Is Europe becoming uninvestable?

[UK]

26 minutes ago, Spekulatius said:

Sentiment is so bad that it‘s time to look at and buy European equities. You heard it here first.

 

The two big investments I made this year are both European companies with large US exposure (30+ and 50+ of sales IIRC), they provide their services locally, so hopefully no disruption from possible tariffs:)

[james22]

 

[Libs]

2 hours ago, james22 said:

 

 

Wow. That speaks volumes.

[beerbaron]

Europe GDP has never been equal to US in my lifetime. This does not pass the smell test.

[Spekulatius]

You realize that the EU lost 67M people due to Brexit? US population is up more than 10% in that timeframe. The increase per capita of the US vs EU is way less impressive.

 

Also, if the EU is to blame, why isn’t the UK doing better since Brexit? It’s the perfect natural experiment, imo.

 

I do agree the EU has a problem, but a lot of these hot takes are deceiving, imo.

 

Checking in, you get another 15-20% explained by exchange rate movement. In 2008, the Euro was at 1.5 USD at the beginning and 1.28 at the end. Not sure which one is right here, but if I take the average and compare to 1.08 at YE 2023, I can explain another ~20% of the difference.

 

And no, inflation does not explain the change in exchange rate. The Euro was overvalued in 2008 and is undervalued now. If you don’t believe me, travel to Europe and compare prices.

Edited November 14 by Spekulatius

[Dalal.Holdings]

https://www.reuters.com/technology/space/airbus-ceo-says-spacex-would-not-pass-anti-trust-test-europe-2024-11-14/

 

Quote

By contrast, SpaceX is free to decide where to invest and manufactures 80% of what it needs, Faury said.

 

"In Europe, we tend to do the ... opposite. We make 20%, we buy 80%. And by buying 80%, you have a large supply base which is pleasing everybody. Well, Elon Musk's space is not pleasing anybody except Elon Musk," Faury said.

 

The hardcore globalists of the World Economic Forum have left their mark on Europe. It’s not pretty

[LC]

On 11/13/2024 at 7:55 AM, UK said:

 

The two big investments I made this year are both European companies with large US exposure (30+ and 50+ of sales IIRC), they provide their services locally, so hopefully no disruption from possible tariffs:)

 

Do you mind sharing the names? 

[UK]

7 minutes ago, LC said:

 

Do you mind sharing the names? 

 

Sure: ERF and RTO. Both have their own threads.

[Dalal.Holdings]

Are people in Europe even aware of the big problems facing their continent ?

 

 

 

[formthirteen]

25 minutes ago, Dalal.Holdings said:

Are people in Europe even aware of the big problems facing their continent ?

 

No, the majority of people are not aware and the stock market knows it. One recent example is Northvolt:

 

An EV-battery maker that raised $15 billion from investors including Goldman Sachs filed for bankruptcy protection after almost running out of cash

https://news.yahoo.com/news/ev-battery-maker-raised-15-103725217.html

 

 Maybe China doesn't want to share their technology with the Europe:

https://thedeepdive.ca/did-china-sabotage-northvolt-unraveling-the-crisis-behind-swedens-battery-giant/

 

Quote

 

However, according to a blog post by Swedish commentator Lars Wilderäng, who has gained attention for his reporting on financial markets, the relationship between Northvolt and Wuxi Lead took a turn. Wilderäng claims that Wuxi Lead provided defective equipment, which Northvolt has struggled to operate without the direct involvement of Chinese technicians.

Worse yet, he suggests that certain machine functionalities were deliberately omitted or sabotaged, with some speculating that the Chinese manufacturer aimed to undermine Northvolt’s operations from the outset.

 

 

Quote

 

If Chinese actors do take control of the company’s assets, it would be a significant blow to Europe’s goal of achieving energy independence. The continent has already been caught in the crosshairs of the global competition for dominance in renewable energy technologies, and this incident underscores just how vulnerable European initiatives are to external interference.

Furthermore, the possibility of deliberate industrial sabotage raises questions about the ethical and geopolitical dimensions of doing business with Chinese manufacturers, especially in critical industries like renewable energy. Wuxi Lead’s alleged actions also shine a spotlight on China’s growing economic influence and its willingness to use its technological leverage to maintain control over key industries.

With potential bankruptcy looming, the coming weeks could determine the future of not only Northvolt but also the European Union’s ambitions for a sustainable, independent energy future.

 

 

The market knows something about China too:

 

Edited Friday at 09:48 PM by formthirteen

[John Hjorth]

29 minutes ago, formthirteen said:

 

No, the majority of people are not aware and the stock market knows it. One recent example is Northvolt:

 

An EV-battery maker that raised $15 billion from investors including Goldman Sachs filed for bankruptcy protection after almost running out of cash

https://news.yahoo.com/news/ev-battery-maker-raised-15-103725217.html

 

 Maybe China doesn't want to share their technology with the Europe:

https://thedeepdive.ca/did-china-sabotage-northvolt-unraveling-the-crisis-behind-swedens-battery-giant/

 

 

 

The market knows something about China too:

 

 

@formthirteen,

 

Are you trying kidding us all here on CoBF with this kind of reasoning and argumentation?

 

Quote

... the majority of people are not aware and the stock market knows it ...

 

Will you please give us all a break!

 

-What are you even talking about here? Please specify or describe the connections by causation between the elements of what you are talking about! Your post is saturated by biased populism, without any roots in economic realities.

 

What is your personal nationality and where do you live now?

[Dalal.Holdings]

1 hour ago, John Hjorth said:

 

@formthirteen,

 

Are you trying kidding us all here on CoBF with this kind of reasoning and argumentation?

 

 

Will you please give us all a break!

 

-What are you even talking about here? Please specify or describe the connections by causation between the elements of what you are talking about! Your post is saturated by biased populism, without any roots in economic realities.

 

What is your personal nationality and where do you live now?

 

The problem is that the average European citizen seems complacent from over here in the USA. The only time I see them in the streets is if they are going to raise the retirement age or cut their pensions. It seems the avg European citizen has no idea the economic malaise that's in store for them if they continue on this trajectory.

[Spekulatius]

The German government is gone. Somebody is paying attention. The election outcome in February will be telling either way it goes. A strong mandate for the CDU would be progress. If votes go to the left and right splinter parties then not so much.
 

Stocks are getting cheap there. Low expectations are one way you can see positive surprises.

[Dinar]

12 minutes ago, Spekulatius said:

The German government is gone. Somebody is paying attention. The election outcome in February will be telling either way it goes. A strong mandate for the CDU would be progress. If votes go to the left and right splinter parties then not so much.
 

Stocks are getting cheap there. Low expectations are one way you can see positive surprises.

Which names do you find attractive and why?  Thank you.

[Spekulatius]

2 hours ago, Dinar said:

Which names do you find attractive and why?  Thank you.

BNR (Brenntag), DHL, JST (Jost), perhaps JUN3

 

There are a few others that are nanocaps that I won’t mention, at least not before you buy them and perhaps never.

 

All the above operate world wide pretty much.

Edited Saturday at 03:52 AM by Spekulatius

[Dalal.Holdings]

I know it's a shock based on my posts, but I've been buying stuff in Europe too. I hope the continent comes to its senses and fast.

[mcliu]

Europe is like the Citigroup of countries. 

Edited Saturday at 03:11 AM by mcliu

[Spekulatius]

Seem more a problem for the US than Europe or Sweden. This was financed by US investors, entrepreneurs are from the US and they set up shop in Sweden because I assume tax incentives and because the market was supposed to be there:

 

I interviewed for battery startup job in the US and was surprised to learn that they were working with another battery startup in Norway that seems to be financed entirely from US VC’s.

 

[formthirteen]

 

Quote

Time is running out and the expansion is pressing

 

Quote

German wind power output has plunged to less than 0.2 GW, compared to an installed capacity of ~70 GW.

 

The solution from the ”Federal Ministry for Economic Affairs and Climate Action” — previously known as ”Federal Ministry for Economic Affairs and Energy” — is to give back 75% of the carbon tax to the company, but only to ”approx. 350 German companies facing very intense international competition”:

https://www.bmwk-energiewende.de/EWD/Redaktion/EN/Newsletter/2024/01/Meldung/news5.html

 

Let's check the statistics of RWE, one of the largest energy producers in Germany and Europe:

 

This must be a really difficult problem to solve? I wonder who the beneficiaries of these policies are?

 

 

 

 

 

 

Edited Saturday at 05:13 AM by formthirteen

[Spekulatius]

It takes you 3 minutes of google search to determine that the above stats from X are grossly incorrect as far as energy sources are concerned. First he mixes up total energy consumption with power consumptions which is RWE’s business.

 

Germans power generation is more than 50% renewables.

 

 

You can actually go straight to RWE website and look at sources 

https://www.rwe-production-data.com/en/map

 

https://www.cleanenergywire.org/factsheets/germanys-energy-consumption-and-power-mix-charts

 

[Dalal.Holdings]

20 hours ago, Spekulatius said:

The German government is gone. Somebody is paying attention. The election outcome in February will be telling either way it goes. A strong mandate for the CDU would be progress. If votes go to the left and right splinter parties then not so much.
 

Stocks are getting cheap there. Low expectations are one way you can see positive surprises.

 

You think Merz will undo the damage of recent leaders ? He seems to have some promise

[Dinar]

You guys just don't get it.  Europe is finished unless it gets Margaret Thatcher in every country and kicks out those that hate the western way of life.  

A continent where most political leaders (except Germany, Hungary and Czech Republic) obsess with jailing Israeli leaders for waging war the way it has been waged since tirme immemorial rather than focusing on fixing their economies or preventing natural disasters from killing hundreds people (Spain) will not prosper.  Historically societies that kicked out Jews did not prosper, and neither did societies that imported millions of Muslims.  Europe is doing both.  There is no freedom of speech in  UK unless you call for wiping Israel of the map.  In Germany they want to ban essentially the largest political party - Afd.  

Imagine the US being run by Harvard/Yale faculty, no freedom of speech/information control that would make old USSR proud and instead of Elon Musk + Indian/Chinese/Korean immigrants you have Muslim immigrants with no work ethic and many of whom hate and ready to kill non-Muslims.  Now would the country prosper?  US is being saved by entrepreneurs both domestic and imported, but why would Musk go or stay in Europe?  To have Rachel Reeves tax him to death?  Macron & Sanchez regulate him to death?  

[backtothebeach]

Germany needs its own D.O.G..E…News article today:

“German Ministry of Defense wants to spend 825 million Euros on dress uniforms”.

That’s more than €4000 per soldier for a jacket, shirt, pants and shoes. Also totally unnecessary at the moment.

[Spekulatius]

17 hours ago, Dalal.Holdings said:

 

You think Merz will undo the damage of recent leaders ? He seems to have some promise

No idea. German politics is strange  and it is likely that left and right wing parties gain ground  ( if you can really distinguish between left and right as they seem to have some common objectives)

https://www.politico.eu/article/germany-superstar-sahra-wagenknecht-far-left-far-right/
 

We could end up with a Weimar Republic situation again (worst case). Best case is that the CDU gets a stronger mandate (still needs a minority partner to govern) and actually breaks away from Merkels and Scholz policies, because those for sure aren’t working.

Edited 10 hours ago by Spekulatius

[Dalal.Holdings]

11 hours ago, Dinar said:

You guys just don't get it.  Europe is finished unless it gets Margaret Thatcher in every country and kicks out those that hate the western way of life.  

A continent where most political leaders (except Germany, Hungary and Czech Republic) obsess with jailing Israeli leaders for waging war the way it has been waged since tirme immemorial rather than focusing on fixing their economies or preventing natural disasters from killing hundreds people (Spain) will not prosper.  Historically societies that kicked out Jews did not prosper, and neither did societies that imported millions of Muslims.  Europe is doing both.  There is no freedom of speech in  UK unless you call for wiping Israel of the map.  In Germany they want to ban essentially the largest political party - Afd.  

Imagine the US being run by Harvard/Yale faculty, no freedom of speech/information control that would make old USSR proud and instead of Elon Musk + Indian/Chinese/Korean immigrants you have Muslim immigrants with no work ethic and many of whom hate and ready to kill non-Muslims.  Now would the country prosper?  US is being saved by entrepreneurs both domestic and imported, but why would Musk go or stay in Europe?  To have Rachel Reeves tax him to death?  Macron & Sanchez regulate him to death?  

 

I think this is overly pessimistic. You are already seeing the election of Trump have big effects across Europe.

 

https://www.politico.eu/article/germany-chancellor-olaf-scholz-social-democratic-party-spd-leadership-german-election-politics/

 

Quote

With Germany’s entire political and business class in a state of despair over the U.S. election result, Merz said President-elect Donald Trump might vaguely remember Scholz, before adding: “Don’t think you have any authority to talk to this new president. He will drop you like a lightweight.”

 

Trump is a forcing function that is pushing Europe to get its act together because he makes continuing on Europe's current path much less feasible.