"And, moreover it's lucky, you don't even have to think about it, because most US investors will do the right thing, by continuing to prefer domestic stocks, without even having to think about it."


i think if you look at it in the first half of the year a lot stocks did well. the big caps did badly. as price gets lower better off owning stocks. i still think many big companies are overvalued but there are companies doin well that have gotten a lot cheaper no matter what their size. bought some mbs reits when market picked up today. yields are just too good on em to pass up.



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Old 07-16-2002, 05:08 PM
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Default Re: Europeans screw themselves



Yes, there is a lot of capital outflow from the Europeans but i would think the bulk of it is from the Japanese shifting out of dollar assets into Euros, sterling, and just about any other currency


The issue is not a net outflow but rather the large current account deficit which requires a large net inflow in order to sustain it. A large part of this in the past was equities but also into bonds, both govies and corporates. Now the US 10Y yields less than the Bund, and after Enron, worldcom, tyco, etc. risk aversion to corporates is high.


So is all this an overreaction? possibly, and there could be a short term correction but the virutous cycle for the dollar may be turning
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