Sunday, October 05, 2008

Europe is next for a Bailout plan...

With the U.S. $700 Billion dollar bailout completed attention has now turned to Europe to help their financial institutions. Our markets faired pretty poorly after the vote on Friday but I think that is more of a Buy the rumour sell the fact, senario. Aslo the realization has to be setting in that we have to pay for this and our economy is weakening at a rapid pace.

Yeesterday European leaders met to discuss ways to help the situation. The Group deceided that:

``Each government will act according to its own methods and its own means but in a coordinated manner with the other European states,'' French President Nicolas Sarkozy, who called the meeting, told reporters.

This comes as the initial stages of helping financial institutions begins to unravel.
Hypo Real Estate Holdings announced that a government backed (35 Billion Euro)deal to save the institution collapsed when banks withdrew their support.

Although European leaders are saying all the right things action is needed. As Laurence Boone, an economist at Barclays Capital in Paris puts it:

The statement on supporting banks ``is not a progress. It's the same as before the summit.''

I do not see how the markets take any of this as a positive come Sunday night/Monday morning. It looks like we are in for another long week.

Good Luck and Good Currency Trading.


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