The insigbtful folks at Marketwatch write: “…sometimes an investment is such an obvious winner that not even a dummy can pass. That’s why you should short the euro. It’s easy money. For more than two years, the European Union has been wrangling with Greece’s sovereign-debt problems. And if you thought the U.S. government’s response to our financial crisis was bad, the EU is making Timothy Geithner look downright competent.
There have been lukewarm agreements, deals with the International Monetary Fund and its ladies’-man former chief. There have been global summits, international pressure and rescue packages. But none of this has done much to alleviate the crisis. They’ve bought time, sure, but there’s just been time to fight.
Of course, we know that the Greece debt problem isn’t about Greece at all. It’s about the German and French banks that hold the bonds. And it’s not even about the Grecian bonds but Spanish, Portuguese and Italian bonds, too.
For the moment, however, let’s limit this to Greece. French and German banks have $90.7 billion in exposure to that country’s sovereign debt. To make matters worse, Italian and Portuguese banks have a combined $11.4 billion in exposure, according to the Bank of International Settlements.
Now, let’s consider Portugal. Weakling Spain has nearly $85 billion in bank and nonbank exposure to its Iberian neighbor. Germany has close to $40 billion in exposure and France nearly $30 billion, according to the BIS.
Finally, Spain’s debt is as manageable as a running of the bulls in an elevator. Here, Germany holds $180 billion; France, $140 billion; and even the United States, close to $50 billion — with $19.5 billion of that on bank balance sheets….
Read more at http://www.marketwatch.com/story/short-the-euro-and-make-a-buck-2011-09-20
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