Economic Review **Current Euro and Greece Situation - 2012**

A lot of traders seems to forget that Greece is not the only member states to be in trouble. It's just that their trouble is huge and take up a lot of attention.
There are a few more other troubled EZ members (notably Spain, Italy, France, Ireland, etc) whose economy is tethering on the brink of collapse too. That is the most worrisome part of the whole Euro issue.

I have absolutely no fear in shorting the Euro on any kind of spike upwards as I know for sure that it has no way of maintaining that level.
The USD is a whole different barrel of fish altogether as the USD is pegged to just too many commodities, trades, and to some foreign countries currencies making the USD (for the foreseeable future) the preferred currency to keep....even we forex traders' trading accounts are mostly in USD!
 
You are right Stavro. But also I am right. At the end it does not matter who's right or who's wrong. Words are just that. The facts will speak for themselves. Time will tell amigo, only time.
With no disrespect or sarcasms. I TRULY Respect You and everybody on the FPA. We might have different opinions, but that's what makes the world we live in the great place it is... :cool:

Have the greatest night or morning amigo... since I have no idea where you are at now...!!! :p
 
Thank you Stavro for your analysis. I live in Greece and I can tell you that the cituation is very very difficult. The people have no more money to spend, not even for food. So economy goes down. Bussiness are closing down, all kind of shops close down everyday. I can tell you that even pizzarias and souvlaki makers have no work. Years ago the big avenues of Athens were most hours of the day full of traffic. Now there is no traffic at any hour during the day. People don't use their cars. There is no money for gasoline. All houses are cold. There is no money for heating. That way economy can't grow. Near this point is Portugal. Spain follows. Italy the same. The Euro problem is growing everyday. Even Germany is going to face problem because all Southern countries have no money to buy german products. So I personally don't see any future for Euro carrency.

Have a good time!!!
 
I don't know who is responsible for today's Euro/USD spike upwards, but it's created a very interesting situation.
Without a doubt, there will be a huge numbers of short positions on the pair (I am one of them). If it goes further upwards to the 1.33 or even 1.4 & 1.5 levels (which would become ridiculous levels), more short positions will be placed (including myself).

So, where will the EUR/USD land-up today???
 
Dear Stavro, Being on the spot (actually a mud pool) I couldn't agree with you more. What is now happening is possibly buying time, as elections in France may change the whole orientation of the Eurogroup. For Greece and mainly for Europe the best solution would have been a default WITHIN the eurozone and not going to drachma. The expected move from the ECB was to take all countries depts and issue a Eurobond with analogous debit to the debt of the individual countries. There are some strong voices pushing that but the Banks are the major obstacle. With elections in Greece coming up, social unrest at the limit of uprising, and the complete lack an innability to install any development plan, I would not be surprised if Fitch would downgrade Greece in the next few weeks to one of the default statuss'. This is a real possibility, thus I am personally having a few "intellingent" short orders in place with a target of 1.16! Thank you for your contributions as you have convinced me to try news trading after many years:)
 
Further to my post the intervew of the BBC news says it all:
 
Last edited by a moderator:
Do you know how many people are exposed to Greece? we are talking about a country not a State like CA. Plus a hand with no fingers wont work unless you get a robotic arm. No point having afountain with no water doesn't look good does it.

California GDP - $1,936 Billion (2010)
Greece GDP - $304 Billion (2010)

California 5 Year CDS 191 bps (Bloomberg)
Greece 5 Year CDS was 8870 bps (Bloomberg)

Outstanding debt
California $119 billion
Greece $428 billion

Greece can deficit spend, print its own currency, etc. California cannot, but it all comes back to debt to GDP ratio for now.
 
Hi Stavro - most of us in the UK agree with your overall analysis - we were just lucky that we could not comply with the requirements to join the pre Euro strictures in the 1990s; of course the politicians now say they never meant to join - hindsight!!

One or two things to add - Greece in particular has the largest % black economy in Europe at something over 30% of GDP (guessed of course!) whereas Spain & Italy are at about 20% 9 I'm not guessing Spain as I lived & worked their for 6 yeras).

A € problem is that the Greeks for example need to devalue hteir currency about 3% a year compared with Germany so it will never work. However the elephant in the room is not actually Greece etc, it is actually Germany - if germany left the € the rest could probably survive, but of course the € would be a pretty useless currency also. So germany is not just the elephant it is also a crocodile!- and now firmly in charge of Europe.

I would only disagree on one thing - a root cause of the banking disaster was probably the scrapping of Glass Steagall in the 1990s in the USA - it then took Goldman et al only 10 years to screw things up, aided by reagans crazy strictures about how many hoses had to be mortgaged by less well off people. And Lehman was probably because Fulds was more crazy greedy & less principled than the rest!
 
One final thought - the germany/France axis had finally got round to letting Greece go before the latest events, so they cannot even get that right - hence the delays over the last fwe days when the Greeks with mine Herren in charge managed to "meet" the obligations.

By the way Greece never met the criteria to join the € in the first place as all Europeans noe know.
 
Back
Top