subject: Moretti Associates - No Consensus On EU Debt [print this page] Moretti Associates - No Consensus On EU Debt
"Moretti Associates" principals are apparently warning the firm's clients to limit their exposure to the euro and recommending they sell remaining holdings into strength against the dollar.
Analysts at the investment house remain convinced that it is the inability of the 17 member group of nations that use the single currency to bridge the divide over how to combat the debt crisis rather than the debt itself which is destabilizing the currency.
A senior "Moretti Associates" analyst said, "The Germans and the French don't want to move too quickly whilst others are keen to address the renewed surge in Portuguese bond yields that they view as likely to lead to a run on Spain or Italy once Portugal has been bailed out. It's a mess and we'd rather our clients had less exposure since the euro has begun weakening against the dollar and other currencies again."
Adding to the confusion is the news that several political decision makers in countries that have already been bailout out have expressed grievances about some of the terms attached to the emergency funding received from the EFSF (European Financial Stability Facility).
"Moretti Associates" suggests that there may be a move to renegotiate the terms of their bailout programs which could further exacerbate the situation.
"Moretti Associates" believe that the recovery in the US is sustainable only as long as the Federal Reserve's ability to provide additional stimulus remains unhindered by a newly-empowered Republican majority in Congress which has already signaled its opposition to what it sees as further weakening in the reserve currency status of the US dollar.
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