Eurozone crisis is back and here to stay - News and Current Events | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events

Eurozone crisis is back and here to stay
Started:April 10th, 2012 (06:16 PM) by kbit Views / Replies:163 / 0
Last Reply:April 10th, 2012 (06:16 PM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Eurozone crisis is back and here to stay

Old April 10th, 2012, 06:16 PM   #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,839 since Nov 2010
Thanks: 3,275 given, 3,321 received

Eurozone crisis is back and here to stay

It's back. After a four-month respite in which equity markets rallied strongly and interest rates on bonds fell, the eurozone's debt crisis is on again. Those who said the European Central Bank was merely putting a large piece of sticking plaster on monetary union's open wound with its cheap credit policy have been proved right.

Since the troubled period began at the end of 2009, there has been a clear pattern to events: crisis, response, respite, new crisis.

The latest recovery has been robust, but it was always a fantasy to believe that the ECB could solve all the euro's problems with its long-term refinancing operations, ladling out ultra-cheap three-year money to European banks.

The current flare-up has three dimensions. The contingent cause of Spanish bond yields heading back into the danger zone (yields on 10-year debt were touching 6% on Tuesday night) was poor demand for bonds in last week's bond auctions.

Fears of contagion and growing opposition to Mario Monti's labour market reforms explain why the Italian stock market has been taking such a thumping, with the shares of badly hit banks suspended.

A second factor is the emergence of political risk. Greece is holding an election early next month, and support has slumped for the two major parties that backed austerity in order to secure a second bailout from the European Union, the ECB and the International Monetary Fund earlier this year. The chances of the Greek public electing a government that repudiates the terms of the bailout is deemed to be high.

Analysts are also worrying about the outcome of the French presidential election, since the polls show that the socialist candidate François Hollande, who wants to rewrite the eurozone's painstakingly negotiated fiscal pact, has a good chance of defeating Nicolas Sarkozy in a run-off.

Markets look at France, Italy, Spain, Portugal and Greece and see the potential for general strikes and civil strife as opposition to austerity hardens. It is not an outlook that inspires much confidence, so at the very best European markets face another two months of turbulence and uncertainty.

The likelihood, however, is that the crisis will go on for much longer. That's because the problems that have resurfaced over the past week have a deeper, structural cause: the flaw in the single currency that has left the weaker countries of the southern fringe deeply uncompetitive in relation to the powerful nations at the core.

The traditional remedy – devaluation – is ruled out by membership of the euro, so the affected countries have no choice but to go for "internal devaluations", which means making themselves more competitive by driving down wages, pensions and public spending.

These programmes are draconian and deeply unpopular. In Rome and Athens, technocratic governments have no mandate for them. To make matters worse, austerity is driving Europe ever deeper into recession, making it harder to get to grips with sovereign debt. It is a toxic, and highly dangerous, mix.

Eurozone crisis is back and here to stay | Business | The Guardian

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > Eurozone crisis is back and here to stay

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
Geithner: Obama Wouldn't Ask Me to Stay kbit News and Current Events 1 January 25th, 2012 06:23 PM
ECB Back-Door Bailout That Will End The Crisis? kbit News and Current Events 0 December 16th, 2011 10:24 AM
Ratings Boss: Eurozone Crisis 'Getting Worse' kbit News and Current Events 0 October 11th, 2011 12:57 PM
How to stay awake while trading anniebee321 Psychology and Money Management 31 January 4th, 2011 06:10 PM
The More Things Change, The More They Stay The Same tigertrader Off-Topic 0 October 8th, 2010 01:16 PM

All times are GMT -4. The time now is 03:14 PM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-26 in 0.07 seconds with 19 queries on phoenix via your IP