Today’s market suffered heavy risk aversion sell offs as Germany said that the aid package for Greece is “not yet a done deal”, plus ratings downgrade of both Greece and Portugal’s sovereign credit worthiness, created the perfect storm that we haven’t seen for quite a while…
The heart of the matter is simple, and it could be summarized up in just one word: “Elections”… As German politicians campaign for re-elections, aid for Greece became a political tool used to sway public opinion…
However, this is very much like playing with fire… A certain degree of political posturing may be ok, or some may have thought, the reaction across the entire globe is sending a clear and unmistakingly message that this issue may be too important to toy with.
That’s why both ECB President Jean-Claude Trichet and IMF Director Dominique Strauss-Kahn will be heading to Berlin today and speak with parliamentary leaders about this aid package, and that failure to help Greece may eventually result in direct impact on the euro-area, including Germany.
I believe we’ll see strong EUR gains following this meeting, as a matter of fact, the entire exaggerated loss of the EUR should be recovered today, because I don’t believe that Germany and other European governments will have any other choice but to approve the aid for Greece… or the consequence will make Lehman Bro. look like child’s play in comparison…
The main issue is not the size of the aid package, or even the size of Greece’s GDP (less than 3%) in Euro Zone, it is about confidence and the cost to borrow (by issuing bonds) and meet obligations… With Greece falling first, other countries will have no choice but to follow, due to the viscious cycle of running a deficit while paying a high interest rate to borrow… Very much like legalize loan-sharking on a country to country level… only when you don’t pay, other members in the EU get their equivalent fingers chopped off…
Henry Liu
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{ 16 comments… read them below or add one }
Greece and Spain won’t pay back. This was a calculated Risk, and a Lesson for the Banking System. What is happening in Greece, is a very well orchestrated show, to get granted €110bn aid, to avert meltdown. A new deception compared with the old Trojan Horse. The only thing Germans can do is:
REPOSSESS 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
U.S.A must REPOSSESS 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
Greece’s problem is too much debt. Greece has a budget deficit of 12.7% of GDP – meaning that the country is spending 12.7% more than the value of one year’s economic output.
Greece is no different to a serial credit card borrower who can’t pay back his loans. But just like a serial credit card borrower, as long as Greece keeps relying on borrowed money to fund itself, the problem won’t go away. It will just get worse.
http://www.defenseindustrydaily.com/Greece-in-Default-on-U-214-Submarine-Order-05801/
But don’t worry; the ECB, the Fed or both will print the money.
And all of us will share the pain, with our hard-earned money.
Bad is never good until worse happens.
Dear Henry
I just wanted to let you know that i have learnt a lot from you.I was able to get your book from a friend in Nigeria,You introduced sentimental trading in forex.And after I finished reading it.My trading changed for ever.To summarize it,i don\’t scalp as much as I use to.I dive into 80 to 230pips in a single trade,
And during the month of February\’s surefiretradingchallenge,I came fourth with a profit of 645% and i traded only 5 days to make that because I was preparing to leave to Cairo,and i had less chance but traded for only 5 days to make that.I have also thanked you in my Google document I presented to the surefiretradingchallenge.Holla me for a copy of my Google document.Thanks bro
Mercury:
Could you send me an email to henry[at]newsprofiteer[dot]com? I’d love to see where you’ve taken my sentiment trading idea to, thank you
Hi Henry,
In general, there is nothing much to argue about on up coming event in Euro zone. However, when we have to put this into a trading plan before clicking the trade button, I feel that the TIMING become absolutely crucial.
IF, a big IF, I have entered any long contract on EUR yesterday after reading your positive outlook, I would have to bear the pain to taste the trough now. Of course, you never ask anyone to trade on that. I didn’t if you want to know.
Just hope you can help to shed some light about how to translate an idea to profitable trade.
Market is constantly changing. If you have entered according to my analysis yesterday, you should have exited the market when 1) Germany came out and said Aid package is not a done deal or 2) S&P downgraded Portugal and Greece…
There is just no way I’d have predicted these 2 unscheduled events, all we can do is to react to them… but as long as the LONG term view remains true, we should be able to cash in with a little patience.
Hi Henry,
Thank you so much for the great job you are doing. I will appreciate if you could do more in depth analysis on technical analysis. I do not have much time to glue to my computer all day long. Thank you once again
Hey Henry,
This is my first time following your article so we will see what happen. Good job.By the way,I need to know where to go on your site to get your alert?
thanks
Just signup on the top right form… I only send out email alerts when there are news pending for the next day. Thanks,
Thanks for the analysis Henry. I thought the German posturing was a bit too Nazi-ish with Greece being so close to defaulting.
Gavin
In a sense its all about politics… and german politicians wanted german people to know that this is a game of chicken, but in reality is a rigged game… the end has been decided but whatever they can get out of this stunt will further their political career…
April 27, 2010
Hi Henry,
God bless you Henry!
Fantastic forex news and your forecast. I am really amazed how informatic your articles are, thank you once gain for your regular update. I am just a beginner in the forex trading and unfortunately, with my initial investment of 5 grand, I did manage to gain about 2 grands within two weeks only to lose 5 grands the following week, just because I did not have access to news and forecast such as yours.
Thank you Henry for your most informatic news.
Gopal
Gopai:
Sorry to hear that. My advice, cut down your lot size by at least 50%… if it still is too much, do it by another 50%. You have to be able to go to sleep without worrying about your trade and not sweating when the market goes against you, that will be your “right” lot size and take it slow… always.
April 27, 2010
Hi Henry,
Fantastic forex news and your forecast. I am really amazed how informatic your articles are, thank you once gain for your regular update. I am just a beginner in the forex trading and unfortunately, with my initial investment of 5 grand, I did manage to gain about 2 grands within two weeks only to lose 5 grands the following week, just because I did not have access to news and forecast such as yours.
Thank you Henry for your most informatic news.
Gopal
Hello Henry,
This is just exactly my analysis for Euro with regard to the issue of Greece.It’ll be shameful for the euro-zone not to be able to deal with issues that pertain them.With this in mind,i also agree with the fact that Germany and other European governments will have no other choice but to approve the aid for Greece.Hence an ultimate turn around in the strength on Euro.
With this in view,i started buying euro pairs in advance,thanks and happy piping day.
Hi Henry, I look forwar to your news letter daily, it has given me a lot more confidence. Would love to be in your mentoring course, but cant afford just yet. I seriously hope your right about the euro and thank you for telling us the real story.
regards
Anthea Monger
My pleasure, Anthea…