Why I would sell the euro rather than buy it...

"Too many leaders do not translate to leadership. Many spoke. None inspired confidence . "

• The European  leadership seems unable to understand the nature of the network of strategic issues facing the Union. They have too many leaders and a seemingly  unrealistic, coordinated strategy.The Germans seem to suggest that the Greeks have no distinctive or core competencies. They have virtually written off the Greek people as unable to exploit any competitive advantage. To be in the German  good books, Greece needs activities processes and skills that are rather difficult for competitors to imitate and therefore underpin competitive advantage.  That is  a difficult order in a country that has nearly 50 % of its youth unemployed.  European supervision will ensure harping on productive employment- which should aggravate rather than mitigate unemployment. ("Fiscal Consolidation"???)The terms of the Greek bailout are significantly tougher than pre- referendum a week ago. In addition to requirements on pensions and sales taxes,  creditor representatives now have full access to ministers and a veto over relevant legislation. So Greece now seems like a European colony. The Asset reconstruction Fund seems old wine in a new bottle. 

• Morgan Stanley says it fears that China might just tip the globe into another recession. The desperation in Chinese regulatory action: the iron handed arrest of a fall in the overheated stock market supports the fears of instability potential. Chinese capital flight might have already occurred. It will not go to Europe but might go to the dollar assets or Australian / Canadian property markets.

• Saudi Arabia is borrowing big time (First time since 2007).  It reportedly has a deficit of about $130bn this year. The  air war on Yemen is taking its toll.  Saudis may already have drawn down near just about 8 % of its forex reserves.  With Iran accord, almost there, oil will run through the streets of glut. 

Sell on the fact ; buy on the rumour. 

This blog is not intended as an Investment Advice. This academic work is without any risk or responsibility.