For the last few weeks I have been debating with a guy that I think the USD is going down, gold was going up. I saw it returning to the Y85 support. He was saying I was wrong, and maybe so. The reason for my trepidation was the believe the market would get worse, that a Goldman Sachs size financial institution would fail. I specifically mentioned Goldman Sachs and J.P. Morgan because years ago they had the biggest exposure to derivatives. With this (until recently unregulated) market having contracts 3x larger than the physical market, and higher for some commodities, and with there being a risk on counter-party exposure, it would seem natural to expect folly. Well, if this news is correct - Fortis Bank (former ABN Bank) - and its all over the internet, then the Dow is going to break 11, 400 pts support when the market opens this week.
The flipside is that the USD is likely to be a safe haven, but I would suggest not as safe as the Japanese Yen. Last time I looked it was Y107 to the USD. I'm a long way off target though. This will be big news. You would expect a significant rate cut in the wake of it. We might just get to my 1% Fed rate soon.
PS: I though it was convention to change the name of a bank after it restructures, not before.
------------------------------------------------PS: I though it was convention to change the name of a bank after it restructures, not before.
Andrew Sheldon www.sheldonthinks.com
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