CHART OF THE DAY: Serious Question: Does The Euro Even Care About What Happens In Europe?

CHART OF THE DAY: Serious Question: Does The Euro Even Care About What Happens In Europe?

Joe Weisenthal and Eric Platt | Oct. 26, 2011, 3:53 PM | 301 | 4

 

The more we look at US markets the less it looks like Europe is proving to be a big force in one way or another.

As we pointed out this weekend, what’s clearly moving the US market is expectations around GDP growth.

As the data has improved, US stocks have improved in a pretty straightforward manner.

But it’s funny, because you always hear about how the US market is so closely correlated with the euro.

So then we wondered, does the euro actually care about Europe stresses? You’d think so, but it’s not that obvious.

via CHART OF THE DAY: Serious Question: Does The Euro Even Care About What Happens In Europe?.

 

This brings up a lot of interesting questions.  For one the euro is remarkably stable considering the turmoil in the sovereign debt markets.  Part of that explanation can be  summed up by saying that if Greek were to forsake the euro it might actually cause it to rally.  But it wouldn’t be long before the speculators attacked the Italian debt and Spanish debt.  In fact that’s happening now.  There is really now way to fix this situation without printing money.  That’s the rub. When they finally get round to that, one by one countries will abandon the euro, and when that happens, the currency will plunge.