hopefully the retrace will settle at 61.8 and we can get on with it!
all hinges on Trickie at 1230... he will probably pull his head out of the sand and talk the Euro up... also...
Greece looks like it is taking a play out of the Irish textbook, with its Finance Minister offering a blanket guarantee to depositors. Raising the insurance on deposits from Eur20k to Eur30k was already being talked about, but this latest move will apparently cover any deposit regardless of size. While this should theoretically calm strains within the Greek banking system, it raises a number of thorny longer term questions just as in the case of the Irish scheme.
The two biggies start with the European Commission"s competition committee, which shouldn"t like arbitrary decisions by member states to fully back all deposits at national banks but exclude foreign banks which are still operating within the EU (non-Greek and non-Irish banks suffering without
the unlimited backing of government lines etc).
Then there is the question of what would happen if public funds are actually needed down the road; presumably that will balloon national deficits, which would threaten participation under the Maastricht Treaty. At the least, what Greece spur of the moment decision does is to up the odds of some type of Europe-wide bank bailout plan as speculated for discussion this weekend. But it also raises questions over the future of the Euro itself, and spreads between government funding and bank funding within selected countries.
Federal Reserve officials are weighing further interest rate cuts, even if Congress passes the TARP, in the face of a deteriorating economic outlook and severely strained financial conditions, according to the WSJ. The next scheduled FOMC meeting is on October 28/29.
Senate Majority Leader Harry Reid on the ABC News website headlines "
Reid: Another Insurance Co. on Verge of Falling".
Cheers
............Kauri