Hello Traders: The news last night said that the Irani government moved billions of dollars of assest out of European banks Friday--or maybe it was Thursday and Friday. Iran is doing this in anticipation of UN sanctions due to its nuclear program. Now, if Iran pulled assest out of European banks, might those banks have had to sell other assets to maintain cash reserves? Might the sell off on Friday be explained in large part by a European bank stock liquidation to replenish cash removed by Iran? The steady drop with no real gaps (except at the open, which might have been the result of pre-open accumulation of European sell orders) or sudden rushes, no swings of price recovery intraday, and no significant news to otherwise move prices down. I'm not buying the pundits saying the few earnings reports combined with the Ossamma tape were the cause. Any thoughts? And, if the Irani cash move is behind this one day drop, what might that suggest for the coming week? Just thinking out loud here. NDG
Conventional wisdom suggests $40bil - $50 bil is really a drop in the bucket. Besides, the FX market was not all that active, only trading in a single big figure range, so nothing really was probably done there unless it was done outside the market and hedge in options,etc.. I think the question is what is Iran going to DO with the $$? If they do things the islamic banking way, they may convert to gold but if they do things the smart way, they probably FX'ed it out of Euros and into either a basket of smaller currencies or, ironically, USD! However, do note that there was a $25 run up in spot gold over the last 2-3 days, granted coming after the tokyo crash, but still there. hmmm.....
First of all, the market ignores Osama beyond temporary spooks following actual acts of terrorism. The Iranian money is a pittance. Itâs all bravado. They probably diversified their EU money in a basket of global currencies long before they started talking big with their nuclear program. Otherwise, they would keep their mouth shut. It's the same reason why Chavez is talking big these days. They both have oil to sell to nations other than the EU and the US, and they both can put their money in places other than the EU and the U.S.
it was very smart to move their money, i don't think that it's good for the iranians to have nuke tech BUT this situation along with geopolitical situations in south america and africa will cause such volitility in our markets and for option traders like myself, this volitility is a dream come true!!! "LET'S MAKE SOME MONEY" - JIm Cramer.