When It Rains It Pours, in Euroland

The euro was the big loser yesterday, even when most other majors were able to either eke out gains or at least hold their ground versus the buck. Today the buck is higher versus the entire pack.

And today the euro presses lower for a whole slew of reasons. First, and most prevalent in the marketplace, is the continued uncertainty surrounding the bailout of Greece, from where and when and if it might come.

If Richard is right the US smokes Europe!

Last month, we did notice that US consumer credit rose unexpectedly. It didn’t seem to get much press, as all eyes were focused on non-farm payroll.

The question is: Is a snapback coming? Yes, answers Morgan Stanley’s Richard Berner [our emphasis]:

Your Daily Recommended Allowance of China Opinion

Have a look at this gem from Ambrose Evans-Pritchard: Is China’s Politburo spoiling for a showdown with America? I won’t comment on it since we’ve included much of these same ideas frequently in the pages of Currency Currents already; nevertheless he presents these ideas forcefully and succinctly. Here’s an example of the Chinese delusion that Evans-Pritchard points out:

Markets Misbehave. Certainty is fantasy!

Note: The body of today’s issue is a reprint from 14 August 2007.

How many times have you heard this little piece of inanity uttered: “Markets hate uncertainty.”? I heard it said on Friday as I was “passing through” one of the TV “financial” shows on my way to the Home and Garden Channel—the only place safe on the dial for me. Every time I hear that “uncertainty” phrase uttered, it just drives me nuts!

Why in the heck would anyone in their right, or wrong, mind ever think markets have certainty? If they did, the quant funds wouldn’t be blowing apart right now. If they did, we would have no such thing as a dynamic pricing system. Market certainty is standing in line for eight hours for a loaf of bread in the old Soviet Union—you were certain nothing else was on the shelf, and certain the price would set by the state—that’s certainty for you!