Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (166657)	5/18/2002 10:31:37 PM
From: Haim R. Branisteanu	Read Replies (3) \| Respond to of 436258

Thanks Pearly, one more point I would like to point out about the EUR /USD is the events of last summer. Some history After the US market started south the EUR rose from 0.82 to an high of 0.96 by Feb. 2001 in hope that the EZ would carry the day. By May it was clear that WE ALL are in the same boat and the EUR turned tail down to 0.835 also because of EZ tax issues and mindless spending of the savings in the Mattress Bank. At the first hint that the US economy is slowing by AG testimony in July the EUR shot up to the 0.92 range then by early September the US sentiment started to turn and the EUR dropped in few days to 0.89 range. After Sept. 11 the EUR shot above the 0.93 mark in assumption that the US will slide in deep recession. With the progress in the war in Afghanistan and evidence that the US economy does not go into the toiled the EUR slid to 0.875 by November 2001. Then Japan decided that they need a lower Yen and massively bought EUR selling Yen which brought the EUR to around 0.90. Even with the euphoria about the introduction of the EUR, the EUR started a sharp slide to 0.86 within a month. Why I am bringing up those points ? that the movements of currencies are exaggerated by the bank traders and momentum players on perception more than economic fundaments ......... and perception is based on politics and they dictate money flow. One great example is this week swing in the EUR / USD of 2% in 3 days for actual no real economic reason. As to fundamentals, at the moment the US , Germany, France have increased budget deficits. They already announced that their "country interest" is not to adhere to ECB imposed rules of less than 3% GDP deficits. Germany and Portugal are close to 3% of GDP and Spain is very fast closing up. Germany acknowledged that the will have a tax revenue gap, but will make it up " in the second half of 2002". Italy Greece and now most of Europe will have higher inflation due to the 4% rise in wages, the US does not have such a widely spread problem. Reading the various reports of the monkeys at the various banks I cam to the conclusion that they are all as clue less as we are. The only difference is that they are trying to catch a move and re-enforce it that is how they make money. In February I was tilted to long EUR and had long discussion with bank traders who completely disagreed with me predicting EUR 0.85. Now I am tilted long USD as I was in September and I am in the same situation. My change of hearth about the EUR are; the EZ dependence on the US economy, the strength of the EZ Unions, the inability of Germany to get out of the doldrums (after so many years) and the upcoming election, shrinking tax revenues, the arrogance of the French who insist to run the ECB, the odd partners who are failing to integrate like Portugal and Greece and the changing political picture to far right which will bring more confrontation with the socialists who control the unions not to mention the far left and the "liberals" who are quite active in Europe.