Posted on 2/8/2010, 9:22:26 PM by FromLori
Traders and hedge funds have bet nearly $8 billion against the euro, amassing the biggest short position in the euro ever, reports FT.
Investors increased their short positions against the euro to record levels in the week ending February 2, according to the latest figures from the Chicago Merc.
The build-up in net short positions represents more than 40,000 contracts traded against the euro, equivalent to positions worth $7.6 billion.
This kind of size suggests that there are major players involved, hedge funds and the like.
However, it is not clear to me that shorting the euro is the way to play the European debt crisis. If the EU bends and decides to print euros to bailout the PIIGS, then this is a great trade. In my mind, it is difficult to see how Germany would be willing to lead the strong EU members in a mass bailout of the PIIGS. That said, given the non-printing of money by the Fed, dollar strength versus the euro is likely anyway, but not because of the crisis.
The crisis environment, however, will make traders nervous and add fuel to dollar strength.
ping
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The image of George Soros reduced to dumpster diving is like drinking fine wine.
Anyone surprised?? I’ll bet you a burger that if the Euro falls, Goldman Saks will make the most money off of it. This crew has been selling the US economy short for years, why should the EU be any different??
It is a really efficient allocation of resources: all those managers and brokers and analysts and secretaries running about trying to guess whether to go long or short.
It is also great for adding information to the system. If there is and amount 'A' of something it must be so much better to trade '100*A' of it then just a measly 'A' of it. That's got to really help the market get to the correct price real quick.
/sarc
lol govt. sucks is really into everything
Exploded Connecticut Power Plant Was a Goldman Sachs Deal
http://www.economicpolicyjournal.com/2010/02/exploded-connecticut-power-plant-was.html
Europe should have never embraced the Euro. Instead of States, they are different countries,with different cultures to deal with. Having all of this under one financial umbrella is just to much. Greece and Spain are going to bring the Euro to it’s Bankrupt knees.
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