Thursday, May 20, 2010

Update 5/20

Today was another really bad day; it started with the NYSE issuing "order 48".. which is where they do not have to state an opening price on the DOW. Throughout the day, there were some drastic currency moves as well; at one point, there was a huge drop in the GBP followed by a steep rise in the JPY; there might have been intervention on the part of the Bank of Japan to keep their currency from spiraling up too fast. The euro seemed to hold it's ground most of the day until late afternoon, when a central bank intervened, sending the euro up two cents in a matter of five minutes. Yesterday the Swiss openly intervened to keep their currency down as people in Europe were exchanging euros for Swiss francs in mass numbers; there was at least two major interventions by the Swiss. Despite all, the DOW had a really bad day, down nearly 4% by the close.. a stiff loss. The German finance minister chimed in with a statement saying that there needs to be a plan for an orderly default of some EU nations.

These actions today, in combination with those of the last couple of weeks, seem to be the actions of a currency and continent in the spasms of economic collapse. Central bank interventions, mass currency moves, crashing stock markets, central bank purchases of Bonds..

Krasting seems to think that the ECB and Fed are secretly using the Swiss Central Bank as their muscle, backing them with money when they need.. an interesting theory. Given his expertise on these matters.. anywho, it's worth a read:

Shaun's (as always) very detailed commentary on yesterday is always very good:

My question is still... how long can they keep doing this ??
Tomorrow Germany's parlaiment votes on their part of the $440 billion euro rescue; I think it'll pass just fine. I'm sure that German MP's are being given a good look at the abyss, and well they should. If they vote against the measure, look for all hell to break loose.

No comments:

Post a Comment