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European Problems

September 9, 2011 – 4:59 pm

Europe jumped to the fore in trader’s and investor’s minds yet once again this morning with one of the members of the governing council of the ECB resigning. The European Central Bank is responsible for the bond buying program and any disruption is very upsetting for the markets. They have been buying sovereign debt to keep interest rates down for European governments and the person who quit apparently disagreed with how the program was implemented.

It appeared that after President Obama’s jobs speech last night that the market was going to be higher as the futures were up. That all disappeared by the time the market opened.

The dollar rallies every time something in Europe disturbs the traders. The fear is that European problems are getting deeper rather than being solved. Politicians around the world are slow to react as we see in our own government and as the dollar gets stronger our stock market falls.

The truly important question is whether or not Europe can pull us into a recession and everyone is trying to figure that out.

Good Trading
Steve Peasley

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