If the lack of a bailout is such a disaster, answer me this:

[Lydia Leftcoast]

Why are the currency markets holding steady?

Since most of my customers are overseas, I keep a close eye on foreign exchange rates, and throughout the day, the dollar was fluctuating in a narrow range of less than one cent against all major currencies.

Now that it's daytime in Asia, the dollar has fallen one cent against the yen and the euro and has actually risen about a cent against the pound.

Frankly, I've seen the dollar fall two or three cents per hour for a couple of hours at a stretch, as it did earlier this summer.

Can anyone explain the panic in the stock market as opposed to the calm in the foreign exchange markets?

[juno jones]

1. K&R!

[Xenotime]

2. They are next. This whole system is going down the tubes.

[avaistheone1]

3. Link please

[Lydia Leftcoast]

4. Does that mean all currencies are going to fall? Or just the dollar?

:shrug:

[gravity]

7. All currencies can't fall

Currency markets are relative.

[Lydia Leftcoast]

8. Of course they can't. That's why I don't understand the poster's assertion

The dollar could certainly crash, but that would be relative to some other currency, which would remain strong.

[gravity]

12. If the world economy goes down with the US

then there will be no change in currency. Europe and Asia are still dependent on the US economy, so it is a realistic scenario.

[Lydia Leftcoast]

14. Not as dependent as they used to be

I know from my translation work that Japan has reduced its dependence on the U.S. (not eliminated it, of course) and concentrated on developing new markets in developing countries, Eastern Europe, and even Western Europe.

[Winterblues]

28. Gold and it is remaining strong

:shrug:

[lostnotforgotten]

5. Maybe The Currency Traders Know This Is A Scam

eom

[Lydia Leftcoast]

6. That's my take on it, too

They're pretty astute about which economic moves are good and which are bad.

[rhett o rick]

10. They don't care if it is a scam or not as long as they get to keep gambling a bit

longer.

[valerief]

9. K&R

[Speck Tater]

11. Who are you going to believe? George Bush or your own lying eyes?

Would Bush lie to you? Would Bush cry wolf and try to incite fear and panic in order to push through some ill-considered piece of garbage legislation? Don't be ridiculous. You must trust Bush.

Scream and holler, run and shout!
Or Bush will let the monsters out!

[Critters2]

13. The Dow Jones Pre-market Futures are up +84.

Make of that what you will. Maybe some people buying in low, but it isn't continuing to drop. The opening will be interesting.

[Lydia Leftcoast]

15. It's afternoon in Asia, and the dollar is still holding steady

against the yen, euro, and pound, still fluctuating in a narrow range only one cent away from its values during the U.S. business day.

[Kurt_and_Hunter]

16. It's a global phenomenon

[On the Road]

17. It Affects All Countries

the dollar might even go up during a crash in relation to a lot of other currencies. US is still safer than most other places.

[Lydia Leftcoast]

18. Hmm, dollar holding amazingly steady against

the euro, yen, and pound, and it's almost the end of the business day in Asia. :eyes:

[readmoreoften]

19. It'll probably fail without the bailout. It'll definitely fail with Paulson's version.

It is intended to fail. I don't get it. What part of "the Bush administration is not to be trusted" do people fail to grasp?

[anigbrowl]

20. Asian and European markets are going through the floor too

In case you hadn't noticed, this is a global credit crisis. The various central banks are not going to allow currency runs at a time like this and would buy t-bills heavily if the dollar came under attack.

[nadinbrzezinski]

21. Checked Asian markets lately?

[Lydia Leftcoast]

22. Yes, the dollar regained against the yen

was holding steady against the pound, and was up slightly against the euro. :shrug:

[lonestarnot]

23. That is curious.

No one has really been talking about the dollar.

[HamdenRice]

24. The international markets need dollars to buy treasury bills

There are very conflicting pressures on the dollar right now:

Downside:

- investors fleeing from mbs and other dollar denominated US securities, dumping dollars causing downward pressure;

- investors dumping dollars because of fear caused by failure of bailout;

- investors dumping dollars as they get out of equities;

- investors dumping dollars because of trade the trade deficit;

- much smaller number of investors dumping dollars because of concern about the long term credit worthiness of t-bills;

Upside:

- a huge portion of the "flight" from dollar denominated securities like mbs is turned right around to treasury bills, which are still considered the safest investment on the planet (at least until some other financial super power emerges); yield on treasuries is approaching zero because of demand for treasuries.

No one knows which way these conflicting forces will eventually push the dollar.

[Kurt_and_Hunter]

26. ding ding ding!

[Lydia Leftcoast]

25. Well, well, the dollar's still rising

Recovered against the yen, and up slightly against the pound and euro.

Maybe the world (aside from the banks that were too closely tied to Wall Street financial schemes) DIDN'T want the bailout after all.

[Lydia Leftcoast]

27. The dollar is still holding steady

In fact, it's up against the yen, euro, and pound since yesterday.

I bet the currency traders know that the bailout would have exacerbated inflation.

[Lydia Leftcoast]

29. Wednesday morning, October 1

Dollar up slightly against the yen and euro, way up against the pound.