By John Galt
June 19, 2011
I leave the house for a while and the world blows up. Per AFP:
Germany ‘dismisses Greek debt compromise plan’
With that being established, the prime comment from the article drives the point home as to the severity of this crisis now:
Der Spiegel had reported ahead of its Monday issue that the German finance ministry called for a beefed-up version of Europe’s temporary bailout mechanism lending to Greek banks to insure they have adequate collateral with the ECB.
<snip>
But a German official, who spoke on condition of anonymity, said that while “several options” were being debated to involve private creditors in an Athens rescue, the reported proposal was “no longer on the agenda”.
The source added that the initial plan had differed from the reported proposal in “key aspects”.
Based on this report and the late hour in the negotiations, it would appear that the Euro currency is about to be incinerated and crash severely as Forex trading opens later this afternoon. I would expect the Euro to decline to 139.50ish and after breaking that level, head to 132 barring a miracle from the ECB, Germans, and French in the weeks ahead. Add in the Federal Reserve meeting and results on Wednesday where the message will be one of stealth tightening and the Eurozone is primed for a major crash as the liquidity crisis spreads.
Use this chart (below) of the Euro to track short term support areas and hope that it does not crack 132 with volume or it will retest 125 then 120 with little effort; and crater the U.S. equity market as a result.
And now this from Bloomberg:
Europe May Withhold Half of Greek Payment
By James G. Neuger and Jonathan Stearns – Jun 19, 2011 1:56 PM ET