Tag Archives: Angela Merkel

Our Two Cents – Week of 2/27/12

As Hollywood celebrated the Academy Awards Feb. 26, the world watched “The Artist” snag five trophies and Meryl Streep receive her third Oscar win. On the financial stage, eyes cast on the German parliament, Greek finances and U.S. economy confidence.

After agreeing on a new rescue package for Greece Feb. 20, the eurozone stepped back into the spotlight as German Chancellor Angela Merkel won a parliamentary about Greek aid from the Bundestag—the lower house of the German parliament. The vote favored the 130 billion-euro package to help Greece. She cautioned her fellow lawmakers that pushing Greece out of the euro would result in failures for the European Union and global economy.

Merkel also spoke about the European Stability Mechanism, saying Germany was willing to expedite payments to the ESM—the eurozone’s primary bailout fund—if other European members followed. She said Germany was willing to pay 11 billion euro to the ESM to accelerate funding. Regardless of adding new money to the fund, some German lawmakers believed that a third Greek rescue package could arise because they felt that even new funds would not right Greece’s finances. Aside from discussions about Greece, Germany saw positive news in its IFO (the country’s No. 1 think tank), predicting an increased business climate. The nation’s rating jumped to 109.6 points, better than the expected 108.7. A higher IFO showed dwindling signs of a German recession.

In the U.S., economists continue to see financial optimism. As many Americans ushered in the weekend, the Standard & Poor’s 500-share index finished Feb. 24 at its highest point since 2008. The S&P closed at about 1,365 points—the highest mark since June 2008 before the worst of the financial crisis. The good news continued with signs of a growing economy. The National Association for Business Economics said the U.S. economy will rise 2.4 percent in 2012. The NABE February survey also showed expectations of an average unemployment rate of 8.3 percent, with the economy adding about 170,000 jobs a month in 2012.

For hedge funds in 2012, investors forecast $250 billion in new assets, with net inflows of as much as $140 million and the rest coming from investment returns. According to the Morningstar MSCI Composite Hedge Fund Index, hedge fund performance in January jumped 1.9 percent—the largest monthly gain since December 2010.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Mirror, mirror on the wall, what’s the fairest currency of them all? The Brothers Grimm in “Snow White” posed that question about the queen’s beauty, but in the financial world, Germany’s Deutsche mark had been one of the strongest and handsomest monetary units in the land.

As the euro zone crisis continues, German Chancellor Angela Merkel and French President Nicolas Sarkozy have issued an ultimatum to the 27 European Union governments, saying they need greater control of their national budgets by Dec. 9. If countries don’t participate, the 17-member euro zone will progress with plans for amendments to fiscal treaties aimed at creating a tighter and more integrated union. While Germany spearheads reforms, Standard & Poor’s warned that credit ratings for European nations, including Europe’s economic powerhouse of Germany, could drastically fall if agreements to the financial crisis aren’t reached.

A history dating back to 1871, the Deutsche mark’s official user is Germany, with unofficial users Bosnia, Montenegro and Kosovo. This is our fifth post in our series about “currency culture,” where we examine the history of different world currencies and how they play a role in popular culture (see our previous posts about Britain’s pound sterling, Italy’s lira, Switzerland’s franc and Greece’s drachma). With an introduction as melodic as Ludwig van Beethoven’s Symphony No. 9, here are some interesting facts about the mark:

  • Commonly called the “Deutschmark” in English; called the “Mark” or “D-Mark” in German
  • Introduced June 20, 1948, by Ludwig Erhard, late chancellor of Germany, and replaced the Reichsmark
  • Symboled as “DM”
  • Banknotes of DM 5, DM 10, DM 20, DM 50, DM 100, DM 200; coins of 1 pf, 2 pf, 5 pf, 10 pf, 50 pf, DM 1, DM 2, DM 5, DM 10
  • Deutsche Bundesbank, the central bank of Germany, is referred to as “Buba” (from Budesbank)
  • Banknotes observe notable Germans such as fablers Jacob Grimm and Wilhelm Grimm, writer and novelist Bettina von Arnim, scientist Paul Ehrlich, naturalist Maria Sibylla Merian and mathematician Johann Carl Friedrich Gauss
  • Construction costs of Neuschwanstein Castle—the inspiration for Disneyland’s Sleeping Beauty Castle—during the lifetime of King Ludwig II totaled 6.2 billion deutsche marks
  • Signal Iduna Park, considered to be the “Opera House of German Football,” has an estimated price tag of 35 million deutsche marks
  • Deutsche Bank is a leading global investment bank in Germany, Europe, North America and Asia and title sponsors the professional golf tournament Deutsche Bank Championship held Labor Day weekend in Norton, Mass.
  • Taxi fare from Berlin Schoenefeld International Airport to the city of Berlin costs about 60 to 70 deutsche marks
  • Costs zero deutsche marks to enter Oktoberfest, the most famous event in Germany and the world’s largest fair (the beer, however, is not free)

Like a Mercedes-Benz, we hope these facts “mark” some new luxurious currency knowledge as your drive to master the financial markets continue.

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Italian reforms, British backlash, German refusal and French strength made headlines last week. We hedged our bets on the best news in the currency market, and here’s how we made out.

All eyes were on Europe again this past week as Italy’s premier-designate Mario Monti stepped into the spotlight to help right Italy’s fiscal flounders. Monti faced a monumental task of galvanizing the country’s electorate and politicians to accept crucial reforms that would stop Italy’s sinking economy. This sparked some fears for economists because Italy’s economy is the eighth largest in the world and if not rightly handled could cause global reverberations. While Monti pushed reforms, former Prime Minister Silvio Berlusconi hit the recording studio. The once-battled politician is releasing a CD of love songs, where he croons with Mariano Apicella, a Neapolitan ballad singer he has collaborated with for previous albums. In England, Britain saw rising unemployment at 8.3 percent for September, but that didn’t stop Germany from blasting the U.K. to start helping the euro zone. Volker Kauder, parliamentary leader of the Christian Democratic Union and a senior member of Chancellor Angela Merkel’s party, blasted the British government, saying that “Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we’re letting the British get away with.” Germany said it wasn’t planning to pay for the bulk of spending from other countries because it wants a unified continent. However, more core European nations were starting to feel the heat of the euro zone as AAA nations such as France were under pressure for their financial strength—a characteristic that’s no longer taken for granted. France’s cost of borrowing increased more than a half percentage point, and Austria’s spread between its 10-year bonds and benchmark German Bunds hit euro-era highs. Dutch and Finnish spreads have also seen their highest spreads since 2009, generating thoughts about the direction of a new Europe.

In the U.S., some good news about jobs. The number of unemployment benefits fell last week to its lowest level since early April, showing signs that hiring may be rebounding. The Occupy movements in cities such as Los Angeles, Boston and Las Vegas saw for the most part peaceful protests last week, but throngs of demonstrators in New York City took to the New York Stock Exchange and subways to raise concerns about corporate excess. In the markets themselves, hedge funds posted gains of 2.04 percent in October, marking some optimism after two difficult months. We conclude with a look at spending for Black Friday as shoppers are expected to gobble up purchases Nov. 25. According to the National Retail Federation, the average American spent $365.34 on Black Friday in 2010 with overall sales calculating $45 billion.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.