Olympic Impact on Stock Markets
In an uncharacteristic departure from its usually apocalyptic financial doom and gloom, there is an interesting article on ZeroHedge about the economic performance of Olympic host nations:
Interestingly, all recent Olympic hosts have outperformed the MSCI World index in the 12 months following the Olympics. This is true of recent hosts regardless of the size of the economy or state of development, suggesting either the local market is boosted by the international profile of the Games, or is perhaps relieved to have the Games behind them.
Heaven knows the UK needs some economic stimulant. For all the complaints about the Olympics from the population, maybe it could actually be positive for business...Could the UK experience a mini boom in infrastructure investments? Could London equities outperform the rest of the world in the next 12 months?
Personally I am skeptical...
we have far too many underlying problems here in the UK for a bit of sport to fix. What about the underlying concept though? Athens was held at a time of a global boom and when Greece was experience benefits from cheating its way into the EU (with the help of Goldman). Beijing was during the biggest financial collapse in the Western world for the past 80 years and China was still a growth machine.
Comments
If you look at my first blog
If you look at my first blog post, Olympinomics, I linked to a study that showed small economies benefit more than large ones (sorry no link, on iPad). For recent Olympics, I think you are right in saying that each city/country had special economic circumstances impacting them.
The real legacy of London, will be an increase or decrease in tourism. If people find they love the city, London will be revitalized as a tourist destination. If people hate the city, then London's billions in investment were wasted. I think that this love/hate is something the organizers of the games won't be able to control, and will depend on the weather. If it rains through the games , London is SOL.
My WSO Blog
"Unbelievably Believable" -- RG3
21 Lives: If you look at my
If you look at my first blog post, Olympinomics, I linked to a study that showed small economies benefit more than large ones (sorry no link, on iPad). For recent Olympics, I think you are right in saying that each city/country had special economic circumstances impacting them.
The real legacy of London, will be an increase or decrease in tourism. If people find they love the city, London will be revitalized as a tourist destination. If people hate the city, then London's billions in investment were wasted. I think that this love/hate is something the organizers of the games won't be able to control, and will depend on the weather. If it rains through the games , London is SOL.
Definitely agree on the tourism part. Unfortunately I don't think the weather will be good and from what I've seen, the public transport networks will not be able to cope if there are too many people; the Central line in particular is simply unacceptable for the 21st century.
See my other WSO blog posts>
On tourism once more, there
On tourism once more, there is an observed phenomenon whereby olympic hosts see substantially depressed tourism figures during their olympic year (save for the games themselves). I'd be interested in seeing an analysis with this adjustment. I imagine it is more significant in smaller, more tourist-dependent host nations. Greece definitely comes to mind.
"There are three ways to make a living in this business: be first, be smarter, or cheat."
Sandhurst: On tourism once
On tourism once more, there is an observed phenomenon whereby olympic hosts see substantially depressed tourism figures during their olympic year (save for the games themselves). I'd be interested in seeing an analysis with this adjustment. I imagine it is more significant in smaller, more tourist-dependent host nations. Greece definitely comes to mind.
A lot of the given reason for the depressed tourism due to the Olympics are people who would have traveled, but due to the Olympics will not. Excessive crowds and increased prices lead many to travel to other destinations instead. This also goes for intra-country tourism, not just international, I'm sure there are a lot of Brits who would travel to London sometime during August, but due to the Olympics will not.
And how can you blame them? Prices for hotels are already up 50% compared to last year.
My WSO Blog
"Unbelievably Believable" -- RG3
[quote=Asatar Definitely
[quote=Asatar
Definitely agree on the tourism part. Unfortunately I don't think the weather will be good and from what I've seen, the public transport networks will not be able to cope if there are too many people; the Central line in particular is simply unacceptable for the 21st century.[/quote]
Yeah, worst case scenario would be weather induced transportation problems. Then it would be raining, and people would be stuck in it. Let's just hope it isn't storming for the opening ceremonies.
My WSO Blog
"Unbelievably Believable" -- RG3
Rent has gone up Alot. People
Rent has gone up Alot. People have actually moved out their homes for 3 months so they can charge $15,000+ rent. The fat cats from the Olympic Committee need some where to stay.
In terms effect on London.Maybe more business investors, but doubt it London is already pretty famous not lacking PR
infra investment - the only
infra investment - the only banks in the market who can still punch above 15yrs tenor are the Japs and Germans (and Unicred if you find them on a good day). the Japs like very basic, what is known as availability, projects. Germans have a bit more bite for innovative stuff. Furthermore, on small infra borrowers have stopped going to the banks as they frequently pull out halfway through a project... Cameron’s pension fund idea is great on paper but the funds don't have the skill set. they used to rely on the monolines but since they've fallen away they're not willing to hire project finance guys as it's a risk, and costs are tight at the moment (totes obvi braaah).
the stock market - this may have a boom, but from all accounts the lev loan market is basically shutting down, there's no deal flow anyway, and now most people are getting the hell out of the city, big trades wont get done.