The euro fell to a 21-month low against the dollar on Wednesday as investors added to bearish bets on growing concerns about a chaotic Greek exit and widespread skepticism about the outcome of an EU summit.
Bad luck, bad timing, or both is my thinking for this morning. I just spent three months in the EU and the euro value against the US dollar remained steadily between 1.31 and 1.32. This morning, the value dropped to 1.25. See what I mean?
It is hard to find the good news out there as everyone is focused on the bad news, or lack of bad news out of Europe. Truthfully, I am sick of reading about Europe every day, when in fact nothing is happening at the moment. Let the folks over there get on with whatever it is they need to do, and when they do that, whatever that is, then let’s talk about that.
I said “hard” to find something good out there, not impossible. Actually, I found two things that keep me on the optimistic track.
- In its twice-yearly economic outlook released on Tuesday, the OECD forecast that global growth would ease to 3.4 percent this year from 3.6 percent in 2011, with the euro zone crisis the main risk to achieving this target.
- Americans bought 3.3 percent more homes in April led by strong gains in Midwest and West.
The first is interesting in that the forecast revision to the downside is not important. The drop is insignificant. No, the important thing is the Organization for Economic Cooperation and Development (OECD) forecasts a 3.4% global growth rate. How bad is that? If only the US could grow at that rate.
The second is really stretching it for me, but it is still good news no matter. Anytime Americans are buying homes it is a good thing.
Foreign investors are likely to keep cutting their holdings of Italian and Spanish government bonds this year, after slashing their share of each country’s public debt to around a third of the total in the first quarter of 2012.
You see, even I can’t get away from Europe. The only thing I can say here is that we have seen this before. If some good news comes out of the dinner-time summit in Europe today, the fear run will abate, as it has done before. If it is bad news, well, then the banks in country will have to pick up the slack as investors will keep on running. This, of course, will add to the perception that a financial crisis is imminent, and so on …
Hey! What about that Facebook IPO? So much hype, so much drama, so little substance, and a whole lot of fizzle describes how that all came out. On top of that, the Feds are now looking into the “glitches” that kept some of those on the inside track from selling their shares after the opening and a lawsuit has been filed about those same glitches. Somebody smells something fishy, and that somebody doesn’t like the smell. The breathless media got a whopper when it hooked onto Facebook as the latest thing to blather on about.
Trade in the day; Invest in your life
