The Eurozone "DEAL" 101: Easy Trade for our Poor Country Pipster Cousins? - NOT!

Get Ready to Short the Euro Again | MadHedgeFundTrader on ZeroHedge
The move has triggered a “feel good” rally for the European currency, which has soared to the low $1.41’s. Herein lies the opportunity. Wait for this rally to exhaust itself, then sell the daylights out of the Euro. They next move on European interest rates has to be down. Now that the can has been kicked down the road on the debt problem the European Central Bank can now focus on the distressed economy.

Here are the details in summary:

*Capital for the European Financial Stability Fund will be increased to €1 trillion.
*Greek debt will be written down 50%, halving the country’s debt to GDP ratio in one fell swoop.
*European bank capital ratios must be raised from 6% to 9% by June next year. 
The package raises more questions than it answers. It delivers less than what the optimists were hoping for, but more than what the pessimists dreaded. You really have to wonder
Where are banks are going to raise $120 billion in private capital in this environment. As a result,
Asian sovereign debt funds will probably end up owning large stakes in European banks at fabulous discount prices.
While the cut in Greece’s debt load to only 120% of GDP is welcome, it offers no clear path on how the beleaguered country is going to cope with the heavy burden of the remaining balance.

0 comments:

Post a Comment

GOVERNMENT REQUIRED DISCLAIMER

Government Required Disclaimer: Crude Oil Gold Trading Room does not hold itself out as a Commodity Trading Advisor (“CTA”). Given this representation, all information and material provided by Crude Oil Gold Trading Room is for educational purposes only and should not be considered specific investment advice. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.