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If there was one thing that dominated the conversation this week it was the marred Facebook IPO. Over the course of the past several days, the offering has tarnished the Nasdaq and could cost Morgan Stanley millions.So this week, analysts and pundits poured out research and commentary on the topic.
But something else happened: Greece.
The country is back in focus, and everyone is now talking about a Greek exit from the eurozone.
And everyone has a different opinion.
'Since last year we've had this idea that we're going to be reaching a peak, that Q2/Q3 will be a decisive moment for the crisis in Europe,' Nomura's Global Head of Fixed Income Des Supple told analysts today in a conference call. He added, 'we are seeing the manifestation of crisis accelerators.'
'Jumping on the bandwagon was a very profitable thing to do for a while. But then the bandwagon or--the merry-go-round, to change the metaphor ever so slightly--the merry-go-round stops. It's like a game of Old Maid, as Lord Cain's told us. Somebody's always left holding the bad card. Or musical chairs; someone can't get into the last chair.'
'While we experienced a devastating crash in 2009, it was just a preview for the catastrophe that's coming next, says perma-bear Peter Schiff. The real crash will come from the 'government's phony cure' for the economic troubles that have swept our nation, Schiff details in his new book The Real Crash: How To Save Yourself And Your Country.'
'But the Federal Reserve's central growth scenario projects 2.7 per cent to 3.1 per cent growth next year. Societe Generale analyst Aneta Markowska says it is unclear how much fiscal restraint had been factored into the the Fed's forecasts for next year, but it is evident that they have discounted very little fiscal tightening. This creates downside risks to the Fed's current growth forecast...'
'Now, part of this is a bit facetious. I really don't think they should try to kick Germany out of the EMU. But they should certainly unify more tightly and begin pushing back very aggressively. There's much more to the EMU than Germany, but for some reason everyone is taking orders from Angela Merkel. Europe needs leaders to start walking into meetings and making very serious threats. There are millions of people held hostage in a depression due to this inaction.'
' 'I absolutely don't think that room for negotiation is zero,' Fuest told Business Insider, arguing Germans are not as resolute on this issue as they have made themselves out to be right now. 'I don't think that the German government in particular will want to make concessions beforehand,' he qualified. 'The reason is that mentally this message would be very difficult' for policymakers both domestically and in terms of forcing countries on a bailout program to make necessary economic reforms.'
'1. Easing inflation and easy monetary policy could see growth recover in the second half of the year which should help markets. 2. As recent developments in Europe and weaker economic data fade there will be greater appetite for risk. 3. A switch of 'sector leadership' from technology to energy - since energy valuations relative to tech is at its lowest level in the last decade barring the low point at the financial crisis.'
'Damodaran, being a value investor isn't ready to buy. 'With its user base, Facebook has the ingredients to generate sizable profits down the road, albeit with substantial risks along the way,' he wrote. 'At the right price, I would buy the company, notwithstanding the uncertainty about the future. At the IPO offering price or even at the price at which it is trading at right now, I would not.''
'The role of euro area banks in international finance has therefore declined gradually since the start of the financial crisis (from a 57.3% market share in 2007). Emerging European countries are the most vulnerable to reduced international banking activity in the euro area; banks in the rest of the world are far less exposed to them (about a tenth as much for the USA and UK). At end-2011, euro area banks' loans to emerging Europe represented $992bn, some 4.9% lower than a year before.'
'But in reality if you look at the credit scores of the loans they're actually making, it's much higher, an average of about 720. So there is not much lending going on to the lower quality borrowers because of probably a lot of the uncertainty around not only the macro outlook and the housing outlook but also what the mortgage finance system will look like. So I would expect to see credit remain tight certainly in the near term.'
'...all this market weeping and gnashing of teeth could prove yet another significant buying opportunity: Greece may yet exit the euro after all, but with effective ECB and global policy action its impact could be limited to no more than the rounding error that the Hellenic Republic's small size and deplorable politics render most fitting. '
'Throughout this period emerging market economic growth exploded, commodity prices soared, and US economic growth underperformed other major developed markets -- all of which are clearly US dollar negatives and unsustainable in the long run, in our view. The view from a longer lens suggests an entirely different story. For instance, year- over-year changes in the US dollar and S&P 500 have exhibited almost no correlation since 1974.'
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