Blas Calzada: "The ECB will raise rates to avoid a double bubble"
Interesting commentary on the current delicate situation.
The former president of the National Securities Market Blas Calzada, who now coordinates the advisory committee of the Ibex index, considered today that the ECB will have to raise interest rates if it wants to avoid the formation of a "double bubble", and stock Real estate, and that "erupts in bad way."
Blas Calzada acknowledged that the current inflation in Europe "not justify" a rise in rates in the euro zone, but also warned that the "historically low" interest rates, despite recent increases, is causing price hikes of housing and public actions.
In view of this economist, the European Central Bank (ECB) is at "a crossroads" because on the one hand receives requests policies to maintain low rates so that they encourage the growth of national economies, but on the other , Must also bear in mind that this "will provoke a double bubble, stock and real estate," we do not know how you're going to end. "
The U.S. Federal Reserve, said Calzada, has been in that position, because also his country was at risk of a housing bubble and the stock markets grew faster than it would be reasonable. " "The Fed has pulled down the street in the middle and the bubble has stopped. The ECB would have to do the same," he added.
At present, interest rates in the U.S. are at 5.25%, while in the euro zone is 3.5.
Calzada said that the fact that the "historically low" interest rates has coincided with a time of high corporate profits is favoring the bids (bids), because companies find it profitable to borrow to gain size and increase profits.
That succession of bids, added the adviser of the Ibex index, in turn, is driving the rise in different stock markets, which have regained the levels this year lost in 2000, when the so-called "bubble technology".
However, Blas Calzada stressed that neither the bags have the same composition as 2000, because telecommunications companies and internet have lost the weight they were then in favor of other sectors, nor the global economy is not the same, because now " throw more of its growth "emerging countries like China and India and oil producers that the United States and Europe.
The change in pockets of Spain, he explained, has resulted in "the construction, real estate and dealerships have taken over from the telecommunications, which leaves only Telefonica."
Blas Calzada felt that the Spanish stock exchange "is not particularly overvalued," although growing "very quickly" (the selective Ibex 35 and an accumulated growth of 34%).
"There seems to still be in a bubble, but there are companies that have a PER (times the earnings per share is included in share price in the market) very high," said the economist, noted that before starting to have companies Quoted above GBR 25, "which is absurd."
Calzada predicts "stability" in the Spanish stock exchanges for 2007, but feels that "a good correction, even 10%, it would be important to be able to continue."
Written by Carlos Lopez on December 18, 2006 0 comments
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