I think everyone has had a foreboding feeling for quite some time now. There are events unfolding in the world now that scare me. Attitudes are changing. Morals are not what they were. And I am not talking about the the moderate changes my generation went through that shocked our parents, I am talking about the lack of decency and respect that is abundant nowadays. I think there is also a lot of choas in the world. The rise of ISIS and their despicable lack of respect for human life. Israel and the trouble in the holy land. Russias activities and blatent lies. Drug gangs in Mexico killing students. Police in the states shooting defenseless victims. Wars, weapons of mass destruction, Ebola, swine flue, the twin towers. And I agree that money is the root of all evil. I have never really thought about rapture before. I suppose people who lived through concentration camps thought that the end of humanity had come in their time too. I do agree that we need to heed the bible. It regulates human behaviour, Moderates violence and concentrates the mind. Christmas is a good time for new beginnings.
If the world ends tomorrow, I am sure if there is a fee through the pearly gates, that paper currency may not be what they require, so don`t panic just yet.(proof of bkir certs might swing it,I`m thinking)
All joking aside ,nice to see someone noticing the BS that is our monetary system! Good luck
Guys, I have been following this discussion for over a year now. I had bought in and will probably exit now without a significant loss. The reason is that I have recently come to appreciate a biblical prophecy Ezekiel 7:19 "They will throw their silver into the streets and their gold will become abhorrent to them. Neither their silver nor their gold will save them in the day of Jehovah's fury". This worlds financial system is yet another failure of mankind and it will not recover this time. Add to this mankind's irreversible impact on the global environment, capitalist structures which always need losers (people, countries,continents), the disgusting repetitive & circular war industries happily feeding off the less developed countries, the ever more dangerous spirit of independence that inevitably pits person against person, country against country. Not to mention the ever more horrific crimes that we all hear about and of course death. Does no one else feel or see this?? This world stinks! And here we are.....effectively betting on two flies going up a wall. The deteriorating conditions in this world is actually a fulfilment of bible prophecy. The good news is that the prophecy also foretells that this system of things will come to an end shortly and be replaced with a worldwide government...almost as John Lennon describes in "Imagine".... no religions as such, no countries borders. That is in fact the Kingdom that many millions pray for "Thy Kingdom come". It is ruling in heaven since 1914 and will soon intervene here on earth. The wisest thing we can do is become a subject of that kingdom right now. So I'll be focusing my attention on that going forward... whilst still trying to make a living. Shares are too distracting for me.... maybe you guys are more successful at it. Anyway, at least you've all got a sense of humour and are decent enough. So long and good luck while this system lasts...but don't forget the bigger picture. (no need to filter me out as a nutter... this is my first and last post)
Ram, there can only be 2 reasons why you didn't get an answer to your question on time. A. Draghi doesn't check out this forum every day. B. No one knows the answer. Having said that, even if Draghi had looked in today I'm not sure even he could answer your question anyway.
Actually, I'd say he is fairly perplexed by his current measures and the effects they are having, or not having as the case my be. Although he has procrastinated on full qe he has (more or less) promised a trillion euro of potential measures. Not only have banks ignored this funding (so far) but the effect of them on Europe's economies has been negligible so far. Early days yet but the markets are certainly not rushing to price in any benefits which is worrying.
The ecb may yet be forced to take drastic action. Data out of europe even today was disappointing and all the forward indicators point to stagnation at best , deflation at worst. Today's numbers are showing that despite price cuts, factory orders are falling. No one is buying. Why? Because they expect prices to keep falling.
The worrying thing for Draghi is that he has too contrasting qe case books to study. Relative success in the US but complete failure in Japan. If the ecb go and buy government bonds they need to be extremely careful how they structure it. To avoid having it classed as assistance to national governments the normal way to proceed would be through Europe's banks. Now that the majority of them have stable balance sheets any money for bonds they do get should (in theory anyway) be lent out and a profit made on the loans with a healthy margin.
For bkir this should be good news. They are operating in an economy that might actually want to borrow some money. They also operate with one of the best interest rate margins in Europe. Should be a win win you would think. Well, Ireland inc has to hope that a crappy Europe doesn't drag the US and the UK down before they decided to fix the economy. Both these countries have been outspoken in their fear that this may happen. If it does then not even Draghi could predict the effect of qe on bkir. Hence his reluctance to answer your question today I suspect ram.
I'd answer it by noting the ECB is already taking quantative easing measures. It is trying to expand its balance sheet from €2 trillion to €3 trillion through TLTROs (long term bank funding), plus purchases of asset backed securities (ABS) and covered bond purchases. But not a lot has happened to BKIR share price since September when this was announced - that tells you a lot. Problem is, the global system is already flooded with liquidity (hence the muted take-up of the last TLTRO by banks), and in the Euro area rates are already close to zero. Daft as it sounds, there is also not a lot for the ECB to buy: when you apply all the ECB conditions, the universe of eligible covered bonds shrinks to €1 trillion and about €500bn of ABS, and the ECB can't buy it all without messing up the market. So much as he may try, Mr. Draghi finds it tough to spend €1 trillion. As to the impact of full blown QE - the outright purchases of Euro area Government bonds - the best explanation I have seen was written by Daniel Gros at the Center for European Policy Studies. 'The ECB's Faulty Weapon'. He wrote "QE can be effective only in economies in which changes in long-term interest rates play an important role in the private sector ... this is not the case in Europe in which most long term investment is financed via bank loans that typically do not have long term maturities - often less than five years - because banks themselves have little secure long-term financings. Moreover interest rates charged on these loans are not linked to market [Government bond] rates, but rather to the bank's refinancing cost, which is already close to zero." In other words, QE worked in the US because bond markets are deep and lots of assets (especially home loans and corporate borrowings) are priced off the US Govt bond curve, so when the Fed buys bonds, and drives the yield lower, it has an immediate knock on benefit to the wider economy. Not so in Europe. Then you have the Germans. Jurgen Stark, the ECB's own economist, has gone on record calling his boss's existing quantitive steps an act of desperation with incalculable risks. I'd give all my BKIR shares to be a fly on the wall in the room where Draghi tells him he wants to do full blown QE ... not sure he comes out alive ... But if Draghi wins and there is full QE, I'd expect a short term rally for banks, including BKIR (look at the US, where bank stocks rose), but I'd also expect it to be short lived because (a) of the reasons above - it wont really work, and (b) the Germans will concede QE only if Europe is back in its next recession and that will be negative for BKIR.
Dividends: Sooner than you think. This reorganized bank doesn't have empirical ambitions for owning massive administrative buildings and systems. This is a slim operator, leasing, outsourcing, getting the best out of technically savvy staff. Only thing that'll be big is the balance sheet, especially in owners equity. There'll be no chairs in branches except in front of a computer screen, to minimize staff expense.
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