Melinda is once again ahead of the game re: France
<http://www.myfeedme.com/article/11711403.html>:
The French banking stocks were hit hard this morning as the CDS
spreads versus the German Bund spiked. A downgrade of French debt
would be a severe blow to the Eurozone and would put France in the
same category as Portugal, Spain and Greece.
Posted by: glasater
*France default risk up, euro drops vs dollar*
*Source:[Huliq.com] Time:[GMT Jun 4 2010 4:59PM]*
The euro is under pressure again today the exchange rate reaching an
intraday low of 1.20 euros vs the dollar on fears of a downgrade of
French Government bonds due to a higher default risk. The French banking
stocks were hit hard this morning as the CDS spreads versus the German
Bund spiked. A downgrade of French debt would be a severe blow to the
Eurozone and would put France in the same category as Portugal, Spain
and Greece. French banks, such as Societe Generale, have suffered large
derivatives losses and present another risk for their fragile balance
sheets. France has quietly struggled with a high debt/GDP ratio since
the beginning of the crisis and will need severe austerity measures in
order to resolve their solvency issues. French banks may need another
bailout, similar to the Spanish bailout of CajaSur last month. In light
of the recent events, the euro cannot find a stable support level vs the
dollar and may fall into a fast and furious downward spiral towards
1.10. That would be a seven year low and could be sustainable if fiscal
and monetary policies are implemented and strictly enforced across the
Eurozone. Europe also needs to implement a large financial regulation
package and it is unlikely that the two Herculean efforts will be
completed in the next few months as it continues to struggle to find
common ground among its two main economic forces: France and Germany.
Jean-Claude Trichet, Chairman of the ECB, remains silent which indicates
that the Central Bank is no longer supporting the euro but rather opts
to let it run its own course. Traders and market makers have shunned the
euro for several weeks now but were frustrated with the artificial
support and intervention in the free markets. That support has now come
to a halt and the euro is at the mercy of the inter-currency markets,
which will show a continued and steeper decline of the euro in the
months to come. Written by Nick Doms © 2010, all rights reserved
http://www.myfeedme.com/article/11711403.html
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