WTF is happening to the Euro?

[robuzo]

Simon Johnson: Simon Johnson: With the Euro Falling, US Recovery Is Under Threat
The German authorities are happy to have the euro depreciate this far, and probably would not mind if it moves another 10-20 percent. They are convinced that they must -- in fact, should -- export their way back to acceptable growth levels.

Competitive depreciation is of course a no-no in international policy circles. But if your dissolute neighbors -- with whom you happen to share a credit union -- threaten to implode their debt rollovers, and markets react negatively, how can you be held responsible?

Germany and France have no objection to euro depreciation -- they are confident that the European Central Bank can prevent this from turning into inflation.

[Spin]

Some comments from Mervyn King today...

"The Bank remains cautious over the UK's prospects of growth"


"The UK economy has continued to bump along the bottom," "But a gradual recovery in output may now be in prospect."



"economic growth was unlikely to return to the levels seen before the economic crisis for a considerable period".



All very bad news for any hope of the pound returning to the 60 to the baht area inside the next twelve months I think

stop worrying about it.

I'm not worrying as I earn in U$D, but lots of folks are concerned as they have retired in Thailand and are on fixed incomes denominated in sterling. Those guys have had their incomes slashed and when combined with lack of interest payments on savings and inflation in Thailand, there is plenty to worry about, unless you have your head in the sand.

[ItsRobsLife]

The Greeks are holding a national strike today over pay cuts and pension freezes due to the national debt repayments, 113% of GDP apparently.
The Greek gov doesn't have any room to negotiate and desperately needs a handout from the EU to stop bankruptcy, a handout/bailout being without precedent and as yet it's uncertain what will happen. In light of this hedge fund mangers are betting on the Euro decreasing in value, a self fulfilling prophecy, as they are holding E8 billion in short stocks and will profit from it's demise.

It seems that even after the global financial meltdown, hedge fund companies still have more sway over the future of a currency, it's country and it's citizens, than the politicians or the citizens of those countries.
Something is very wrong in this, the inflexibility of the Euro operating conditions are causing the problem, as well as Greece's corruption, but the financial markets are looking at a possible feeding in frenzy, with the attitude that they're in it to make money and this is an opportunity to do so.
So while the living conditions of and future prospects of people go further down the pan to repay the massive debt of the financial crisis, the financial institutions continue to make massive profits.

[Butterfly]

44 THB/EUR

[Bung]

xe.com has it at 45.75

[Butterfly]

XE.com is not real, it feeds from some "virtual" FX trading network, like most of them, they don't deliver THB

it's a virtual "rate" with a virtual "currency", you need to look at actual THB that can be delivered through SWAPs or foreigner exchange banks

[Bung]

Greece 'told it faces sanctions'
Greece has been told that it must make further spending cuts or face sanctions, the eurozone chief has said.
Jean-Claude Juncker told German radio that Greece must understand that other eurozone members are not prepared to pay for its mistakes.
After the European Union vowed to helped Greece last week, the tone has turned harsher this week as talk of a bail-out proves unpopular.
Greece's woes have sent the euro down to a nine-month low recently.
Mr Juncker - chairman of the 16 nations that share the single currency and also Luxembourg's prime minister - has said Greece agreed to outline additional cuts in March if necessary.
He added that further measures would be imposed if Greece's debt reduction plans were not shown to be on target by 16 March.
'Completely wrong'
Greece's debt crisis is "first and foremost a Greek problem and an internal Greek problem," Mr Juncker said.
"The financial markets are completely wrong if they think they can destroy Greece," he added.

“ We won't abandon Greece ”
France's Christine Lagarde

Europe's leaders pledged to help Greece last week - without spelling out exactly what they were willing to do.
"We won't abandon Greece," French Finance Minister Christine Lagarde told reporters. "It's clear that we are all in this together."
Greece is trying to reduce its giant public deficit from 12.7% - more than four times what single currency rules allow.
It has pledged to reduce this to 8.7% during 2010 under an austerity plan that involves major cuts in public spending.
But those plans are hugely unpopular with the Greek public and massive strikes have already been scheduled.
Greek bank shares fell 2.4% early on Tuesday on the continuing concerns.
The overall stock index is down 14.6% so far this year.
Greece's Finance Minister George Papaconstantinou said that he wanted the other eurozone nations to release details of their planned bail-out for his country to ease market fears that the country could default on its debts.
But Mr Juncker said it would be "unwise" to publicly detail "the measures we are putting in place".
Mr Papaconstantinou has said repeatedly that his country isn't asking for financial help from Brussels.
Ministers and bank officials from the eurozone continue to meet in Brussels on Tuesday.

Story from BBC NEWS:
BBC News - Greece 'faces Europe sanctions without spending cuts'

Published: 2010/02/16 08:21:28 GMT

© BBC MMX

[Marmite the Dog]

Something is very wrong in this, the inflexibility of the Euro operating conditions are causing the problem, as well as Greece's corruption

Most of the tin-pot countries that make up the Euro-zone should never have been there. I reckon there's only 4 that come anywhere near the criteria; Germany, France, Luxembourg and the UK.

[ItsRobsLife]

Greece is trying to reduce its giant public deficit from 12.7% - more than four times what single currency rules allow.
It has pledged to reduce this to 8.7% during 2010 under an austerity plan that involves major cuts in public spending.
But those plans are hugely unpopular with the Greek public and massive strikes have already been scheduled.
Greek bank shares fell 2.4% early on Tuesday on the continuing concerns.
The overall stock index is down 14.6% so far this year.

Just delaying the inevitable IMO. Saving face is a Western impairment too.

[Fabian]

Even Germany does not meet the criteria anymore.

In my opinion Greece should be kicked out of the Euro, at least if they are not successful in cutting the deficit.

[robuzo]

Even Germany does not meet the criteria anymore.

In my opinion Greece should be kicked out of the Euro, at least if they are not successful in cutting the deficit.

Maybe kicking them out would be the best thing for them. Krugman has some interesting things to say here:
Op-Ed Columnist - The Making of a Euromess - NYTimes.com
And there’s not much that Spain’s government can do to make things better. The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation. . .[snip] Greece, of course, is in even deeper trouble, because the Greeks, unlike the Spaniards, actually were fiscally irresponsible. Greece, however, has a small economy, whose troubles matter mainly because they’re spilling over to much bigger economies, like Spain’s. So the inflexibility of the euro, not deficit spending, lies at the heart of the crisis.

[lom]

Luxembourg

you consider that a country?
and then he included UK

[kebabbaro]

I see the Euro getting a beating again today, buy dont blame the PIGS

Not least for the PIGS – Portugal, Italy, Greece and Spain

Blame the STUPID

Spain, Turkey, UK, Portugal, Italy, Dubai

Exactly Spin:
Britain at risk of worse deficit crisis than Greece - Telegraph

Britain at risk of worse deficit crisis than Greece

Britain is at risk of a Govenment deficit crisis worse than that of Greece, sparking serious fears over the economic stability of the country.


In surprise news which sent the pound sliding on Thursday, official figures showed that the Government borrowed £4.3 billion last month.
It was the first time since 1993 that the public finances had gone into the red in January – a month in which tax revenues usually push the Exchequer into the black.

(...)

[Spin]

Originally Posted by Telegraph Britain at risk of worse deficit crisis than Greece

This is rubbish, the Uk has all sorts of problems but will always find a way of raking in obscene amounts of coin. Example, oil from the falklands, the 100 billion pound wind power project around the British Isles, 4g licencing, and best of all, cheating idiots like the Thais out of vast sums of money for shit like the GT200

Greece cannot even try to compare with the uk when it comes to generating revenue when pushed like they are now.

........



I see the US Fed raised the interest rate last night. Ergo, the dollar will rally and US stocks will decline. Fund managers in the US will sell stocks and buy treasuries and fill the gap left by the reduced Chinese buying, best of all the Euro will weaken and take the pressure off that zone.

Ben to the rescue again.

[Butterfly]

I see the US Fed raised the interest rate last night

nope, they didn't

it's the discount rate, the Fed window rate that it charges for emergency funding only, and that gets you in trouble with the Fed if you use the facility

it's symbolic though so who knows how the market will react, they might get confused and thought the interest rates are on the way up. Watch the Feds fund rate for a clue on future interest rate directions.