Wait, just how bad is Europe right now???

redrumloa

redrumloa

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The US dollar is trading at its strongest level against the euro in 20 years as recession fears push the pair closer to parity​

The euro has fallen below $1.03 for the first time since 2002.

The USD/EUR pair is something I used to track heavily in the 00s and somewhat less so in the 10s. This article just happened upon my feed. We mostly discuss US here, so I have to ask. Are EURO trading countries really just that much worse off than the US right now? The US is facing another deep and long recession, at best. What is Europe facing??
 

The euro could sink to 0.9 against the US dollar if Russia cuts off oil supplies to Europe, portfolio manager says​

  • The euro could fall further if Russia completely cuts off Europe from its oil.
  • That's according to Kaspar Hense who told Bloomberg that he expects the euro to slip to $0.90.
  • "It's all about Russia," he said.
The euro could fall to $0.90 against the dollar if Russia cuts off its oil from Europe, a portfolio manager told Bloomberg Wednesday.

Kaspar Hense, senior portfolio manager at BlueRay Asset Management, said he sees the euro declining if Europe starts rationing energy which will also trigger a recession, though he noted such a scenario was not his base case.

"It could be a very long winter," Hense told Bloomberg.

Hense's comments come as the euro fell to a new 20-year low on Tuesday as markets weighed growing fears of recession. European inflation hit a record-high in June, running at 8.6%, which pushed the European Central Bank to aggressively raise rates.

Traders have remained cautious on the euro because the ECB hasn't taken steps to raise rates as aggressively as the Federal Reserve. In essence, the euro is "unbuyable this summer" according to Kit Juckes, chief global currency strategist at Societe Generale who spoke to Bloomberg.

And Hense isn't alone in seeing a further decline in the euro. Deutsche Bank's George Saravelos said in note Thursday that the German bank expects the euro to slip to a range between $0.95 to $0.97 against the dollar.

"Continued (partial) supply of Russia gas through the summer would in our view not be enough as the risks of a shutdown would persist in to winter," the note said.
 
Look. Here's the thing. Personally, I don't care if Trump is ever President again. I didn't care for the man, or his personality, but I LOVED the direction he took this country in. For the first time, the nation as a whole was really moving forward and everything he did seemed to benefit the American people.

- record low unemployment
- record high consumer confidence level
- low gas prices
- phenomenal stock market performance (which affects everyone's ability to retire)
- record job growth spurred by industries coming back into the country
- a border that was in the midst of becoming secured.

To me it hit home in that from 2016 to 2020, my retirement account gained in value on average, $7500 per year. This year's statement shows that in the first 18 months of Resident fumblenut's reign, my retirement account LOST $8500 and that's not counting the $2800 of my own money I put in... At this rate, by the time this idiot leaves office, my retirement account will be worth less than it was in 2016 and that means I won't be able to retire as planned in 9 years...

Failures of Resident Fumblenuts:

- record high inflation
- record high gas prices
- record high cost of living
- record high vehicle costs
- record low consumer confidence
- record high homelessness (even amongst working families)
- an ACTIVELY ENCOURAGED invasion of illegals flowing readily across our southern border...

The only thing so far that he can take credit for is the low employment rate, BUT that has zero to do with him and more to do with the fact that we're coming out of COVID lockdowns and a lot of jobs are opening back up...

So.. This isn't about Trump. This is about the failures of the current Resident...
 
Wayne said:
So.. This isn't about Trump. This is about the failures of the current Resident...
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I was joking in my previous post but are you really saying the Euro is doing so badly against the US Dollar because Biden is a failure?
 
Robert said:
I was joking in my previous post but are you really saying the Euro is doing so badly against the US Dollar because Biden is a failure?
Click to expand...

Not speaking for Wayne but I knew you were joking, at least partially. The USD / EUR pair is just one currency pair and Forex is a complicated beast with a sh*t ton of moving parts. That said what is simple is the USD value is collapsing in value domestically, as shown by the historic inflation being seen. The Fed has been printing trillions upon trillions of dollars out of thin air starting long before even the current corpse in the White House. Simple supply and demand dictates massive inflation. My post was that I would have assumed the Euro to strengthen against it. I know the printing press over there has been cranking also, but not to the extent the US has been doing it. At least that's what I thought. The US has openly been the honeypot for every hairbrained Liberal vanity project and foreign government to dip their sticky fingers into.

How could the Euro do worse?? Did Brexit cause that much damage to the currency? Am I missing that other countries are close to leaving the union?
 
redrumloa said:
How could the Euro do worse?? Did Brexit cause that much damage to the currency? Am I missing that other countries are close to leaving the union?
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As you say, it's a lot more complicated than some president doing a good job or some PM doing a bad one. Brexit certainly has an influence, as does Covid and Russia's ongoing invasion of Ukraine.
 
Robert said:
I was joking in my previous post but are you really saying the Euro is doing so badly against the US Dollar because Biden is a failure?
Click to expand...
Well, no, not really I guess. Just felt a rant coming on...

What almost all countries are dealing with now is a new form of economic war. Resident fumblenuts wants to brag that he's imposing sanctions on Russia and will destroy their economy. Putin on the other hand either controls, or has strong friends who control most of the world's oil and natural gas exports. So, in effect, what we have is Resident fumblenuts taking a pair of vise grip pliers out of the cupboard and wrenching down on his own balls while grimacing like the idiot he is...

I can't speak for Russia, because I'm neither Russian nor do I have any insight on life there, but I'm sure they are doing just fine without Levi jeans. America however (and I'm sure the EU to a large extent) is really grinding to a halt without fuels, so I guess my real question here is like the 80's movie "War Games" where the computer plays Thermonuclear war and discovers that there are no scenarios where anyone wins...

Who is winning this war? It's certainly not us, or the EU, so.....???
 
In forex terms, this is pretty surprising speed.

Euro falls below dollar for first time in 20 years​

Fears of recession in Europe are weighing heavily on the European currency.

I never expected to see parity again, let alone flipping to dollar strength. Hopefully I can get ahead of my debt soon and buy some new retro gear from Europe.
 
WTF is going on over there? I'm hearing about people forced to go cut fire wood to keep warm and now bands canceling their tour? It's not sales since some of the stops were already sold out.

Anthrax Cancel European Tour Due to “Out of Control” Costs​

Read the band’s statement: “Sadly due to ongoing logistical issues and 2022 costs that are out of our control, we have no other option but to cancel the European leg of our upcoming 2022 tour. We will however be coming to the UK as scheduled. Tickets can be refunded at point of purchase.”

When one commenter tried to blame the cancellation on poor ticket sales, Anthrax replied, clarifying their initial statement: “Rest assured, there were zero issues with sales. Check out the news over there for a few minutes. We absolutely adore the European fans and love playing there and a re very sad not to come. It doesn’t work ‘example’ when tour buses double and triple in cost.”

Anthrax are likely referring to the rising cost of goods and services, especially in the energy sector, as Europe has been hit with record high inflation in recent months.

Anthrax are not filthy rich rock stars. They are road dogs that tour to survive. If they are canceling, it means they would be losing money doing so. Even breaking even they'd probably continue.
 
Still wondering why Alex Jones was deplatformed (while the seals clapped)?

 
Here's one boggle I have.

Yes. Gas prices here in the US have gone up 200% (though they're back down a tiny bit recently). Reports are that gas companies are "making record profits" but here's the thing... Fuel companies -- like every other company out there -- have set business ratios for price to profit, right?

Say -- strictly as an example -- their business model was set to price at a "30%" profit margin. This is fairly typical across all markets, from oil companies to Walmart...

For every $1, they get 30 cents, right? So, if the price of gasoline to the consumer goes from $2 (pre-Biden) to $5 (with Biden), they're still making 30% profit, or in that case 75 cents per gallon...

This is what the "reported profit" is showing that the media wants to use to blame the oil companies for all the problems...

The physical price of a barrel of crude oil today is over 4x what it was on April 1, 2020 (immediately after resident Fumblenutz took over). $19.90 to over $87 per barrel. (source: https://www.macrotrends.net/2566/crude-oil-prices-today-live-chart).. That means that while $87.00+ per barrel is not unique, the costs to provide that gasoline have technically quadrupled. Toss in the costs of gas used for the trucks involved, the labor shortages, the... well everything going up drastically, and you can see that oil companies are NOT the issue here...

This is the cost of America pissing off Russia over Ukraine and Trump previously pissing off China over tariffs.

America was never in a position to win an economic war with Russia, because -- since resident Fumblenutz is pushing the green new deal down our throats -- we are now back to be reliant on Russia and other enemies for our oil.... #FJB. That is all.
 
Wayne said:
Here's one boggle I have.

Yes. Gas prices here in the US have gone up 200% (though they're back down a tiny bit recently). Reports are that gas companies are "making record profits" but here's the thing... Fuel companies -- like every other company out there -- have set business ratios for price to profit, right?

[...]

This is the cost of America pissing off Russia over Ukraine and Trump previously pissing off China over tariffs.

America was never in a position to win an economic war with Russia, because -- since resident Fumblenutz is pushing the green new deal down our throats -- we are now back to be reliant on Russia and other enemies for our oil.... #FJB. That is all.
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First, there is a difference between markup and margin and revenue and profit. If you have a store and you markup goods 100% then your margin on the sales will be 50%, but buying stock isn't your only cost. You have employees and infrastructure which may be encumbered by loans etc. After accounting for all costs of business the final profit margin for a healthy company is usually in the range of 10%. If the costs of your products go up rapidly and you maintain the same sales margin/markup and the rest of your costs don't go up at the same rate then both your profit and your profit margin increase.

If the energy companies adjusted their costs to maintain the same dollar value profit then their profit margin would actually fall and the investors would probably get a bit stroppy about that. On the other hand, and there is as mechanism that already exists but just needs tweaking, the higher your profits are the more tax you pay. If your tax brackets and rates are well designed then you automatically capture windfall profits without having to pass special laws.

An additional thing that could be added would be to make debt repayment (and not just interest payments) tax deductable. If a company had a bumper year and was going to incur a higher marginal tax rate they could then reduce their earnings for the year by paying off some debts. This would have the benefit of reducing the money supply (creation of debt is an expansion of the money supply and repayment of debt or extinguishment by bankruptcy eliminates that money) which would be anti-inflationary.
 
Robert said:
Following the new UK PM announcing a tax cut for the rich yesterday, the pound has plummeted further. You can now buy one for a dollar and ten cents.
https://twitter.com/x/status/1573280802267439105
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Now below $1.10 and tanking against the Euro too. I blame Joe Biden.
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The GBP-EUR exchange rate was worse in 2019 so this is not alarming just yet.

Of course, that is not to say that the proposed tax cuts aren't absurd.
 
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