Finance Matters

Posts Tagged ‘euro’

From the euro’s creation to Greek woes

Burton Malkiel, author of the finance classic A Random Walk Down Wall Street, was on CNBC this morning with Steve Liesman.

Malkiel is one of the minds behind the efficient market hypothesis (EMH), which many have argued became obsolete during the financial crisis because the “markets didn’t work.”

Liesman asked Malkiel about it.

“What it means is information gets reflected quickly,” said Malkiel explaining the EMH.  “You get a tabloid of prices that is very hard to beat.  In fact most managers don’t beat the index and those that do in one year aren’t usually the same ones that do in the next year.”

“What the efficient market hypothesis does not mean is that markets are always correct.  Markets are always wrong.  The point is nobody knows at any one time – the price is wrong, but nobody knows whether it’s too high or too low and the market is unbeatable, but that doesn’t mean it’s right.”

“Nobody can consistently beat the market,” said Malkiel.  “Over time the market is the only one that gets it right.”

Here’s the full interview from CNBC:

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• STOCKS END LOSING STREAK: Here’s What You Need To Know
• GEORGE SOROS: The Euro Crisis Just Entered A ‘Less Volatile But More Lethal Phase’
• Wells Fargo’s Adams: If Europe Slows Down, This Sector Will Do Worse Than The Financials

Greece’s bond swap is moving forward, the country’s second bailout looks assured, Europe is safe for the moment, and European stocks even managed to rally today.

The euro? Not doing so hot.

In fact, it’s been on a downward slide more or less since Greece announced that it officially had sufficient investor participation to trigger CACs and go through with the deal.

While we’ve crossed below $1.31 at other moments recently, the fact that we’re doing this again on positive headlines is puzzling. Check out the EUR/USD:

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Expectations Are High That Greek Bond Swap Deal Will Succeed And A Credit Event Will Occur
• ECB’s Draghi Destroys Hopes For Future Rate Cut, Scoffs At Risks To Bank’s Balance Sheet
• FITCH DOWNGRADES GREECE TO ‘RESTRICTED DEFAULT’

One day ahead of the big Eurogroup meeting, it appears the mood is risk on: for now.

Monday should be quiet — due to the US Holiday — but at least the euro is moving nicely higher.

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Euro Slumps As Greek Debt Swap Talks Go Nowhere
• The Euro Swings Above $1.30 For The First Time In Weeks
• The Euro Takes A Tumble After Lagarde Suggests The Public Sector Could Take Losses

Jim O’Neill, Chairman of Goldman Sachs Asset Management, is feeling good about his bullish call on the dollar against the yen.

Japan’s central bank recently announced a surprise move to expand its asset purchase program by 10 trillion yen, or around $129 billion.  This caused the dollar to jump 1 percent to 78.48 yen today.

In December, O’Neill highlighted just two currency trades: 1) short the franc against the euro and 2) long the dollar against the yen.

Specifically, he projected that the dollar could surge to 100 yen by the end of the year.

O’Neill told Dow Jones that the Bank of Japan’s surprise move made him “more confident” in his yen call.

SEE ALSO: Goldman’s Jim O’Neill Presents His 11 Predictions For 2012 >

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• CHART OF THE DAY: The Roubini Stock Market Indicator
• The VIX Spikes 10% To A 2-Week High
• Here’s The Chart That Has Stock Market Bears Ripping Their Hair Out