€400 billion in European savings flown overseas every year, including to the US, will be invested in Europe from now on. All 27 EU states agreed to establish the S&I Union
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Watch Von der Leyen: €400 billion in European savings flown overseas every year, including to the US, will be invested in Europe from now on. All 27 EU states agreed to establish the S&I Union, a step towa | Streamable
Watch "Von der Leyen: €400 billion in European savings flown overseas every year, including to the US, will be invested in Europe from now on. All 27 EU states agreed to establish the S&I Union, a step towa" on Streamable.
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Tricky one. I love the sovereignty but I also wonder how much that will cut into someone’s pension etc as American stocks have wildly outperformed most other stockmarkets. Admittedly, I’m also worried about a serious crash but…
Like I said, tricky one.
I’m sure that 400 billion inflow is helping that wild outperformance too though.
The total value of the US stockmaket is 70+ trillion. 400 billion is something but not even a significant percentage.
I hear ya, but how many years has that outflow been going? And how much does that push up the price? (I don’t think it’s linear)
Edit: not looking for an actual answer there… More just a point of thought
It’s a Keynesian beauty contest, prices go up because more people put their money there. If they keep it local that also improves the local returns
Ehhhh, a little bit this is also a drastic oversimplification of how the stock market works.
American companies tend to have higher profit returns and growth potential. There aren’t many Microsoft, Alphabet, Meta, Nvidia’s etc in Europe. There are also huge hurdles to growth (navigating almost 30 different sets of regulations plus EU regulations, or however many languages) that American companies do not face.
To an extent, but the claimed future growth is just that, a claim, and companies like Mag7 and the whole AI industry and priced at eye watering levels above their actual earnings. Keep in mind that those reported earnings also include circular financing, for example they report it as earnings/profits when one of their AI investments/subsidiaries goes up in stock price, even though that does not represent actual trade with consumers. There’s a whole lot of smoke and mirrors covering the real value
Oh for sure, the AI bubble is terrifying as I think I noted very early on in the thread. But, even excluding the last half dozen years (so as to ignore American’s absurd covid recovery and AI hype) American stock returns have significantly outperformed European ones.
it’s true that american companies (especially the tech monopolies) often have higher profit margins, but, besides different regulations, the lack of investments is a big problem. So I also think that a S&I union could improve the value of European stocks at least in part.
Oh absolutely, I’m not saying that this won’t help, I’m just saying that there is a very real trade-off and it would be unwise to pretend there isn’t one.
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