Comments
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LSHe didn‘t even mention Turkey & Greece, where EU banks are much exposed
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RKAgree with the tailwind that will come from the weaker EUR. But given the weak overleveraged countries (EU is not Germany) it is unimaginable that interest rates would rise meaningfully in the EU. The countries like Italy and Greece are not able to come to the market for years. ECB holds 1/3 of government debt issues. Draghi is in the corner. So agree with the idea but we might be far from a catalyst. The risk is that "prestigious" flagship banks like Deutsche (DB) might turn out to be the new Lehmans.
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MSI watched this the day it came out Aug 13. EUFN's price at close 19.87. Mr Pelosky's stop loss was 20.20. According to him, he dumped this trade already.
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SPI bought puts on EUFN. We’ll see.
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DRNo technical analysis here. Too bad. TA shows most European equities, bonds and the Euro is bearish, altho it's not linear. Sure the euro will dead cat bounce here shortly, perhaps for multiple months even, but choppily in corrective fashion only, before retesting the 1.03-1.05 lows again later - and breaking it.
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SHVery few people - sometimes including, in my direct experience, members of senior management - fully understand what's lurking inside bank balance sheets. I recall being laughed at for not wanting to catch a falling knife in US financials throughout 2008; "great value" at these prices, I was told all the way down. I do not believe Mr. Pelosky has a solid grasp on the economic and political challenges facing Europe, and nor does he seem to realise how many financial institutions on the continent are essentially insolvent. Risking a position in these t**ds for a possible 7% return - even at a purported 3:1 reward to risk ratio - is 'courageous' to say the least.
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DRAnyone else aware of the Gavekal research and Camp Kotok think tank analyses which is certain that Trump will be placing a HUUUUGE tariff on everything European this fall, in response to the existing 25% Duty that the EU places on *everything* imported into the EU. That tariff reprieve last month was merely buying time while the US first deals with Nafta, China and Japan.
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DSI really liked Mr. Pelosky's Tri Polar World video on RVTV and is certainly worth first or second look. In this trade, I think there is time to wait on this trade and see how the risks and the Euro change. Spanish banks, French banks, and Italian banks alone have approximately $US billion dollar exposures of $80, $40 and $17 on Turkish loans. DLS
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MTstop loss level already hit, brilliant stuff. I would suggest the only time to be long Europe is if and when one the Banks goes pop, and the ECB bailouts start.
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MWThat didn't take long...
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WjOne way to guarantee that I lose money
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JMWith the Turkey situation, already down beyond the stop loss.......
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OGOne heck of a contrarian view at the moment. European banks have too much exposure to Turkey. Is Turkey priced in?