I agree, no one should be in the market leveraged and on the wrong side of these big-boys-moves... For the long term, sure, the USD will weaken as realities are what they are - even shoring up on economic stability.
Not more serious, just somewhat unexpected. In the past days, New Zealand and Ireland officially declared to be in recession. Only now is the magnitude of recession (or worse) in the eurozone, austral-asia, etc being priced in. jmo
But this cannot be. The Euro is headed up! To 1.700 against the USD. I read it here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=108059 and here: http://www.elitetrader.com/vb/showthread.php?s=&postid=2082305
Nice find. Where are all the Dollar bears that were explaining how the Fed has to perform emergency rate hikes in order to support the Dollar and how the ECB was mastering the situation so professionally?
You really don't get it do you? Trichet got exactly want he wanted. A weaker, export friendlier Euro without needing to bastardize rates.........
A Macro reason why the USD is rising: "The Lehman Brothers Europe bankruptcy has ENDED London's presumed benefits from Wall Street's unfolding demise because segregation of customer accounts is nonexistent. Customers are NOW creditors in the bankruptcy. US law prevents this." The Source for the article - Ty Andros http://www.safehaven.com/showarticle.cfm?id=11403&pv=1 My words- In short, this means the Global Investors are fleeing the fact that segregation of client accounts is non-existent in many European banks. The net effect is perhaps a temporary move up in the USD. I have been short EURJPY since June 20th.
Also Euro banks getting rescued as they are more leveraged than US investment banks were. Deutsche bank is 50 to 1, Barclays is 60 to 1. Compared with 33 to 1 for Lehman and 40 to 1 for Merril. They probably have less CDO and MBS though.
Dh, does my comment have any relevance with regards to creditworthiness of a nation given that a group of investors / creditors gets thrown out with the bathwater?