Financial and Stock Markets Hit by Collapsing Euro Currency

Stock-Markets / Financial Markets 2010
May 15, 2010 - 04:32 AM

By: Anthony_Cherniawski

U.S. Michigan Consumer Sentiment Index Rose to 73.3 in May - Confidence among U.S. consumers increased in May, a sign the biggest part of the economy is helping strengthen the expansion.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 73.3 from 72.2 in April. The gauge was projected to rise to 73.5, according to the median forecast in a Bloomberg News survey.

The outlook appears rosy, indeed. Now, if only the markets will agree.

Germany Loses Control Over Its Currency and wants out.

Romano Prodi recalls how he persuaded Germany to allow debt-swamped Italy into the euro: support our membership and we’ll buy your milk, he said. Germany got the message, allowing entry rules to be bent to create a 16-nation market for its exporters. Now, German taxpayers are footing the bill http://www.bloomberg.com/apps/news?pid= ... FXA8&pos=2 for that permissiveness as Europe bails out divergent economies lashed to a single currency with little control over national taxes and spending.

The consequences are an 860 billion-euro ($1 trillion) bill for a debt binge led by Greece, sagging confidence in the European Central Bank’s independence and mounting speculation that a currency designed to last forever might break apart.

France may join the exit of the Euro, too.

The markets were initially unsettled by news that the French president had threatened to pull France out of the eurozone. http://www.guardian.co.uk/business/2010 ... withdrawal The startling threat was made at a Brussels summit of EU leaders last Friday, at which the deal to bail out Greece was agreed, according to a report in El PaÃ*s newspaper quoting Spanish Prime Minister José Luis RodrÃ*guez Zapatero. http://www.elpais.com/articulo/espana/Z ... inac_2/Tes

Will the S&P Index move below 950 next?


--After more than a 4% gap-up rally on Monday, the S&P Index could only sustain its upward momentum until Wednesday. The European bailout was just too good to be true. As we see the European leaders unable to agree on the terms of the bailout, it appears that the markets are now spinning out of control again. One issue that hasn’t been addressed is “qui bono?â€