Monday, May 24, 2010

Hedge funds bet big on the falling euro; European bank CDS costs nearing Lehman-era levels $DB $CS $BCS

Hedge funds bet big on the falling euro” – several prominent funds, inc. many who profited from
the implosion of the US sub-prime market, are positioning themselves for a further decline in the euro;
traders and brokers told the Sunday Telegraph that HFs are using a variety of instruments to bet on
further euro declines; “shorting the euro is the biggest best in town” London Telegraph.

· Solution for the European debt crisis – detailed in the London Telegraph: 1) a restructuring of
certain country’s debts (Greece, Portugal, Ireland); 2) bank stress tests w/capital injection options
from the ECB (like what occurred in the US); 3) the nations whose debt wasn’t restructured will see
their debt guaranteed by the ECB; 4) the G20 provides support for FX markets.link

· European bank CDS costs nearing Lehman-era levels – London Telegraph.

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