Welcome!

Web 2.0 Authors: Bob Gourley, Trevor Parsons, Srinivasan Sundara Rajan, Yeshim Deniz, Torben Andersen

News Feed Item

Europeans Need to Embrace Radical Change to Save the Euro

LONDON, December 3, 2012 /PRNewswire/ --

  • A Greek exit and profound restructuring could be the least painful scenario for saving the Eurozone
  • Latest e-book from Saxo Capital Markets argues Eurozone needs to reach rock-bottom before recovery

The Eurozone will bounce back only once its leaders and inhabitants end up in such a desperate situation that they realise the only way out is through radical change, says Saxo Capital Markets.

     (Logo: http://photos.prnewswire.com/prnh/20121115/574147  )

Steen Jakobsen, Chief Analyst at Saxo, comments:

"We are now nearing the point of no return for Europe. Time is running out for Europe as 2012 became an issue of letting the central banks do the dirty job of keeping the tail-risk away though Draghi's put and general easy monetary policy."

"A Greek exit may sound like a frightening scenario, but profoundly restructuring the Eurozone may be less painful than a slow Japanese style death, with deflation, massive fiscal deficits, negative real-rates, housing prices lower than 30 years ago and a stock market valuation at less than 50% of its peak."

In "The Euro in crisis", the third chapter of the e-book in Saxo Capital Markets' FX Debates Series, Saxo analyses the unfolding of the Eurozone crisis as a three-stage process, following its evolution through phases of denial, protest and, ultimately, change.

Steen Jakobsen explains:

"First, in the denial phase we have fiscal stimulus. Then in the protest phase we have changes of political figureheads where there is no real change, but with some milder fiscal stimulus underneath. Then, ultimately, we move to a serious mandate for change. The Eurozone will bounce back only once its leaders and citizens, prompted by social unrest, realise and accept that the only way out is through radical change."

About social unrest Steen Jakobsen comments:

"It's very likely that someone who is getting their salary pummeled, their disposable income pummeled, and their purchasing power pummeled gets upset because, with the high stock market, the richest 1% and the corporations are making all the money. History shows that when the source of tension becomes too big, things can blow up. That's where we are at today."

Saxo Capital Markets sees three potential outcomes to the Eurozone debt crisis:

•             Meeting of the Cardinals - 20%probability

•             Extend-and-pretend Squared - 60% probability

•             Doom-and-Gloom - 20% probability


Meeting of the Cardinals

The Meeting of the Cardinals (MoC) will be the only orderly solution dictated by rational and practical solutions, where some countries need to leave the Euro, whether permanently or for a tempory period.

Comments Jakobsen:

"Here, the guinea pig will most likely be Greece. This will force Club Med to the table and make them accept further loss of sovereignty on fiscal and monetary policy, most likely in a German model where the European Court of Justice becomes the highest-ranking authority.

"The MoC scenario will likely lead to a short-term negative market reaction and a deep one-to-three year recession. However, this could also trigger the final phase of the three-phase crisis model: Mandate for Change. Inside the mandate for change there is a V-shaped recovery when reforms are initiated from the low point. For investors, the MoC is the best solution as it will lead to several years of prosperity amid better debt-to-equity, more realistic future expectations, and a public sector under control."

Extend-and-Pretend Squared

According to Jakobsen, the more likely scenario, however, is that Eurozone policy markets will continue to use delay tactics.

"The extend-and-pretend forever solution is about buying time - more of the same patch work solutions, slowly forcing Europe towards fiscal consolidation, not changing the Maastricht Treaty but the European Central Bank (ECB) charter to allow it to be lender-of-last-resort. This is the final phase of 'Maximum Intervention' - bigger and bigger direct support on liquidity and no impact on the solvency. This outcome is a vicious circle as every time the major central banks start the printing press, people's purchasing power diminishes." explains Jakobsen.

Doom-and-gloom

Under this scenario there are no good solutions to this crisis. Markets would re-test their 2009 lows and there will be a deep rooted discontentment with politics and the banking system, which could lead to social unrest and worse.

Steen Jakobsen concludes:

"The magnitude of this debt crisis is far larger than the market realises. The idea that it's merely a question of Germany paying is not only naïve, but also impossible. They cannot and they should not pay - and nor is the ECB the only solution to this debt crisis. There is only one solution: the system must fail and both the Euro and the Eurozone need to be redefined."

"The Euro in crisis" is the third part of Saxo's e-book, #FXdebates - Trading Insights from our Top Analysts, which focuses on trends in currency movements and pairings, the challenges affecting FX traders and advice on key trading strategies. The other articles in the #FXdebates series will focus on:

  • The US Dollar (published)
  • Yuan Diplomacy (published)
  • Gold - Just another currency?
  • Currency Wars: Battle Of The Weakest

The #FXdebates series of articles will be published over the next three months, leading the way to an event in February 2012 in collaboration with Bloomberg LINK.  

For more information please see:   http://uk.saxomarkets.com/fxdebates

Follow the debates via twitter: https://twitter.com/SaxoMarketsUK

Hashtag: #FXdebates

About Saxo Capital Markets

Saxo Capital Markets UK Limited is a wholly owned subsidiary of Saxo Bank A/S, the parent company of the Saxo Bank Group, an international financial services group specialising in trading and investment across global financial markets. Saxo Bank has operated in the UK since March 2006, initially as a branch of Saxo Bank A/S and since 1 January, 2012 as Saxo Capital Markets UK Limited.

Saxo Capital Markets UK offers private investors online trading and investment in FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives, and online wealth management for Funds, Shares, ETFs, Certificates and Bonds. Saxo Capital Markets UK also offers online trading services to a broad institutional client base including Hedge Funds, Introducing Brokers and Money Managers through our award-winning trading platform SaxoTrader, SaxoWebTrader and SaxoMobileTrader and Saxo's B2B/API services.

Additionally a large base of Banks, Brokers, Asset and Money managers, utilise our award winning white label solutions, in order to provide their clients with access to all or some of our trading platforms and associated liquidity.

Find out more about FX Trading opportunities with Saxo Capital Markets.

Media enquiries
Uriel Alvarado Cancino, Chief Public Relations and Marketing Officer, Saxo Capital Markets UK
+44(0)207-151-2026, [email protected]

Nicholle De Beer, Public Relations and Marketing Manager, Saxo Capital Markets UK
+44(0)207-151-2024, [email protected]

Smithfield
+44(0)20-7360-4900, [email protected]


More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...