Israeli market falls over 6%

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larryswedroe
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Israeli market falls over 6%

Post by larryswedroe » Sun Aug 07, 2011 7:32 am

Perhaps this is an indicator of what will happen in US. Not many of the stocks on the Tel Aviv market are duel listed here in our markets.

xerty24
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Post by xerty24 » Sun Aug 07, 2011 7:43 am

link

and they've still got their AAA rating too.

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Post by Aptenodytes » Sun Aug 07, 2011 7:51 am

That wouldn't surprise me. I think the depth of the problem we find ourselves in is still sinking in. The NY Times piece (http://www.nytimes.com/2011/08/07/busin ... ml?_r=1&hp) contained pretty sobering assessments from Rogoff and Stiglitz, among others. If those guys are saying we may be in for a Japan-type slump, it gives you pause. I know that nobody has figured out how to accurately predict the stock market, including these economists, but their insights into the fundamental nature of the challenge that lies ahead is relevant and depressing.

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Post by Lbill » Sun Aug 07, 2011 8:00 am

Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
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Post by stevewolfe » Sun Aug 07, 2011 8:09 am

Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
NO way for you to know that. How many times have we seen the overseas markets sell off and the US market go up and vice-versa. The market was down 200 points Friday en route to a 400 point intra day swing when apparently everyone but the general public knew this was coming.

So no, there is no way to know what will happen tomorrow.

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Post by xerty24 » Sun Aug 07, 2011 8:18 am

stevewolfe wrote:
Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
NO way for you to know that. How many times have we seen the overseas markets sell off and the US market go up and vice-versa. The market was down 200 points Friday en route to a 400 point intra day swing when apparently everyone but the general public knew this was coming.

So no, there is no way to know what will happen tomorrow.
The difference is that this time there's material new information and the overseas markets are the first (briefly) open public markets to reflect this. If you really think the US is going to open up on Monday, I'll give you 2:1 against.

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Post by tflannery65 » Sun Aug 07, 2011 8:31 am

xerty24 wrote:link

and they've still got their AAA rating too.
So a AA country gives a AAA country economic aid every year. I believe U.S. gives Israel something around $3 bln a year. Not to single out Israel.......

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Post by am » Sun Aug 07, 2011 8:42 am

If the markets were going down for sure, then seems like an one of those inverse ETFs is in order. I think I am going to put my entire 401k on inverse s&p 500 and then plan on early retirement on Tuesday.

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Post by richard » Sun Aug 07, 2011 8:50 am

Futures markets start reporting around 6:00pm eastern time. Asian markets start trading a couple of hours later. That should provide a better indication of Monday than the Israeli market. Not that I'm very optimistic.

It's a bit late to trade if you anticipate large losses Monday.

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Post by Tuxx » Sun Aug 07, 2011 8:57 am

xerty24 wrote:link

and they've still got their AAA rating too.
Incorrect. They were downgraded also.

http://www.standardandpoors.com/ratings ... pSectorNR=

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Post by DaveS » Sun Aug 07, 2011 9:03 am

There are other things going on in Israel. There is an article over at the NY Times about 250,000 in a protest march against the high cost of living there. Maybe some of the crash is fear of price controls. Dave

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Post by Tuxx » Sun Aug 07, 2011 9:05 am

DaveS wrote:There are other things going on in Israel. There is an article over at the NY Times about 250,000 in a protest march against the high cost of living there. Maybe some of the crash is fear of price controls. Dave
Don't worry. The U.S. will have their turn.

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Post by richard » Sun Aug 07, 2011 9:12 am

Tuxx wrote:
DaveS wrote:There are other things going on in Israel. There is an article over at the NY Times about 250,000 in a protest march against the high cost of living there. Maybe some of the crash is fear of price controls. Dave
Don't worry. The U.S. will have their turn.
The US had its turn. Are you old enough to remember wage and price controls?

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Post by Lbill » Sun Aug 07, 2011 9:13 am

Maybe we'll see this on Monday:

Image
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Post by Tuxx » Sun Aug 07, 2011 9:13 am

Nixon was war related not having a freaking job related.

Now we got the war related and can't get a freaking job related.

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Post by SVariance1 » Sun Aug 07, 2011 9:17 am

DaveS wrote:There are other things going on in Israel. There is an article over at the NY Times about 250,000 in a protest march against the high cost of living there. Maybe some of the crash is fear of price controls. Dave
I don't think this would cause a 6% decline. Bad news out of Israel happens frequently.
Mike

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Post by jpsfranks » Sun Aug 07, 2011 9:21 am

The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.

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Post by SVariance1 » Sun Aug 07, 2011 9:25 am

So far we have Saudi Arabia and Israel with steep declines. I expect steep declines for stocks on Monday. This may sound like a broken record to some if you have read my posts but valuations are still relatively high and the economy is worse than people thought. Oh yeah, now people have to deal with a historic downgrade of the US. In the past, we had the Fed to bail us out but this time there is no backstop. It is hard to say where this thing ends but I am confident we will see very high volatility.
Mike

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Post by SVariance1 » Sun Aug 07, 2011 9:26 am

jpsfranks wrote:The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.
That is a good point.
Mike

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Post by SVariance1 » Sun Aug 07, 2011 9:27 am

jpsfranks wrote:The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.
Does Saudia Arabia also trade Sunday to Thursday?
Mike

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Post by baw703916 » Sun Aug 07, 2011 9:30 am

jpsfranks wrote:The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.
Good point. With the time difference, the Tel Aviv market hasn't been open since the first hour or so of trading last Thursday in the U.S.

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Post by jpsfranks » Sun Aug 07, 2011 9:30 am

SVariance1 wrote:
jpsfranks wrote:The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.
Does Saudia Arabia also trade Sunday to Thursday?
The Saudi weekend is Thursday-Friday so I would assume they trade Saturday-Wednesday.

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Post by baw703916 » Sun Aug 07, 2011 9:32 am

SVariance1 wrote:
jpsfranks wrote:The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.
Does Saudia Arabia also trade Sunday to Thursday?
SA is actually open on saturdays, it's the only exchange that I'm aware of that is. I think most of the other exchanges in the Gulf are open on sundays.
Most of my posts assume no behavioral errors.

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Post by SVariance1 » Sun Aug 07, 2011 9:38 am

jpsfranks wrote:
SVariance1 wrote:
jpsfranks wrote:The Tel Aviv stock exchange trades Sunday-Thursday. So I don't think they've traded since global markets fell 5-6% on Thursday (US time). If it's only down 6% I'd think that's pretty sanguine considering they're pricing in the end of last week, the downgrade, and their own current domestic turmoil.
Does Saudia Arabia also trade Sunday to Thursday?
The Saudi weekend is Thursday-Friday so I would assume they trade Saturday-Wednesday.
Now this is starting to make some sense. These markets most likely have reacted to the global sell off that has already occurred. No way to tell if the downgrade is included in the decline. It appears that we have very little information that would give us a clue about Monday.
Mike

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Post by xerty24 » Sun Aug 07, 2011 9:42 am

baw703916 wrote:SA is actually open on saturdays, it's the only exchange that I'm aware of that is. I think most of the other exchanges in the Gulf are open on sundays.
Dubai is down 3.7% for today.

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Post by peter71 » Sun Aug 07, 2011 9:45 am

Here's some more data -- Saudi Arabia is open today too with more modest losses, and some other Arab states have relatively modest (1%-3%) losses too.

http://www.emirates247.com/markets/stoc ... 7-1.411758

Btw, I agree that while there's often "trouble in Israel" the recent protests and such are likely more specifically troubling to capitalists than most.

Best,
Pete

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Re: Israeli market falls over 6%

Post by baw703916 » Sun Aug 07, 2011 9:56 am

larryswedroe wrote:Perhaps this is an indicator of what will happen in US. Not many of the stocks on the Tel Aviv market are duel listed here in our markets.
I looked at Teva pharma. It dropped by 4.71% today in Tel Aviv (had a gain last thursday).

The US ADR shares had a gain last wednesday, and a combined drop thursday and friday of 4.0%.

So it doesn't look like there was much going on in that stock besides catching up to the prices of the ADR shares.

It was extremely volatile, though.
Most of my posts assume no behavioral errors.

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Post by Morgthorak » Sun Aug 07, 2011 10:04 am

Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
I've heard of "gold bugs" but what is a "stock bug?" Is there such a thing as a "bond bug" too? :lol:

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Post by letsgobobby » Sun Aug 07, 2011 10:11 am

xerty24 wrote:
stevewolfe wrote:
Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
NO way for you to know that. How many times have we seen the overseas markets sell off and the US market go up and vice-versa. The market was down 200 points Friday en route to a 400 point intra day swing when apparently everyone but the general public knew this was coming.

So no, there is no way to know what will happen tomorrow.
The difference is that this time there's material new information and the overseas markets are the first (briefly) open public markets to reflect this. If you really think the US is going to open up on Monday, I'll give you 2:1 against.
I will take that bet. In the green within the first hour. 2:1 odds. $50 vs $25 to the other's favorite charity.

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Post by xerty24 » Sun Aug 07, 2011 10:17 am

letsgobobby wrote:
xerty24 wrote:
stevewolfe wrote:
Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
NO way for you to know that. How many times have we seen the overseas markets sell off and the US market go up and vice-versa. The market was down 200 points Friday en route to a 400 point intra day swing when apparently everyone but the general public knew this was coming.

So no, there is no way to know what will happen tomorrow.
The difference is that this time there's material new information and the overseas markets are the first (briefly) open public markets to reflect this. If you really think the US is going to open up on Monday, I'll give you 2:1 against.
I will take that bet. In the green within the first hour. 2:1 odds. $50 vs $25 to the other's favorite charity.
SPY at 10:30 ET then? It closed at 120.08. You can donate to this site if I'm right :).

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Post by letsgobobby » Sun Aug 07, 2011 10:21 am

Fair enough. You can also donate to Bogleheads. Win win!!!

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Post by Doc » Sun Aug 07, 2011 10:29 am

SVariance1 wrote:
DaveS wrote:There are other things going on in Israel. There is an article over at the NY Times about 250,000 in a protest march against the high cost of living there. Maybe some of the crash is fear of price controls. Dave
I don't think this would cause a 6% decline. Bad news out of Israel happens frequently.
On one of this morning's talk show Alan Greenspan opined that the effect of the two factors was unclear. (And the comment wan't in GreenSpeak.)

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Re: Israeli market falls over 6%

Post by rustymutt » Sun Aug 07, 2011 10:34 am

larryswedroe wrote:Perhaps this is an indicator of what will happen in US. Not many of the stocks on the Tel Aviv market are duel listed here in our markets.
Perhaps Larry? lol
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Post by renditt » Sun Aug 07, 2011 10:40 am

I think my Boglehead 2011 contest prediction of 950 will soon be reality :wink:

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Post by stevewolfe » Sun Aug 07, 2011 10:51 am

xerty24 wrote:
stevewolfe wrote:
Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
NO way for you to know that. How many times have we seen the overseas markets sell off and the US market go up and vice-versa. The market was down 200 points Friday en route to a 400 point intra day swing when apparently everyone but the general public knew this was coming.

So no, there is no way to know what will happen tomorrow.
The difference is that this time there's material new information and the overseas markets are the first (briefly) open public markets to reflect this. If you really think the US is going to open up on Monday, I'll give you 2:1 against.
So this has nothing to do with the riots / demonstrations inside Israel ( http://www.cnn.com/2011/WORLD/meast/08/ ... ?hpt=wo_c2) and ONLY to do with the US AAA rating? And you're SURE about that.... Really?

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Post by allsop » Sun Aug 07, 2011 10:59 am

stevewolfe wrote:
xerty24 wrote:
stevewolfe wrote:
Lbill wrote:Tel Aviv market trading has been suspended after a 6%+ drop. That's what will happen in U.S. market on Monday too. How many times do stockbugs have to get hit in the head?
NO way for you to know that. How many times have we seen the overseas markets sell off and the US market go up and vice-versa. The market was down 200 points Friday en route to a 400 point intra day swing when apparently everyone but the general public knew this was coming.

So no, there is no way to know what will happen tomorrow.
The difference is that this time there's material new information and the overseas markets are the first (briefly) open public markets to reflect this. If you really think the US is going to open up on Monday, I'll give you 2:1 against.
So this has nothing to do with the riots / demonstrations inside Israel ( http://www.cnn.com/2011/WORLD/meast/08/ ... ?hpt=wo_c2) and ONLY to do with the US AAA rating? And you're SURE about that.... Really?
He has a wager going on, and perhaps you can join as well :)

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Post by Harold » Sun Aug 07, 2011 11:05 am

renditt wrote:I think my Boglehead 2011 contest prediction of 950 will soon be reality :wink:
Thanks for that. I just checked and I'm now in 2nd place!

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Post by larryswedroe » Sun Aug 07, 2011 11:13 am

First, as people noted, Israel's market had been closed since before our market crashed on Thursday.
Second, it is certainly possible you could see government announcements before our markets open, coordinated efforts, etc. Not saying it will happen, but certainly possible.
And even if we get sharp drop at open doesn't necessarily mean that day ends that way.
So IMO perhaps is the right word.

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Re: Israeli market falls over 6%

Post by BlueEars » Sun Aug 07, 2011 11:14 am

larryswedroe wrote:Perhaps this is an indicator of what will happen in US. Not many of the stocks on the Tel Aviv market are duel listed here in our markets.
Larry, are you yelling fire in a crowded theater? :)

Here is what I posted last Sunday (not my best moment):
Right now the SP500 futures are up about +1.2% (Sunday, 19:23 EST) and dollar is up. Lots of warm fuzzies coming out of Washington from both sides.

I'm hoping we make back the 3.9% the SP500 lost last week.
Well, the SP500 futures last Sunday did not predict the Monday SP500 move. So why should the Israeli exchange do so for this Monday?

"Perhaps" is clearly the right word. Perhaps the market will go up, or perhaps down. :wink:

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Les

Post by larryswedroe » Sun Aug 07, 2011 11:33 am

Yes, I want everyone to panic and sell so I can buy cheap (:-))

Of course my crystal ball is always cloudy and IMO it is highly likely that if we get a contagion type problem that you will see emergency actions and coordinated ones by Central Banks, like engaging in Quantitative Easings around the globe (especially in hard currency countries who don't want to see their currencies appreciate--say Swiss, Japan, etc).

And personally think the worse it gets the more likely you actually get Congress to act instead of bicker, and REAL action, not the phony action we got last week with very little in way of real cuts. Nowhere what was needed to bend the curve on the debt to gnp ratio

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Re: Israeli market falls over 6%

Post by letsgobobby » Sun Aug 07, 2011 11:34 am

Les wrote:Perhaps the market will go up, or perhaps down. :wink:
which is exactly why a bet with 2:1 odds is one worth taking. :wink:

Truth is this is unprecedented. The reaction is unknown. The preventative coordinated steps which might be taken worldwide are also unknown. This is totally unknowable. So I'd call the odds 50:50 on an up or down move. I mean, we can't even agree what treasuries will do, and they were the direct receiver of the downgrade!

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Post by quijybo » Sun Aug 07, 2011 11:35 am

Looking past Monday, it seems we are destined for dow at the low to mid-10k levels we saw at the initial recovery from the immediate shock of the near-collapse of the financial system. That was in mid 2010. In fact this is the level we saw from 2003 to 2005, a period of remarkable stability and uninspiring economic growth. I would expect that even if we see another (temporary) panic, we'll soon return to that mid-10k level.

It does not seem likely the coming week will go lower than that, and if so, for it probably won't be more than a few days. I cannot see how this downgrade will trigger a bank run, and that is what we'd need to see to go back to the dark says of 2008-2009. It seems low-8k is the "financial system is near collapse" dow level. Things are ugly but not that ugly.

Just my wild guesses...

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Post by Lbill » Sun Aug 07, 2011 11:42 am

I'm personally hoping for at least a 30% haircut for stocks, which might bring the valuations back down to sanity. Too bad it takes an international financial implosion these days for there to be any hope for financial and political rationality...
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Post by john94549 » Sun Aug 07, 2011 11:53 am

Funniest thing. Bogleheads don't fret about market-timing until they do.

Ahem, stay the course, sell the bourse. Or was that "buy the bourse"?

Francophiles will enjoy the joke.

I'm buying any dips.

And don't be callin' me a dip, you dip.

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Re: Les

Post by GammaPoint » Sun Aug 07, 2011 11:58 am

larryswedroe wrote:(especially in hard currency countries who don't want to see their currencies appreciate--say Swiss, Japan, etc).
Okay, economics lesson for me. Why exactly do some countries like to see their currency at low valuations relative to the dollar? I mean, I guess that would boost exports and manufacturing, but it just naively *seems* that that means your country is poorer and that you country's effort is being valued at less than what it could be. Someone please enlighten me.

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Re: Les

Post by BlueEars » Sun Aug 07, 2011 12:07 pm

GammaPoint wrote:
larryswedroe wrote:(especially in hard currency countries who don't want to see their currencies appreciate--say Swiss, Japan, etc).
Okay, economics lesson for me. Why exactly do some countries like to see their currency at low valuations relative to the dollar? I mean, I guess that would boost exports and manufacturing, but it just naively *seems* that that means your country is poorer and that you country's effort is being valued at less than what it could be. Someone please enlighten me.
You cannot really separate economics from politics. Some leaderships in other countries prefer fuller employment to a stronger currency relative to our currency. Enough said, I won't mention the countries or other political considerations. This is just a simple example.

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Re: Les

Post by allsop » Sun Aug 07, 2011 12:28 pm

GammaPoint wrote:
larryswedroe wrote:(especially in hard currency countries who don't want to see their currencies appreciate--say Swiss, Japan, etc).
Okay, economics lesson for me. Why exactly do some countries like to see their currency at low valuations relative to the dollar? I mean, I guess that would boost exports and manufacturing, but it just naively *seems* that that means your country is poorer and that you country's effort is being valued at less than what it could be. Someone please enlighten me.
An example: Sweden (EU member, but not part of Euro) is a very open economy with 50% of GDP coming from exports, according to World bank: Exports of goods and services (% of GDP)

When the Swedish Krona becomes weak, like when there is a flight to "quality", this will help our export because we then become more competitive and lessen the impact of the crisis for us.

On Krugman's blog there are several articles with regards to currency valuations.

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Re: Les

Post by avalpert » Sun Aug 07, 2011 12:33 pm

Les wrote:
GammaPoint wrote:
larryswedroe wrote:(especially in hard currency countries who don't want to see their currencies appreciate--say Swiss, Japan, etc).
Okay, economics lesson for me. Why exactly do some countries like to see their currency at low valuations relative to the dollar? I mean, I guess that would boost exports and manufacturing, but it just naively *seems* that that means your country is poorer and that you country's effort is being valued at less than what it could be. Someone please enlighten me.
You cannot really separate economics from politics. Some leaderships in other countries prefer fuller employment to a stronger currency relative to our currency. Enough said, I won't mention the countries or other political considerations. This is just a simple example.
Of course you can separate economics from politics - economics is just the science which attempts to explain the mechanics of the economy it doesn't imply or preclude value choices by and outcome preferences of politicians.

It is like saying you can't separate physics from politics because some countries prefer nuclear energy and some don't.

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Post by larryswedroe » Sun Aug 07, 2011 12:37 pm

need balance
Strong currency of course keeps import costs down and inflation down as well (keeps domestic companies focused on being competitive with cheap imports.
Also tends to hold commodity prices down

Weak currency helps imports of course, but can raise inflation pressures as domestic companies can raise prices as don't keep with those cheap imports
And commodity prices tend to be higher.

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Post by HomerJ » Sun Aug 07, 2011 12:39 pm

Lbill wrote:How many times do stockbugs have to get hit in the head?
So far, I've never lost money on a market crash; in fact, I've always made more money BECAUSE of the crash and then the following recovery....

So I've NEVER been hit in the head.... so far.

Someday you may right, but your mooing is tiresome. We KNOW these crashes happen, and we STILL make money... That 10% historical average INCLUDES crashes and 16 years of no growth, etc.

This may not prove true in the future... but we have YET to be hit on the head Little Bill.

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