Europe to start buying bonds Monday

[HuggieBear]

Expect two things Monday:

1) The EU will start buying bonds directly


2) The US, Japan, and China will step in and start buying Euro's....could produce a major short squeeze


http://online.wsj.com/article/SB100...9763092666450.html?mod=WSJ_hpp_sections_world

 

[CClement]

So you would go short on EUR/USD or...?

 

[Martinghoul]

Hope this is true, I do, yes...

However, I remember that weekend a short while ago. I really expected Barclays to buy Lehman.

 

[Debaser82]

Quote from Martinghoul:

Hope this is true, I do, yes...

However, I remember that weekend a short while ago. I really expected Barclays to buy Lehman.

Why do you hope this is true, Martinghoul? Because you are positioned for a rebound or because you think it would be best for everyone?

As you know I live in Europe myself and quite frankly it's getting kind of irritating how no one was talking about the irrationality of the markets when they had their biggest rally of the century but when stocks crater for a week or so something must be done immediately apparantly.

"Speculators" get blamed for everything and politicians and central banks must save the world now!

What do people expect? Stocks rising forever without ever dropping again and countries being able to brorow at 0% regardless of their fundamentals?

 

[CClement]

But why is it the euro will fall when the markets open again. Merkel, Sarkozy and Barroso have just said they will do anything to defend the euro, and that the markets will know about their plan before monday. Shouldn't this strength the euro?

 

[Martinghoul]

Quote from Debaser82:
Why do you hope this is true, Martinghoul? Because you are positioned for a rebound or because you think it would be best for everyone?

debaser, I hope this is true, because, in my view, without prompt decisive action, the EUR experiment is definitely dead (it might be dead anyways, even if there's action). I like the EUR experiment, I think it's a great and hopeful endeavor. I don't want to watch it crumble. Moreover, stocks are irrelevant, apart from the fact that they wake up the politicians. Stocks catch a cold when the sov bond mkt sneezes and, I can assure you, the bond mkt was on its deathbed Thursday. Your favorite OLOs were joining their peripheral friends and there was no bid in sight.

It's hard for me to think about how I'd do in a rebound or a collapse. I'd like to think I will do OK in either scenario, but one of the problems with a collapse is that it's impossible to know what to expect. One thing for sure, I certainly don't give a rat's arse about stocks. Spooz can go back to 666, for all I care.

 

[Martinghoul]

Quote from CClement:

But why is it the euro will fall when the markets open again. Merkel, Sarkozy and Barroso have just said they will do anything to defend the euro, and that the markets will know about their plan before monday. Shouldn't this strength the euro?

The reason is, ironically, that the only way to defend the EUR, at this point, is to print more of 'em.

 

[Alexandre]

let's not forget the euro started at 1.15 against the dollar and we are at 1.27

don't forget that what costs $200 on amazon US costs 250 euros on amazon FR

don't tell me the euro is not overvalued

I believe parity with the dollar makes sense

 

[Covertibility]

I remember the Euro started at par with the dollar and then Saddam wanted to get paid in Euro's when the Euro was at 0.75 to the dollar.

Too many people are short the Euro, expect the squeeze next week.

 

[Alexandre]

After the introduction of the euro, its exchange rate against other currencies fell heavily, especially against the U.S. dollar. From an introduction at US$1.18/€, the euro fell to a low of $0.8228/€ by 26 October 2000.