Posts by "cat0nip"

methinks there is a connection FED and EFSF summit.
Most possibly the issue is undercapitalization and very high leverage of EZone banks ( note
commercial banks and investment banks are not separated in Ezone) .
Thus one can expect the EFSF summit has no degrees of freedom left.
They must decide a full ( CDS will be activated) backstop of banks for a 50% to 60 % haircut of Greece debt;
that is more than Eur 250 bln for bank recap
and
around 1.5 EUR trn EFSF bailout fund
I assume, as there were big USD long pos and even more EUR short pos built up , a squeeze
could propel EURUSD above 1.4
this should be a very good short level for 400 pips , from 1.4 to 1.41

expect EURUSD down to 1.35 and further 1.30 by end of this week.

Not agreed to forecast an entirely political market you are better off tossing a coin.
The govt of Slovakia has lost confidence votum , EFSF extension is rejected.
This is not positive for EUR but good for USD. If there is no miracle action for ex.
Merkel makes some Eur as a working girl , we will not see higher EURUSD the next days.
Because now Slovakia has to dissolve the govt and elect a new. That takes at least two weeks.
Greece will be bailed out by EU ECB IMF with EUR 8 bln in Nov. But next targets are belgium and again Portugal and then France. Dexia bailout is expensive.

imo ECB will at most cut 25 bps . EURx little changed, most part of EURUSD is due to USDx weaker. W/o sufficient bank recapitalization EUR is pretty soon doomed. Possibly ECB has little choice , must provide big lending tender. But...perhaps it doesn't. Not a sure bet.

One of the birth defects of Euro is fiscal sovereignty. The other economical sovereignty. The third, as a consequence, is an incredible huge administrative overhead that slows down any
decision making process. The fourth is the media are either mouthpiece of the respective governments or of unions or of entrepreneurs but none is independent.
This kind of multi-cultural over-national democracy had failed to weather headwinds and will go under in heavy storm.
Thus the only choice left is to repair the birth defects. The recent proposal of Eurobonds lite, that only the so far remaining triple-A rated members issue Eurobonds, is doable, if Germany quits balking at it. A good start. Otherwise, Euro will collapse.