Sweet: Europe triggers Nuclear Option to burn Speculators

HAMISH_MCTAVISH

May 9 (Bloomberg) -- European Union finance ministers pledged to stop a sovereign-debt crisis from shattering confidence in the euro as they held an emergency summit to hammer out a lending mechanism that may be worth around $645 billion.

“We are going to defend the euro,” Spanish Economy Minister Elena Salgado told reporters as she arrived to chair today’s Brussels meeting. “We think we have a duty for more stability for our currency. We will do whatever is necessary.”

:rotfl::rotfl::rotfl::rotfl:

You heard it here first folks, Hamish was right...... Again.

And dear god do I hope some hedgies and forex hounds get screwed into oblivion with a naked short position.

Euro up 1% in pre market trading already......:D

1984ReturnsForReal_2

lvader

I might help the Euro, not sure how it well help stocks and the banking credit crunch that is building again.

Mr_Mumble

Looks like the plan that leaked 36 hours ago, which has been analysed by the hedgies who are licking their lips, read this:

Sarkozy Will Get Stuffed

Degenerate

You're jumping the gun inferring that a full agreement has been reached from Salgado's words. Even if an agreement is hammered out tonight, it's nothing but another blast of hot air until it's approved by the Bundestag and fights off the inevitable challenge in the German constitutional court. Even if it passes these hurdles it will be nothing but a sticking plaster on the gaping wound of a fundamentally flawed, ultimately doomed currency union.

Bullfighter

I'm sure some short positions will get blown Monday morning.

But in the long term what happens when the 600bn is all gone?

dopester

Mr_Mumble wrote: »

Looks like the plan that leaked 36 hours ago, which has been analysed by the hedgies who are licking their lips, read this:

Sarkozy Will Get Stuffed

Link needs adjusting - a click off from that page - but an interesting read.

Sarkozy, the fool! Sarkozy has fallen for it, taken the bait, entered the run and followed it to be torn apart near the high stand, storms of splinters before the fire - or absorbed and digested - or the attacks quenched and drowned, by the markets.

Sarkozy and no other politicians are a match for the markets. Sarkozy and his economic advisors might have witnessed other historical market adjustments of great suddenness and ferocity in moments of crisis and transition. Nevertheless, what
they will see and experience from trying to force the markets to bend to their liking will be from will be on a level more barbarous and wild than anything before witnessed. Even with their political experience, Sarkozy and others like him will be left physically reeling.

The market will fend off clumsy, unsophisticated and brutal moves to impose terms on it. The markets will be able to cope with bludgeoning attempts. Sarkozy will feel it like a series of kicks in the belly; but marshalled, synchronised, sequenced and unleashed by the advanced, wholly more intelligent and able, commanding power of the markets.

The markets will prevail - else the overall damage will be worse - should the politicians really believe inflation and QE is going to lead to a stable and happy outcome. You don't fix a long-wave cycle peaked-out debt crisis + final 10 year debt orgy, with yet more debt.

amcluesent

>We will do whatever is necessary.<

If the Germans get their chance, doesn't that usually result in millions being killed?

Spartacus_Mills

We need Asheron to provide their thoughts on this.

HAMISH_MCTAVISH

Spartacus_Mills wrote: »

We need Asheron to provide their thoughts on this.

Gold is crashing hard...... Down £25 already this morning.

http://www.taxfreegold.co.uk/goldpriceslive.html

He's probably in a state of shock.;)

Generali

HAMISH_MCTAVISH wrote: »

And dear god do I hope some hedgies and forex hounds get screwed into oblivion with a naked short position.

A covered short is when you borrow stock and sell it to someone else hoping to buy it back at a profit and repay the loan.

A naked short is the same but you don't borrow the stock to cover your short position.

In either case, your risk is identical (that the price of the shares go up rather than down).

You can't have a naked short in cash as by definition you borrow the cash!

On to the trade itself. There one main thing that drives down the value of a currency relative to another. Relative returns available to investments. If the ECB maintains low interest rates and Governments reduce spending that is likely to reduce the returns available to investors and push down the value of the Euro. The only thing that will defend the value of the Euro will be to increase rates but that will crucify the Club Med countries hell bent on fiscal destruction!

From your article:

Investors should use a rally in the euro to make fresh bets on the currency’s decline toward $1.20 within three months, according to Barclays Capital, the world’s third-biggest foreign-exchange trader.

“To access the new facilities, countries would need to agree to fiscal consolidation measures,” David Forrester, Singapore-based currency economist at Barclays Capital, wrote in a note today. “This tight fiscal/easy monetary policy mix is likely to be negative for euro.”