Nikkei Up 5%: The Eurocrisis is Over!

You have got to hand it to them, haven’t you? Past masters these politicians at bull. Call it what you will: baloney, rubbish, pulling the wool over our eyes, lying through their teeth and still smiling. Can we believe it? Do they actually think we’re that naïve? Come on guys, we weren’t born yesterday.

Just a few hours after French President François Hollande stated on a state visit to Japan that the Euro crisis was over, the Nikkei rallied 5% today!

But, I think that Monsieur Hollande’s speech will have to go down in history as the scam of the 21st century. Okay, so we need to be upbeat about the economic recovery. So, we need to sell ourselves. We need to tell everyone just how great we all really are. They might just believe us if we say it loud enough. The US has been doing it for years now, and people are still believing them, aren’t they? Well, almost! Mr Hollande is like the guy that sold London Bridge in 1968 to a guy from Arizona for a £1.63 million because of some smooth-talk. He actually thought it was Tower Bridge. Imagine his surprise when he opened the box to find it was a shoddy, recent, dull looking bridge that was pretty worthless. Imagine the surprise of the rest of the world Mr. Hollande when they open the box and find that there is nothing inside that you have been talking about for the past few days.

I always learnt that if you have to shout it from the rooftops, you can’t be what it is that you are yelling at people. I can hear you Mr. Hollande! The Eurozone crisis is well and truly over. Except, the figures are telling me otherwise. Or is he just trying to get his name into the papers?

Whatever happened, thank you Mr. Hollande, the Japanese have gobbled it up faster than they can say Sushi. That’s a 5% rise in the Nikkei, the biggest daily increase in two years! The Yen also dropped to ¥98.3 against the US dollar, from ¥97.5. That means a weakened yen and fuel for a rise in exports from Japan. Technology firms such as Sharp Corp increased by +15.21%. Fuji Heavy Ind. Increased +12.91% and Tokuyama rose by 12.68%, for example.

Mr. Hollande believes that the Eurozone will come out all of this stronger and better. Strength in the face of adversity, united we stand! Sounds like Mr. Hollande has just found the new slogan for the EU27. We never believed the first one Mr. Hollande (“United in Diversity”), so there’s no point changing it. Europe has never been so divided!

Has Mr. Hollande been looking at the figures? New figures on debt-to-income ratios in the Eurozone show that Ireland, Greece and Portugal all have levels of 300% in terms of indebtedness. Ireland has a debt of €192bn, which is 340% of government income. Greece is at 350%. The UK has a debt-income ratio of 212%.

Still, that looks pretty damn good when you look at the debt-income ratio of the USA, which is 560%. Hey, he was right after all, we’re doing fine!

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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