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by Ashraf Laidi
Posted: Feb 20, 2010 5:00
Comments: 30765
Posted: Feb 20, 2010 5:00
Comments: 30765
Forum Topic:
EUR
Discuss EUR in this thread
Mr. Market needs to be feed and he has not gotten anything tasty from the EU or IMF for weeks.
Lately it has been all bad news, with the Spanish banking crisis intensifying, intramural battles withing the ECB raging and Germany losing its preeminent position as the undisputed first among equals in the euro zone.
All of that is reflected in the renewed nervousness among investors, who are demanding higher yields to buy government debt (despite the ECBs steady purchases).
Spanish spreads over the German benchmark are within 20 bp of their highest levels despite a trillion pledge to sure up the euro zone and billions in ECB bond buying
Not a good sign for the euro. Shock and awe, it aint. Maybe Spanish banks are going through a stress test right now.
a eurozone common treasury had had to be installed with the introduction of the common currency... I wouldn't mind a central government with local governors
small is beautiful
but it won't happen the eurozone will disintegrate same as the Eastern Roman Empire disappeared under the load of its administration.
In multiprocessor computers we had the phenomenon of trashing a job cannot be assigned to a CPU and is trashed from stack to stack...in a round robin discipline... that is how eurozone administration works.
As well, he wants to strengthen economic governance by the EU summit on June 17.
Like it or not, the recent bailouts have been an important step toward a centralized EU economic structure that could serve the group well int he years ahead, if national interests are set aside for the good of the whole. A huge IF
EUR/USD trades at 1.2198
(WTF how can some one get this wrong)
The Eastern European country that has suffered a 26% GDP loss in the past two years was the butt of a cruel joke this morning.
Latvian news agency LETA published a letter from IMF Managing Director Dominique Struass-Kahn supporting a "mini-devaluation" of the lat. Latvia has kept its currency pegged to the euro despite crippling debt because of plans to join the EU.
Turns out the letter from Strauss-Kahn was a forgery!
From the IMF (via FT Alphaville)http://blogs.ft.com/money-supply/2010/06/01/forgeries-and-the-lat/
Regarding this mornings LETA story, which referred to a purported letter from the IMF Managing Director: the letter mentioned is false and we advised LETA that it was forged. It does not represent the views of the IMF.
Our views on the currency are well known and have not changed. We, together with the European Commission and other programme partners, continue to support the governments programme of economic policies that rest on keeping the current currency regime and the plan to join the euro.
Painful austerity continues to be the only option.
Of course nobody buys USD per UST for a return ON investment but for a return OF investment.
And no one buys EUr for a return of investment.
We may see some days of sideways in EURUSD but the eur crisis is far from contained.
When ECB states about 100 bln EUR of risky bank assets this is most certainly over optimistic
and refers to ECB's QE of troubled sov bonds but banks lack solvency it is still a critical situation
and spain may soon face a savings bank run.