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VIDEOECB Says Economic Growth Unlikely
Its latest report says the eurozone's financial sector and economy are facing a "hazardous contagion" caused by the region's debt crisis.
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Economic growth prospects are dim as government deficits have driven up general borrowing costs across the eurozone. The ECB believes that the eurozone’s financial sector and economy are facing a “hazardous contagion” caused by the region's debt crisis.
In the report, the ECB listed the main risks to the euro financial system, which it believes are: the sustainability of public finances, the crowding out of private investments, the balance sheets of euro non-financial corporations, household sector credit loss, and European financial institutions.
Along with this bearish report, this morning the UK Times is reporting that France’s AAA credit rating may be a stretch and the Wall Street Journal is reporting that the US is pushing Europe to disclose the results of bank stress tests to calm the markets.
As hedge fund manager Hugh Hendry said last week, “I would recommend you panic. The European banking system is in a crisis.”
How to Play It:
For those who want to attempt to trade in Europe, the Ultra Short MSCI Europe (EPV) is a popular way to have a short bet on the region.
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Another possible way to be against the euro is by shorting the Euro Trust (FXE). Those bearish on the euro could look into making this trade.
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New to investing? E*Trade can help. Click here to watch a series of brief educational videos like "New to Online Investing," "The Basics of Stock Screening," "Options for Beginners," and more.
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